HB 1416 -- Regulation of Business Opportunities

Co-Sponsors:  Green, Rizzo

This bill regulates business opportunities.  In its main
provisions, the bill:

(1)  Defines "business opportunity" as the sale or lease of
products, equipment, supplies, or services for which more than
$100 has been paid for the start-up of a business, and in which
written guarantees or other conditions are represented by the
seller;

(2)  Requires the seller to provide to the purchaser at least 3
days before a contract is signed or at least 3 days before
payment for the business opportunity is made by the purchaser,
whichever occurs first, a written disclosure statement with a
cover sheet and index.  The bill outlines the specific
information which must be contained in the disclosure
statement.  Certain disclosures required by the Federal Trade
Commission may be substituted for the disclosure statement
required by this bill;

(3)  Requires sellers to file with the Secretary of State's
office a copy of the disclosure statement before advertising or
offering the business opportunity, and to update this filing at
least annually.  An annual fee of $300 must be remitted with the
filing.  Any material changes to the information filed before
the annual update requires notification to the Secretary of
State's office and a fee of $50.  All fees required by this bill
will be deposited in the newly created "Business Opportunities
Regulation Fund."  Moneys in the fund do not transfer to the
General Revenue Fund unless the balance exceeds twice the amount
appropriated in the prior fiscal year for administration of this
program;

(4)  Requires sellers who make written guarantees to purchasers
to either obtain a surety bond or establish a trust account or
guaranteed letter of credit for at least $50,000.  Actions
against the bond, trust account, or guaranteed letter of credit
are authorized if violations of the provisions of this bill
occur;

(5)  Provides that sellers who do not file the required
information with and pay the required fees to the Secretary of
State's office are guilty of a class A misdemeanor;

(6)  Prohibits sellers from engaging in certain activities,
including making certain misrepresentations and false claims; and

(7)  Sets the penalty for anyone who willfully violates any of
the bill's provisions as a fine of up to $100,000 or
imprisonment for up to 10 years, or both.