Bill Text: CA AB2106 | 2015-2016 | Regular Session | Chaptered
Bill Title: Sellers of travel: registration.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2016-09-23 - Chaptered by Secretary of State - Chapter 517, Statutes of 2016. [AB2106 Detail]
Download: California-2015-AB2106-Chaptered.html
BILL NUMBER: AB 2106 CHAPTERED
BILL TEXT
CHAPTER 517
FILED WITH SECRETARY OF STATE SEPTEMBER 23, 2016
APPROVED BY GOVERNOR SEPTEMBER 23, 2016
PASSED THE SENATE AUGUST 17, 2016
PASSED THE ASSEMBLY AUGUST 30, 2016
AMENDED IN SENATE AUGUST 15, 2016
AMENDED IN SENATE JUNE 9, 2016
AMENDED IN SENATE MAY 31, 2016
AMENDED IN ASSEMBLY MARCH 10, 2016
INTRODUCED BY Assembly Member Irwin
FEBRUARY 17, 2016
An act to amend Sections 17550, 17550.20, 17550.21, and 17550.37
of the Business and Professions Code, relating to sellers of travel.
LEGISLATIVE COUNSEL'S DIGEST
AB 2106, Irwin. Sellers of travel: registration.
Existing law regulates sellers of travel, as defined, and
requires their registration with the Attorney General. Under existing
law, the Travel Consumer Restitution Corporation provides
restitution to a person aggrieved by the failure of a seller of
travel to refund payments for air or sea transportation or travel
services, subject to specified restrictions. Existing law requires
the Travel Consumer Restitution Corporation to assess, as specified,
sellers of travel for the corporation's operations fund and the
Travel Consumer Restitution Fund.
Existing law requires sellers of travel to register by filing with
the Consumer Law Section specified fees for each location of
business and specified information about the seller of travel
including its business form, its place of organization, and certain
personal identification numbers of each of its owners and principals.
This bill would also require sellers of travel to file with the
Consumer Law Section the name, address, and telephone number of the
sole member or the sole shareholder of a limited liability company or
"S" corporation, as described, with which the seller of travel
contracts and the file number assigned to the seller of travel by the
Secretary of State or the Franchise Tax Board.
Existing law prohibits the issuance, approval, or renewal of
registration of a seller of travel until specified filing and late
fees have been paid.
The bill additionally would prohibit the issuance, approval, or
renewal of registration until the seller of travel has paid any
outstanding assessments due to the Travel Consumer Restitution
Corporation.
Existing law requires the Attorney General to suspend the
registration of a seller of travel who fails to make required
payments to the Travel Consumer Restitution Corporation or who
submits a check in payment of a registration fee or late fee that is
not honored by the institution on which it is drawn.
The bill would require the Attorney General to suspend the
registration of a seller of travel who fails to provide the Consumer
Law Section the file number assigned to the seller of travel by the
Secretary of State or the Franchise Tax Board.
Existing law restricts refund payments from the Travel Consumer
Restitution Fund to persons aggrieved by sellers of travel who, at
the time of sale, were paid-up participants in the fund. Under
existing law, any person aggrieved who files a claim for payment from
the fund thereby waives his or her right to bring an action at law
or equity against the seller of travel as to that claim, as
specified, unless the seller of travel was not a paid-up participant.
The bill would instead allow refund payments to persons aggrieved
by sellers of travel who had been paid-up participants at any time
during the period commencing with the 18 months previous to the time
of sale, and ending with the expiration of the applicable time period
provided for filing an action. Under the bill, any person aggrieved
who files a claim for payment from the fund would thereby waive his
or her right to bring an action at law or equity against the seller
of travel as to that claim, as specified, unless the seller of travel
had not been a paid-up participant at any time during that time
period.
Existing law exempts from the provisions regulating sellers of
travel an individual, natural person who meets specified conditions.
This bill instead would exempt from those provisions a person who
is an individual, a single-member limited liability company whose
sole member is an individual, or a single-shareholder "S" corporation
whose sole shareholder is an individual that meets specified
conditions.
The bill would correct an incorrect cross-reference and make other
nonsubstantive changes.
This bill would incorporate additional changes to Section 17550.20
of the Business and Professions Code proposed by AB 2138 that would
become operative if this bill and AB 2138 are enacted and this bill
is enacted last.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17550 of the Business and Professions Code is
amended to read:
17550. (a) The Legislature finds and declares all of the
following:
(1) Certain advertising, sales, and business practices of sellers
of travel have worked financial hardship upon the people of this
state.
