PRINTER'S NO. 127
No. 143 Session of 1999
INTRODUCED BY GODSHALL, SATHER, NAILOR, ARGALL, BARD, BELARDI,
BELFANTI, BUNT, M. COHEN, CURRY, DEMPSEY, GEIST, HALUSKA,
HARHAI, HENNESSEY, KAISER, KENNEY, LEDERER, LUCYK, MICHLOVIC,
MICOZZIE, PESCI, RAMOS, ROBINSON, STABACK, E. Z. TAYLOR,
THOMAS, TRELLO, WALKO, WOGAN, WOJNAROSKI, YOUNGBLOOD AND ZUG,
JANUARY 26, 1999
REFERRED TO COMMITTEE ON TOURISM AND RECREATIONAL DEVELOPMENT,
JANUARY 26, 1999
AN ACT
1 Providing for the regulation of sellers of travel; requiring
2 that certain bonds be secured for the benefit of customers;
3 requiring bank deposits; and providing penalties.
4 TABLE OF CONTENTS
5 Section 1. Short title.
6 Section 2. Definitions.
7 Section 3. Legislative findings.
8 Section 4. Construction and nonapplicability.
9 Section 5. Advertisements.
10 Section 6. Information required.
11 Section 7. Cancellation and refunds.
12 Section 8. Evidence of financial security.
13 Section 9. School purchases of travel or tour services.
14 Section 10. Registration.
15 Section 11. Prohibited practices by sellers of travel.
16 Section 12. Offenses.
1 Section 13. Burden of proof.
2 Section 14. Investigation.
3 Section 15. Authority.
4 Section 16. Venue.
5 Section 17. Regulations.
6 Section 18. Effective date.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Short title.
10 This act shall be known and may be cited as the Sellers of
11 Travel Act.
12 Section 2. Definitions.
13 The following words and phrases when used in this act shall
14 have the meanings given to them in this section unless the
15 context clearly indicates otherwise:
16 "Accommodations." Any hotel or motel room, condominium or
17 cooperative unit, cabin, lodge or apartment; any other
18 commercial structure designed for occupancy by one or more
19 individuals; or any lodging establishment as provided by law.
20 "Adequate bond." A corporate bond of an amount at least
21 equal to the amount required under the contract between the
22 seller of travel and the travel or tour services carrier or
23 company or person providing other services in conjunction with
24 travel or tour services.
25 "Advertise." To make a representation in the solicitation of
26 travel or tour services. The term includes communication with
27 other members of the same partnership, corporation, joint
28 venture, association, organization, group or other entity.
29 "Air carrier." A transporter of persons by air which is
30 subject to regulation as such by a governmental agency.
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1 "Broker." Any person or corporation not included in the term
2 "motor carrier" and not a bona fide employee or agent of any
3 such carrier, or group of such carriers, who or which, as
4 principal or agent, sells or offers for sale any transportation
5 by a motor carrier, or the furnishing, providing, or procuring
6 of facilities therefor, or negotiates for, or holds out by
7 solicitation, advertisement, or otherwise, as one who sells,
8 provides, furnishes, contracts, or arranges for such
9 transportation, or the furnishing, providing, or procuring of
10 facilities therefor, other than as a motor carrier directly or
11 jointly, or by arrangement with another motor carrier, and who
12 does not assume custody as a carrier.
13 "Bureau." The Bureau of Consumer Protection.
14 "Charitable organization." Any nonprofit organization.
15 "Commission." The Pennsylvania Public Utility Commission.
16 "Contract." Any agreement, certificate, reservation request
17 or confirmation form, membership application or use agreement,
18 license or reservation confirmation whereby the purchaser
19 obtains the right to benefits and privileges of the prearranged
20 travel or tourist service, or to a vacation form committing the
21 seller of travel to provide transportation pertaining to
22 reservations, tour or travel arrangements and accommodations.
23 "Land carrier." A transporter of persons by land which is
24 subject to regulation as such by a governmental agency.
25 "Motor carrier." A common carrier by motor vehicle, and a
26 contract carrier by motor vehicle.
27 "Offer for sale." Any direct or indirect representation,
28 claim or statement or undertaking by any means or method to
29 arrange for, provide or acquire travel reservations or
30 accommodations, tickets for domestic or foreign travel by air,
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1 rail, ship or any other medium of transportation or hotel and
2 motel accommodations or sightseeing tours.
3 "Seller of travel." Any resident or nonresident person,
4 firm, corporation, business entity or charitable organization
5 who offers for sale, directly or indirectly, at wholesale or
6 retail travel or tour services in exchange for a fee, commission
7 or other consideration.
8 "Subrogation." The substitution of one person in the place
9 of another with reference to a lawful claim, demand or right, so
10 that he who is substituted succeeds to the rights of the other
11 in relation to the debt or claim.
