H-1777.3          _______________________________________________

 

                            SUBSTITUTE HOUSE BILL 1704

                  _______________________________________________

 

State of Washington              54th Legislature             1995 Regular Session

 

By House Committee on Commerce & Labor (originally sponsored by Representatives Lisk, L. Thomas, Ballasiotes, Kremen, Chappell, Cooke, Goldsmith, Padden, Radcliff, Mulliken, Pennington, McMorris, Smith, Delvin, Hickel, Mastin, Sehlin, Beeksma, Robertson, Cairnes, Koster, Brumsickle, D. Schmidt, Horn, Reams, Campbell, Chandler, Backlund, McMahan and Elliot)

 

Read first time 02/28/95.

 

Eliminating registration requirements for sellers of travel.



     AN ACT Relating to sellers of travel; amending RCW 19.138.010, 19.138.021, 19.138.030, 19.138.040, 19.138.050, 19.138.140, 19.138.150, 19.138.160, 19.138.170, 19.138.180, 19.138.190, 19.138.200, 19.138.210, 19.138.220, 19.138.230, 19.138.240, 19.138.250, 19.138.270, 19.138.280, 19.138.300, and 19.138.310; repealing RCW 19.138.055, 19.138.100, 19.138.110, 19.138.120, 19.138.130, 19.138.1701, and 19.138.260; prescribing penalties; and providing an effective date.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

 

     Sec. 1.  RCW 19.138.010 and 1994 c 237 s 1 are each amended to read as follows:

     The legislature finds and declares that advertising, sales, and business practices of certain sellers of travel have worked financial hardship upon the people of this state; that the travel business has a significant impact upon the economy and well-being of this state and its people; that problems have arisen regarding certain sales of travel; and that the public welfare requires ((registration of sellers of travel)) vigorous enforcement of consumer protection statutes in order to eliminate unfair advertising, sales and business practices.  The legislature further finds it necessary to establish standards that will safeguard the people against financial hardship and to encourage fair dealing and prosperity in the travel business.

 

     Sec. 2.  RCW 19.138.021 and 1994 c 237 s 2 are each amended to read as follows:

     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

     (1) (("Department" means the department of licensing.

     (2) "Director" means the director of licensing or the director's designee.

     (3))) "Seller of travel" means a person, firm, or corporation both inside and outside the state of Washington, who transacts business with Washington consumers, including, but not limited to, travel agencies, who sell, ((provide,)) furnish contracts for, arrange, ((or)) advertise, or book, either directly or indirectly, by any means or method, ((to arrange or book)) any travel services including travel reservations or accommodations, tickets for domestic or foreign travel by air, rail, ship, bus, or other medium of transportation or hotel or other lodging accommodation and vouchers or coupons to be redeemed for future travel or accommodations for a fee, commission, or other valuable consideration.

     (a) "Seller of travel" includes a travel agent and any person who is an independent contractor or outside agent for a travel agency or other seller of travel whose principal duties include consulting with and advising persons concerning travel arrangements or accommodations in the conduct or administration of its business.  ((If a seller of travel is employed by a seller of travel who is registered under this chapter, the employee need not also be registered.))

     (b) "Seller of travel" does not include:

     (i) An air carrier;

     (ii) An owner or operator of a vessel including an ocean common carrier as defined in 46 U.S.C. App. 1702(18), an owner or charterer of a vessel that is required to establish its financial responsibility in accordance with the requirements of the federal maritime commission, 46 U.S.C. App. 817 (e), and a steamboat company as defined in RCW 84.12.200 whether or not operating over and upon the waters of this state;

     (iii) A motor carrier;

     (iv) A rail carrier;

     (v) A charter party carrier of passengers as defined in RCW 81.70.020;

     (vi) An auto transportation company as defined in RCW 81.68.010;

     (vii) A hotel or other lodging accommodation;

     (viii) A person or entity who either packages or operates, or both, all or a portion of transportation and other travel services and whose primary distribution of these travel services is through retail travel agencies;

     (ix) An affiliate of any person or entity described in (i) through (((vii))) (viii) of this subsection (((3))) (1)(b) that is primarily engaged in the sale of travel services provided by the person or entity.  For purposes of this subsection (((3)(b)(viii))) (1)(b)(ix), an "affiliate" means a person or entity owning, owned by, or under common ownership, with "owning," "owned," and "ownership" referring to equity holdings of at least eighty percent.