(2) The travel business has a significant impact upon the economy
and well-being of this state and its people.
(3) Problems have arisen that are peculiar to sellers of travel
business.
(4) The public welfare requires regulation of sellers of travel in
order to eliminate unfair advertising, sales, and business
practices, to establish standards that will safeguard the people
against financial hardship, to encourage competition, fair dealing,
and prosperity in the travel business, and to provide certain and
reliable funding for the seller of travel registration program and
enforcement by the office of the Attorney General of this article.
(b) It is the intent of the Legislature in enacting this article
that the Department of Justice, to the extent that resources are
available, work together with representatives of the affected
business community to develop sample forms that will, to the maximum
extent possible, enable sellers of travel to comply with the
requirement to provide to persons making payment the information
required by paragraph (1) of subdivision (a) of Section 17550.13, in
a manner that is simplified, efficient, and nonduplicative, and in a
manner that recognizes the particular burdens and situations that may
exist for small sellers of travel in their efforts to comply with
the provisions of that section.
SEC. 2. Section 17550.20 of the Business and Professions Code is
amended to read:
17550.20. (a) (1) Not less than 10 days prior to doing business
in this state, a seller of travel shall apply for registration with
the office of the Attorney General by filing with the Consumer Law
Section the information required by Section 17550.21 and paying the
following fees, as applicable:
(A) A filing fee of one hundred dollars ($100) for each location
from which the seller of travel conducts business.
(B) A late fee of five dollars ($5) per day, up to a maximum of
five hundred dollars ($500), for each day after the time specified by
this section until the filing fee and the information required by
Section 17550.21 are received.
(2) A seller of travel may annually renew its registration by
making the filing required by Section 17550.21 and paying the filing
fees and late fees required by paragraph (1).
(3) A registration shall not be issued, approved, or renewed until
the late fee, the filing and late fees for each year the seller of
travel operated without being registered, and any outstanding
assessments due to the Travel Consumer Restitution Corporation as
required by Sections 17550.43 and 17550.44 have been paid.
(4) A seller of travel shall be deemed to do business in this
state if the seller of travel solicits business from locations in
this state or solicits prospective purchasers who are located in this
state.
(b) Registration shall be valid for one year from the effective
date thereof shown on the registration issued by the office of the
Attorney General.
(c) Whenever, prior to expiration of a seller of travel's annual
registration, there is a material change in the information required
by Section 17550.21, the seller of travel shall, within 10 days, file
an addendum updating the information with the Consumer Law Section
of the office of the Attorney General.
(d) (1) Not less than 10 days prior to the transfer or sale of any
interest in a seller of travel, the selling or transferring owner
shall file with the office of the Attorney General, Seller of Travel
Program, a notice of encumbrance, sale, or transfer of ownership,
using a form provided for that purpose by the office of the Attorney
General. The notice shall provide the information required pursuant
to subdivision (d) of Section 17550.21 as to each transferee.
(2) Until the time the notice of encumbrance, sale, or transfer of
ownership required in paragraph (1) is filed as required, the
selling, encumbering, or transferring owner is responsible for all
acts of and obligations imposed by law on the transferee sellers of
travel to the same extent as they would have been responsible had
there been no transfer, sale, or encumbrance.
(e) (1) The office of the Attorney General shall suspend the
registration of a seller of travel who does any of the following:
(A) Fails to make any payment required pursuant to Article 2.7
(commencing with Section 17550.35).
(B) Submits a check in payment of a registration fee or late fee
required by this section that is not honored by the institution on
which it is drawn.
(C) Fails to provide the file number assigned by the Secretary of
State or the Franchise Tax Board to the seller of travel, as required
by subdivision (m) of Section 17550.21.
(2) The Attorney General shall provide written notice to the
seller of travel by first-class mail at the seller of travel's place
of business set forth in the registration statement that the seller
of travel's registration has been suspended until all fees that are
due have been paid. The registration of the seller of travel shall be
suspended until all such payments due have been collected.
(f) The Attorney General may, at his or her discretion and subject
to supervision by the Attorney General or his or her delegate,
contract out all or any part of the processing of registrations
required by this section.
(g) This section does not apply to a person who is an individual,
a single-member limited liability company whose sole member is an
individual, or a single-shareholder "S" corporation whose sole
shareholder is an individual, that meets all of the following:
(1) Has a written contract with a registered seller of travel to
act on that registered seller of travel's behalf in offering or
selling air or sea transportation and other travel goods or services
in connection with the transportation.
