BILL REQ. #: H-0875.1
State of Washington | 62nd Legislature | 2011 Regular Session |
Read first time 01/18/11. Referred to Committee on Business & Financial Services.
AN ACT Relating to sellers of travel; and amending RCW 19.138.021 and 19.138.140.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 19.138.021 and 2001 c 44 s 1 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) "Sale of travel-related benefits" means the sale of travel
services if the travel services are not identified at the time of the
sale with respect to dates, price, or location and includes:
(a) Sales of travel club memberships;
(b) Sales of vacation certificates or other documents that purport
to grant the holder of the certificate or other document the ability to
obtain future travel services, with or without additional
consideration; or
(c) Sales of travel-industry member benefits including those
through either or both the issuance and sale or the consulting with or
advising for consideration of persons in connection with the obtaining
of international airlines travel agent network identification cards or
memberships.
(4) "Travel club" means a seller of travel that sells memberships
to consumers, where the initial membership or maintenance dues are at
least twice the amount of the annual membership or maintenance dues.
(5) "Seller of travel-related benefits" means a person, firm, or
corporation that transacts business with Washington consumers for the
sale of travel-related benefits.
(6) "Seller of travel" means a person, firm, or corporation both
inside and outside the state of Washington, who transacts business with
Washington consumers, including retail location travel agencies, home-based travel agencies, and online travel agencies.
(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 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 (6)(b) that is primarily engaged in
the sale of travel services provided by the person or entity. For
purposes of this subsection (6)(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.
(7) "Travel services" includes transportation by air, sea, or
ground, hotel or any lodging accommodations, package tours, or vouchers
or coupons to be redeemed for future travel or accommodations for a
fee, commission, or other valuable consideration.
(8) "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, internet, or cable
transmission that relates to travel services.
(9) "Transacts business with Washington consumers" means to
directly offer ((or)), sell, or allow purchase of travel services or
travel-related benefits 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 19.138.140 and 2003 c 38 s 1 are each amended to read
as follows:
(1) 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)) by a seller of travel that are received
from a person or entity, for retail travel services offered by the
seller of travel. This subsection does not apply to travel services
sold by a seller of travel, when payments for the travel services are
made through the airlines reporting corporation.
(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;
(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) The seller of travel may deposit noncustomer funds into the
trust account as needed in an amount equal to a deficiency resulting
from dishonored customer payments made by check, draft, credit card,
debit card, or other negotiable instrument.
(4) 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.
(5) 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.
(6) 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.
(7) The seller of travel need not maintain a trust account nor
comply with the trust account provisions of this section if the seller
of travel:
(a)(i) Files and maintains a surety bond approved by the director
in an amount of not less than ten thousand nor more than fifty thousand
dollars, as determined by rule by the director based on the gross
income of business conducted for Washington state residents by the
seller of travel during the prior year. The bond shall be executed by
the applicant as obligor by a surety company authorized to transact
business in this state naming the state of Washington as obligee for
the benefit of any person or persons who have suffered monetary loss by
reason of the seller of travel's violation of this chapter or a rule
adopted under this chapter. The bond shall be conditioned that the
seller of travel will conform to and abide by this chapter and all
rules adopted under this chapter, and shall reimburse any person or
persons who suffer monetary loss by reason of a violation of this
chapter or a rule adopted under this chapter.
(ii) The bond must be continuous and may be canceled by the surety
upon the surety giving written notice to the director of the surety's
intent to cancel the bond. The cancellation is effective thirty days
after the notice is received by the director.
(iii) The applicant may obtain the bond directly from the surety or
through other bonding arrangement as approved by the director.
(iv) In lieu of a surety bond, the applicant may, upon approval by
the director, file with the director a certificate of deposit, an
irrevocable letter of credit, or such other instrument as is approved
by the director by rule, drawn in favor of the director for an amount
equal to the required bond.
(v) Any person or persons who have suffered monetary loss by any
act which constitutes a violation of this chapter or a rule adopted
under this chapter may bring a civil action in court against the seller
of travel and the surety upon such bond or approved alternate security
of the seller of travel who committed the violation of this chapter or
a rule adopted under this chapter or who employed the seller of travel
who committed such violation. A civil action brought in court pursuant
to the provisions of this section must be filed no later than one year
following the later of the alleged violation of this chapter or a rule
adopted under this chapter or completion of the travel by the customer;
or
(b) Is a member in good standing in a professional association,
such as the United States tour operators association or national tour
association, that is approved by the director and that provides or
requires a member to provide a minimum of one million dollars in errors
and professional liability insurance and provides a surety bond or
equivalent protection in an amount of at least two hundred fifty
thousand dollars for its member companies.
(8) 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.