05 LC 19
6434
Senate
Bill 141
By: Senator Balfour of the 9th
By: Senator Balfour of the 9th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Article 2 of Chapter 12 of Title 16 of the Official Code of Georgia
Annotated, relating to gambling and related offenses, so as to prohibit pyramid
promotional schemes; to provide definitions; to provide for penalties and
procedures; to provide for other related matters; to repeal conflicting laws;
and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Article
2 of Chapter 12 of Title 16 of the Official Code of Georgia Annotated, relating
to gambling and related offenses, is amended by striking in its entirety Code
Section 16_12_38, relating to chain letter clubs, pyramid clubs, and like groups
as lotteries, and inserting in lieu thereof the following:
"16_12_38.
The
organization of any chain letter club, pyramid club, or other group organized or
brought together under any plan or device whereby fees or dues or anything of
material value to be paid or given by members thereof are to be paid or given to
any other member thereof, which plan or device includes any provision for the
increase in such membership through a chain process of new members securing
other new members and thereby advancing themselves in the group to a position
where such members in turn receive fees, dues, or things of material value from
other members, is declared to be a lottery; and whoever shall participate in any
such lottery by becoming a member of, or affiliating with, any such group or
organization or whoever shall solicit any person for membership or affiliation
in any such group or organization shall be guilty of a misdemeanor of a high and
aggravated nature; provided, however, that this Code section shall not include a
'multilevel distribution company,' as defined in paragraph (6) of Code Section
10_1_410, which is operating in compliance with Part 3 of Article 15 of Chapter
1 of Title 10.
(a)
As used in this Code section, the term:
(1)
'Compensation' means a payment of any money, thing of value, or financial
benefit.
(2)
'Consideration' means the payment of cash or the purchase of goods, services, or
intangible property, and 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.
(3)
'Inventory' includes both goods and services, including company produced
promotional materials, sales aids, and sales kits that the plan or operation
requires independent salespersons to purchase.
(4)
'Inventory loading' means that the plan or operation requires or encourages its
independent salespersons to purchase inventory in an amount which unreasonably
exceeds that which the salesperson can expect to resell for ultimate consumption
or to use or consume in a reasonable time period.
(5)
'Participant' means a person who joins a plan or operation.
(6)
'Person' means an individual, a corporation, a partnership, or any association
or unincorporated organization.
(7)
'Promote' means to contrive, prepare, establish, plan, operate, advertise, or to
otherwise induce or attempt to induce another person to be a
participant.
(8)
'Pyramid promotional scheme' means any plan or operation in which a participant
gives consideration for the right to receive compensation that is derived
primarily from the recruitment of other persons as participants into the plan or
operation rather than from the sale of goods, services, or intangible property
to participants or by participants to others.
(b)(1)
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
subsection that a person, on giving consideration, obtains goods, services, or
intangible property in addition to the right to receive
compensation.
(2)
Nothing in this Code section 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
complies with the cancellation requirements of subsection (d) of Code Section
10_1_415.
(3)
Any person who participates in a pyramid promotional scheme shall be guilty of a
misdemeanor of a high and aggravated nature. Any person who establishes,
promotes, or operates a pyramid promotional scheme shall be guilty of a felony
and, upon conviction thereof, shall be punished by imprisonment for not less
than one nor more than five years.
(4)
Nothing in this Code section shall be construed so as to include a 'multilevel
distribution company,' as defined in paragraph (6) of Code Section 10_1_410,
which is operating in compliance with Part 3 of Article 15 of Chapter 1 of
Title10."
SECTION
2.
All
laws and parts of laws in conflict with this Act are repealed.