SENATE BILL REPORT

SB 6201

BYSenators Lee and Rasmussen; by request of Attorney General

Changing regulation of health studio services.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):January 18, 1990; January 24, 1990

Majority Report:  Do pass.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McDonald, McMullen, Matson, Murray, Smitherman, West, Williams.

Senate Staff:Jonathan Seib (786-7427)

                  February 7, 1990

AS PASSED SENATE, FEBRUARY 6, 1990

BACKGROUND:

The Health Studio Services Act regulates the sale and operation of health studio services in the state.  The act defines "health studio" generally to mean a facility "which purports to assist patrons to improve their physical condition or appearance through physical exercise, body building, weight loss, figure development or any similar activity."  There has been some confusion about whether this language includes martial arts facilities.

In certain situations, buyers of health studio services are entitled to a pro rata refund of initiation or membership fees.  The refund amount is computed by "dividing the contract price by the number of weeks in the contract term and multiplying the result by the number of weeks remaining in the contract term."  In some cases, however, the contract term is not stated.

The act was intended to allow health studios to make one year contracts which were not cancellable by the buyer except in cases of death or disability.  There is a potential in existing language for the law to be applied unequally in this regard depending on the payment structure used by any given studio. 

SUMMARY:

Martial arts facilities are explicitly included in the definition of "health studio" and will be subject to regulation under the Health Studio Services Act.

For purposes of computing pro rata refunds, a term of 36 months will be used unless another term is stated in the contract.

Language is added clarifying the cancellation and refund provisions for contracts of one year or less, and requiring explicit warning to the buyer regarding fees which are not refundable.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: Michael Grant, Donna Fisher, Attorney General's office