     (((4))) (2) "Travel services" includes transportation by air, sea, or rail ground transportation, hotel or any lodging accommodations, or package tours, whether offered or sold on a wholesale or retail basis.

     (((5))) (3) "Advertisement" includes, but is not limited to, a written or graphic representation in a card, brochure, newspaper, magazine, directory listing, or display, and oral, written, or graphic representations made by radio, television, or cable transmission that relates to travel services.

 

     Sec. 3.  RCW 19.138.030 and 1994 c 237 s 10 are each amended to read as follows:

     A seller of travel shall not advertise that air, sea, or land transportation either separately or in conjunction with other services is or may be available unless he or she has, prior to the advertisement, determined that the product advertised was available at the time the advertising was placed.  This determination can be made by the seller of travel either by use of an airline computer reservation system, or by ((written confirmation)) relying upon an advertisement brochure or other materials provided by or received from the vendor whose program is being advertised.

     It is the responsibility of the seller of travel to keep written or printed documentation of the steps taken to verify that the advertised offer was available at the time the advertising was placed.  These records are to be maintained for at least two years after the placement of the advertisement.

 

     Sec. 4.  RCW 19.138.040 and 1994 c 237 s 11 are each amended to read as follows:

     At or prior to the time of full or partial payment for air, sea, or land transportation or any other services offered by the seller of travel in conjunction with the transportation, the seller of travel shall furnish to the person making the payment a written statement conspicuously setting forth the following information:

     (1) The name and business address and telephone number of the seller of travel.

     (2) The amount paid, the date of such payment, the purpose of the payment made, and an itemized statement of the balance due, if any.

     (3) ((The registration number of the seller of travel required by this chapter.

     (4))) The name of the vendor with whom the seller of travel has contracted to provide travel arrangements for a consumer and all pertinent information relating to the travel as known by the seller of travel at the time of booking.  The seller of travel will make known further details as soon as received from the vendor.  All information will be provided with final documentation.

     (((5))) (4) The conditions, if any, upon which the contract between the seller of travel and the passenger may be canceled, and the rights and obligations of all parties in the event of cancellation.

     (((6))) (5) A statement in eight-point boldface type in substantially the following form:

     "If transportation or other services are canceled by the seller of travel, all sums paid to the seller of travel for services not performed in accordance with the contract between the seller of travel and the purchaser will be refunded within thirty days of receiving the funds from the vendor with whom the services were arranged, or if the funds were not sent to the vendor, the funds shall be returned within fourteen days after cancellation by the seller of travel to the purchaser unless the purchaser requests the seller of travel to apply the money to another travel product and/or date."

 

     Sec. 5.  RCW 19.138.050 and 1994 c 237 s 12 are each amended to read as follows:

     (1) If the transportation or other services contracted for are canceled, or if the money is to be refunded for any reason, the seller of travel shall refund to the person with whom it contracts for travel services, the money due the person within thirty days of receiving the funds from the vendor with whom the services were arranged.  If the funds were not sent to the vendor and remain in the possession of the seller of travel, the funds shall be refunded within fourteen days.

     (2) Any material misrepresentation with regard to the transportation and other services offered shall be deemed to be a cancellation necessitating the refund required by this section.

     (3) When travel services are paid to a vendor and charged to a consumer's credit card by the seller of travel, and the arrangements are subsequently canceled by the consumer, the vendor, or the seller of travel, any refunds to the consumer's credit card must be applied for within ten days from the date of cancellation.

     (4) The seller of travel ((shall)) is not ((be)) obligated to refund any cancellation penalties ((imposed by the vendor with whom the services were arranged)) if these penalties were disclosed in the statement required under RCW 19.138.040.

