79R10512 YDB-D
By: Solomons, Jackson H.B. No. 135
Substitute the following for H.B. No. 135:
By: Laubenberg C.S.H.B. No. 135
A BILL TO BE ENTITLED
AN ACT
relating to regulation of health spas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 702, Occupations Code, is
amended by adding Section 702.107 to read as follows:
Sec. 702.107. SALES TAX PERMIT; PROOF OF REGISTRATION
REQUIRED. (a) A health spa operator shall submit to the comptroller
a copy of the operator's certificate of registration at the time the
operator applies for a sales tax permit.
(b) The comptroller may not issue a sales tax permit to a
health spa operator who fails to comply with this section. The
secretary of state shall assist the comptroller in determining
whether a business is a health spa under this chapter.
SECTION 2. Section 702.151, Occupations Code, is amended to
read as follows:
Sec. 702.151. SECURITY REQUIRED. (a) Except as provided by
Subchapter E, the secretary of state may not issue a health spa
operator's certificate of registration to an applicant unless the
applicant files a surety bond, or posts other security as
prescribed by the secretary, in the amount prescribed by the
secretary under Subsection (b) [of $20,000].
(b) The secretary of state shall prescribe the amount of
security required for an applicant in the amount determined
sufficient by the secretary to protect the health spa's total
membership. The amount may not be less than $20,000 or more than
$50,000.
SECTION 3. Subchapter D, Chapter 702, Occupations Code, is
amended by adding Section 702.158 to read as follows:
Sec. 702.158. REVIEW OF SECURITY AMOUNT. (a) At least once
every three years, the secretary of state shall review the amount of
security a health spa operator is required to post under Section
702.151 to determine whether the amount is sufficient to protect
the health spa's total membership. The secretary may increase the
amount required if the secretary determines that the increase is
necessary to protect that membership but may not increase the
amount above the maximum amount allowed under Section 702.151(b).
(b) The secretary of state may adopt procedures necessary to
implement this section, including:
(1) establishing a schedule to review the amount of
security posted by each health spa operator; and
(2) requiring each health spa operator to submit
periodically a written statement of the health spa's total
membership.
SECTION 4. Section 702.202, Occupations Code, is amended to
read as follows:
Sec. 702.202. QUALIFICATIONS FOR EXEMPTION. A certificate
holder may apply for an exemption under Section 702.201 if:
(1) the certificate holder does not require, or
solicit or offer a plan or program that requires, a health spa
consumer to:
(A) execute a membership contract for a term that
exceeds 31 days;
(B) execute a note or retail installment
contract;
(C) authorize a draw or other recurring debit on
a financial institution in favor of the certificate holder or the
certificate holder's assignee;
(D) pay an initiation fee or other fee, not
including monthly dues; or
(E) prepay for a term that exceeds 31 days; or
(2) the certificate holder submits a sworn statement
every three years with the secretary of state stating that the
certificate holder:
(A) has assets based on net book value that
exceed $50,000 per registered location [continuously owned and
operated a health spa in this state for not less than five years at
the same location]; [and]
(B) has operated under substantially the same
ownership or management for at least five years; and
(C) has not been the subject of a complaint
relating to the closing of a health spa owned by the certificate
holder or the failure of a health spa owned by the certificate
holder to open that has been initiated or filed by a member of the
health spa with a governmental authority in this state.
SECTION 5. Section 702.301(a), Occupations Code, is amended
to read as follows:
(a) A contract:
(1) must be:
(A) in writing; and
(B) signed by the purchaser; [and]
(2) must state the proposed opening date of the health
spa that is the subject of the contract, if the health spa is not
open on the contract date; and
(3) must include the health spa operator's certificate
of registration number.
SECTION 6. Section 702.304, Occupations Code, is amended to
read as follows:
Sec. 702.304. CANCELLATION AND REFUND NOTICE. (a) Except
as provided by Subsection (b), a [A] contract must state in at
least 10-point type that is boldfaced, capitalized, underlined, or
otherwise conspicuously distinguished from surrounding written
material:
(1) "NOTICE TO PURCHASER: DO NOT SIGN THIS CONTRACT
UNTIL YOU READ IT OR IF IT CONTAINS BLANK SPACES."
(2) "IF YOU DECIDE YOU DO NOT WISH TO REMAIN A MEMBER
OF THIS HEALTH SPA, YOU MAY CANCEL THIS CONTRACT BY MAILING TO THE
HEALTH SPA BY MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DAY YOU
SIGN THIS CONTRACT A NOTICE STATING YOUR DESIRE TO CANCEL THIS
CONTRACT. THE WRITTEN NOTICE MUST BE MAILED BY CERTIFIED MAIL TO THE
FOLLOWING ADDRESS:
(Address of the health spa home office)."
