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2004 SESSION
049579212Be it enacted by the General Assembly of Virginia:
1. That § 59.1-306 of the Code of Virginia is amended and reenacted as follows:
§ 59.1-306. Bond or letter of credit required; exception.
A. Every health spa, before it enters into a health spa contract and accepts
any moneys in excess of the prorated monthly fee for the month when the
contract is initially executed plus one month's fees or accepts any initiation
fee in excess of seventy-five dollars$75, shall file and maintain with the
Commissioner, in form and substance satisfactory to him, a bond with corporate
surety, from a company authorized to transact business in the Commonwealth or a
letter of credit from a bank insured by the Federal Deposit Insurance
Corporation in the amounts indicated below:
Number of Amount of bond
applicable contracts or letter of credit
0 to 250 $10,00030,000
251 to 500 $20,00035,000
501 to 750 $30,00040,000
751 to 1000 $40,00045,000
1001 to 1250 $50,00055,000
1251 to 1500 $60,000
1501 to 1750 $70,000
1751 to 2000 $80,000
2001 or more $100,000
The number of applicable unexpired contracts shall be separately calculated for each location where health spa services are offered.
Each separate location where health spa services are offered shall be considered a separate health spa and shall file a separate bond or letter of credit with respect thereto, even though the separate locations are owned or operated by the same owner.
However, no owner shall be required to file with the Commissioner bonds or letters of credit in excess of $ 300,000. If the $ 300,000 limit is applicable, then the bonds or letters of credit filed by such owner shall apply to all health spas owned or operated by the same owner.
B. A health spa which has not filed a bond or letter of credit may nevertheless
sell health spa contracts of up to thirty-six36 months' duration so long as the
amount of payment actually charged, due or received each month by the health spa or any holder of its
health spa contracts does not exceed the monthly fee calculated pursuant to the definition thereof in
§ 59.1-296, with the exception that the payment actually charged may include a
maximum initiation fee of seventy-five dollars$75 for health spa contracts of
twelve12 months or more in duration.