By: Hinojosa S.B. No. 1835
(In the Senate - Filed March 8, 2023; March 20, 2023, read
first time and referred to Committee on Business & Commerce;
April 5, 2023, reported favorably by the following vote: Yeas 11,
Nays 0; April 5, 2023, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to certain contract and notice requirements for the
cancellation of a health spa membership.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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 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 PROVIDING NOTICE
[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 AFTER MIDNIGHT OF THE THIRD BUSINESS DAY AFTER
THE DAY YOU SIGN THIS CONTRACT YOU DECIDE YOU DO NOT WISH TO REMAIN A
MEMBER OF THIS HEALTH SPA, YOU MAY CANCEL THIS CONTRACT BY PROVIDING
30 DAYS' NOTICE TO THE HEALTH SPA."
(4) [(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 PROVIDING [MAILING BY
CERTIFIED MAIL A WRITTEN] NOTICE STATING YOUR DESIRE TO CANCEL THIS
CONTRACT, ACCOMPANIED BY PROOF OF PAYMENT ON THE CONTRACT TO THE
HEALTH SPA [AT THE FOLLOWING ADDRESS:
[(Address of the health spa home office)]; AND
(B) 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 PROVIDE A COPY OF YOUR CONTRACT TOGETHER WITH
PROOF OF PAYMENTS MADE ON THE CONTRACT TO THE TEXAS SECRETARY OF
STATE. THE REQUIRED CLAIM INFORMATION MUST BE RECEIVED BY THE
SECRETARY OF STATE NOT LATER THAN THE 90TH DAY AFTER THE DATE NOTICE
OF THE CLOSURE OR RELOCATION IS FIRST POSTED ON THE SECRETARY OF
STATE'S INTERNET WEBSITE."
(5) "IF YOU MOVE YOUR RESIDENCE MORE THAN 25 MILES FROM
A HEALTH SPA OPERATED BY (insert: the name of the health spa
registration holder), YOU MAY CANCEL THIS CONTRACT BY PROVIDING
NOTICE TO THE HEALTH SPA STATING YOUR DESIRE TO CANCEL THIS
CONTRACT."
(6) "IF ON A DOCTOR'S ORDER, YOU CANNOT PHYSICALLY
RECEIVE THE SERVICES PROVIDED BY THE HEALTH SPA FOR A PERIOD OF MORE
THAN THREE MONTHS BECAUSE OF A SIGNIFICANT PHYSICAL DISABILITY, YOU
MAY CANCEL THIS CONTRACT BY PROVIDING NOTICE TO THE HEALTH SPA."
(7) [(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 PROVIDING [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)(4)(B) [(a)(3)(B)] in a contract only
if the operator is required to post security with the secretary of
state under Subchapter D.
(c) A health spa operator shall include a statement in a
contract that any notice provided by a member to cancel a contract
may be given to a health spa:
(1) in person, by e-mail, by certified mail, or by
telephone; and
(2) for a contract entered into through an Internet
website, through an Internet website.
SECTION 2. Section 702.307, Occupations Code, is amended to
read as follows:
Sec. 702.307. CANCELLATION OF CONTRACT FOR FULL REFUND.
(a) A member may cancel a contract and receive a full refund of the
payments made under the contract by providing to the certificate
holder for the health spa [sending], not later than midnight of the
third business day after the contract date, [written] notice of
cancellation, accompanied by proof of payment made under the
contract[, by certified mail to the certificate holder's home
office].
(b) A certificate holder who receives notice under
Subsection (a) shall refund the payments made under the contract
not later than 48 hours [the 30th day] after the date notice is
received.
SECTION 3. Section 702.308, Occupations Code, is amended by
amending Subsections (a), (b), and (c) and adding Subsections (a-1)
and (a-2) to read as follows:
(a) A member may cancel a contract and receive a refund of
unearned payments made under the contract by providing to the
certificate holder for the health spa 30 days' notice accompanied
by proof of payment made under the contract.
(a-1) A member may cancel a contract and receive a refund of
unearned payments made under the contract by providing [sending
written] notice of cancellation, accompanied by proof of payment
made under the contract, [by certified mail] to the certificate
holder for the health spa [holder's home office] if the certificate
holder:
(1) closes the health spa and fails to provide
alternative facilities not more than 10 miles from the location of
the health spa;
(2) relocates the health spa more than 10 miles from
its location preceding the relocation; or
(3) fails to provide advertised services.
(a-2) A member may cancel a contract and receive a refund of
unearned payments made under the contract by providing notice of
cancellation, accompanied by proof of payment made under the
contract to the certificate holder for the health spa, if the
member:
(1) moves the member's residence more than 25 miles
from any health spa operated by the seller; or
(2) on a doctor's order, cannot physically receive the
services provided by the health spa for more than three months
because of a significant physical disability.
(b) A member who dies or becomes totally and permanently
disabled after the date a contract is entered into, or the member's
estate, may cancel the contract and receive a refund of the unearned
payments made under the contract by providing to the certificate
holder for the health spa [sending written] notice of cancellation
[by certified mail to the certificate holder's home office]. The
certificate holder may require the member, or the member's estate,
to provide reasonable proof of the member's death or disability.
(c) A certificate holder who receives notice under
Subsection (a), (a-1), (a-2), or (b) shall refund the unearned
payments made under the contract to the member, or the member's
estate, as appropriate, not later than 48 hours [that the 30th day]
after the date notice is received.
SECTION 4. This Act takes effect September 1, 2023.
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