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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