Court Opinion

ID: 4130025
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:59:19.668831+00
Date Added: 2024-06-11T14:31:28.197476
License: Public Domain

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DAN MORALES                                   August 26,1992
 \‘,‘I,,“SkI118
S.W. 128 (Tex. 1909) (savings clause of a repealing statute is strictly construed).
Section 6.09(b) states that the spas it applies to are “subject to the security
requirements in effect on August 31, 1989.” Thus, it indicates that all spas in that
category are subject to security requirements, the amount of which shall be
determined by reference to former law. The grandfather clause, strictly speaking,
was not a “security requirement” of the former law, but an exemption from the
security requirement; thus, section 6.09(b) does not keep that clause in effect.

         Moreover, we believe that your interpretation of the savings clause is
consistent with the legislative intent underlying House Bill 863. An express purpose
of the Health Spa Act is to “safeguard the public against fraud, deceit, imposition,
and financial hardship” in the field of health spa services by prohibiting contractual
and marketing practices that had injured the public. V.T.C.S. art. 52211, 5 2. The
act is to be liberally construed and applied to promote this purpose. Id 5 4.

       One purpose of the 1989 legislation was to improve the consumer protection
aspects of the Health Spa Act. House Comm. on Governmental Organization, Bill
Analysis, H.B. 863, 71st Leg. (1989). The security deposit provision provides a

                                        p. 828
Honorable John Hannah - Page 4          m-157)

source from which health-spa members may recover any unused portion of their
dues or fees if the health spa becomes insolvent or ceases operations. The 1985
version of subsection 10(d) allowed the owner of any health spa that had been
satisfactorily established since September 1, 1983 to open new spas without any
security deposit. Your reading of section 6.09 extends the security deposit
requirement to all spas now open or to be opened in the future. This reading serves
the consumer-protection purpose of the Health Spa Act and the 1989 amendments
because it accords to all consumers of health-spa services a means of recouping
unused dues or fees paid to a spa that becomes insolvent or ceases operations.

       Accordingly, we agree that section 6.09 creates only two categories of health
spas, one subject to the security requirements that became effective on September 1,
1989, and the other subject to the security requirements in effect on August 31,
1989. No health spas, even those grandfathered by the prior version of article 52211,
V.T.C.S., are now exempt from the security deposit requirement.

         You inquire about the amount of security deposit to be Sled under the
Health Spa Act by a health spa that was exempt from the security-deposit
requirement by the former version of the statute. When the Health Spa Act was
adopted in 1985, it required security in the amount of 20 percent of prepayments,
but not less than $20,000 or more than $50,000. Acts 1985, 69th Leg., ch. 13
(formerly codified as V.T.C.S. art. 52214 3 10(b)). This security requirement
applied to the spa for two years after the filing date, and thereafter only $5,000 in
security had to be maintained. Id (formerly codified as V.T.C.S. art. 522lZ, 9 10(c)).
The 1989 enactment establishes a uniform $20,000 security deposit for all spas and
requires maintenance of security in this amount for two years after the spa ceases
business or until claims against it are satisfied or foreclosed by law. Acts 1989,71st
Leg., ch. 1039, g3.17 (codified as V.T.C.S. art. 52211. 5 10(b), (c)). You contend
that a spa that was previously exempt from the security deposit requirement must
initially file $20,000 before it can be eligible for the reduction to $5,000.

        A health spa that was exempt from the security deposit prior to September 1,
1989 is subject to the security deposit requirements in effect on August 31, 1989.
Former section 10 required the security bond to be filed by the 30th day after the
health spa opened its doors and set it as 20 percent of the total value of the
prepayments received by the spa, but not less than $20,000 or more than $50,000.
Acts 1985,69th Leg., ch. 13. “Prepayment” was formerly defined as “a payment for
all services or for the use of facilities made by members of a health spa before the
first day the services or facilities are made available to the members.” Id After

                                     p. 829
Honorable John Hannah - Page 5           ml-157)

maintaining the minimum $20,000 security for two years, the health spa is to
maintain security in the amount of $5.000.

        A health spa that was exempt from the initial security bond requirement
under the former law camrot now comply with the requirement that it file a security
bond within 30 days after opening the spa. Moreover, the former law based the
amount of security bond on prepayments received prior to opening, an amount
unlikely to be relevant to any present exposure for unpaid fees and dues for health
spas that have operated since 1983. The spas that were formerly “grandfathered
had operated at one location for two years prior to the effective date of the 1985
statute without any member filing a lawsuit or a complaint with a governmental
authority relating to the failure to open or the closing of the health spa. Acts 1985,
69th Leg., ch. 13. That two years of operation without such complaints or lawsuits
appears to serve the same purposes as the requirement that a spa maintain at least
$20,000 in security for the first two years of operation. In our opinion, health spas
that were exempt from all security deposits under the now-repealed section 10(d)
are now required to maintain security in the amount of $5,000 without first filing a
security deposit of $20,000.

        If a spa in operation on August 31, 1989 opens a new location after
September 1,1989, the new spa location will be able to file a security deposit by the
30th day after opening. The new spa location will therefore be required to file an
initial security deposit of 20 percent of the total value of the prepayments it has
received, but not less than $20,000 nor more than $50,000. It must maintain this
amount of security for two years after the date the security is filed, and thereafter, it
must continuously maintain security in the amount of $5,000.

                                  SUMMARY

              V.T.C.S. article 52211, the Health Spa Act, as amended in
          1989. effective September 1, 1989, requires every health spa in
          the state to file a surety bond with the secretary of state. The
          security requirements imposed by the present version of the law
          applies to a health spa that opens an initial location on or after
          September 1.1989, and to each additional location opened after
          that date by such spas. A health spa in operation before
          September 1, 1989, and any additional location opened by that
          health spa on or after September 1, 1989, is subject to the
          security requirements in effect on August 31, 1989. An

                                        p.   830
Honorable John Hannah - Page 6          (ml-157)

         exemption for some health spas from all security requirements
         included in the prior version of the Health Spa Act has been
         repealed and is not continued in effect by the savings clause in
         the 1989 amendments.        Health spas that were formerly
         exempted from the security requirement no longer have the
         benefit of that exemption.
              Health spas that were exempt from all security deposits
         under the repealed provision are now required to maintain
         security in the amount of $5,000 without first filing a security
         deposit of $20,000. If a spa in operation on August 31, 1989
         opens a new location after September 1, 1989, the new spa
         location must file an initial security deposit of 20 percent of the
         total value of the prepayments it has received, but not less than
         $20,000 nor more than $50,000. It must maintain this amount of
         security for two years after the date the security deposit is filed,
         and thereafter,. it must continuously maintain security in the
         amount of $5,000.

                                                  DAN      MORALES
                                                  Attorney General of Texas

WILL. PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Susan L Garrison
Assistant Attorney General

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