 

     Sec. 6.  RCW 19.138.140 and 1994 c 237 s 8 are each amended to read as follows:

     (1) Within five business days of receipt, a seller of travel shall deposit all sums received from a person or entity, for travel services offered by the seller of travel, in a trust account or other ((approved)) account maintained in a state or federally insured financial institution located in Washington state.  Exempted are airline sales made by a seller of travel, when payments for the airline tickets are made through the airline reporting corporation either by cash or credit card sale.

     (2) The trust account or other ((approved)) account required by this section shall be established and maintained for the benefit of any person or entity paying money to the seller of travel.  The seller of travel shall not in any manner encumber the amounts in trust and shall not withdraw money from the account except the following amounts may be withdrawn at any time:

     (a) Partial or full payment for travel services to the entity directly providing the travel service;

     (b) Refunds as required by this chapter;

     (c) The amount of the sales commission;

     (d) Interest earned and credited to the trust account or other approved account; or

     (e) Remaining funds of a purchaser once all travel services have been provided or once tickets or other similar documentation binding upon the ultimate provider of the travel services have been provided.

     (3) ((At the time of registration, the seller of travel shall file with the department the account number and the name of the financial institution at which the trust account or other approved account is held as set forth in RCW 19.138.110.  The seller of travel shall notify the department of any change in the account number or location within one business day of the change.)) If the attorney general has good cause to believe that a violation of this chapter has or is about to occur, the attorney general may require the seller of travel to furnish the account number and the name of the financial institution at which the trust account or other account is held.  If a seller of travel is required to furnish information in accordance with this subsection, the seller of travel must notify the attorney general of any change in the account number or location of the account within one business day of the change.

     (4) The ((director)) attorney general, by rule, may allow for the use of other types of funds or accounts only if the protection for consumers is no less than that provided by this section.

     (5) The seller of travel need not comply with the requirements of this section if all of the following apply, except as exempted in subsection (1) of this section:

     (a) The payment is made by credit card;

     (b) The seller of travel does not deposit, negotiate, or factor the credit card charge or otherwise seek to obtain payment of the credit card charge to any account over which the seller of travel has any control; and

     (c) If the charge includes transportation, the carrier that is to provide the transportation processes the credit card charge, or if the charge is only for services, the provider of services processes the credit card charges.

     (6) If the seller of travel maintains its principal place of business in another state and maintains a trust account or other ((approved)) account in that state consistent with the requirement of this section, ((and if that seller of travel has transacted business within the state of Washington in an amount exceeding five million dollars for the preceding year,)) the out-of-state trust account or other ((approved)) account may be substituted for the in-state account required under this section.

 

     Sec. 7.  RCW 19.138.150 and 1994 c 237 s 9 are each amended to read as follows:

     A seller of travel shall perform ((its)) the seller's duties reasonably and with ordinary care in ((providing)) selling, furnishing contracts for, arranging, advertising, or booking travel services.

 

     Sec. 8.  RCW 19.138.160 and 1994 c 237 s 14 are each amended to read as follows:

     (1) A nonresident seller of travel soliciting business or selling travel in the state of Washington, by mail, telephone, or otherwise, either directly or indirectly, shall register with the department of revenue and is deemed, absent any other appointment, to have appointed the ((director)) secretary of state to be the seller of travel's true and lawful attorney upon whom may be served any legal process against that nonresident arising or growing out of a transaction involving travel services.  That solicitation signifies the nonresident's agreement that process against the nonresident that is served as provided in this chapter is of the same legal force and validity as if served personally on the nonresident seller of travel.

     (2) Service of process upon a nonresident seller of travel shall be made by leaving a copy of the process with the ((director)) secretary of state.  The fee for the service of process shall be determined by the ((director)) secretary of state by rule.  That service is sufficient service upon the nonresident if the plaintiff or plaintiff's attorney of record sends notice of the service and a copy of the process by certified mail before service or immediately after service to the defendant at the address given by the nonresident in a solicitation furnished by the nonresident, and the sender's post office receipt of sending and the plaintiff's or plaintiff's attorney's affidavit of compliance with this section are returned with the process in accordance with Washington superior court civil rules.  Notwithstanding the foregoing requirements, however, once service has been made on the ((director)) secretary of state as provided in this section, in the event of failure to comply with the requirement of notice to the nonresident, the court may order that notice be given that will be sufficient to apprise the nonresident.

