House Bill hb1449

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    Florida House of Representatives - 2001                HB 1449

        By the Committee on Agriculture & Consumer Affairs and
    Representatives Spratt, Stansel and Kendrick





  1                      A bill to be entitled

  2         An act relating to consumer protection;

  3         amending s. 496.411, F.S.; requiring charitable

  4         organizations or sponsors to display certain

  5         information on certain solicitation materials;

  6         amending s. 501.017, F.S.; requiring certain

  7         health studio contract refunds to be issued

  8         within a time certain; amending s. 501.019,

  9         F.S.; expanding application of felony penalties

10         for knowingly making false representations for

11         certain purposes; amending s. 539.001, F.S.;

12         prohibiting pawnbrokers from knowingly

13         accepting stolen property; correcting

14         terminology; amending s. 559.801, F.S.;

15         revising a definition; amending s. 559.803,

16         F.S.; specifying additional information

17         required in certain business opportunity

18         contract disclosure statements; amending s.

19         559.807, F.S.; revising application of

20         requirements for certain securities relating to

21         selling business opportunities; amending s.

22         559.809, F.S.; specifying an additional

23         prohibited act by business opportunity sellers;

24         amending s. 559.902, F.S.; providing an

25         additional exception for certain schools to

26         application of certain motor vehicle repair

27         shop provisions; amending s. 559.904, F.S.;

28         revising certain requirements for motor vehicle

29         repair shop registrations; amending s. 559.905,

30         F.S.; providing additional estimated cost of

31         repair requirements for written repair

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  1         estimates; amending s. 559.9221, F.S.; revising

  2         Motor Vehicle Repair Advisory Council

  3         membership requirements; repealing s.

  4         559.903(5), F.S., relating to a definition of

  5         minor repair service; providing an effective

  6         date.

  7

  8  Be It Enacted by the Legislature of the State of Florida:

  9

10         Section 1.  Subsection (6) is added to section 496.411,

11  Florida Statutes, to read:

12         496.411  Disclosure requirements and duties of

13  charitable organizations and sponsors.--

14         (6)  Each charitable organization or sponsor that is

15  required to register under s. 496.405 shall conspicuously

16  display the following information on every printed

17  solicitation, written confirmation, receipt, or reminder of a

18  contribution:

19         (a)  The organization's or sponsor's registration

20  number issued by the department under this chapter.

21         (b)  The percentage, if any, of each contribution that

22  is retained by any professional solicitor that has contracted

23  with the organization or sponsor.

24         (c)  The percentage of each contribution that is

25  received by the organization or sponsor.

26

27  If the solicitation consists of more than a single item, the

28  statement shall be displayed prominently in the solicitation

29  materials.

30         Section 2.  Paragraphs (b) and (d) of subsection (1) of

31  section 501.017, Florida Statutes, are amended to read:

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  1         501.017  Health studios; contracts.--

  2         (1)  Every contract for the sale of future health

  3  studio services which is paid for in advance or which the

  4  buyer agrees to pay for in future installment payments shall

  5  be in writing and shall contain, contractual provisions to the

  6  contrary notwithstanding, in immediate proximity to the space

  7  reserved in the contract for the signature of the buyer, and

  8  in 10-point boldfaced type, language substantially equivalent

  9  to the following:

10         (b)1.  A provision for the cancellation and refund of

11  the contract if the contracting business location of the

12  health studio goes out of business, or moves its facilities

13  more than 5 driving miles from the business location

14  designated in such contract and fails to provide, within 30

15  days, a facility of equal quality located within 5 driving

16  miles of the business location designated in such contract at

17  no additional cost to the buyer.

18         2.  A provision that notice of intent to cancel by the

19  buyer shall be given in writing to the health studio.  Such a

20  notice of cancellation from the consumer shall also terminate

21  automatically the consumer's obligation to any entity to whom

22  the health studio has subrogated or assigned the consumer's

23  contract. If the health studio wishes to enforce such contract

24  after receipt of such showing, it may request the department

25  to determine the sufficiency of the showing.

