___________________ moved that HB 1183 be amended as follows:
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Section 1. For the purposes of this Act, the term, promote, means contrive, prepare, establish,
plan, operate, advertise, or otherwise induce or attempt to induce another person to participate in a
pyramid promotional scheme.
Section 2. For the purposes of this Act, the term, appropriate inventory repurchase program,
means a program by which a plan or operation repurchases, upon request and upon commercially
reasonable terms, when the salesperson's business relationship with the company ends, current and
marketable inventory in the possession of the salesperson that was purchased by the salesperson for
resale. Any such plan or operation shall clearly describe the program in its recruiting literature, sales
manual, or contract with independent salespersons, including the disclosure of any inventory which
is not eligible for repurchase under the program.
Section 3. For the purposes of this Act, the term, pyramid promotional scheme, means any plan
or operation by which a person gives consideration for the opportunity to receive compensation that
is derived primarily from the introduction of other persons into the plan or operation rather than from
the sale and consumption of goods, services, or intangible property by a participant or other persons
introduced into the plan or operation. The term includes any plan or operation under which the
number of persons who may participate is limited either expressly or by the application of conditions
affecting the eligibility of a person to receive compensation under the plan or operation, or any plan
or operation under which a person, on giving any consideration, obtains any goods, services, or
intangible property in addition to the right to receive compensation.
Section 4. For the purposes of this Act, the term, compensation, means a payment of any money, thing of value, or financial benefit conferred in return for inducing another person to participate in
a pyramid promotional scheme.
Section 5. For the purposes of this Act, the term, consideration, means the payment of cash or
the purchase of goods, services, or intangible property. The term does not include the purchase of
goods or services furnished at cost to be used in making sales and not for resale, or time and effort
spent in pursuit of sales or recruiting activities.
Section 6. For the purposes of this Act, the term, inventory loading, means that the plan or
operation requires or encourages its independent salespersons to purchase inventory in an amount,
which exceeds that which the salesperson can expect to resell for ultimate consumption or to consume
in a reasonable time period, or both.
Section 7. No person may establish, promote, operate, or participate in any pyramid promotional
scheme. A limitation as to the number of persons who may participate or the presence of additional
conditions affecting eligibility for the opportunity to receive compensation under the plan does not
change the identity of the plan as a pyramid promotional scheme. It is not a defense under this section
that a person, on giving consideration, obtains goods, services, or intangible property in addition to
the right to receive compensation.
Section 8. Nothing in this Act limits, precludes, preempts, or prohibits any prosecuting or
enforcement entity from proceeding against any scheme or plan, or person involved with such scheme
or plan, involving the disposal or distribution of merchandise as defined by subdivision 37-24-1(7)
for any other violation of state law.
Section 9. If it appears to the prosecuting or enforcement entity that any person has engaged or
is about to engage in any act or practice constituting a violation of any provision of this Act, or any
rule or order under this Act, the prosecuting or enforcement entity may do one or more of the
following:
general fund.
Section 10. In any civil or administrative proceeding brought pursuant to this Act, the burden of
showing compliance with the provisions of this Act lies with the plan, scheme, or person involved
with such plan or scheme, and shall be shown by clear and convincing evidence.
Section 11. Nothing in this Act may be construed to prohibit a plan or operation, or to define a
plan or operation as a pyramid promotional scheme, based on the fact that participants in the plan or
operation give consideration in return for the right to receive compensation based upon purchases
of goods, services, or intangible property by participants for personal use, consumption, or resale so
long as the plan or operation does not promote or induce inventory loading and the plan or operation
implements an appropriate inventory repurchase program."