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    2019 Year in Review: Keeping Gyms Safe from Over-regulation

    Protecting your health club from misguided regulations takes many hours of tracking, monitoring, and lobbying on any legislation impacting your business. That time spent led to many victories and gives a glimpse into 2020.

    While the overall trend in 2019 was toward legislation that favored employees over employers, IHRSA also identified many direct threats to health club operations in multiple states.

    What happened with these bills, and what does it mean for your club, staff, and members?

    IHRSA monitored over 500 bills from legislatures across the country in 2019, and 18 of those bills reached a level that required direct action. Through IHRSA's advocacy, testimony, and grassroots engagement from club operators, we successfully mitigated all 18.

    2019 year in review keeping gyms safe from over regulation infographic column width

    Which Issues Threatened Your State?

    The proposals IHRSA defeated in 2019 include:

    • Contract restrictions
    • Overreaching regulation
    • Biometric data restrictions
    • Sales tax
    • AED mandates

    Was your health club lucky enough to be in a state that didn't have a battle this year? Keep reading because bad bills can—and often do—cross borders.

    Seeing the issues clubs in neighboring states face is a great way to predict what you might be dealing with in the near future.

    A lot happened in 2019, so first, we’ll look at the victories and bills that won't be returning next session. Next, we'll discuss pending legislation that could still put your club at risk. Then we'll end on some positive legislation that will get more people active.

    We've divided each issue into one of four categories to help you quickly navigate the full impact of our efforts to protect your business and the industry.

    1. Victory: Harmful industry legislation prevented—or positive legislation passed—due to IHRSA's direct advocacy.
    2. Building momentum: Industry positive legislation that did not advance into law.
    3. Defeat: Negative legislation that became law despite IHRSA's advocacy efforts.
    4. Did not advance: Negative legislation that did not require IHRSA's advocacy efforts because it did not go anywhere.

    Victories for the Fitness Industry in 2019

    Note: Unless otherwise noted, the following bills were defeated or died in committee, and will not be up for consideration in 2020.

    Contract Restrictions

    Again this year, several states introduced bills attempting to regulate club membership contracts and restrict automatic renewal clauses:

    • New Mexico,
    • Maryland,
    • Missouri, and
    • West Virginia.

    IHRSA supports contract provisions that allow for the automatic continuation of service at the end of the original term on a month-to-month, at-will basis, as it offers consumers increased choice and flexibility.

    New Mexico: VICTORY

    IHRSA submitted testimony opposing House Bill (H.B.) 522, which would have required businesses using auto-renew contracts to receive affirmative consent, and send reminders 30-60 days before the renewal period.

    Maryland: VICTORY

    IHRSA submitted testimony opposing Senate Bill (S.B.) 514, which would have required businesses making auto-renew offers online to allow consumers to cancel them online.

    Missouri: VICTORY

    IHRSA submitted testimony opposing H.B. 1246, which proposed more regulations for automatically renewing contracts, including:

    • disclosure,
    • consumer consent,
    • providing acknowledgment of the terms and cancellation policy, and
    • allowing those who accepted the offer online to cancel online.

    West Virginia: VICTORY

    S.B. 253 proposed additional regulations for automatically renewing contracts, including disclosing the terms, requiring affirmative consumer opt-in and notification requirements for the business. IHRSA remained in contact with the bill sponsor, making them aware of our objections throughout the process.

    Overreaching Regulation

    Even well-intentioned regulations can have unintended consequences or create barriers by preventing new businesses from opening.

    Texas: DID NOT ADVANCE

    H.B. 321 and S.B. 1011 would have increased the maximum amount required that a health club maintains in a surety bond from $50,000 to $75,000. IHRSA worked with our lobbyist to closely monitor these bills. H.B. 321 passed the House but did not advance, and S.B. 1011 saw no movement.

    Biometric Data

    Biometric legislation is a growing issue. Currently, only Illinois, Texas, and Washington have privacy laws regulating the collection and use of biometric data. However, 12 states considered proposals restricting the use of biometric data in 2019.

    Tools that capture biometric data include:

    • fingerprint scans,
    • body composition scans,
    • VO2 max testing, and
    • iris scans and facial recognition.

    Even if you don't see your state below, it's worth considering how these requirements would impact how you and your staff operate.

