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COMMITTEE REPORT
April 16, 2008
S. 1059
S. Printed 4/16/08--S.
Read the first time January 31, 2008.
To whom was referred a Bill (S. 1059) to amend Section 44-79-40, Code of Laws of South Carolina, 1976, relating to prohibited contractual provisions in contracts for physical fitness services, so as to, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, page 2, by striking lines 26-41 and inserting:
/ (3) provide for a renewal option, for a duration longer than one month but not more than twelve months, which to be enforceable must be exercised by the buyer in writing, or by payment by the buyer of part or all of the renewal price. Any A renewal option for a duration longer than one month may be exercised only near the expiration of any previous contract and for only not more than twelve months.
(4) provide for an automatic renewal option, for a duration of no longer than one month, which to be enforceable must be disclosed in bold type of at least ten-point font on the front page of the contract and must be initialed by the customer. The customer will be given the ability to opt in to the automatic renewal provision at the time the initial contract is executed by initialing an opt in provision. Near the expiration of the initial contract, the facility shall make a good faith effort to notify the customer of the automatic renewal option which the customer selected at the time the initial contract was executed. Price may not increase or decrease in an automatically renewed contract without written notice to the customer of at last thirty, but not more than sixty days prior to the effective date of the change in price.
(5) specify that cancellation of a contract voids automatic renewal provisions. /
Renumber sections to conform.
Amend title to conform.
HARVEY S. PEELER, JR. for Committee.
EXPLANATION OF IMPACT:
The Department of Consumer Affairs indicates that this bill would have no impact on the General Fund of the State or on federal and/or other funds.
Approved By:
Harry Bell
Office of State Budget
TO AMEND SECTION 44-79-40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PROHIBITED CONTRACTUAL PROVISIONS IN CONTRACTS FOR PHYSICAL FITNESS SERVICES, SO AS TO MAKE TECHNICAL LANGUAGE AND REFERENCE CHANGES; AND TO AMEND SECTION 44-79-60, RELATING TO PERMISSIBLE CONTRACTUAL PROVISIONS IN CONTRACTS FOR PHYSICAL FITNESS SERVICES, SO AS TO PROVIDE FOR AUTOMATIC RENEWAL OPTIONS FOR PHYSICAL FITNESS SERVICES CONTRACTS ON CONDITION THAT THE AUTOMATIC RENEWAL BE FOR NO MORE THAN ONE MONTH, THE AUTOMATIC RENEWAL PROVISION BE DISCLOSED IN BOLD TYPE OF AT LEAST TEN-POINT FONT ON THE FRONT PAGE OF THE INITIAL CONTRACT, AND THE CUSTOMER BE GIVEN THE ABILITY TO OPT OUT OF THE AUTOMATIC RENEWAL PROVISION AT THE TIME THE INITIAL CONTRACT IS EXECUTED, TO PROVIDE THAT THE PRICE OF AN AUTOMATICALLY RENEWED CONTRACT MAY NOT CHANGE WITHOUT WRITTEN NOTICE TO THE CUSTOMER AT LEAST THIRTY BUT NO MORE THAN SIXTY DAYS PRIOR TO THE EFFECTIVE DATE OF THE CHANGE IN PRICE, AND TO PROVIDE CANCELLATION OF A CONTRACT VOIDS AUTOMATIC RENEWAL PROVISIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 44-79-40 of the 1976 Code is amended to read:
"Section 44-79-40. No contract for physical fitness services may:
(1) have a duration of longer than twenty-four months or be, nor a duration measured by the life of the buyer customer, the life of the center, or any similar indefinite term; provided, however, if a center demonstrates financial responsibility to the administrator of the Department of Consumer Affairs and has been in operation for five or more years in this State, it may offer contracts for physical fitness services for a period duration of up to thirty-six months if approved in writing by the administrator;
(2) waive the required provisions of this chapter;
(3) provide that a right of action or defense of the member customer may be cut off by assignment of the contract to a third person."
SECTION 2. Section 44-79-60 of the 1976 Code is amended to read:
"Section 44-79-60. A contract for physical fitness services may contain clauses which:
(1) provide for extension of the term of the agreement for a period equal to a period of temporary disability or pregnancy of the customer, or for any other just or reasonable cause;
(2) specify that the written contract constitutes the entire agreement between the parties;
(3) provide for a an automatic renewal option for a duration of no longer than one month, which to be enforceable must be exercised by the buyer in writing, or by payment by the buyer of part or all of the renewal price. Any renewal option may be exercised only near the expiration of any previous contract and for only twelve months disclosed in bold type of a least ten-point font on the front page of the initial contract and must be initialed by the customer that the automatic renewal provision will apply. The customer must be given the ability to opt out of the automatic renewal provision at the time the initial contract is executed by initialing an opt out provision. Price may not increase or decrease in an automatically renewed contract without written notice to the customer at least thirty but no more than sixty days prior to the effective date of the change in price;
(4) specify that cancellation of a contract voids automatic renewal provisions."
SECTION 3. This act takes effect upon approval by the Governor.
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