BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2138| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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: AB 2138 Page 2 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 AB 2138 Page 3 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) AB 2138 Page 4 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 **** END **** AB 2138 Page 5