HBA-MPM H.B. 3332 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3332
By: Woolley
Business & Industry
3/29/2001
Introduced



BACKGROUND AND PURPOSE 

The Health Spa Act establishes procedures for registering a health spa with
the secretary of state (secretary).  Unless exempted, a person must obtain
a certificate of registration and file a security deposit with the
secretary for the benefit of members of the spa who have unused prepaid
membership fees in the event that the spa ceases operation.  Current law
provides that when a spa closes, the secretary is required to publish a
notice in a newspaper of general circulation in the county where the spa is
located or the county nearest to the spa, and authorizes the secretary to
claim reasonable expenses not to exceed $3,000 for the publication.  The
intent of the notice is to provide the members with prepaid membership fees
to the closed spa a method of refund for the unused portion of their
membership fees.  However, these procedures are unnecessary when a spa
closes and all members have had unused membership fees reimbursed.  Posting
a notice at the spa location and on the secretary's Internet site may be
more efficient and cost effective. House Bill 3332 removes the requirement
that the notice of closing be posted in a newspaper and provides that the
notice be posted at the spa location and on the secretary's website. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 3332 amends the Occupations Code to modify the requirements
regarding the closing of a health spa (spa).  The bill requires a
certificate holder no later than the third day after the spa is closed to
contemporaneously post a notice at the spa stating that the spa is closed
and provide procedural information in the notice for spa members to file a
claim to recover financial loss with the secretary of state (secretary) and
procedures for perfecting a security claim.  The bill sets forth the size
and location of the notice posted at the spa location and requires it to be
continuously posted for at least 14 days.  The certificate holder is
required to notify the secretary of the spa's closing and the date the
notice was posted. The bill requires the secretary to post on the
secretary's Internet website a notice that the spa is closed and requires
this notice to be continuously posted for at least 30 days.  If the
certificate holder fails to post the notice, the secretary is required to
post the notice at the spa location within 30 days after the secretary
discovers that the spa has closed.  The bill requires the secretary to
notify the appropriate surety company or obligor of the administrative
proceedings under the provisions of this bill no later than 10 days after
the secretary discovers the spa's closure. 

H.B. 3332 repeals existing law authorizing the secretary to claim
reasonable expenses incurred in publishing a notice regarding a spa's
closure against the security filed or posted by the certificate holder.  

EFFECTIVE DATE

September 1, 2001.