BILL REQ. #:  H-1815.1 

READ FIRST TIME 02/17/11.   

     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) Except as provided in (b) and (c) of this subsection, 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.
     (b) If the seller of travel receives a sum of less than two thousand dollars from a person or entity for retail travel services, the sums must only be deposited into the trust account if they are held by the seller of travel for more than five business days.
     (c) This subsection (1) 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.