AN ACT Relating to
sellers of travel; amending RCW 19.138.021, 19.138.030, 19.138.040, 19.138.100,
19.138.110, 19.138.130, and 19.138.140; creating a new section; repealing RCW
19.138.055; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. 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, 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)) for
travel services.
(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) An affiliate of
any person or entity described in (i) through (vii) of this subsection (3)(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), 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;
(ix) Direct
providers of transportation by air, sea, or ground, or hotel or other lodging accommodations
who do not book or arrange any other travel services.
(4) "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))
or vouchers or coupons to be redeemed for future travel or accommodations
for a fee, commission, or other valuable consideration.
(5)
"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.
(6) "Transacts
business with Washington consumers" means to directly offer or sell travel
services to Washington consumers, including the placement of advertising in
media based in the state of Washington or that is primarily directed to
Washington residents. Advertising placed in national print or electronic media
alone does not constitute "transacting business with Washington
consumers." Those entities who only wholesale travel services are not
"transacting business with Washington consumers" for the purposes of
this chapter.
Sec. 2. 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)) any travel services ((is))
are 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 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. 3. 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)) travel 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 contained in subsections
(1) through (6) of this section. If the sale of travel services is made over
the telephone or by other electronic media and payment is made by credit or
debit card, the seller of travel shall transmit to the person making the
payment the written statement required by this section within three business
days of the consumer's credit or debit card authorization. The written
statement shall contain 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) 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) 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. 4. RCW 19.138.100 and 1994
c 237 s 3 are each amended to read as follows:
No person, firm, or
corporation may act or hold itself out as a seller of travel unless, prior to
engaging in the business of selling or advertising to sell travel services, the
person, firm, or corporation registers with the director under this chapter and
rules adopted under this chapter.
(1) The registration
number must be conspicuously posted in the place of business and must be
included in all advertisements. Any corporation which issues a class of equity
securities registered under section 12 of the securities exchange act of 1934,
and any subsidiary, the majority of voting stock of which is owned by such
corporation including any wholly owned subsidiary of such corporation are not
required to include company registration numbers in advertisements.
(2) The director shall
issue duplicate registrations upon payment of a nominal duplicate registration
fee to valid registration holders operating more than one office.
(3) No registration is
assignable or transferable.
(4) If a registered
seller of travel sells his or her business, when the new owner becomes
responsible for the business, the new owner must comply with all provisions of
this chapter, including registration.
(5) If a seller of
travel is employed by or under contract as an independent contractor or an
outside agent of a seller of travel who is registered under this chapter, the
employee, independent contractor, or outside agent need not also be registered
if:
(a) The employee,
independent contractor, or outside agent is conducting business as a seller of
travel in the name of and under the registration of the registered seller of
travel; and
(b) All money
received for travel services by the employee, independent contractor, or
outside agent is collected in the name of the registered seller of travel and
deposited directly into the registered seller of travel's trust account as
required under this chapter.
Sec. 5. RCW 19.138.110 and 1994
c 237 s 4 are each amended to read as follows:
An application for
registration as a seller of travel shall be submitted in the form prescribed by
rule by the director, and shall contain but not be limited to the following:
(1) The name, address,
and telephone number of the seller of travel;
(2) Proof that the
seller of travel holds a valid business license in the state of its principal
state of business;
(3) A registration fee
in an amount determined under RCW 43.24.086;
(4) The names,
((address)) business addresses, and ((social security)) business
phone numbers of all employees, independent contractors, or outside
agents who sell travel and are covered by the seller of travel's
registration. This subsection shall not apply to the out-of-state employees of
a corporation that issues a class of equity securities registered under section
12 of the securities exchange act of 1934, and any subsidiary, the majority of
voting stock of which is owned by the corporation;
(5) A report prepared
and signed by a bank officer, licensed public accountant, or
certified public accountant or other report, approved by the director, that
verifies that the seller of travel maintains a trust account at a federally
insured financial institution located in Washington state, or other
approved account ((at a federally insured institution located in the state
of Washington)), the location and number of that trust account or other
approved account, and verifying that the account ((is maintained and used))
exists as required by RCW 19.138.140. The director, by rule, may permit
alternatives to the report that provides for at least the same level of
verification.
