Assembly Commerce and Economic Development Committee Statement to Assembly, No. 4048 (1R) (May 14, 2026)

Summary

An Assembly Commerce and Economic Development Committee statement to Assembly, No. 4048 [First Reprint], State of New Jersey, dated May 14, 2026, reporting the bill favorably with committee amendments. As amended, the bill requires a health club facility to notify contract buyers at least 60 days and again at least 30 days before a change in ownership, including the new business name and the date billing begins under the new entity. A buyer may deny assignment of the contract or nullify it up to seven days before new billing begins, with improper charges refunded within 30 days. The bill defines "change in ownership" to include a transfer of 51 percent or more of outstanding equity and is identical to Senate Bill No. 3306 (1R).

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY,
No. 4048

with
committee amendments

STATE
OF NEW JERSEY

DATED: MAY 14,
2026

The Assembly Commerce and Economic Development
Committee reports favorably and with committee amendments Assembly Bill No.
4048 (1R).

As amended, this bill modifies current law on health club services contracts by
requiring the health club facility to notify, by mail or electronically
and at least 60 days in advance and again by mail or electronically at least 30
days in advance, the buyer of a contract if a change in ownership of the health
club facility is to occur. Notice is to also include the date billing begins
under the new business entity and the business name under new ownership. If
membership rates and service offerings of the facility are to stay the same but
the name of the business is to change upon transfer of facility ownership, this
is to be included in the notice as is the stipulation that the contract of a
buyer will not be assigned to the new owner if the buyer denies, through
written, electronic, or in-person communication, assignment of the contract at
least seven days before the date billing under the new entity begins. If the
buyer of the contract allows the contract to be assigned to the new owners, the
buyer has up to seven days before the date billing under the new entity begins
to nullify the contract. Any charges made against the account of the buyer
during the seven-day period before billing under the new business entity begins,
including after a buyer requested nullification of a contract but not before
the request was made, are to be refunded by the health club facility within 30
days of receipt of the request to nullify.

If membership rates are to change or there is a
decrease in service offerings upon the transfer of ownership of a health club
facility, the facility is to notify, once by mail or electronically and at
least 60 days in advance and again by mail or electronically at least 30 days
in advance, the buyer of a health club services contract: of the ownership
change; the change in service offerings or the new membership rates and the
date when the new rates and any change in services take effect; the business
name of the facility under new ownership; the date the new billing under the
new business entity begins; and that the contract will be assigned to the new
owner if the buyer of the contract consents to the transfer through written,
electronic, or in-person communication to the health club facility within 30
days of the date of the transfer, which is to be promptly processed by the
facility. The buyer of the contract has up to seven days before the date
billing under the new entity begins to nullify the contract. If the consent is
not received by the health club facility within 30 days before the transfer of
ownership, the contract will be deemed cancelled. Any charges made against the
account of the buyer during the seven-day period before billing under the new
entity began, including after a buyer requested cancellation of a contract but
not before the request was made, are to be refunded by the health club facility
within 30 days of receipt of the request to cancel.

The bill requires that if a health club facility is to
change ownership, the owner of the health club facility is require to post a
notice, at least 30 days in advance of the transfer in ownership and for 26
days after the transfer in ownership, in a prominent location in the facility
the name of the new business entity; the date billing under the new entity
begins; and that the buyer of the contract may elect to decline or approve to
have their contract assigned to the new owner for the requisite amount of time
as established in the bill. Additionally, the bill stipulates that its
provisions addressing changes in ownership of a health club facility do not
apply to health club facility closures. The bill also stipulates that if
ownership of a health club facility is not changing but the business entity that
owns the facility is, notice is to be given to buyers of contracts to the health
club facility at least 30 days prior to the change in business entity. Lastly,
the bill defines “change in ownership” to mean a change in the ownership of a
health club facility upon completion of a transaction that results in the sale,
transfer, assignment, or other disposition of 1) all or substantially all of
the assets of a health club facility or 2) 51 percent or more of the
outstanding equity of a health club facility, whether in memberships; shares of
capital stock; or other ownership interests.

As amended and reported by the committee, Assembly
Bill No. 4048 (1R) is identical to Senate Bill No. 3306 (1R), which was also
amended and reported by the committee on this date.

COMMITTEE AMENDMENTS :

The committee amended the bill to:

(1) require notice of change in ownership be sent to
buyers of health club facility contracts at least 30 days in advance of the
change;

(2) establish that certain notices be sent if there
is no change in the name of a health club facility;

(3) include, in a notice of change in ownership, the
name of the new business entity and the date billing under the new entity
begins;

(4) stipulate that a buyer of a health club facility
contract has up to seven days before the date billing under the new entity
begins to nullify the assignment of the contract and that a buyer can deny a
contract be assigned through in-person communication;

(5) clarify that any charges made against the account
of a buyer of a contract after the buyer requests nullification or cancellation
of a contract, but not before the request to nullify or cancel was received,
are to be reimbursed by the health club facility within 30 days of receiving
the request to nullify or cancel a contract;

(6) require that a health club facility post a notice
30 days before a change in ownership information including the name of the new
business entity; the date billing under the new entity begins; and that a buyer
of a contract may elect to decline or approve assignment of their contract in
the requisite timelines as stipulated in the bill;

(7) establish that the provisions of the bill
regarding a change in ownership do not apply to closures of a health club
facility;

(8) require 30-day notice to buyers of health club
facility contracts if there is no change in ownership but there is a change in
the business entity;

(9) define “change in ownership;” and

(10) make technical corrections.

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