12 "Travel or tour services." Any arrangement for individuals
13 or groups, including:
14 (1) vacation or travel packages, sightseeing tours,
15 prearranged travel services, travel reservations or
16 accommodations, tickets for domestic or foreign travel by
17 air, rail, ship, bus or other medium of transportation or
18 hotel or other accommodations;
19 (2) travel-related prizes or awards for which the
20 traveler must pay a fee or, in connection with the prize or
21 award, expend moneys for the direct or indirect monetary
22 benefits of the person or business entity making the award in
23 order for the traveler to collect or enjoy the benefits of
24 the prize or award;
25 (3) travel-related services provided in conjunction with
26 solicitations for the sale of any investments, goods,
27 products or services or in conjunction with promotional
28 opportunities, including, but not limited to, land and
29 interest in land, timeshare plans, housing, commodities or
30 securities; and
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1 (4) vacation certificates and travel clubs.
2 "Traveler." The purchaser of travel or tour services, person
3 otherwise entitled to receive travel or tour services for a fee
4 or commission, person who has received a travel-related prize or
5 award or person who has been provided travel-related services in
6 conjunction with solicitations of the sale of any investments,
7 goods, products or services, or in conjunction with promotional
8 opportunities, including, but not limited to, land and interest
9 in land, time-share plans, housing commodities or securities.
10 "Vacation certificate." Any arrangement, plan, program or
11 vacation package that promotes, discusses or discloses a
12 destination or itinerary or type of travel whereby a purchaser
13 for consideration paid in advance is entitled to the use of
14 travel, accommodations or facilities for any number of days,
15 whether certain or uncertain, during the period in which the
16 certificate can be exercised and no specific date or dates for
17 its use are designated. A vacation certificate does not include
18 prearranged travel, tourist-related services or tour-guide
19 services when a seller of travel remits full payment for the
20 cost of such services to the provider or supplier within ten
21 business days of the purchaser's initial payment to the seller
22 of travel.
23 Section 3. Legislative findings.
24 The General Assembly finds and declares as follows:
25 (1) Certain advertising, sales and business practices of
26 sellers of travel have worked financial hardship upon the
27 people of this Commonwealth.
28 (2) The travel business has a significant impact upon
29 the economy and well-being of this Commonwealth and its
30 people.
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1 (3) Problems have arisen which are peculiar to the
2 seller of travel business.
3 (4) The public welfare requires regulation of sellers of
4 travel in order to eliminate unfair advertising, sales and
5 business practices.
6 (5) Standards are needed which will safeguard the people
7 against financial hardship and to encourage competition, fair
8 dealing and prosperity in the travel business.
9 Section 4. Construction and nonapplicability.
10 (a) Construction.--The provisions of this act insofar as
11 they are in conflict with any statutory law or common law
12 relating to agency shall supercede the conflicting provisions
13 and principles.
14 (b) Nonapplicability.--This act does not apply to:
15 (1) Any direct common carrier of travelers or property
16 regulated by an agency of the Federal Government or employees
17 of such carrier when engaged solely in the transportation
18 business of the carrier.
19 (2) An interstate or intrastate common carrier of
20 travelers selling only transportation or employees of such
21 carrier when engaged solely in the transportation business of
22 the carrier.
23 (3) Hotels, motels or other places of public
24 accommodation selling public accommodations or employees of
25 such hotels, motels or other places of public accommodations
26 when engaged solely in making arrangements for
27 accommodations.
28 (4) Any resident or nonresident person, firm,
29 corporation or business entity maintaining or purporting to
30 maintain a business location or branch office in this
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1 Commonwealth involved solely in the rental, leasing or sale
2 of transportation vehicles.
3 (5) Any resident or nonresident person, firm,
4 corporation or business entity maintaining or purporting to
5 maintain a business location or branch office in this
6 Commonwealth who makes travel arrangements only for
7 themselves, for their employees or agents, for the
8 distributors, franchisees or dealers of the person's products
9 or services or for the employees or agents of the
10 distributor, franchise, dealer or financially related entity.
11 Section 5. Advertisements.
12 All price-related advertisements placed by a seller of travel
13 shall display or contain the registration number of the seller
14 of travel assigned by the bureau under section 10.
15 Section 6. Information required.
16 A seller of travel shall not deposit money or other valuable
17 consideration in payment for travel or tour services unless,
18 within five days of the time after the traveler's payment is
19 deposited, the seller of travel furnishes to the traveler a
20 written statement or electronic communication clearly and
21 conspicuously setting forth the following information:
22 (1) The name, business address and telephone number of
23 the seller of travel.
24 (2) The amount paid, the date of payment, the purpose of
25 the payment made and an itemized statement of the balance
26 due, if any.
27 (3) The location of the bond required by this act.
28 (4) The method of transportation, the date and place of
29 each departure.
30 (5) The conditions, if any, upon which the contract
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1 between the seller of travel and the traveler may be
2 canceled, and the rights and obligations of all parties in
3 the event of a cancellation.
