November 12, 2004 |
2004-R-0855 | |
MARTIAL ARTS STUDIO FEES | ||
By: Daniel Duffy, Principal Analyst Jamilia Grier, Budget Analyst | ||
You asked if martial arts studios pay the same licensing and guaranty fund fees as other health clubs and if any payments have been made from the guaranty fund during the past three years.
SUMMARY
Martial arts studios pay the same $ 200 annual license fee paid; by all health clubs, but smaller martial arts studios pay a lower annual guaranty fund fee, $ 100 rather than $ 500. The guaranty fund has reimbursed consumers for losses in each of the past three years.
FEES FOR MARTIAL ARTS STUDIOS
The law requires health clubs to be licensed by the Department of Consumer Protection, offer consumer contracts that meet certain standards, and participate in the Health Club Guaranty Fund if they offer contracts lasting more than 30 days and collect payments more than 30 days in advance. The statutory definition of “health club” is fairly broad and specifically includes organizations primarily operated to teach forms of martial arts, such as judo, karate, or kung fu (CGS § 21a-216). The annual license fee for all health clubs, including martial arts studios, is $ 200 (CGS § 21a-223).
The Health Club Guaranty Fund is intended to recompense consumers who suffer a financial loss because their health club closes. It reimburses club members who have a claim against a club that closes due to (1) failure to provide services, (2) failure to comply with contract obligations, (3) failure to remain open during the duration of the contract, and (4) failure to comply with health club law. A martial arts studio that has annual gross revenues of less than $ 100,000 must pay an annual guaranty fund fee of $ 100. All other licensed health clubs pay an annual guaranty fund fee of $ 500 (CGS § 21a-226(b)).
PAYMENTS FROM THE HEALTH CLUB GUARANTY FUND
Table 1 displays the amount of guaranty fund receipts and payments from fiscal year 2001-02 to the present.
Table 1: Health Club Guaranty Fund
Year |
Receipts |
Payments |
2001-02 |
$ 153,410 |
$ 37,329 |
2002-03 |
161,816 |
29,630 |
2003-04 |
117,104 |
1,127 |
DD: ts