    Restrictions on how you collect and use biometric data may be coming to your club sooner than you think.

    In eight of the 12 states referenced above, these bills will carry over for consideration in 2020. Here's what happened in the other four.

    Arizona: VICTORY

    IHRSA opposed H.B. 2478, which would have required businesses that collect biometric identifiers to require informed consumer consent for commercial use, develop retention and destruction schedules for the information, and allowed the attorney general to investigate potential violations.

    IHRSA submitted opposing testimony outlining our concerns with the bill's lack of clarity regarding whom the bill refers to and which businesses its targets.

    Florida: VICTORY

    Florida lawmakers modeled H.B. 1153 and its companion S.B. 1270 after Illinois' Biometric Information Privacy Act (BIPA). Like BIPA, the bill would have allowed any person to bring a lawsuit against businesses, different from other state laws that only allow the attorney general to sue.

    These bills would have established numerous notification and consent requirements for businesses collecting consumers' biometrics. IHRSA worked with our lobbyists to amend or defeat these bills.

    Montana: VICTORY

    H.B. 645 would have established a biometric privacy law requiring businesses to retain consumer consent to use biometric information for non-security purposes. IHRSA opposed H.B. 645’s expansive and ambiguous definitions of “biometric identifier.”

    Like the New Hampshire bill mentioned below, the bill’s definition of biometric information was unclear on what it might include or exclude.

    Rhode Island: DID NOT ADVANCE

    H.B. 5945 would have required businesses to develop a written policy for the retention, collection, and destruction of biometric information. H.B. 5945 also would have prohibited the collection of biometric data without first informing the subject in writing of the collection and storage, and receiving a written release.

    The bill would have allowed any individual to bring a lawsuit against businesses, which is different from other states that only allow the attorney general to sue under the law.

    Sales Tax

    IHRSA opposes taxes on health club memberships and services. IHRSA believes that the government should encourage regular exercise and healthy lifestyles, not discourage them by increasing costs to consumers.

    This year, the battle over sales tax took place in five states:

    • Florida,
    • Tennessee,
    • Montana,
    • West Virginia, and
    • Wyoming.

    Florida: VICTORY

    IHRSA and its lobbyist opposed H.B. 1377, which sought to apply the state sales tax to all services in the state, including personal training. Currently, sales tax in Florida applies to memberships, but not services.

    Tennessee: VICTORY

    IHRSA worked with Tennessee legislators and constituents to pass what would eventually become S.B. 960 / H.B. 1138, which removed the sales tax from fitness centers and health clubs.

    Before the 2019 session began, IHRSA reached out to Tennessee legislators seeking their support for a sales tax rollback.

    Once legislators introduced bills to exempt all health clubs from the sales tax, IHRSA organized a grassroots campaign to eliminate this barrier to living a healthy lifestyle.

    We could not have passed this bill without the support of Tennessee clubs and lawmakers who understand the value of being physically active. They made this victory possible.

    Montana: VICTORY

    H.B. 300 sought to replace the state property tax with a sales tax, including a 2.5% sales tax on services. IHRSA submitted testimony in opposition to H.B. 300 and provided club operators with information and resources to testify against the bill and submit their testimony online.

    West Virginia: VICTORY

    IHRSA submitted testimony against S.B. 83, which sought to remove the sales tax exemption on fitness to fund other programs.

    West Virginia: BUILDING MOMENTUM

    IHRSA supported H.B. 2548, a "Healthy Living" bill that would have created a healthy living tax credit against the personal income tax.

    Wyoming: VICTORY

    H.B. 67 sought to apply the sales and use tax to health clubs and other specified services.

    While it would have reduced the sales and use tax rate from 4% to 3.5%, IHRSA submitted testimony opposing this bill. Taxing fitness only serves to disincentivize people from being active.

    AED

    IHRSA supports AED legislation that contains necessary liability protections—use and non-use—for club owners and their employees, reasonable staffing requirements for staffed and unstaffed clubs, and adequate compliance time.

    Colorado: VICTORY

    IHRSA influenced H.B. 19-1183, which would have required public places—including health clubs—to accept an AED if given as a donation.

    IHRSA submitted testimony expressing our concerns that the bill lacked liability protections, and had the potential to create disparities in which buildings require AEDs. Since public places are not required to have AEDs, and this bill would require their acceptance if offered, it would create a selective and uneven mandate.

