AN ACT Relating to travel promoters; amending RCW 19.138.010, 19.138.020, 19.138.030, 19.138.040, 19.138.050, 19.138.060, and 19.138.080; adding new sections to chapter 19.138 RCW; repealing RCW 19.138.070; and prescribing penalties.

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

Sec. 1. Section 1, chapter 283, Laws of 1986 and RCW 19.138.010 are each amended to read as follows:

The legislature finds and declares that advertising, sales, and business practices of certain travel ((~~charter or tour operators~~)) promoters 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 segments of the travel ((~~charter or tour operator~~)) promoter business; and that the public welfare requires regulation of travel ((~~charter or tour operators~~)) promoters 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. Section 2, chapter 283, Laws of 1986 and RCW 19.138.020 are each amended to read as follows:

(1) "Travel ((~~charter or tour operator~~)) promoter" means a person who sells, provides, furnishes, contracts for, arranges, or advertises in this state that he or she can or may arrange, or has arranged, whether at wholesale or retail, air, sea, or land transportation either separately or in conjunction with other services. "Travel ((~~charter or tour operator~~)) promoter" does not include:

(a) An air carrier;

(b) An ocean carrier;

(d) A rail carrier;

(e) A ((~~charter party carrier~~)) public or private educational institution arranging travel solely for students or employees; or

(f) An auto transportation carrier((;

~~(g) A person who operates a travel agency business and meets standards no less than those required on January 1, 1987, for authorized agents of the airline reporting corporation;~~

~~(h) A person who:~~

~~(i) Has operated a travel tour or charter business for at least three years under the same ownership or management;~~

~~(ii) Has total annual revenue, not including airline transportation fares, of at least five hundred thousand dollars;~~

~~(iii) Has a certificate of insurance issued by a company authorized to conduct an insurance business under the laws of any state for at least one million dollars for errors and omissions; and~~

~~(iv) Has in effect a surety bond for at least one hundred thousand dollars to the benefit of any consumer who has made payment to the person operating the travel tour or charter business; or~~

(i) A person who sells membership in an organization, club, or association that entitles the purchaser to obtain transportation or other services from a travel charter or tour operator and who does not arrange or provide for transportation)).

(2) "Advertise" means to make any representation in conjunction with, or to effect the sale of, travel services and includes communication with other members of the same partnership, corporation, joint venture, association, organization, group or other entity.

(3) "Passenger" is a person who purchases travel arrangements in Washington state and on whose behalf money or other consideration has been given or is to be given to another, including another member of the same partnership, corporation, joint venture, association, organization, group or other entity, for procuring transportation or other travel services.

(4) "Adequate bond" means a bond executed by an authorized surety insurer in an amount not less than fifty thousand dollars or an amount equal to ten percent of the total revenue of the two highest consecutive months for the travel ((~~charter or tour operator's~~)) promoter's business during the prior calendar year, whichever is greater, but in no case, more than five hundred thousand dollars, for the benefit of every person for whom services have not been delivered by the wrongful act of the principal acting in the course and scope of his or her occupation or business or by any official, agent, or employee of the principal acting in the course or scope of his or her employment or agency.

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

(6) "Director" means the director of the department of licensing, or the director's duly authorized representative.

(7) "Travel certificate" means a document that represents that the holder is entitled to air, sea, or land transportation at a discount or reduced price or to purchase air, sea, or land transportation at a discount or reduced price from a specified source, whether or not the holder is required to pay additional money or fulfill any requirements to utilize the certificate.

Sec. 3. Section 3, chapter 283, Laws of 1986 and RCW 19.138.030 are each amended to read as follows:

A travel ((~~charter or tour operator~~)) promoter 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 such advertisement, received written confirmation with a carrier for the transportation advertised. The alphabetized listing of travel promoters appearing in the advertising section of telephone books or other directories, all materials used to directly solicit business, including but not limited to correspondence, cards, and posters, and all other advertising, including by airwave transmission, shall show or announce the travel promoter's current registration number.

Sec. 4. Section 4, chapter 283, Laws of 1986 and RCW 19.138.040 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 travel ((~~charter or tour operator~~)) promoter in conjunction with such transportation, the travel ((~~charter or tour operator~~)) promoter 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 travel ((~~charter or tour operator.~~)) promoter;

(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((.)), and a statement disclosing when and under what circumstances a refund of the payment will be made to the person making the payment or that the payment is totally or partially nonrefundable;

(3) The location and number of the trust account or bond required by this chapter((.));

(4) The name of the carrier with whom the travel ((~~charter or tour operator~~)) promoter has contracted to provide the transportation, the type of equipment contracted, and the date, time, and place of each departure: PROVIDED, That the information required in this subsection may be provided at the time of final payment((.));

(5) The conditions, if any, upon which the contract between the travel ((~~charter or tour operator~~)) promoter and the ((~~passenger~~)) person may be canceled, and the rights and obligations of all parties in the event of such cancellation((.));

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

"If transportation or other services are canceled by the ((~~travel charter or tour operator~~)) supplier, all sums paid to the travel ((~~charter or tour operator~~)) promoter for services not performed in accordance with the contract between the travel ((~~charter or tour operator~~)) promoter and the ((~~passenger~~)) person will be refunded, subject to the supplier's refund policy within fourteen days after the ((~~cancellation by the travel charter or tour operator~~)) travel promoter receives the money, to the ((~~passenger~~)) person or the party who contracted for the ((~~passenger~~)) person unless: (a) Mutually acceptable alternative travel arrangements are provided; or (b) the services were disclosed to be partially refundable or nonrefundable."