(2) Acts only on behalf of a registered seller of travel with whom
the person has a written contract in the offer or sale to a
passenger of air or sea transportation and other goods or services in
connection with the transportation and sells no other air or sea
transportation or travel services to that passenger.
(3) Provides air or sea transportation or travel services that are
offered or sold pursuant to the official agency appointment of the
registered seller of travel with whom the person has a written
contract.
(4) Does not receive any consideration for air or sea
transportation or other travel services from the passenger.
(5) Requires the passenger to pay all consideration for air or sea
transportation or other travel services directly to the air carrier
or ocean carrier or to the registered seller of travel.
(6) Discloses both of the following:
(A) The person is acting on behalf of a registered seller of
travel.
(B) The name, address, telephone number, and registration number
of the registered seller of travel on whose behalf the person is
acting.
The person shall make the disclosures required by this paragraph
in writing to the passenger at the same time the passenger receives
notice under Section 17550.13. If the person transacts business in
this state on the Internet, the disclosures also shall appear on the
home page of the person's Internet Web site and shall be prominently
set forth in the first electronic mail message sent to the passenger
that refers to the passenger's purchase of air or sea transportation
or travel services.
(h) Whenever the Attorney General determines that a registration
application is accurate and complete, the application shall be
processed and a registration certificate shall be issued to the
seller of travel within 21 days.
SEC. 2.5. Section 17550.20 of the Business and Professions Code is
amended to read:
17550.20. (a) (1) Not less than 10 days prior to doing business
in this state, a seller of travel shall apply for registration with
the office of the Attorney General by filing with the Consumer Law
Section the information required by Section 17550.21 and paying the
following fees, as applicable:
(A) A filing fee of one hundred dollars ($100) for each location
from which the seller of travel conducts business.
(B) A late fee of five dollars ($5) per day, up to a maximum of
five hundred dollars ($500), for each day after the time specified by
this section until the filing fee and the information required by
Section 17550.21 are received.
(2) A seller of travel may annually renew its registration by
making the filing required by Section 17550.21 and paying the filing
fees and late fees required by paragraph (1).
(3) A registration shall not be issued, approved, or renewed until
the late fee, the filing and late fees for each year the seller of
travel operated without being registered, and any outstanding
assessments due to the Travel Consumer Restitution Corporation as
required by Sections 17550.43 and 17550.44 have been paid.
(4) A seller of travel shall be deemed to do business in this
state if the seller of travel solicits business from locations in
this state regardless of the geographic location of the prospective
purchaser including persons located outside of this state or the
country or solicits prospective purchasers who are located in this
state.
(b) Registration shall be valid for one year from the effective
date thereof shown on the registration issued by the office of the
Attorney General.
(c) Whenever, prior to expiration of a seller of travel's annual
registration, there is a material change in the information required
by Section 17550.21, the seller of travel shall, within 10 days, file
an addendum updating the information with the Consumer Law Section
of the office of the Attorney General.
(d) (1) Not less than 10 days prior to the transfer or sale of any
interest in a seller of travel, the selling or transferring owner
shall file with the office of the Attorney General, Seller of Travel
Program, a notice of encumbrance, sale, or transfer of ownership,
using a form provided for that purpose by the office of the Attorney
General. The notice shall provide the information required pursuant
to subdivision (d) of Section 17550.21 as to each transferee.
(2) Until the time the notice of encumbrance, sale, or transfer of
ownership required in paragraph (1) is filed as required, the
selling, encumbering, or transferring owner is responsible for all
acts of and obligations imposed by law on the transferee sellers of
travel to the same extent as they would have been responsible had
there been no transfer, sale, or encumbrance.
(e) (1) The office of the Attorney General shall suspend the
registration of a seller of travel who does any of the following:
(A) Fails to make any payment required pursuant to Article 2.7
(commencing with Section 17550.35).
(B) Submits a check in payment of a registration fee or late fee
required by this section that is not honored by the institution on
which it is drawn.
(C) Fails to provide the file number assigned by the Secretary of
State or the Franchise Tax Board to the seller of travel, as required
by subdivision (m) of Section 17550.21.
(2) The Attorney General shall provide written notice to the
seller of travel by first-class mail at the seller of travel's place
of business set forth in the registration statement that the seller
of travel's registration has been suspended until all fees that are
due have been paid. The registration of the seller of travel shall be
suspended until all such payments due have been collected.
(f) The Attorney General may, at his or her discretion and subject
to supervision by the Attorney General or his or her delegate,
contract out all or any part of the processing of registrations
required by this section.
