It is enacted by the General Assembly as follows:

SECTION 1. Section 5-50-3 of the General Laws in Chapter 5-50 entitled "HEALTH CLUBS" is hereby amended to read as follows:

5-50-3. Bonding. -- (a) Prior to the execution of any contract for health club services, every seller which sells contracts for health club services, except {ADD (1) ADD} non-profit organizations, weight loss and control services which do not provide physical exercise facilities and classes, and which do not obligate the customer for more than thirty (30) days, and which do not require an initiation fee as a condition of said contract, {ADD and (2) a seller which does not require an initiation fee as a condition of a health club contract and whose only type of membership does not exceed thirty (30) days and which posts a conspicuous notice, placed with or near its schedule of rates posted pursuant to section 5-50-8(B) or at its entrances, that the seller is not subject to the bonding requirements of this section, ADD} shall for each individual health club location or facility obtain a surety bond in the amount of ten thousand dollars ($10,000) for a facility with less than ten thousand (10,000) square feet of permanently covered non-court sport exercise/aerobic/fitness area; twenty thousand dollars ($20,000) for facilities between ten thousand (10,000) square feet and twenty-five thousand (25,000) square feet of permanently covered non-court sport exercise/aerobic/fitness area; and thirty thousand dollars ($30,000) for facilities with greater than twenty-five thousand (25,000) square feet of permanently covered non-court sport exercise/aerobic/fitness area. Proof of bonding must be presented at the time of registration or re-registration.

SECTION 2. This act shall take effect upon passage.