Sec. 5. Section 5, chapter 283, Laws of 1986 and RCW 19.138.050 are each amended to read as follows:

(1) If the transportation or other services contracted for are canceled by the travel promoter, the travel ((~~charter or tour operator~~)) promoter shall return to the ((~~passenger~~)) person within fourteen days after the cancellation all moneys paid for services not performed in accordance with the contract unless mutually acceptable alternative travel arrangements are provided.

(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.

Sec. 6. Section 6, chapter 283, Laws of 1986 and RCW 19.138.060 are each amended to read as follows:

(1) Except as otherwise provided in ((~~subsection (3) of~~)) this section, a travel ((~~charter or tour operator~~)) promoter shall deposit ninety percent of ((~~all sums~~)) the net amount received for transportation or any other services offered by the travel ((~~charter or tour operator~~)) promoter in conjunction with such transportation in a trust account in a federally insured financial institution.

(2) The trust account required by this section shall be created and maintained for the benefit of the passengers paying money to the travel ((~~charter or tour operator~~)) promoter, for the purpose of consumer protection, and a passenger's claim to the trust is prior to the claims of any secured or unsecured creditor in the event of a proceeding in bankruptcy. The travel ((~~charter or tour operator~~)) promoter shall not in any manner encumber the corpus of the account and shall not withdraw money therefrom except: (a) In an amount equal to partial or full payment for the services contracted for the passengers to the carrier or person providing the other services offered by the travel ((~~charter or tour operator~~)) promoter; or (b) to make the refunds as required by RCW 19.138.050 or as provided for by written contract between the travel ((~~charter and tour operator~~)) promoter and passengers. A travel ((~~charter and tour operator~~)) promoter may withdraw from the account any interest earned and credited to the trust account for the sole benefit of the travel ((~~charter and tour operator~~)) promoter after all services have been provided as contracted.

(3) ((~~A travel charter and tour operator, instead of~~)) In lieu of maintaining a trust account as provided in subsections (1) and (2) of this section, a travel promoter may maintain an adequate bond.

(4) A violation of any provision of this section shall constitute a gross misdemeanor punishable under RCW 9A.20.021(2).

Sec. 7. Section 8, chapter 283, Laws of 1986 and RCW 19.138.080 are each amended to read as follows:

A violation of ((~~RCW 19.138.030 through 19.138.070~~)) this chapter shall constitute a violation of RCW 19.86.020.

NEW SECTION. Sec. 8. No travel promoter as defined under RCW 19.138.020 may sell, provide, furnish, contract for, arrange, or advertise in this state that he or she can or may arrange, or has arranged, whether at wholesale or retail, air, sea, or land transportation without being registered to conduct such business by the department under this chapter.

NEW SECTION. Sec. 9. (1) A travel promoter shall register at least ten days prior to doing business in the state, or within ten days after being notified of the registration requirement by the appropriate agency, by filing an application with the department.

(2) Each application for registration shall be accompanied by a fee to be determined by the director as provided in RCW 43.24.086.

(3) Each application shall be on a form as prescribed by the director and contain the following information:

(a) The name or names of the travel promoter, including the name under which the travel promoter is doing or intends to do business if different from the name of the travel promoter;

(b) The travel promoter's principal place of business;

(c) The name and address of any owner or the chief executive and operating officers, or any agent for purposes of service of process;

(d) The location and number of all trust accounts required by RCW 19.138.060 to be maintained by the travel promoter, or if a bond is maintained in lieu of the trust account as provided by RCW 19.138.060, a copy of that bond;

(e) A list of any independent contractors who will be using the account;

(f) A copy of all travel certificates, if any, which are or will be sold, marketed, or distributed to any person or entity by the travel promoter; and

(g) Any other material information the director may by rule require for the protection of consumers.

(4) At the time of registration the department shall issue a registration number to the travel promoter.

(5) The registration shall be valid for one year from the effective date and may be renewed annually.

(6) The director shall establish by rule the procedural requirements and fees for renewal of registration. Renewal of registration also requires a completed application as set forth in subsection (3) of this section.

(7) A travel promoter shall notify the department within thirty days after any change in the information on its application regarding the names and addresses of owners, officers, agent for purposes of services of process, or place of business.

NEW SECTION. Sec. 10. The department shall cooperate with the office of the attorney general in enforcing this chapter and shall refer to the attorney general or the proper prosecuting attorney any evidence available concerning violations of this chapter. The attorney general or proper prosecuting attorney may in their discretion, in addition to any other action they might commence, bring an action in the name of the state against any person to restrain and prevent the doing of any act or practice prohibited by this chapter.

NEW SECTION. Sec. 11. Any person who violates this chapter is guilty of a misdemeanor, except for violations of RCW 19.138.060.

NEW SECTION. Sec. 12. The director may revoke, suspend, or deny issuance of registration to any travel promoter who violates this chapter.

NEW SECTION. Sec. 13. The rights and remedies under this chapter are in addition to any other rights or remedies provided by law. The provisions of this chapter shall be construed liberally for the accomplishment of the purposes thereof.

NEW SECTION. Sec. 14. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 15. Sections 8 through 13 of this act are each added to chapter 19.138 RCW.

NEW SECTION. Sec. 16. Section 7, chapter 283, Laws of 1986 and RCW 19.138.070 are each repealed.