(g) This section does not apply to a person who is an individual,
a single-member limited liability company whose sole member is an
individual, or a single-shareholder "S" corporation whose sole
shareholder is an individual, that meets all of the following:
(1) Has a written contract with a registered seller of travel to
act on that registered seller of travel's behalf in offering or
selling air or sea transportation and other travel goods or services
in connection with the transportation.
(2) Acts only on behalf of a registered seller of travel with whom
the person has a written contract in the offer or sale to a
passenger of air or sea transportation and other goods or services in
connection with the transportation and sells no other air or sea
transportation or travel services to that passenger.
(3) Provides air or sea transportation or travel services that are
offered or sold pursuant to the official agency appointment of the
registered seller of travel with whom the person has a written
contract.
(4) Does not receive any consideration for air or sea
transportation or other travel services from the passenger.
(5) Requires the passenger to pay all consideration for air or sea
transportation or other travel services directly to the air carrier
or ocean carrier or to the registered seller of travel.
(6) Discloses both of the following:
(A) The person is acting on behalf of a registered seller of
travel.
(B) The name, address, telephone number, and registration number
of the registered seller of travel on whose behalf the person is
acting.
The person shall make the disclosures required by this paragraph
in writing to the passenger at the same time the passenger receives
notice under Section 17550.13. If the person transacts business in
this state on the Internet, the disclosures also shall appear on the
home page of the person's Internet Web site and shall be prominently
set forth in the first electronic mail message sent to the passenger
that refers to the passenger's purchase of air or sea transportation
or travel services.
(h) Whenever the Attorney General determines that a registration
application is accurate and complete, the application shall be
processed and a registration certificate shall be issued to the
seller of travel within 21 days.
SEC. 3. Section 17550.21 of the Business and Professions Code is
amended to read:
17550.21. Each filing pursuant to Section 17550.20 shall contain
the following information:
(a) The name or names of the seller of travel, including the name
under which the seller of travel is doing or intends to do business,
if different from the name of the seller of travel.
(b) The seller of travel's business form and place of organization
and, if operating under a fictitious business name, the location
where the fictitious name has been registered. If the seller of
travel does business in California from one or more locations in this
state but does not maintain its principal place of business in this
state, the seller of travel shall state whether it meets the
requirements of paragraph (16) of subdivision (e) of Section 17511.1.
(c) The complete street address or addresses of all locations from
which the seller of travel will be conducting business, including,
but not limited to, locations at which telephone calls will be
received from, or made to, passengers or other sellers of travel. The
statement shall designate which location is the principal place of
business.
(d) The complete business and residential addresses and telephone
numbers, the driver's license number and state of issuance or
equivalent personal identification, the social security number, and
the date of birth of each owner and principal of the seller of
travel. "Owner" means a person who owns or controls 10 percent or
more of the equity of, or otherwise has claim to 10 percent or more
of the net income of, a seller of travel. "Principal" means an owner,
an officer of a corporation, a general partner of a partnership, or
a sole proprietor of a sole proprietorship.
(e) A statement as to whether the seller of travel, any owner, or
principal, or any other seller of travel owned or managed by any
owner or principal of the seller of travel, or the seller of travel
itself has had entered against that person or entity any judgment,
including a stipulated judgment, order, made a plea of nolo
contendere, or been convicted of any criminal violation. The
statement shall identify the person, the court or administrative
agency rendering the judgment, order, or conviction, the docket
number of the matter, and the date of the judgment, order, or
conviction; where the judgment, order, or record of conviction is
filed; and the nature of the case or judgment. This subdivision does
not require disclosure of marital dissolution, child support, or
child custody proceedings.
(f) A copy of the travel certificates, if any, that are or will be
sold, marketed, or distributed to any person or entity by the seller
of travel.
(g) The seller of travel shall file with the Attorney General a
signed and dated statement providing the following:
(1) The account number of each trust account required by this
article.
(2) The name and address of each financial institution at which
the seller of travel maintains a trust account required by this
article.
(3) Any registration number issued to the seller of travel by the
Airline Reporting Corporation or the International Association of
Travel Agents Network.
(4) A consent form consenting to the Attorney General, a district
attorney, or their representatives obtaining directly from the
Airlines Reporting Corporation, International Association of Travel
Agents Network, a seller of transportation, provider of
transportation, provider of travel services, and any financial
institution where passenger funds have been deposited, any
information related to an investigation of a seller of travel's
compliance with this section. The consent form shall be provided by
the Attorney General. If a bond is maintained in lieu of the trust
account, a copy of that bond shall be filed with the Attorney
General.
