SB224 Summary

• Amends Alabama Code Sections 8-19-3 and 8-19-5 to add definitions and prohibitions related to pyramid sales structures and inventory repurchase programs.

• Defines "bona fide inventory repurchase program" as requiring entities to repurchase current and marketable inventory within 12 months at not less than 90 percent of original net cost when a salesperson's business relationship terminates.

• Excludes from pyramid sales structure prohibition any plan that does not cause inventory loading and implements a bona fide inventory repurchase program meeting specified requirements.

• Requires recruiting literature, sales manuals, and contracts to clearly describe the inventory repurchase program and disclose any inventory not eligible for repurchase.

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