26         3.  A provision that if the department determines that

27  a refund is due the buyer, the refund shall be an amount

28  computed by dividing the contract price by the number of weeks

29  in the contract term and multiplying the result by the number

30  of weeks remaining in the contract term.  The business

31  location of a health studio shall not be deemed out of

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  1  business when temporarily closed for repair and renovation of

  2  the premises:

  3         a.  Upon sale, for not more than 14 consecutive days;

  4  or

  5         b.  During ownership, for not more than 7 consecutive

  6  days and not more than two periods of 7 consecutive days in

  7  any calendar year.

  8

  9  A refund shall be issued within 30 days after receipt of the

10  notice of cancellation made pursuant to this paragraph.

11         (d)  A provision for the cancellation of the contract

12  if the buyer dies or becomes physically unable to avail

13  himself or herself of a substantial portion of those services

14  which he or she used from the commencement of the contract

15  until the time of disability, with refund of funds paid or

16  accepted in payment of the contract in an amount computed by

17  dividing the contract price by the number of weeks in the

18  contract term and multiplying the result by the number of

19  weeks remaining in the contract term.  The contract may

20  require a buyer or the buyer's estate seeking relief under

21  this paragraph to provide proof of disability or death.  A

22  physical disability sufficient to warrant cancellation of the

23  contract by the buyer shall be established if the buyer

24  furnishes to the health studio a certification of such

25  disability by a physician licensed under chapter 458, chapter

26  459, chapter 460, or chapter 461 to the extent the diagnosis

27  or treatment of the disability is within the physician's scope

28  of practice. A refund shall be issued within 30 days after

29  receipt of the notice of cancellation made pursuant to this

30  paragraph.

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  1         Section 3.  Subsection (2) of section 501.019, Florida

  2  Statutes, is amended to read:

  3         501.019  Health studios; penalties.--

  4         (2)  Any person health studio owner or, in the case of

  5  corporate ownership, any officer of the corporation, or any

  6  manager of a health studio or health studio's business

  7  location, who knowingly makes a false representation to the

  8  department with the intent to obtain an exemption of any kind

  9  from the requirements of s. 501.016 commits a felony of the

10  third degree, punishable as provided in s. 775.082, s.

11  775.083, or s. 775.084.

12         Section 4.  Paragraph (n) is added to subsection (12)

13  of section 539.001, Florida Statutes, and subsection (21) of

14  said section is amended, to read:

15         539.001  The Florida Pawnbroking Act.--

16         (12)  PROHIBITED ACTS.--A pawnbroker, or an employee or

17  agent of a pawnbroker, may not:

18         (n)  Knowingly accept or receive misappropriated

19  property from a conveying customer in a pawn or purchase

20  transaction.

21         (21)  RULEMAKING AUTHORITY.--The agency department has

22  authority to adopt rules pursuant to chapter 120 to implement

23  the provisions of this section.

24         Section 5.  Paragraph (a) of subsection (1) of section

25  559.801, Florida Statutes, is amended to read:

26         559.801  Definitions.--For the purpose of ss.

27  559.80-559.815, the term:

28         (1)(a)  "Business opportunity" means the sale or lease

29  of any products, equipment, supplies, or services which are

30  sold or leased to a purchaser to enable the purchaser to start

31  a business for which the purchaser is required to pay an

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  1  initial fee or sum of money which exceeds $500 to the seller,

  2  and in which the seller represents:

  3         1.  That the seller or person or entity affiliated with

  4  or referred by the seller will provide locations or assist the

  5  purchaser in finding locations for the use or operation of

  6  vending machines, racks, display cases, currency or card

  7  operated equipment, or other similar devices or

  8  currency-operated amusement machines or devices on premises

  9  neither owned nor leased by the purchaser or seller;

10         2.  That the seller will purchase any or all products

11  made, produced, fabricated, grown, bred, or modified by the

12  purchaser using in whole or in part the supplies, services, or

13  chattels sold to the purchaser;

14         3.  That the seller guarantees in writing that the

15  purchaser will derive income from the business opportunity

16  which exceeds the price paid or rent charged for the business

17  opportunity or that the seller will refund all or part of the

18  price paid or rent charged for the business opportunity, or

19  will repurchase any of the products, equipment, supplies, or

20  chattels supplied by the seller, if the purchaser is

21  unsatisfied with the business opportunity; or

22         4.  That the seller will provide a sales program or

23  marketing program that will enable the purchaser to derive

24  income from the business opportunity, except that this

25  paragraph does not apply to the sale of a sales program or

26  marketing program made in conjunction with the licensing of a

27  trademark or service mark that is registered under the laws of

28  any state or of the United States and the seller requires use

29  of the trademark or service mark in the sales agreement.