(h) A statement signed by each owner and principal granting
permission to the office of the Attorney General to obtain from any
financial institution or credit union at which any trust account
required by Section 17550.15 is maintained, information relating to
that trust account, as set forth in paragraph (2) of subdivision (f)
of Section 17550.15.
(i) The name, address, and telephone number of each person
described in subdivision (g) of Section 17550.20 with whom the seller
of travel contracts.
(j) The name, address, and telephone number of the sole member or
the sole shareholder of a limited liability company or "S"
corporation described in subdivision (g) of Section 17550.20 with
which the seller of travel contracts.
(k) If at the time of registration renewal, no change has occurred
to the information provided in the last filed complete registration
statement and the permission described in subdivision (h) has not
expired, the seller of travel may, instead of filing a registration
statement containing the information required by subdivisions (a) to
(j), inclusive, file a statement attesting to the continued accuracy
of the information in the last filed complete registration statement.
The attestation shall be in a form specified by the Attorney General
and verified as described in subdivision (l).
(l) The information required by this section shall be verified by
a declaration signed and dated by each owner and principal of the
seller of travel, or in the case of a registered seller of travel
that does business in California, from one or more locations in
California, and that meets the requirements of paragraph (16) of
subdivision (e) of Section 17511.1, by a duly authorized officer of
the corporation, under penalty of perjury pursuant to the laws of the
State of California. The declaration shall specify the date and
location of signing. Upon reregistration by a previously registered
seller of travel, the information required by this section may be
verified by the chief executive officer of a corporation, managing
partner of a partnership, or manager of a limited liability company.
(m) The file number assigned by the Secretary of State or the
Franchise Tax Board to the seller of travel.
SEC. 4. Section 17550.37 of the Business and Professions Code is
amended to read:
17550.37. (a) "Person aggrieved," as used in this article, means
a passenger, as defined in Section 17550.3, located in California at
the time of sale, or a person located in California at the time of
sale who made any payment on behalf of the passenger for air or sea
transportation or travel services, who has sustained a loss as a
result of the failure of a seller of travel to refund payments made
by or on behalf of a passenger as payment for air or sea
transportation or travel services, where a refund is due as a result
of the bankruptcy, insolvency, cessation of operations, or material
failure to provide the transportation or travel services purchased by
the passenger, regardless of whether the passenger or a person
making payment on behalf of the passenger initially contracted with
that seller of travel. "Loss," as used herein, shall be limited to
losses that are incurred in a transaction with a seller of travel
who, at the time of sale, was registered pursuant to Section
17550.20, and who had been a paid participant at any time during the
period commencing with 18 months previous to the time of sale, and
ending with the expiration of the applicable time period provided in
law for the filing of a civil, administrative, or other available
action under the law that is available to the person aggrieved.
"Person aggrieved" shall not mean or include a passenger, or person
making payment on behalf of a passenger, in a transaction where the
air or sea transportation or travel services are furnished by a
business entity that is located and providing transportation or
travel services outside of the United States and is not in compliance
with Article 2.6 (commencing with Section 17550).
(b) Any person aggrieved who files a claim for payment from the
Travel Consumer Restitution Fund thereby waives his or her right to
bring any action at law or equity that is against the seller of
travel as to whom the claim is made and arises from the transaction
that is the subject of the claim against the restitution fund. The
claim form required by Section 17550.46 shall include a clear and
conspicuous notice of the waiver.
(c) The waiver of rights provided for by subdivision (b) shall not
apply to any claimant whose claim is denied on any of the following
grounds, as set forth in the statement of decision required by
subdivision (d) of Section 17550.47:
(1) The seller of travel had not been a paid-up participant in the
Travel Consumer Restitution Fund at any time during the period of
time provided in subdivision (a).
(2) The seller of travel was not, at the time of sale, registered
pursuant to Section 17550.20.
(3) The claimant was not located in California at the time of
sale, as required by subdivision (a).
SEC. 5. Section 2.5 of this bill incorporates amendments to
Section 17550.20 of the Business and Professions Code proposed by
both this bill and Assembly Bill 2138. It shall only become operative
if (1) both bills are enacted and become effective on or before
January 1, 2017, (2) each bill amends Section 17550.20 of the
Business and Professions Code, and (3) this bill is enacted after
Assembly Bill 2138, in which case Section 2 of this bill shall not
become operative.