(3) "IF THE HEALTH SPA GOES OUT OF BUSINESS AND DOES
NOT PROVIDE FACILITIES WITHIN 10 MILES OF THE FACILITY IN WHICH YOU
ARE ENROLLED OR IF THE HEALTH SPA MOVES MORE THAN 10 MILES FROM THE
FACILITY IN WHICH YOU ARE ENROLLED, YOU MAY:
(A) CANCEL THIS CONTRACT BY MAILING BY CERTIFIED
MAIL A WRITTEN NOTICE [TO THE HEALTH SPA] STATING YOUR DESIRE TO
CANCEL THIS CONTRACT, ACCOMPANIED BY PROOF OF PAYMENT ON THE
CONTRACT[. THE WRITTEN NOTICE MUST BE MAILED BY CERTIFIED MAIL] TO
THE HEALTH SPA AT THE FOLLOWING ADDRESS:
(Address of the health spa home office); AND [."]
(B) ["YOU MAY ALSO BE ENTITLED TO] FILE A CLAIM
FOR A REFUND OF YOUR UNUSED MEMBERSHIP FEES AGAINST THE BOND OR
OTHER SECURITY POSTED BY THE HEALTH SPA WITH THE TEXAS SECRETARY OF
STATE. TO MAKE A CLAIM AGAINST THE SECURITY SEND A COPY OF YOUR
CONTRACT TOGETHER WITH PROOF OF PAYMENTS MADE ON THE CONTRACT TO THE
TEXAS SECRETARY OF STATE. THE WRITTEN NOTICE MUST BE MAILED BY
CERTIFIED MAIL TO THE FOLLOWING ADDRESS:
OFFICE OF THE SECRETARY OF STATE
STATUTORY DOCUMENTS SECTION
P.O. BOX 12887
AUSTIN, TEXAS 78711-2887."
(4) "IF YOU DIE OR BECOME TOTALLY AND PERMANENTLY
DISABLED AFTER THE DATE THIS CONTRACT TAKES EFFECT, YOU OR YOUR
ESTATE MAY CANCEL THIS CONTRACT AND RECEIVE A PARTIAL REFUND OF YOUR
UNUSED MEMBERSHIP FEE BY MAILING A NOTICE TO THE HEALTH SPA STATING
YOUR DESIRE TO CANCEL THIS CONTRACT. THE HEALTH SPA MAY REQUIRE
PROOF OF DISABILITY OR DEATH. THE WRITTEN NOTICE MUST BE MAILED BY
CERTIFIED MAIL TO THE FOLLOWING ADDRESS:
(Address of the health spa home office)."
(b) A health spa operator is required to include the
statement under Subsection (a)(3)(B) in a contract only if the
operator is required to post security with the secretary of state
under Subchapter D.
SECTION 7. Subchapter I, Chapter 702, Occupations Code, is
amended by adding Section 702.404 to read as follows:
Sec. 702.404. INFORMATION REQUIRED IN ADVERTISEMENT. (a)
A health spa operator may not advertise in any print or electronic
medium unless the advertisement includes the health spa operator's
certificate of registration number or an identification number
issued as provided by Subsection (b).
(b) The secretary of state shall adopt procedures for the
issuance of an identification number which may be used in
advertisements for purposes of Subsection (a) by health spas with
more than one location in this state.
SECTION 8. The heading to Section 702.452, Occupations
Code, is amended to read as follows:
Sec. 702.452. NOTICE REQUIREMENT BEFORE [OF CLOSED] HEALTH
SPA CLOSING.
SECTION 9. Section 702.452, Occupations Code, is amended by
amending Subsections (a) and (b) and adding Subsection (f) to read
as follows:
(a) At least 30 days before [Not later than the third day
after] the date a health spa is scheduled to close or relocate
[closed], the certificate holder shall contemporaneously:
(1) post, inside and outside each entrance to [at] the
health spa [location], a notice stating:
(A) the date [that] the health spa is scheduled
to close or relocate [closed];
(B) that a member of the health spa may, not later
than the 90th day after the date the health spa closes or relocates
[notice is first posted], file with the secretary of state a claim
to recover actual financial loss suffered by the member as a result
of the health spa closing; and
(C) the procedures for perfecting a security
claim; and
(2) notify the secretary of state in writing of the
health spa closing or relocation and the date that the notice was
first posted.
(b) The notice posted under Subsection (a)(1) must be:
(1) at least 8-1/2 by 11 inches in size; and
(2) [posted in a place that is readily accessible to
the general public during the former operating hours of the health
spa; and
[(3)] posted continuously for at least 30 [14] days.
(f) The notice required under Subsection (a) is not required
in the case of a fire, flood, or act of God that is not within the
reasonable control of a health spa.
SECTION 10. Sections 702.203 and 702.204, Occupations Code,
are repealed.
SECTION 11. Not later than January 1, 2006, the comptroller
of public accounts shall provide the secretary of state with the
name and address of each person that holds a sales tax permit issued
before September 1, 2005, and provides services that may require
the person to hold a health spa operator's certificate of
registration under Chapter 702, Occupations Code.
SECTION 12. This Act takes effect September 1, 2005.