Florida Senate - 2005                      COMMITTEE AMENDMENT
    Bill No. SB 2648
                        Barcode 681918
                            CHAMBER ACTION
              Senate                               House
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11  The Committee on Commerce and Consumer Services (Aronberg)
12  recommended the following amendment:
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14         Senate Amendment (with title amendment) 
15         Delete everything after the enacting clause
16  
17  and insert:  
18         Section 1.  Section 849.091, Florida Statutes, is
19  amended to read:
20         849.091  Chain letters, pyramid clubs, etc., declared a
21  lottery; penalty prohibited; penalties.--
22         (1)  The organization of any chain letter club, pyramid
23  club, or other group organized or brought together under any
24  plan or device whereby fees or dues or anything of material
25  value to be paid or given by members thereof are to be paid or
26  given to any other member thereof, which plan or device
27  includes any provision for the increase in such membership
28  through a chain process of new members securing other new
29  members and thereby advancing themselves in the group to a
30  position where such members in turn receive fees, dues, or
31  things of material value from other members, is hereby
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Florida Senate - 2005 COMMITTEE AMENDMENT Bill No. SB 2648 Barcode 681918 1 declared to be a lottery, and whoever shall participate in any 2 such lottery by becoming a member of, or affiliating with, any 3 such group or organization or who shall solicit any person for 4 membership or affiliation in any such group or organization 5 commits a misdemeanor of the first degree, punishable as 6 provided in s. 775.082 or s. 775.083. 7 (2) A "pyramid sales scheme," which is any sales or 8 marketing plan or operation whereby a person pays a 9 consideration of any kind, or makes an investment of any kind, 10 in excess of $100 and acquires the opportunity to receive a 11 benefit or thing of value which is not primarily contingent on 12 the volume or quantity of goods, services, or other property 13 sold in bona fide sales to consumers, and which is related to 14 the inducement of additional persons, by himself or herself or 15 others, regardless of number, to participate in the same sales 16 or marketing plan or operation, is hereby declared to be a 17 lottery, and whoever shall participate in any such lottery by 18 becoming a member of or affiliating with, any such group or 19 organization or who shall solicit any person for membership or 20 affiliation in any such group or organization commits a 21 misdemeanor of the first degree, punishable as provided in s. 22 775.082 or s. 775.083. For purposes of this subsection, the 23 term "consideration" and the term "investment" do not include 24 the purchase of goods or services furnished at cost for use in 25 making sales, but not for resale, or time and effort spent in 26 the pursuit of sales or recruiting activities. 27 Section 2. Section 849.09105, Florida Statutes, is 28 created to read: 29 849.09105 Pyramid promotional schemes prohibited; 30 penalties.-- 31 (1) For purposes of this section: 2 5:38 PM 04/07/05 s2648d-cm27-e0a
Florida Senate - 2005 COMMITTEE AMENDMENT Bill No. SB 2648 Barcode 681918 1 (a) "Appropriate inventory repurchase program" means a 2 program by which a plan or operation repurchases, upon request 3 and upon commercially reasonable terms, when the salesperson's 4 business relationship with the company ends, current and 5 marketable inventory in the possession of the salesperson that 6 was purchased by the salesperson for resale. Any such plan or 7 operation shall clearly describe the program in its recruiting 8 literature, sales manual, or contract with independent 9 salespersons, including the disclosure of any inventory that 10 is not eligible for repurchase under the program. 11 (b) "Commercially reasonable terms" means the 12 repurchase of current and marketable inventory within 12 13 months from the date of purchase at not less than 90 percent 14 of the original net cost, less appropriate set-offs and legal 15 claims, if any. 16 (c) "Compensation" means a payment of any money, thing 17 of value, or financial benefit conferred in return for 18 inducing another person to participate in a pyramid 19 promotional scheme. 20 (d) "Consideration" means the payment of cash or the 21 purchase of goods, services, or intangible property. The term 22 does not include the purchase of goods or services furnished 23 at cost to be used in making sales and not for resale or time 24 and effort spent in pursuit of sales or recruiting activities. 25 (e) "Current and marketable" excludes inventory that 26 is no longer within its commercially reasonable use or 27 shelf-life period; was clearly described to salespersons prior 28 to purchase as seasonal, discontinued, or special promotion 29 products not subject to the plan or operation's inventory 30 repurchase program; or has been used or opened. 31 (f) "Inventory" includes both goods and services, 3 5:38 PM 04/07/05 s2648d-cm27-e0a
