BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2106


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          Date of Hearing:  April 12, 2016


           ASSEMBLY COMMITTEE ON ARTS, ENTERTAINMENT, SPORTS, TOURISM, AND  
                                   INTERNET MEDIA


                                  Kansen Chu, Chair


          AB 2106  
          (Irwin) - As Amended March 10, 2016


          SUBJECT:  Sellers of travel:  registration.


          SUMMARY:  Makes various changes to the regulations regarding  
          registration of sellers of travel with the Consumer Law Section  
          of the Attorney General's Office and expands covered entities  
          subject to consumer restitution payments under the Travel  
          Consumers Restitution Fund for violations of the Seller of  
          Travel law.


          Specifically, this bill:  


          1)Requires sellers of travel to provide the file number issued  
            to them by the Secretary of State to the Consumer Law Section  
            of the Attorney General's Office and further provides that the  
            Attorney General shall suspend the registration of a seller of  
            travel who fails to file this information.



          2)Prohibits the issuance, approval, or renewal of registration  
            until the seller of travel has paid any outstanding  
            assessments due to the Travel Consumer Restitution  








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            Corporation.



          3)Allows refund payments to persons aggrieved by sellers of  
            travel who had been paid-up participants at any time during  
            the 12 months previous to the time of sale. 



          4)Declares that any person aggrieved who files a claim for  
            payment from the fund would 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 the 12 months  
            previous to the time of sale. 



          5)Exempts single-member limited liability corporations and "S"  
            Corporations that conduct their activities in accordance with  
            specified procedures.
          6)Contains technical clean up provisions.

          EXISTING LAW:  


          1)Regulates sellers of travel and requires sellers of travel to  
            register by filing with the Consumer Law Section of the  
            Attorney General's Office and pay 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. (Bus. & Prof. Code Sec.  
            17550 et seq.)



          2)Prohibits the issuance, approval, or renewal of registration  








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            of a seller of travel by the Consumer Law Section, until  
            specified filing and late fees have been paid.
          3)Defines a "seller of travel" to mean a person who sells,  
            provides, furnishes, contracts for, arranges, or advertises  
            that he or she can or may arrange, or has arranged, wholesale  
            or retail, either of the following:  

             a)   Air or sea transportation either separately or in  
               conjunction with other travel services; or 

             b)   Land or water vessel transportation, other than sea  
               carriage, either separately or in conjunction with other  
               travel services if the total charge to the passenger  
               exceeds $300.  

          4)Establishes the Travel Consumer Restitution Corporation in  
            order to provide restitution to a person aggrieved (as  
            defined) by the failure of a seller of travel to refund  
            payments for air or sea transportation or travel services,  
            subject to specified restrictions. (Bus. & Prof. Code Sec.  
            17550.35. et seq.)

          5)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.



          6)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.



          7)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. 








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          8)Declares that 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. 



          9)Exempts from regulation those sellers of travel who are  
            individual and natural persons that conduct their business  
            activities in accordance with specified procedures.
          FISCAL EFFECT:  Unknown


          COMMENTS:  


          1)Author and sponsor's statement of need and explanation of  
            legislation.


            According to the author, the purpose of this legislation is to  
            accomplish three things. First, he states that, "the Seller of  
            Travel law does not require that sellers of travel comply with  
            the requirements of current law (outside of the Sellers of  
            Travel law) that they obtain a California State Tax  
            Identification number issued by the Secretary of State.  
            Sellers of travel who are in compliance with this requirement  
            have identified businesses that are not in compliance. AB 2106  
            will correct this loophole in the existing law to ensure that  
            sellers of travel comply with the requirement that they obtain  
            a California State Tax Identification number issued by the  
            Secretary of State." 











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            In addition, according to the author, "there have been  
            circumstances where the consumer has not been able to recover  
            from the Travel Consumer Restitution Fund [TCRF] because the  
            seller of travel was late in paying its assessment to the  
            TCRF. To address this problem       AB 2106 ensures that a  
            consumer's ability to recover from the Travel Consumer  
            Restitution Fund [TCRF] does not depend on whether the seller  
            of travel was late in paying its assessment to the TRCF." 





            Finally, the author states, "since the Seller of Travel law  
            was enacted 25 years ago, it has become common for independent  
            agents to organize as a single-member limited liability  
            corporation or as an S-Corporation, to reflect this trend, AB  
            2106 will update the Seller of Travel law to ensure that  
            independent agents may be a business entity and do not have to  
            be a natural person."


            This bill is sponsored by the California Coalition of Travel  
            Organizations [CCTO], which is a coalition of  associations of  
            travel agents and tour operators. They urge passage of this  
            measure, writing in part to say, "CCTO was the sponsor of the  
            legislation enacted in 1995 that established California's  
            Seller of Travel [SOT] Law and its landmark Travel Consumer  
            Restitution Fund. AB 2106 would update the existing SOT law in  
            the Business and Professions Code in order to enhance the  
            consumer protections and the efficiency of the law? (Passage  
            of the bill) would enhance the state's unique and effective  
            Seller of Travel Law to the benefit of both California  
            consumers as well as the state's travel industry.











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          2)Prior related legislation. AB 1107 (Irwin),  Chapter 253,  
            Statutes of 2015, required sellers of travel to maintain all  
            business records for a minimum period of 3 years; authorized  
            the Attorney General to maintain an action for recovery of  
            examination costs and expenses in any court of competent  
            jurisdiction, as specified; required the seller of travel to  
            pay for costs and expenses for any examination if the Attorney  
            General bills the seller of travel, provided that the  
            examination shows that the seller of travel has failed to  
            comply with certain requirements; made a technical change to  
            require specified assessments to be due 45 days from the date  
            the bill for that assessment is sent to the seller of travel,  
            and not 45 days from the date mailed.
          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Coalition of Travel Agents




          Opposition


          There is no opposition on file.




          Analysis Prepared by:Dana Mitchell / A.,E.,S.,T., & I.M. / (916)  
          319-3450









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