HOUSE
BILL ANALYSIS
HB
2027
Brief
Description: Regulating travel
sales.
Sponsors: Representatives Lisk, McMorris, Schoesler, Boldt,
Hickel, Honeyford, and Zellinsky
Hearing:
February 26, 1997
BACKGROUND:
Registration
of travel sellers
Beginning
in 1996, sellers of travel must register with the Department of Licensing. The
registration fee is set by the department and is determined by the cost of
monitoring and enforcing the registration program. The registration fee is
$234. Sellers of travel that operate more than one office are issued a
duplicate registration for each office and pay a fee of $25 for each office.
Registration is renewed every other year unless the director determines
otherwise.
Posting
of registration numbers
Registration
numbers must be posted at the travel seller=s place of
business and in all advertising with limited exception.
Written
customer disclosure statement
A
written disclosure statement must be provided to the customer. The statement
must include travel seller=s name, address, phone number and registration
number; itemized statement of costs and payment; names of all vendors providing
travel services and information on travel arrangements; and the rights and
obligations of all parties in the event of cancellation of the travel
arrangements.
Trust
accounts
A
trust account must be maintained by a seller of travel for money paid by the
customer for travel services. Money received from a customer must be deposited
in this account within five days of its receipt. Money paid by cash or credit
card for airline tickets through the airline reporting corporation (ARC) is
exempt from this requirement. Only specified seller of travel expenses may be
withdrawn from the trust account.
Division
of responsibilities between the Attorney General and the Department of
Licensing
The
department has primary responsibility for the registration program and
monitoring compliance with business practices required under the law. These
activities include auditing books and records upon complaint from a customer,
suspending and revoking registration, issuing cease and desist orders for
violations of the sellers of travel law, and imposing administrative
penalties. The Attorney General investigates consumer complaints against
sellers of travel.
SUMMARY
OF BILL:
Registration
of travel sellers
The
registration fee may not exceed $50. A separate registration fee must be paid
for each office or business location having two or more employees for
businesses operating in multiple locations. Registration is renewed annually
unless the director of the Department of Licensing determines otherwise.
Posting
of registration numbers
Registration
numbers need not be included in institutional advertising which is advertising
that does not include prices or dates for travel. For example, registration
numbers would not be required in the yellow pages of the telephone book.
Written
disclosure statement
Rather
than requiring a detailed disclosure statement on the penalties imposed upon
cancellation of travel arrangements, the seller of travel has the option to
advise the customer that cancellation penalties and penalties for changing
arrangements may apply and additional details will be provided upon request.
Trust
account
A
trust account is not required for those sellers of travel who file and maintain
a surety bond in the amount of $10,000 or an alternative form of security
approved by the director such as a certificate of deposit or an irrevocable
line of credit. A seller of travel who is a member in good standing of a
professional association is also exempt from the requirement to maintain a
trust account. The association must be approved by the director and must
provide for its members a minimum of $1 million in errors and omissions
insurance or a surety bond or its equivalent in the amount of $250,000.
Division
of responsibilities between the Attorney General and the Department of
Licensing
The
duties of the Department of Licensing under the sellers of travel law is
limited to administering the registration of travel sellers and the maintenance
of trust accounts. Authority to inspect and audit books and records in
response to a complaint is shifted to the Attorney General.
The
Attorney General is the primary enforcement and investigative agency for the
sellers of travel law. The office has the following duties and
responsibilities: (1) Inspect and audit books and records upon receipt of a
complaint; (2) investigate, in response to a complaint, whether a person has
violated or is about to violate the sellers of travel law; (3) publish information
about violations of the law; (4) investigate complaints on practices of sellers
of travel; (5) exercise subpoena powers and take evidence; (6) issue cease and
desist orders for practices that violate the law; and (7) assess and collect
civil penalties.
Sunset
of the sellers of travel act
The
sellers of travel act sunsets June 30, 1999.
New
registration and practice requirements for sellers of travel-related benefits
Provisions
that parallel those for sellers of travel are applicable to sellers of
travel-related benefits with some exceptions. The sale of travel-related
benefits includes sales of memberships in a travel club where date, price and
location of travel is not identified. The sale of vacation certificates for
future travel and the sale of travel industry member benefits are considered
sales of travel-related benefits.
A
seller of travel-related benefits must file and maintain a bond in the amount
of $50,000 and must, before making any sales, deposit $100,000 in a cost
recovery account. A minimum balance of $100,000 must be maintained.
A
seller of travel-related benefits must perform its duties reasonably and with
ordinary care.
A
contract for travel-related services may be canceled by the purchaser within
three business days of signing the contract or within three business days
following the receipt of required written disclosures. Each contract must
contain conspicuous notice of this right to cancel. A violation of the seller
of travel-related benefits law allows the purchaser to void the contract and
recover all of the money paid under the contract.
The
director of the Department of Licensing has primary enforcement authority and
performs many of the investigative and enforcement functions that are performed
by Attorney General for sellers of travel under this bill.
The
sellers of travel-related benefits law sunsets in 2002.
RULES
AUTHORITY: The bill does contain
provisions addressing the rule-making powers of an agency.
FISCAL
NOTE: Requested February 18,
1997.
EFFECTIVE
DATE: Ninety days after
adjournment of session in which bill is passed.