 

     Sec. 9.  RCW 19.138.170 and 1994 c 237 s 13 are each amended to read as follows:

     The ((director)) attorney general has the following powers and duties:

     (1) To adopt, amend, and repeal rules to carry out the purposes of this chapter;

     (2) ((To issue and renew registrations under this chapter and to deny or refuse to renew for failure to comply with this chapter;

     (3) To suspend or revoke a registration for a violation of this chapter;

     (4) To establish fees;

     (5) Upon receipt of a complaint, to)) Upon receipt of complaints evidencing a pattern of possible deceptive practices or upon becoming aware of advertising programs that could potentionally be evidence of deceptive practices, the attorney general may inspect and audit the books and records of a seller of travel.  The seller of travel shall immediately make available to the ((director)) attorney general those books and records as may be requested at the seller of travel's place of business or at a location designated by the ((director)) attorney general.  For that purpose, the ((director)) attorney general shall have full and free access to the office and places of business of the seller of travel during regular business hours; and

     (((6))) (3) To do all things necessary to carry out the functions, powers, and duties set forth in this chapter.

 

     Sec. 10.  RCW 19.138.180 and 1994 c 237 s 15 are each amended to read as follows:

     The ((director)) attorney general, in the ((director's)) attorney general's discretion, may:

     (1) ((Annually, or more frequently)) For good cause, make public or private investigations within or without this state as the ((director)) attorney general deems necessary to determine whether ((a registration should be granted, denied, revoked, or suspended, or whether)) a person has violated or is about to violate this chapter or a rule adopted or order issued under this chapter, or to aid in the enforcement of this chapter or in the prescribing of rules and forms of this chapter;

     (2) Publish information concerning a violation of this chapter or a rule adopted or order issued under this chapter; and

     (3) Investigate complaints concerning practices by sellers of travel ((for which registration is required by this chapter)).

 

     Sec. 11.  RCW 19.138.190 and 1994 c 237 s 16 are each amended to read as follows:

     For the purpose of an investigation or proceeding under this chapter, the ((director)) attorney general or any officer designated by the ((director)) attorney general may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the ((director)) attorney general deems relevant or material to the inquiry.

 

     Sec. 12.  RCW 19.138.200 and 1994 c 237 s 20 are each amended to read as follows:

     The ((director)) attorney general or individuals acting on the ((director's)) attorney general's behalf are immune from suit in any action, civil or criminal, based on disciplinary proceedings or other official acts performed in the course of their duties in the administration and enforcement of this chapter.

 

     Sec. 13.  RCW 19.138.210 and 1994 c 237 s 17 are each amended to read as follows:

     If it appears to the ((director)) attorney general that a person has engaged in an act or practice constituting a violation of this chapter or a rule adopted or order issued under this chapter, the ((director)) attorney general may, in the ((director's)) attorney general's discretion, issue an order directing the person to cease and desist from continuing the act or practice.  Reasonable notice of an opportunity for a hearing shall be given.  The ((director)) attorney general may issue a temporary order pending the hearing, which shall remain in effect until ten days after the hearing is held and which shall become final if the person to whom the notice is addressed does not request a hearing within fifteen days after the receipt of the notice.

 

     Sec. 14.  RCW 19.138.220 and 1994 c 237 s 18 are each amended to read as follows:

     The attorney general, a county prosecuting attorney, ((the director,)) or any person may, in accordance with the law of this state governing injunctions, maintain an action in the name of this state to enjoin a person or entity selling travel services ((for which registration is required by this chapter without registration from engaging in the practice until the required registration is secured)) if there is probable cause shown that violation of this section has or is about to occur.  However, the injunction shall not relieve the person or entity selling travel services ((without registration)) from criminal prosecution therefor, but the remedy by injunction shall be in addition to any criminal liability.

 

     Sec. 15.  RCW 19.138.230 and 1994 c 237 s 19 are each amended to read as follows:

     A person or business that violates an injunction issued under this chapter shall pay a civil penalty, as determined by the court, of not more than twenty-five thousand dollars, that shall be paid to the ((department)) attorney general.  For the purpose of this section, the superior court issuing an injunction shall retain jurisdiction and the cause shall be continued, and in such cases the attorney general acting in the name of the state may petition for the recovery of civil penalties.