    In response to IHRSA's concerns, the final bill—which became law—changed the requirement from a mandate to be voluntary, and gave public buildings further discretion in when and how to train staff.

    Colorado: VICTORY

    IHRSA influenced S.B. 19-227, which initially would have required all public places that maintain an AED to carry an opioid antagonist.

    In the wake of IHRSA's advocacy, the final bill was amended to make this provision voluntary, and not applicable to private facilities, while making it more accessible—for those who want—to obtain opioid antagonists without a prescription.

    Virginia: VICTORY

    S.B. 1177 would have required health clubs to maintain an AED onsite without providing sufficient liability protection. IHRSA communicated with the sponsor and submitted testimony requesting the strengthening of Virginia's AED immunity protections.

    What About the Legislation Still in Motion?

    Some of the bills IHRSA watched in 2019 will make a comeback in the coming session. In New Hampshire and Washington, three victories may be short-lived.

    Washington: VICTORY in 2019, PENDING for 2020

    IHRSA fought back against S.B. 5553, an intrusive bill that would have mandated health clubs comply with unprecedented permitting and health and sanitation reporting requirements.

    S.B. 5553 would have required annual permitting and inspections—paid for by clubs—and allowed local officials or the Secretary of Health to establish civil penalties for violations, potentially costing clubs thousands.

    IHRSA submitted testimony opposing S.B. 5553 and mobilized a coalition of club operators to oppose the bill. The coalition's grassroots efforts of calling the sponsor, writing letters, and testifying helped defeat the proposal.

    Though we defeated the bill in 2019, we must remain vigilant. Washington lawmakers could bring it back for further consideration in 2020.

    New Hampshire: VICTORY in 2019, PENDING for 2020

    IHRSA opposed H.B. 536, which sought to add biometric privacy to the state consumer protection code. The way the bill defined biometric information—to include sleep, health, or exercise data—was so expansive that it could have encompassed anything.

    This ambiguity led IHRSA to submit testimony opposing the bill. IHRSA worked with club operators in N.H. to request the bill redefine its definitions.

    While we stopped the bill in 2019, we expect lawmakers to revisit the bill for further consideration in 2020.

    New Hampshire: VICTORY in 2019, PENDING for 2020

    IHRSA submitted testimony regarding New Hampshire S.B. 319, which required health clubs to maintain an AED onsite without providing sufficient liability protection.

    We expect lawmakers will consider this legislation in the next legislative session. IHRSA is actively working with a coalition of organizations in New Hampshire to amend this bill to include all necessary protections.

    What Are the Pending Bills?

    Many states are entering the second year of their two-year legislative session. Therefore, legislation proposed in 2019 is still eligible for consideration in 2020. Though all bills from legislatures that will not meet in 2020 are effectively dead.

    Legislatures not meeting in 2020 include:

    • Montana,
    • Nevada,
    • North Dakota, and
    • Texas.

    Virginia and New Jersey will begin the first of their two-year legislative sessions in 2020. However, New Jersey's current Legislature will extend until January, meaning if the bills listed below do not pass during the lame-duck session, they will be dead in 2020.

    Pending AED Legislation

    Georgia: S.B. 12

    Requires health clubs to have at least one functional AED and have staff complete the American Heart Association or American Red Cross training. S.B. 12 does include liability protection for AED users, Good Samaritans, and owners.

    Massachusetts: H.B. 1890

    All health clubs would have to develop written emergency response policies and procedures. These plans would need to be reviewed and rehearsed regularly and made publicly available to all health club members.

    Also, AEDs would need to be easily accessible, well-marked, known to staff, and located near a form of communication.

    Massachusetts: S.B. 203

    Requires public and semi-public athletic recreation facilities to practice a medical emergency response plan annually.

    New Hampshire: S.B. 319

    Requires health clubs to maintain an AED onsite. IHRSA has worked with the sponsor and coalition partners to strengthen the liability protections of this bill.

    Pending Auto-renewal Legislation

    New Jersey: Assembly Bill 1460 & S.B. 2326

    These proposals want to establish notification requirements for auto-renewal in service contracts. Pending through the first week of January 2020 during lame-duck session only.