30

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  1  For the purpose of subparagraph 1., the term "assist the

  2  purchaser in finding locations" means, but is not limited to,

  3  supplying the purchaser with names of locator companies,

  4  contracting with the purchaser to provide assistance or supply

  5  names, or collecting a fee on behalf of or for a locator

  6  company.

  7         Section 6.  Subsections (11), (12), and (13) of section

  8  559.803, Florida Statutes, are renumbered as subsections (12),

  9  (13), and (14), respectively, and a new subsection (11) is

10  added to said section to read:

11         559.803  Disclosure statement.--At least 3 working days

12  prior to the time the purchaser signs a business opportunity

13  contract, or at least 3 working days prior to the receipt of

14  any consideration by the seller, whichever occurs first, the

15  seller must provide the prospective purchaser a written

16  document, the cover sheet of which is entitled in at least

17  12-point boldfaced capital letters "DISCLOSURES REQUIRED BY

18  FLORIDA LAW."  Under this title shall appear the following

19  statement in at least 10-point type:  "The State of Florida

20  has not reviewed and does not approve, recommend, endorse, or

21  sponsor any business opportunity.  The information contained

22  in this disclosure has not been verified by the state.  If you

23  have any questions about this investment, see an attorney

24  before you sign a contract or agreement."  Nothing except the

25  title and required statement shall appear on the cover sheet.

26  Immediately following the cover sheet, the seller must provide

27  an index page that briefly lists the contents of the

28  disclosure document as required in this section and any pages

29  on which the prospective purchaser can find each required

30  disclosure.  At the top of the index page, the following

31  statement must appear in at least 10-point type: "The State of

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  1  Florida requires sellers of business opportunities to disclose

  2  certain information to prospective purchasers.  This index is

  3  provided to help you locate this information."  If the index

  4  contains other information not required by this section, the

  5  seller shall place a designation beside each of the

  6  disclosures required by this section and provide an

  7  explanation of the designation at the end of the statement at

  8  the top of the index page.  The disclosure document shall

  9  contain the following information:

10         (11)(a)  The total number of persons who purchased the

11  business opportunity being offered by the seller within the

12  past 3 years.

13         (b)  The names, addresses, and telephone numbers of the

14  10 persons who previously purchased the business opportunity

15  from the seller and who are geographically closest to the

16  potential purchaser.

17

18  Should any seller of business opportunities prepare a

19  disclosure statement pursuant to 16 C.F.R. ss. 436.1 et seq.,

20  a Trade Regulation Rule of the Federal Trade Commission

21  regarding Disclosure Requirements and Prohibitions Concerning

22  Franchising and Business Opportunity Ventures, the seller may

23  file that disclosure statement in lieu of the document

24  required pursuant to this section.  Should the seller be

25  required pursuant to 16 C.F.R. to prepare any other documents

26  to be presented to the prospective purchaser, those documents

27  shall also be filed with the department.

28         Section 7.  Section 559.807, Florida Statutes, is

29  amended to read:

30         559.807  Bond or other security trust account

31  required.--

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  1         (1)  If the business opportunity seller makes any

  2  representations set forth in s. 559.801(1)(a)3., the seller

  3  must either have obtained a surety bond issued by a surety

  4  company authorized to do business in this state or have

  5  established a certificate of deposit trust account or a

  6  guaranteed letter of credit with a licensed and insured bank

  7  or savings institution located in the state.  The amount of

  8  the bond, certificate of deposit trust account, or guaranteed

  9  letter of credit shall be an amount not less than $50,000.