 

     Sec. 16.  RCW 19.138.240 and 1994 c 237 s 21 are each amended to read as follows:

     (1) The ((director)) attorney general or county prosecuting attorney may assess against a person or organization that violates this chapter, or a rule adopted under this chapter, a civil penalty of not more than ((one)) two thousand dollars for each violation.

     (2) The person or organization shall be afforded the opportunity for a hearing, upon request made to the ((director)) attorney general within thirty days after the date of issuance of the notice of assessment.  The hearing shall be conducted in accordance with chapter 34.05 RCW.

     (3) A civil penalty shall be imposed by the court for each violation of this chapter in an amount not less than five hundred dollars nor more than two thousand dollars per violation.

     (4) If a person fails to pay an assessment after it has become a final and unappealable order, or after the court has entered final judgment in favor of the state, the ((director)) attorney general may recover the amount assessed by action in the appropriate superior court.  In the action, the validity and appropriateness of the final order imposing the penalty shall not be subject to review.

 

     Sec. 17.  RCW 19.138.250 and 1994 c 237 s 22 are each amended to read as follows:

     The ((director)) attorney general or county prosecuting attorney may assess against a person or organization that violates this chapter, or a rule adopted under this chapter, the full amount of restitution as may be necessary to restore to a person an interest in money or property, real or personal, that may have been acquired by means of an act prohibited by or in violation of this chapter.

 

     Sec. 18.  RCW 19.138.270 and 1994 c 237 s 24 are each amended to read as follows:

     (1) Each person who knowingly violates this chapter or who knowingly gives false or incorrect information to the ((director,)) attorney general((,)) or county prosecuting attorney in filing ((statements)) information required by this chapter, whether or not the ((statement or report)) information is verified, is guilty of a gross misdemeanor punishable under chapter 9A.20 RCW.

     (2) A person who violates this chapter or who gives false or incorrect information to the ((director,)) attorney general((,)) or county prosecuting attorney in filing statements required by this chapter, whether or not the statement or report is verified, is guilty of a misdemeanor punishable under chapter 9A.20 RCW.

 

     Sec. 19.  RCW 19.138.280 and 1994 c 237 s 28 are each amended to read as follows:

     In addition to any other penalties or remedies under chapter 19.86 RCW, a person ((who is)) injured by a violation of this chapter may bring an action for recovery of actual damages, including court costs and attorneys' fees.  No provision in this chapter shall be construed to limit any right or remedy provided under chapter 19.86 RCW.

 

     Sec. 20.  RCW 19.138.300 and 1994 c 237 s 25 are each amended to read as follows:

     The administrative procedure act, chapter 34.05 RCW, ((shall,)) wherever applicable, governs the rights, remedies, and procedures respecting the administration of this chapter.

 

     Sec. 21.  RCW 19.138.310 and 1994 c 237 s 26 are each amended to read as follows:

     All information, documents, and reports filed with the ((director)) attorney general or county prosecuting attorney under this chapter are matters of public record and shall be open to public inspection, subject to reasonable regulation.  The ((director)) attorney general or county prosecuting attorney may make public, on a periodic or other basis, the information as may be necessary or appropriate in the public interest concerning the registration, reports, and information filed with the ((director)) attorney general or county prosecuting attorney or any other matters to the administration and enforcement of this chapter.

 

     NEW SECTION.  Sec. 22.  The following acts or parts of acts are each repealed:

     (1) RCW 19.138.055 and 1994 c 237 s 31;

     (2) RCW 19.138.100 and 1994 c 237 s 3;

     (3) RCW 19.138.110 and 1994 c 237 s 4;

     (4) RCW 19.138.120 and 1994 c 237 s 5;

     (5) RCW 19.138.130 and 1994 c 237 s 6;

     (6) RCW 19.138.1701 and 1994 c 237 s 30; and

     (7) RCW 19.138.260 and 1994 c 237 s 23.

 

     NEW SECTION.  Sec. 23.  This act shall take effect January 1, 1996.

 


                                    --- END ---