Sec. 6. RCW 19.138.130 and 1994
c 237 s 6 are each amended to read as follows:
(1) The director may
deny, suspend, or revoke the registration of a seller of travel if the director
finds that the applicant:
(a) Was previously the
holder of a registration issued under this chapter, and the registration was
revoked for cause and never reissued by the director, or the registration was
suspended for cause and the terms of the suspension have not been fulfilled;
(b) Has been found
guilty of a felony within the past five years involving moral turpitude, or of
a misdemeanor concerning fraud or conversion, or suffers a judgment in a civil
action involving willful fraud, misrepresentation, or conversion;
(c) Has made a false
statement of a material fact in an application under this chapter or in data
attached to it;
(d) Has violated this
chapter or failed to comply with a rule adopted by the director under this
chapter;
(e) Has failed to
display the registration as provided in this chapter;
(f) Has published or
circulated a statement with the intent to deceive, misrepresent, or mislead the
public; or
(g) Has committed a
fraud or fraudulent practice in the operation and conduct of a travel agency
business, including, but not limited to, intentionally misleading advertising((;
or
(h) Has aided or
abetted a person, firm, or corporation that they know has not registered in
this state in the business of conducting a travel agency or other sale of
travel)).
(2) If the seller of
travel is found in violation of this chapter or in violation of the consumer
protection act, chapter 19.86 RCW, by the entry of a judgment or by settlement
of a claim, the director may revoke the registration of the seller of travel,
and the director may reinstate the registration at the director's discretion.
Sec. 7. 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 in a
trust account maintained in a federally insured financial institution located
in Washington state, or other account approved by the director, all sums held
for more than five business days that are received from a person or entity,
for retail travel services offered by the seller of travel((, in a
trust account or other approved account maintained in a federally insured
financial institution located in Washington state. Exempted are airline sales
made)). This subsection does not apply to travel services sold by a
seller of travel, when payments for the ((airline tickets)) travel
services are made through the airline reporting corporation either by cash
or credit or debit 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 ; or
(f) Reimbursement to
the seller of travel for agency operating funds that are advanced for a
customer's travel services.
(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.
(4) The director, 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.
NEW SECTION. Sec.
8. (1) There is created the
joint legislative task force on the sale of travel services. The task force
shall consider: Options for improving the implementation of chapter 19.138 RCW;
methods of providing reduction in unnecessary regulatory burdens; methods of
improving protections for purchasers of travel services; and review of rule
making under the directions provided in the statutes relating to sellers of
travel services.
(2) The task force
shall consist of the following members: Two members of the senate, appointed
by the president of the senate, one from the majority and one from the minority
caucus; two members of the house of representatives, appointed by the speaker
of the house of representatives, one from the majority and one from the
minority caucus; a representative from the office of the attorney general; a
representative from the department of licensing; and four members of the travel
industry. The four members of the travel industry shall be jointly appointed
by the president of the senate and the speaker of the house of representatives
and shall include: A representative of wholesalers of travel services; a
representative of a membership organization that sells travel services; and two
retailers of travel services. The retailers of travel services shall represent
an economic cross section of the retailers of travel services. Recommendations
for appointment of the travel industry representatives may be made by industry
representatives.
(3) The task force
shall meet not more than three times, as a whole. The task force shall submit
any recommendations it makes to the legislature by December 1, 1996. The task
force may make recommendations for statutory or administrative changes.
(4) The legislative
members shall be reimbursed for travel and expenses under RCW 43.03.050 and
43.03.060.
(5) The task force
shall cease to exist on January 1, 1997.
NEW SECTION. Sec.
9. RCW 19.138.055 and 1994 c 237 s 31 are
each repealed.
NEW
SECTION. Sec. 10. This act is necessary for
the immediate preservation of the public peace, health, or safety, or support
of the state government and its existing public institutions, and shall take
effect immediately.