10         (2)  The bond, certificate of deposit, or guaranteed

11  letter of credit trust account shall be in the favor of the

12  department for the use and benefit of. any person who is

13  injured by the fraud, misrepresentation, damaged by any

14  violation of ss. 559.80-559.815, or by the seller's breach of

15  the contract, financial failure, or violation of any provision

16  of this part by the seller.  Such liability may be enforced by

17  filing an action at law in a court of competent jurisdiction

18  without precluding enforcement in an administrative action

19  pursuant to chapter 120.  However, the bond, certificate of

20  deposit, or guaranteed letter of credit shall be amenable and

21  enforceable only by and through administrative proceedings

22  before the department.  A money judgment resulting from an

23  action at law, less any award for costs and attorney's fees,

24  shall be prima facie evidence sufficient to establish the

25  value of the claim in an administrative action.  It is the

26  intent of the Legislature that such bond, certificate of

27  deposit, or guaranteed letter of credit shall be applicable

28  and liable only for payment of claims duly adjudicated by

29  order of the department.  The bond, certificate of deposit, or

30  guaranteed letter of credit shall be open to successive claims

31  but for the business opportunity sale or of any obligation

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  1  arising therefrom, may bring an action against the bond, trust

  2  account, or guaranteed letter of credit to recover damages

  3  suffered; however, the aggregate amount may not liability of

  4  the surety or trustee shall be only for actual damages and in

  5  no event shall exceed the amount of the bond, certificate of

  6  deposit trust account, or guaranteed letter of credit.

  7         Section 8.  Subsection (14) is added to section

  8  559.809, Florida Statutes, to read:

  9         559.809  Prohibited acts.--Business opportunity sellers

10  shall not:

11         (14)  Fail to provide or deliver the products,

12  equipment, supplies, or services as specified in the written

13  contract required under s. 559.811.

14         Section 9.  Subsection (5) is added to section 559.902,

15  Florida Statutes, to read:

16         559.902  Scope and application.--This act shall apply

17  to all motor vehicle repair shops in Florida, except:

18         (5)  Those located in public schools as defined in s.

19  228.041 or charter technical career centers as defined in s.

20  228.505.

21

22  However, such person may voluntarily register under this act.

23         Section 10.  Subsections (3), (4), (5), (6), and (10)

24  of section 559.904, Florida Statutes, are amended to read:

25         559.904  Motor vehicle repair shop registration;

26  application; exemption.--

27         (3)  Each application for registration must be

28  accompanied by a registration fee set forth as follows:

29         (a)  If the place of business only performed "minor

30  repair service": $25.

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  1         (a)(b)  If the place of business has 1 to 5 employees:

  2  $50.

  3         (b)(c)  If the place of business has 6 to 10 employees:

  4  $150.

  5         (c)(d)  If the place of business has 11 or more

  6  employees: $300.

  7         (4)  Each initial and renewal application for

  8  registration must be accompanied by copies of the applicant's

  9  estimate and invoice forms. Such forms must comply with the

10  applicable provisions of this act before a registration may be

11  issued.

12         (5)(4)  No annual registration fee is required for any

13  motor vehicle repair shop which has a local municipal or

14  county license issued pursuant to an ordinance containing

15  standards which the department determines are at least equal

16  to the requirements of this part, or for any motor vehicle

17  dealer licensed pursuant to chapter 320.

18         (6)(5)  The department shall issue to each applicant a

19  registration certificate in the form and size as prescribed by

20  the department in accordance with s. 120.60.  In the case of

21  an applicant with more than one place of business, the

22  department shall issue a registration certificate for each

23  place of business. The certificate must show at least the name

24  and address of the motor vehicle repair shop and the

25  registration number for that place of business. In the case of

26  a mobile motor vehicle repair shop, the certificate must show

27  the home address of the owner, if different from the business

28  address.

29         (6)  Any affidavit of exemption proof of filing

30  certificate, issued by the department prior to July 1, 1997,

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  1  to a motor vehicle repair shop conducting only minor repair

  2  services shall be valid until its expiration.