Florida Senate - 2005 COMMITTEE AMENDMENT Bill No. SB 2648 Barcode 681918 1 including company-produced promotional materials, sales aids, 2 and sales kits that the plan or operation requires independent 3 salespersons to purchase. 4 (g) "Promote" means contrive, prepare, establish, 5 plan, operate, advertise, or otherwise induce or attempt to 6 induce another person to participate in a pyramid promotional 7 scheme, including a pyramid promotional scheme run through the 8 Internet, e-mail, or other electronic communications. 9 (h) "Pyramid promotional scheme" means any plan or 10 operation by which a person gives consideration for the 11 opportunity to receive compensation that is derived primarily 12 from the introduction of other persons into the plan or 13 operation rather than from the sale and consumption of goods, 14 services, or intangible property by a participant or other 15 persons introduced into the plan or operation. The term 16 includes any plan or operation under which the number of 17 persons who may participate is limited either expressly or by 18 the application of conditions affecting the eligibility of a 19 person to receive compensation under the plan or operation, or 20 any plan or operation under which a person, on giving 21 consideration, obtains any goods, services, or intangible 22 property in addition to the right to receive compensation. 23 (2) No person may establish, promote, operate, or 24 participate in any pyramid promotional scheme. A limitation as 25 to the number of persons who may participate in or the 26 presence of additional conditions affecting eligibility for 27 the opportunity to receive compensation under a plan does not 28 change the identity of the plan as a pyramid promotional 29 scheme. It is not a defense under this section that a person, 30 on giving consideration, obtains goods, services, or 31 intangible property in addition to the right to receive 4 5:38 PM 04/07/05 s2648d-cm27-e0a
Florida Senate - 2005 COMMITTEE AMENDMENT Bill No. SB 2648 Barcode 681918 1 compensation. 2 (3) Nothing in this section may be construed to 3 prohibit a plan or operation, or to define a plan or operation 4 as a pyramid promotional scheme, based on the fact that 5 participants in the plan or operation give consideration in 6 return for the right to receive compensation based upon 7 purchases of goods, services, or intangible property by 8 participants for personal use, consumption, or resale so long 9 as the plan or operation does not promote or induce inventory 10 loading and the plan or operation implements an appropriate 11 inventory repurchase program. 12 (4)(a) Any person who establishes, promotes, or 13 operates a pyramid promotional scheme commits a felony of the 14 third degree, punishable as provided in s. 775.082 or s. 15 775.083. 16 (b) Any person who knowingly participates in a pyramid 17 promotional scheme commits a misdemeanor of the first degree, 18 punishable as provided in s. 775.082 or s. 775.083. 19 Section 3. This act shall take effect October 1, 2005. 20 21 22 ================ T I T L E A M E N D M E N T =============== 23 And the title is amended as follows: 24 Delete everything before the enacting clause 25 26 and insert: 27 A bill to be entitled 28 An act relating to pyramid promotional schemes; 29 amending s. 849.091, F.S.; deleting a provision 30 declaring pyramid sales schemes to be a lottery 31 and providing a criminal penalty for 5 5:38 PM 04/07/05 s2648d-cm27-e0a
Florida Senate - 2005 COMMITTEE AMENDMENT Bill No. SB 2648 Barcode 681918 1 participating in such schemes; creating s. 2 849.09105, F.S.; providing definitions; 3 prohibiting establishing, promoting, operating, 4 or participating in pyramid promotional 5 schemes; providing limitations; providing 6 construction; providing criminal penalties; 7 providing an effective date. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 6 5:38 PM 04/07/05 s2648d-cm27-e0a