HB335 Summary

• Amends Alabama Code Sections 8-19-3 and 8-19-5 to add definitions and regulations for pyramid sales structures and inventory repurchase programs in deceptive trade practices law.

• Defines "bona fide inventory repurchase program" as an entity's obligation to repurchase current and marketable inventory from salespersons within 12 months of purchase at not less than 90 percent of original net cost on commercially reasonable terms.

• Excludes from pyramid sales prohibition any plan or operation that does not cause inventory loading and implements a bona fide inventory repurchase program meeting specific requirements including clear disclosure in recruiting materials and contracts.

• Requires entities to clearly describe inventory excluded from repurchase programs, including seasonal, discontinued, or special promotion products, and inventory beyond commercially reasonable shelf-life or that has been used or opened.

• Becomes effective on the first day of the third month following passage and gubernatorial approval.