BILL ANALYSIS                                                                                                                                                                                                    Ó






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                                   THIRD READING 


          Bill No:  AB 2138
          Author:   Low (D) and Bonta (D)
          Amended:  8/10/16 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, 5/9/16 (Consent) - See last page for  
            vote

           SUBJECT:   Sellers of travel


          SOURCE:    California Tour Guide Coalition


          DIGEST:  This bill clarifies that the Sellers of Travel law  
          applies to sellers of travel in California that offer travel to  
          visitors from outside of California.  


          Senate Floor Amendments of 8/10/16 remove chaptering conflicts  
          with AB 2106 (Irwin) which also amends the Sellers of Travel  
          Law.


          ANALYSIS:  









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          Existing law:

          1)Establishes the Sellers of Travel law (Law) which provides a  
            comprehensive scheme for the regulation of sellers of travel  
            (SOT), as defined, 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 et. seq.)

          2)Defines a SOT as a person who sells, provides, furnishes,  
            contracts for, arranges, or advertises that he or she can or  
            may arrange, or has arranged, at wholesale or retail either of  
            the following: air or sea transportation either separately or  
            in conjunction with other travel services, or 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 three hundred dollars  
            ($300).  (BPC § 17550.1(a))

          3)Establishes the Travel Consumer Restitution Corporation (TCRC)  
            which creates the Travel Consumer Restitution Fund (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 clarifies that a SOT shall be deemed to do business in  
          California if the SOT solicits prospective purchasers located in  
          the state or solicits business from locations in the state,  
          regardless of the geographic location of the prospective  
          purchaser, including persons located outside of California or  
          the United States.


          Background


          The California Tour Guide Coalition is the Sponsor of this  
          measure.  According to the Author, "there were issues in  
          Southern California about travel companies promoting travel  
          packages to foreign visitors, specifically from China, to visit  
          California.  For example, a travel agent would sell a package  
          that includes a stay at a five star hotel and a trip to  
          Disneyland, among other things.  But what they end up getting is  







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          a three star hotel experience and a drive-by in front of  
          Disneyland, a trip of much less value than the couple thousand  
          dollars that was paid."  The Author states that this bill will  
          simply clarify that the SOT law includes, and applies to,  
          businesses or operators recruiting in a foreign country or in  
          another state, if the businesses or operators are based in  
          California.  According to the Author, in a situation like that  
          cited above, a consumer would then be able to benefit from the  
          TCRF and protections under the Law.


          Sellers of Travel Law.  The 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 SOT 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.




          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:NoLocal:    No


          SUPPORT:   (Verified8/11/16)


          California Tour Guide Coalition (source)








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          OPPOSITION:   (Verified8/11/16)


          None received


          ARGUMENTS IN SUPPORT:     Supporters note that there exist  
          growing concerns about businesses that sell or promote a  
          particular service or good to foreign visitors.  According to  
          members of the California Tour Guide Coalition, consumers and  
          honest travel businesses are negatively impacted because of  
          misrepresentation by certain tour guide companies to these  
          foreign travelers who reside outside of the state and country.   
          Supporters believe that this bill is an important step forward  
          in the fight against unfair business practices and  
          misrepresentation by tour guides in California.  



          ASSEMBLY FLOOR:  78-0, 5/9/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,  
            Gallagher, Cristina Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones, Jones-Sawyer, 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:  Beth Gaines, Eduardo Garcia

          Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104
          8/12/16 13:22:04


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