  3         (10)  The department may deny, revoke, or refuse to

  4  renew the registration of a motor vehicle repair shop based

  5  upon a determination that the motor vehicle repair shop, or

  6  any of its directors, officers, owners, or general partners:

  7         (a)  Have failed to meet the requirements for

  8  registration as provided in this part;

  9         (b)  Have not satisfied a civil fine, administrative

10  fine, or other penalty arising out of any administrative or

11  enforcement action brought by any governmental agency based

12  upon conduct involving fraud, dishonest dealing, or any

13  violation of this part;

14         (c)  Have had against them any civil, criminal, or

15  administrative adjudication in any jurisdiction, based upon

16  conduct involving fraud, dishonest dealing, or any violation

17  of this part; or

18         (d)  Have had a judgment entered against them in any

19  action brought by the department or the state attorney

20  pursuant to ss. 501.201-501.213 or this part.

21         Section 11.  Paragraph (h) of subsection (1) of section

22  559.905, Florida Statutes, is amended to read:

23         559.905  Written motor vehicle repair estimate and

24  disclosure statement required.--

25         (1)  When any customer requests a motor vehicle repair

26  shop to perform repair work on a motor vehicle, the cost of

27  which repair work will exceed $100 to the customer, the shop

28  shall prepare a written repair estimate, which is a form

29  setting forth the estimated cost of repair work, including

30  diagnostic work, before effecting any diagnostic work or

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  1  repair.  The written repair estimate shall also include the

  2  following items:

  3         (h)  The estimated cost of repair which shall include

  4  any charge for shop supplies or for hazardous or other waste

  5  removal and, if a charge is included, the estimate shall

  6  include the following statement:

  7         "This charge represents costs and profits to

  8         the motor vehicle repair facility for

  9         miscellaneous shop supplies or waste disposal."

10  If a charge is mandated by state or federal law, the estimate

11  shall contain a statement identifying the law and the specific

12  amount charged under the law.

13         Section 12.  Subsection (1) of section 559.9221,

14  Florida Statutes, is amended to read:

15         559.9221  Motor Vehicle Repair Advisory Council.--The

16  Motor Vehicle Repair Advisory Council is created to advise and

17  assist the department in carrying out this part.

18         (1)  The membership of the council may not exceed 11

19  members appointed by the Commissioner of Agriculture.

20         (a)  Eight industry members of the council must be

21  chosen from individuals already engaged in the motor vehicle

22  repair business who are eligible to be registered under this

23  part.  Such members must become registered by October 1, 1993.

24  Thereafter, The professional members of this council must be

25  licensed under this part.  The commissioner shall select one

26  industry member from each of the following categories:

27         1.  Independent automotive mechanics shops.

28         2.  Franchise or company-owned automotive mechanics

29  shops.

30         3.  Independent automotive collision shops.

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  1         4.  Franchise or company-owned automotive collision

  2  shops.

  3         5.  Independent tire dealer.

  4         6.  Franchise or company-owned tire dealer.

  5         7.  Independent motor vehicle dealer licensed under s.

  6  320.27.

  7         8.  Franchise motor vehicle dealer licensed under s.

  8  320.27.

  9         (b)  One member of the council may must be chosen from

10  persons already engaged solely in motor vehicle minor repair

11  service.

12         (c)  Two consumer members of the council must be

13  residents of this state and must not be connected with the

14  motor vehicle repair business.

15         (d)  Within 30 days after July 1, 1993, the

16  commissioner shall appoint one consumer member and four

17  industry members for terms of 2 years and one consumer member,

18  one minor repair shop member, and four industry members for

19  terms of 4 years.  As terms of the members expire, the

20  commissioner shall appoint successors for terms of 4 years.

21  Members shall serve from the time of their appointment until

22  their successors are appointed.

23         Section 13.  Subsection (5) of section 559.903, Florida

24  Statutes, is repealed.

25         Section 14.  This act shall take effect October 1,

26  2001.

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  1            *****************************************

  2                          HOUSE SUMMARY

  3
      Revises various consumer protection provisions relating
  4    to charitable organization disclosure requirements,
      health studio contracts, pawnbrokers, sales of business
  5    opportunities, motor vehicle repair shop registrations
      and repair estimates, and Motor Vehicle Repair Advisory
  6    Council membership requirements. Repeals a definition.
      See bill for details.
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