Review of NL 5-6 Estate Owner Act

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Delia Lake
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Review of NL 5-6 Estate Owner Act

Post by Delia Lake »

As it currently stands, NL 5-6 does not comply with Linden Lab policies, their definitions of Estate Owner (EO), and contractual agreements with LL regarding sims. The terms of this law are also at variance with the current Second Life Terms of Service (ToS) particularly those regarding Virtual Land. Therefore the SC is undertaking a review of NL 5-6, and also NL 5-5 Treasurer Act in the areas where that law relates to NL 5-5. At the conclusion of this review, the SC will issue a report of its findings.

Since it is of import that the citizens of the CDS understand LL policies and contracts with EO's in making laws, regulations and guidelines for our community, and with the expectation that some among our community may wish to contribute to this discussion the SC is also opening a General Discussion thread on NL 5-6.

NL 5-6 Estate Owner Act
ESTATE OWNER
________________________________________

The Estate Owner (EO) is a function defined both by Linden Lab policies and by the system of governance of the sims comprising the CDS.

In the eyes of LL, that person (it must be a single RL person) "owns" the sim (meaning they have bought the right to authority over the sim) and must pay monthly tax on the sim. In addition, they are the sole holder of the right of "Reclaim", the ultimate authority exercizable in a private island sim.

In the eyes of the governance of a CDS sim, the EO receives the funds needed to satisfy the monthly fee to LL. In addition, the EO must duly execute actions within his/her sole ability to perform, resulting from decisions of the various authorized entities of the governing system. These shall be primarily any actions required to be performed on the "Estate" menu, and shall also include "Reclaim" parcels. Many of these roles can be delegated to various Estate Managers. Paying the monthly fee, and reclainming land, cannot be delegated.

To ensure the performance of these necessary functions, the following is proposed for the office of EO.

1). The EO shall be a citizen of a sim within the CDS and shall be appointed by a majority vote of the SC. An EO may serve for one sim or multiple sims.

2). The EO shall serve for life, or until they resign, or until they are removed for cause by a 2/3 vote of the SC.

3). The EO shall be replaced for any of these reasons only with a three month transition period to allow for transfer of sim ownership. The position may NEVER be vacant.

4). In the event of an unanticipated or unexplained absence of the Estate Owner, provision will be made for the sharing of sufficient personal information with a member of the SC so that the account can be accessed and sim ownership transferred on an emergency basis. Should this happen, LL shall be requested to perform an immediate transfer.

5). The EO shall receive funds each month to pay the monthly LL fee and to retain a balance of one month's monthly fee in reserve. The payment shall be made by the sim authority (the Treasurer) in a form and fashion specified by the EO, which may include conversion fees, Paypal charges and the LL transfer fee when required. Each month, the EO will report all receipts and disbursements, as well as the balance of their account with the sim, to the Treasurer. The EO is not considered to be an "account" of the sim; the sim does not own all funds contained within the EO's avatar. Rather, the EO functions as disbursement agent.

6). When circumstances require it, the EO will receive instructions from various of the duly constituted authorities of sim governance to perform necessary actions. In some cases, the EO will appoint Estate Managers, on the instruction of the appropriate authorities, to carry out these responsibilities. An example would be "Marshalls of the Peace" designated to ban as needed recalcitrant avatars. In other cases, such as "reclaiming" land, the EO themself will be called upon to perform this duty. All requests for such services will be logged by the EO, including the name of the requestor entity, and published monthly.

7). The EO will receive no compensation for the office. In addition, the EO will be prohibited from holding any elected or appointed office in the sim government, unless a waiver might be granted, on a case by case basis, by the SC. The only compensation provided will be the ceremonial title "Owner of the Sim".

________________________________________
passed 14 September 2006
amended 16 September 2006
http://portal.slcds.info/index.php?id=182

NL 5-5 Treasurer Act
TREASURER

The responsibility of the Treasurer is defined as follows:

The Treasurer shall oversee and be responsible for the receipt and disbursement of all money received by the City and for the investment of money received by the City.
It shall also be the responsibility of the Treasurer to assure that the fiscal integrity of the City is protected and that all funds are accounted for, whether revenues from taxes, rental charges, user charges, fees, grants, gifts, or any other source and that expenditures comply with applicable Linden Labs TOS's, City TOS's, City Constitution and Laws, City Policies, Administrative Policies and Procedures, court orders and any other mandates affecting expenditures of funds and the management of the City.
In addition, the Treasurer is responsible for establishing controls which will prevent any expenditure of funds which does not meet the requirement of this policy. Violations or attempted violations of this policy are to be reported to the AC, RA and SC(or their successors) immediately upon detection.
The Treasurer shall be responsible for establishing and maintaining internal control procedures that include but are not limited to:
Proper authorization of transactions and activities.
Adequate documents and records.
Adequate safeguards over access and use of assets and records.
In order that the City present fairly and with full disclosure its financial position and results of operations, the Treasurer is responsible for establishing and maintaining an effective accounting system that will result in the:
Identification and recording of all valid transactions. Description on a timely basis of the type of transaction in sufficient detail to permit proper classification of the transaction for financial reporting. Measurement of the transaction's value in a manner that permits recording of its monetary value in the financial statements. Determination of the time period in which the transaction occurred to permit recording of the transaction in the proper accounting period. Proper presentation of the transaction and related disclosures in the financial statements.

