HARRY HUGHES, Governor

3301

each business location where health club services are sold as
well as any other registration information the Division deems
appropriate.

(B) (1) EACH PERSON WHO REGISTERS UNDER THIS SUBTITLE SHALL
PAY A REGISTRATION FEE OF NOT MORE THAN $250 AT THE TIME OF
REGISTRATION.

(2)  ON SEPTEMBER 1 OF EACH YEAR FOLLOWING THE INITIAL
REGISTRATION, EACH REGISTERED PERSON SHALL PAY A RENEWAL FEE IN
AN AMOUNT SET BY THE DIVISION OF NOT MORE THAN $250 TO THE
DIVISION.

(3)  THE FEES COLLECTED UNDER THIS SUBSECTION MAY ONLY
BE USED FOR THE ADMINISTRATION AND ENFORCEMENT OF THIS SUBTITLE.

[(b)] (C) At least one member of the board of directors of
each seller of health club services in this State shall be a
resident of a county where a club of the seller is located and
shall serve as a resident agent for receipt of service of
process.

[(c)] (D) The Division may bring an action for mandamus
against a health club to require the club to register or to have
and maintain the surety required by this section.

[(d)] (E) (1) (I) [A] SUBJECT TO THE PROVISIONS OF
PARAGRAPH (3) OF THIS SUBSECTION, A person who sells health club
services agreements shall purchase a surety bond in an amount not
less than [$50,000, or shall file with the Division an
irrevocable letter of credit or cash] THE AGGREGATE VALUE OF
OUTSTANDING LIABILITIES TO MEMBERS, INCLUDING ALL PREPAID FEES,
MEMBERSHIP FEES, DUES, DEPOSITS, INITIATION FEES, AND FEES FOR
HEALTH CLUB SERVICES.

(II)  THE AMOUNT OF THE BOND SHALL BE BASED ON A
REPORT PREPARED BY AN ACCOUNTANT DESCRIBING THE HEALTH CLUB'S
OUTSTANDING LIABILITIES TO MEMBERS.

(III)  THE REPORT SHALL BE SUBMITTED AT THE TIME
OF INITIAL REGISTRATION AND UPDATED AT EACH RENEWAL UNDER
SUBSECTION (B) OF THIS SECTION.

(2) (I) THE AMOUNT OF THE BOND SHALL BE INCREASED AS
NECESSARY TO TAKE INTO ACCOUNT CHANGES IN THE HEALTH CLUB'S
OUTSTANDING LIABILITIES.

(II) IF A REGISTRANT'S OUTSTANDING LIABILITIES
EXCEED THE AMOUNT OF THE BOND, AND THE REGISTRANT HAS FAILED TO
INCREASE THE BOND, THEN THE REGISTRANT SHALL IMMEDIATELY STOP
SELLING HEALTH CLUB SERVICES AGREEMENTS AND SHALL REFRAIN FROM
SELLING HEALTH CLUB SERVICES AGREEMENTS UNTIL THE REQUIREMENTS OF
THIS SUBSECTION HAVE BEEN SATISFIED.