BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2106|
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CONSENT
Bill No: AB 2106
Author: Irwin (D)
Amended: 6/9/16 in Senate
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 8-0, 6/6/16
AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez,
Mendoza, Wieckowski
NO VOTE RECORDED: Jackson
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 78-0, 5/12/16 (Consent) - See last page for
vote
SUBJECT: Sellers of travel: registration
SOURCE: California Coalition of Travel Organizations
DIGEST: This bill makes various changes to the Sellers of
Travel Law.
ANALYSIS:
Existing law:
1) Establishes the Sellers of Travel Law (Law), which provides a
comprehensive scheme for the regulation of sellers of travel
(SOT) and requires a SOT, unless exempted, to register with
the Attorney General (AG) and to comply with various
requirements. (Business and Professions Code (BPC) § 17550
AB 2106
Page 2
et. seq.)
2) Requires, when registering with the AG, a SOT file certain
information, including the name and contact information of
individuals a SOT contracts with. Requires the AG to suspend
a SOT's registration for failure to make payment to the
Travel Consumer Restitution Fund (TCRF) or writes a
registration fee check that is not honored. Authorizes the
AG to contract for the processing of SOT registrations.
Exempts individuals that conduct their activities in
accordance with specified procedures and disclosures. (BPC
§§ 17550.20, 17550.21)
3) Establishes the Travel Consumer Restitution Corporation
(TCRC) which creates the TCRF 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)
This bill:
1) Specifies that a registration shall not be issued, renewed,
or approved until outstanding TCRF assessments are paid.
2) Requires a SOT to provide the seven-digit California
corporation number assigned by the Secretary of State (SOS)
or the Franchise Tax Board to the AG and specifies that
failure to provide this information is grounds for
registration suspension. Requires a SOT to also provide the
AG the name and contact information for individuals in a
single-member limited liability corporation or "S"
corporation who the SOT contracts with.
3) Prohibits the issuance, approval, or renewal of registration
until the seller of travel has paid any outstanding
assessments due to the TCRC.
AB 2106
Page 3
4) Exempts single-member limited liability corporations and "S"
corporations whose member is a natural person that conduct
their activities in accordance with specified procedures and
disclosures from registration.
5) Allows refund payments to persons aggrieved by SOTs who had
been paid-up participants at any time during the 18 months
previous to the time of sale.
6) Declares that any person aggrieved who files a claim for
payment from the TCRF would waive his or her right to bring
an action at law or equity against the SOT as to that claim
unless the SOT had not been a paid-up participant in the TCRF
at any time during the 18 months previous to the time of
sale.
Background
The Law was enacted by AB 918 (Chapter 1123, Statutes of 1994),
authored by then-Assemblymember Jackie Speier and sponsored by
the source of this bill, working in cooperation with the AG's
office. The Law requires all SOTs 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). The 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 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 and applies
to both retail and wholesale transactions, covering 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 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.
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Page 4
The Law also provides for a number of guarantees. In the
event that there is a cancellation, the purchaser is
entitled to receive a prompt and automatic refund. If
there is a material misrepresentation by the seller, the
Law likewise requires a refund. Finally, the Law provides
that once the seller has received the purchaser's full
payment, the purchased tickets must be promptly delivered.
According to the author, the goals of this bill are to ensure
that SOTs comply with the requirements under current law that
they obtain a California State Tax Identification number issued
by the SOS; to ensure that a consumer's ability to recover from
the TCRF does not depend on whether the SOT was late in paying
its assessment to the TCRF by allowing consumers to recover from
the fund for up to 18 months and; to ensure that independent
agents may be a business entity and do not have to be a natural
person, reflecting the common practice of independent agents to
organize as a single member limited liability corporation or
S-corporation.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified6/29/16)
California Coalition of Travel Organizations (source)
OPPOSITION: (Verified6/29/16)
None received
ARGUMENTS IN SUPPORT: The California Coalition of Travel
Organizations thinks that this bill is important to update
current law in order to enhance the consumer protections and the
efficiency of the Law.
AB 2106
Page 5
ASSEMBLY FLOOR: 78-0, 5/12/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, 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, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Burke, Jones-Sawyer
Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104
7/29/16 12:25:36
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