HBA-TBM S.B. 1318 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1318 By: Staples Business & Industry 4/20/2001 Engrossed 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. Senate Bill 1318 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 Senate Bill 1318 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. S.B. 1318 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.