BILL ANALYSIS Ó
AB 2138
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Date of Hearing: May 3, 2016
ASSEMBLY COMMITTEE ON ARTS, ENTERTAINMENT, SPORTS, TOURISM, AND
INTERNET MEDIA
Kansen Chu, Chair
AB 2138
(Low) - As Amended April 20, 2016
SUBJECT: Sellers of travel.
SUMMARY: Clarifies the jurisdiction and scope of the Sellers of
Travel Law, as provided. Specifically, this bill provides that
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.
EXISTING LAW: Declares that 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. Business and
Professions Code section 17550.20.(a).
FISCAL EFFECT: None. The Legislative Counsel has keyed this
measure non-fiscal.
COMMENTS:
AB 2138
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1)Author's statement of need for legislation: To clarify the law
and thereby curb consumer fraud in the area of travel sales to
foreign national and out of state tourists. According to the
author, the "tourism industry has allowed many types of
businesses to thrive, from travel agents to tour operators,
tour guides to bus drivers. However, there are growing
concerns about businesses, in this case, sellers of travel,
who sell or promote a particular service or good to foreign
visitors. The author believes this clarification of the law is
needed as there have been numerous reports about travel
companies in Southern California making misrepresentations
about their travel offerings. Specifically, the reports
describe companies that promote travel packages to visitors
from other countries, such as China, to visit California. For
example, one anecdote describes a situation where a travel
agent sold a package that was advertised as including a stay
at a five-star hotel and a trip to Disneyland, among other
things, but what it actually included was a three-star hotel
and a drive-by in front of Disneyland. To keep businesses
accountable under the state's seller of travel law, this bill
clarifies that any California based seller of travel is deemed
to do business in California, and therefore is bound by the
Sellers of Travel law, regardless of the geographic location
of the visitor in this country or abroad."
2)Background: The Sellers of Travel Law. Existing law requires
sellers of travel to register with the Office of the Attorney
General (OAG) and establishes procedures and civil and
criminal penalties to protect consumers against
misrepresentations and harmful business practices (BPC §§
17550-17550.30). The law includes, among others, a person who
wishes to sell, provide, arrange, or advertise specified
travel packages. As relevant to this bill, existing law
specifies that "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" (BPC § 17550.20).
AB 2138
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Because the law does not expressly include solicitation of
business from California directed to locations out of the
state or country, the OAG may find extra-territorial
enforcement easier with the clarification contained in this
bill.
3)Recent amendments: Delete the former controversial contents of
the bill which would create a certificate program for tour
guides and substitute the current consumer protection
clarification. As introduced, AB 2138 would have established
the California Tour Guide Act and provided for the
certification and regulation of tour guides by the California
Travel and Tourism Commission, which it would have created
under the Public Utilities Commission. The original version
of the bill was substantially similar to AB 836 (Rendon) of
last year, discussed below, and faced considerable drafting,
implementation and constitutional challenges. Ultimately, the
author concluded that while better trained tour guides is a
laudable goal, tour guide certification was not responsive to
the concerns raised of consumer fraud committed by some travel
agents and the unclear scope of authority under the existing
Sellers of Travel Law to stop such illegal acts.
4)Prior related legislation: AB 836 (Rendon), of 2015, would
have established the California Tour Guide Act and provided
for the certification and regulation of tour guides by the
California Travel and Tourism Commission, as specified. That
bill was held in the Assembly Committee on Appropriations.
REGISTERED SUPPORT / OPPOSITION:
Support
AB 2138
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There is no support for this version of the bill on file.
Opposition
There is no opposition for this version of the bill on file.
Analysis Prepared by:Dana Mitchell / A.,E.,S.,T., & I.M. / (916)
319-3450