47-18-314 - Certificates of exemption. - Tennessee Statutes

47-18-314. Certificates of exemption.

(a)  It is unlawful to accept a down payment for a health club agreement in excess of thirty percent (30%) of the total cost of the agreement without a valid certificate of exemption.

(b)  Each holder of a certificate of exemption shall display such certificate in a conspicuous place at each location where health club services or facilities are provided.

(c)  Certificates of exemption shall be valid for one (1) year from the date of issuance.

(d)  Application for renewal of a certificate of exemption shall be submitted before the expiration date on forms furnished by the division, and shall contain a sworn certification by the holder that the requirements for exemption continue to be met, and that the holder is in full compliance with all provisions of this part.

(e)  In the event a holder of a certificate of exemption ceases to meet the requirements for exemption, then the certificate of exemption shall be invalid.

(f)  Within ten (10) days after any change in the information contained in the original application or the application for renewal, each holder of a certificate of exemption shall notify the division of the change by registered or certified mail.

(g)  An application for exemption shall be submitted on forms furnished by the division and shall be accompanied by:

     (1)  A nonrefundable application fee of fifty dollars ($50.00); and

     (2)  A current personal or corporate financial statement prepared by a public accountant who holds a valid permit to practice in Tennessee.

(h)  A certificate of exemption shall be granted; provided, that the application provides proof satisfactory to the division that the following criteria are met:

     (1)  The applicant has a net worth in excess of two hundred fifty thousand dollars ($250,000) per location where health club services or facilities are provided; and

     (2)  The applicant has operated under substantially the same ownership and control for at least five (5) years.

(i)  For the purpose of calculating net worth as provided in subsection (h), the following are excluded:

     (1)  Assets which represent pre-payment for future services; and

     (2)  Accounts receivable due from health club members for future services.

(j)  Any health club which had applied for and obtained an exemption from the bond requirement under prior law shall be exempt from the provisions of this part which prohibit acceptance of a down payment for a health club agreement in an amount in excess of thirty percent (30%) of the total cost of the agreement. The exemption established by this subsection shall only be valid as long as the health club operates under the same or substantially the same ownership and control that existed when the exemption was granted under prior law.

[Acts 1989, ch. 460, § 12.]