Policy Regarding the Treasurer

The RL person, in the form of their principal avatar, must be a citizen of Neufreistadt, as defined by the founding documents.
The RL person must establish an alternate avatar; that is, one different from their primary SL persona avatar. This alt avatar shall be technically a bank account of the governing entity". All funds of this "Treasurer avatar" are and shall remain the property of Neufreistadt, until the termination of the Treasurer's term in office, at which time they will be transferred to a newly appointed "Treasurer avatar".
Likewise, should the governing entity decide to continue accepting US$ payments, the RL person must establish a Paypal Business account with the buisness name corresponding to the governmental entity which the Treasurer serves. This account, too, shall be technically a bank account of the governing entity. All funds of this Paypal account are and shall remain the property of Neufreistadt, until the termination of the Treasurer's term in office, at which time they will be transferred to a newly appointed Paypal account.
The Treasurer must disclose their RL contact information in confidence to another Citizen of their own chosing in case the untoward should happen to the Treasurer. In this eventuality, access to the Treasurer' alt account and access to the Paypal account would be necessary.
The position of Treasurer shall be understood as a "civil service" type position. The citizen holding this role will not occupy any other elected or administrative position in the governed entity which he/she serves, unless a waiver might be granted, on a case by case basis, by the SC. She/he shall be appointed by the Chancellor, with the advice and consent of the RA, and shall jold their position until they may resign or removed for cause. Any such planned transition shall be of a duration of no fewer than 60 days to allow for reestablishment of accounts and the transfer of funds.

Duties of the Treasurer

1) To pay to the Estate Owner, in a timely fashion, funds sufficient to cover the sim's monthly obligation to LL, along with associated costs which may in incurred.
2) To handle real estate transactions under the direction of the appropriate government bodies of Neufreistadt; e.g., to receive applications from new members and existing citizens for the purchase or transfer of sim(s) land; to prepare necessary the deeds, to guide applicants through the process to ensure transactions are properly executed, and to keep accurate public records regarding the sim(s); the land, the parcels, the ownership configuration, and the obligations of each citizen regarding their monthly fee.
3) To handle the financial transactions under the direction of the appropriate government bodies of Neufreistadt; e.g., to collect revenues, disburse expenses, transfer and exchange currency, and to maintain the necessary in-world and RL accounts needed to administer City funds in both L$ and US$.
4) To maintain a financial system in a manner consistent with RL standard accounting practices, using standard double-entry bookkeeping principles.
5) To maintain an open reporting and record systems which provides the Citizens of Neufreistadt information regarding the financial status of the city and land ownership data. However, RL information regarding Citizens, e.g., contact information, paypal account information, etc., shall be kept private.
6) To cooperate with the bodies of government as established by the citizens of Neufreistadt in carrying out the duties and responsibilities of the office and to work with any special Committees established by such bodies to develop and implement suitable oversight systems.
7) To provide other duties as assigned.
________________________________________
passed 14 September 2006
http://portal.slcds.info/index.php?id=181

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Danton Sideways
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Re: Review of NL 5-6 Estate Owner Act

Post by Danton Sideways »

The pressure to reply to this question has fallen due to the recent vote by the SC to grant temporary waivers to both Rose Springvale and Sudane Erato / Rudeen Edo.

Delia states that NL 5-6, the Estate Owner Act, is out of date with respect to LL policies, but without explaining in what sense. Apparently NL 5-6 fails to take account of the LL policy for associations, where the estate owner must be a RL non-profit, rather than a SL avatar. But in the present case, the avatar Rose Springvale acts effectively as Estate Owner, on behalf of the non-profit, so there seems to be less of a problem than Delia is making out. Or is there more to the story?

These two laws definitely come down to us from the distant past (more than four years ago!), since they still refer to Neufriestadt and "the sim," rather than to CDS. So there is a good chance that they do need revision. And they are a bit confusing. According to the numbering, NL 5-5 comes first, which seems to imply that the function of Treasurer was defined in detail first. The law says that the treasurer must be an alt, separate from the person's principal avatar, who must be a citizen. The Treasurer collects payments from citizens, and transfers funds to the EO, who pays LL. According to the portal (http://portal.slcds.info/index.php?id=224) the Treasurer is Sudane Erato. Does that mean that Sudane is the alt, and that the citizen is Rudeen? I had the impression that it was the other way round: that Sudane was the citizen, and Rudeen the alt. Be that as it may, it does seem that these two positions were meant to be separate, and a waiver is clearly required if they are to be held by the same rl person.

As concerns Rose, I mentioned at the last SC that Patroklus Murakami expressed to me his conviction that there is a conflict of interest between the role of Estate Owner and that of RA member (let alone that of LRA). He would prefer that Rose abstain from participating in RA discussions involving her EO role, and notably involving the non-profit. I find Pat's argument to be reasonable, but in the present state of things, since SC has approved a temporary waiver, Rose herself would have to take the initiative to voluntarily abstain. I would encourage her to do so.

If we are to examine conflicts of interest, there are many within CDS, as Jamie Palisades suggested at the last SC meeting. Notably, it seems to me that there is a potential conflict of interest between the roles of EO and Treasurer, or at the least that their separation would provide more checks-and-balances and hence greater long-term security. So I would suggest modifying these two pieces of legislation to remove any possibilities of waivers.

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