BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1107|
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CONSENT
Bill No: AB 1107
Author: Irwin (D)
Amended: 4/8/15 in Assembly
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 9-0, 6/15/15
AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez,
Jackson, Mendoza, Wieckowski
SENATE JUDICIARY COMMITTEE: 6-0, 7/7/15
AYES: Jackson, Moorlach, Hertzberg, Leno, Monning, Wieckowski
NO VOTE RECORDED: Anderson
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 78-0, 5/14/15 - See last page for vote
SUBJECT: Sellers of travel: regulation
SOURCE: California Coalition of Travel Organizations
DIGEST: This bill requires a seller of travel, as defined, to
maintain their business records for a period of three years;
authorizes the Attorney General to recover their costs and
attorney fees pursuant to an audit that determines noncompliance
with the Sellers of Travel Law and; provides for an assessment
issued by Travel Consumer Restitution Corporation to be sent
pursuant to electronic billing.
ANALYSIS:
Existing law:
1)Establishes the Sellers of Travel law which provides a
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comprehensive scheme for the regulation of sellers of travel
(SOT), as defined, and requires a seller of travel, unless
exempted, to register with the Attorney General (AG) and to
comply with various requirements. (Business and Professions
Code (BPC) § 17550 et. seq.)
2)Requires a SOT to register with the Attorney General's office
(AG).
(BPC § 17550.20)
3)Mandates a SOT deposit all funds received from a passenger for
air or sea transportation for any person, or for any travel
services offered by the seller of travel, and any refunds made
by carriers or providers of travel services, into a secure
trust account. (BPC § 17550.15)
4)Requires a SOT to file an irrevocable agreement with the AG or
a district attorney to allow examination of all business
records at its written request. (BPC § 17550.15(f))
5)Establishes the Travel Consumer Restitution Corporation (TCRC)
which creates the Travel Consumer Restitution Fund as a
mechanism for an aggrieved passenger to be reimbursed when a
SOT fails to provide for travel or in the event that a SOT
becomes insolvent. (BPC § 17550.38)
6)Authorizes the TCRC to bill a SOT for fees necessary to
maintain the fund.
(BPC § 17550.44)
7)Directs the TCRC to mail a SOT any assessments required to
maintain the fund. (BPC § 17550.44)
This bill:
1)Requires a SOT to maintain business records for a minimum
period of three years.
2)Authorizes the AG to recover costs and attorney's fees if the
AG determines through an examination (audit) that the SOT has
failed to comply with any requirements of the SOT Law.
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3)Clarifies that an assessment issued by the TCRC shall be sent,
rather than mailed under current law, effectively authorizing
electronic billing.
Background
The Sellers of Travel Law was enacted by SB 918 (Chapter 1123,
Statutes of 1994), authored by then-Assemblymember Jackie Speier
and sponsored by the California Coalition of Travel
Organizations working in cooperation with the AG's office. The
law requires all sellers of travel to register with the AG's
office, pay an annual fee of $100 to fund the program and pay
annual assessments into a self-sustaining restitution fund (the
TCRF). This law provides specific protections to consumers who
purchase sea or air transportation either singly or in
conjunction with other travel services, such as lodging and car
rentals. The Seller of Travel Law applies to all sellers
located in California, as well as those who sell or offer to
sell from locations outside the state to persons located in
California. The law applies to both retail and wholesale
transactions, and covers sales by tour operators, consolidators,
and wholesalers. A seller who only offers lodging, bus, or
train tours without also offering air or sea transportation is
not covered by the Seller of Travel Law. Lodging establishments
that book travel for their guests and accept no money for doing
so, along with airlines, and cruise lines are also not covered
by this law.
The current SOT law was enacted prior to the advancement of
Internet and electronic transactions, and as such, required the
TCRC to bill SOTs by mail. This bill attempts to bring about
efficiency by allowing for electronic TCRC billing. Current law
also does not require SOTs to maintain their business records
for any period of time so the proposed requirement that records
be maintained for three years is an attempt to provide the AG's
office sufficient records in the event of an audit. Current law
provides that the TCRC shall recover costs and expenses for
examinations or investigations when it participates in an
investigation but there is no corresponding provision allowing
the AG's Office to recover costs for its examinations or audits.
In other contests, these audits or examination costs are
usually chargeable to the examinee when a violation is found.
The revision proposed in this bill would assist in the funding
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of the costs of the AG by providing authority for the AG to
recover its costs when an audit finds that the SOT Law has been
violated.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified8/17/15)
California Coalition of Travel Organizations (source)
OPPOSITION: (Verified8/17/15)
None received
ARGUMENTS IN SUPPORT: The supporting organization believes
that noting that this bill would enhance the state's unique and
effective SOT law to the benefit of both California consumers as
well as the state's travel industry.
ASSEMBLY FLOOR: 78-0, 5/14/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
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NO VOTE RECORDED: Linder, Medina
Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104
8/19/15 20:56:56
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