    New York: S.B. 1475 & A.B. 3173A

    Prohibits certain business practices concerning automatic renewals or continuous service offers to consumers in the state.

    North Carolina: H.B. 686

    Changes notification requirements for automatically renewing contracts.

    Vermont: H.B. 327

    Allows the cancellation of any automatic renewal contracts agreed to online via an online method.

    Pending Biometric Data Legislation

    Illinois: H.B. 3024

    Adds electrocardiogram data to Illinois' BIPA law. This law has already caused health clubs many frivolous lawsuits.

    Illinois: S.B. 2134

    Amends BIPA to delete language creating a private right of action, the part of the law that is currently causing health clubs many lawsuits.

    New York: A.B. 1911 & S.B. 1203

    A.B. 1911 and S.B. 1203 will establish the biometric privacy act. Creating written policies for data retention and destruction and would require written consent to use the biometric data.

    S.B. 1203 would also allow customers to take legal action against businesses that fail to comply with these requirements. In Illinois, this provision has resulted in lawsuits for many club owners.

    New York: A.B. 235 & S.B. 2500

    Prohibits private entities from using biometric information for advertising, marketing, or promotion purposes, or for "any other activity that is intended to influence business volume."

    New Hampshire: H.B. 536

    Adds “biometric information” to the consumer privacy act. IHRSA submitted testimony expressing concern with the vague definition of this bill.

    Rhode Island: H.B. 5945

    This bill would establish BIPA—modeled on the troublesome Illinois law—in Rhode Island, and create a private right of action leading to lawsuits for clubs.

    Pending Consumer Protection Legislation

    Illinois: H.B. 1382

    H.B. 1382 amends the Physical Fitness Facility Medical Emergency Preparedness Act. Currently, this bill has no text, and the goal is unclear.

    Massachusetts: H.B. 280, H.B. 273, & H.B. 321

    H.B. 280 is an unnecessary proposal that would require displaying membership fees, which is already required by law.

    H.B. 273 allows suspension of health club memberships for disabled members.

    H.B. 321 requires health clubs that sell memberships online to offer online cancellation.

    Washington: S.B. 5553

    Mandates health clubs comply with unprecedented permitting and health and sanitation reporting requirements. IHRSA submitted testimony opposing S.B. 5553 and organized a coalition of members to oppose the bill.

    States With Pending Safety Legislation

    Massachusetts: S.B. 1337

    Requires public buildings to maintain medical trauma kits.

    States With Pending Sales Tax Legislation

    Nebraska: L.B. 507

    Eliminates the sales tax exemption for individual massage and personal training services.

    Pennsylvania: H.B. 76 & S.B. 76

    Removes property taxes while expanding the sales tax to include health club memberships and services.

    States With Pending Tax-Exempt Competition Legislation

    Ohio: H.B. 196

    This bill would only exempt gym memberships operated by a nonprofit from sales tax.

    What About Positive Legislation That Gets More People Active?

    It’s not all defense. In 2019, we worked on several positive health promotion bills.

    Arkansas H.B. 1701 prohibits charging students for participating in any organized activity—including physical activity.

    Connecticut and Maryland both passed laws requiring students to get a minimum amount of exercise per week—including recess and physical education.

    Michigan renewed $1 million in funding for health promotion programs in schools (S.B. 139).

    What Do These Battles Mean for 2020?

    While we’re all too familiar with some of the issues we saw threaten club operations in 2019—e.g., contract restrictions, sales tax, and AED requirements—we're getting more familiar with the new and emerging trends restricting the collection and use of biometric data.

    These trends can have implications for the health clubs of today and tomorrow.

    When it comes to legislation—positive or negative—that could impact your business, IHRSA will remain vigilant. As lawmakers start to consider these pending bills, and new ones, in 2020, we will keep you up-to-date.

    So, if you see a legislative alert from us in your email, be sure to open it. If you are not receiving alerts, please email us.

    Until next time, we’ll continue to analyze the action, so you know when to take yours.

    Author avatar

    Olivia MacLennan

    Olivia MacLennan is the Government Relations Coordinator for IHRSA. In addition to supporting IHRSA members and communicating with legislators, she tracks legislation, drafts testimony and alerts, and responds to member inquiries on legal issues. When she’s not at work, Olivia can be found dog sitting or playing defense for her recreational soccer teams.