4 (6) A statement in ten-point boldface type which clearly
5 and conspicuously states, "If travel and tour services or
6 other services are canceled by the seller of travel all sums
7 paid to the seller of travel for services not performed in
8 accordance with the contract between the seller of travel and
9 the traveler will be refunded within ten days of receipt of
10 money from the travel service provider unless the traveler
11 requests the seller of travel to apply the money to another
12 travel or tour service, destination or date."
13 Section 7. Cancellation and refunds.
14 (a) Refunds.--In the event that travel services or tour
15 services contracted for are canceled through no fault of the
16 traveler or if the travel services or tour services are not
17 provided through no fault of the traveler and unless the
18 traveler otherwise advises the seller of travel in writing, the
19 seller of travel shall return to the traveler all moneys paid
20 for services not performed and goods not delivered in accordance
21 with the contract.
22 (b) Misrepresentation.--Any material misrepresentation with
23 respect to the date or place of all departures or arrivals or
24 type of aircraft or land or ocean carrier or similar occurrence
25 shall be reasons for cancellation by the consumer, which will
26 require the refund specified in this section. The seller of
27 travel has the right to substitute another ship, airline or
28 hotel of equal or greater value due to strike, bankruptcy or
29 condition making the accommodations uninhabitable.
30 (c) Subrogation.--Any seller of travel who makes any refund
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1 under the provisions of this act shall be entitled to
2 subrogation as defined in this act.
3 Section 8. Evidence of financial security.
4 (a) Filing and amount.--Before offering, advertising,
5 selling or executing or causing to be executed any contract in
6 this Commonwealth for travel or tour services, every seller of
7 travel shall file and maintain with the bureau evidence of
8 financial security as follows:
9 (1) An adequate bond issued by a surety authorized to do
10 business in this Commonwealth and specifically authorized to
11 issue such surety bonds in this Commonwealth. The requisite
12 bond amount shall be in an amount equal to 100% of the seller
13 of travel's amount of retail business not to exceed $25,000.
14 However, if the seller of travel has revenues in excess of
15 $250,000, then the seller of travel must be bonded for 10% of
16 the previous year's annual gross sales. If the seller of
17 travel provides or offers vacation certificates as part of
18 the travel or tour services, then the bond must be equal to
19 100% of the seller of travel's amount of retail business. A
20 seller of travel filing the bond shall maintain the bond in
21 force in the proper amount as a condition of continuing to
22 engage in business. Evidence of the bond must be filed with
23 the bureau.
24 (2) An adequate bond shall be in favor of the bureau for
25 the benefit of:
26 (i) any traveler injured by having paid money for
27 travel or tour services to a person or entity that fails
28 to provide the travel or tour service; or
29 (ii) any traveler injured as a result of a violation
30 of this act.
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1 (3) The bond requirement may be waived on an annual
2 basis if any of the following apply:
3 (i) sellers of travel who have:
4 (A) contracted with the Airlines Reporting
5 Corporation for the most recent consecutive three
6 years or more and who do not offer vacation
7 certificates; and
8 (B) had three or more consecutive years of
9 experience as a seller of travel under the same
10 ownership and name in this Commonwealth in compliance
11 with this act, unless acquired or formed by a
12 registered seller of travel that has been in business
13 under the same ownership for a period of three years
14 and has not had any civil, criminal or administrative
15 actions instituted against the seller of travel in
16 the vacation and travel business by any governmental
17 agency or any action involving fraud, theft,
18 misappropriation of property or moral turpitude; or
19 (ii) the seller of travel is a broker who has
20 complied with 52 Pa. Code § 39.15 (relating to security
21 for the protection of the public) and has furnished a
22 bond or other security approved by the commission.
23 Such waiver may be revoked if the seller of travel
24 violates any provision of this act.
25 (b) Consent for cancellation.--An adequate bond shall not be
26 canceled without the consent of the bureau.
27 Section 9. School purchases of travel or tour services.
28 (a) Purchase from registered seller of travel.--If a school
29 purchases or arranges for the purchase of travel or tour
30 services for or on behalf of the students of the school, the
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1 school shall purchase the travel or tour services from a seller
2 of travel that is registered under section 10 and that holds
3 adequate security as required by section 8.
4 (b) Nonapplication.--This section does not apply to trips in
5 which the entire cost of the trip for the students as a whole is
6 less than $2,500.
7 (c) Definition.--As used in this section, "school" means a
8 public school offering kindergarten through grade 12 or any part
9 thereof.
10 Section 10. Registration.
11 (a) Registration.--A seller of travel shall file a statement
12 with the bureau, indicating name, home address and business
13 address and, where applicable, the name and address of the
14 financial institution where the bond is located and any other
15 information required by the bureau under this act. The bureau
16 shall assign a registration number to each seller of travel.
17 (b) Registration fee.--Registration fees shall be $150 for
18 the first year and $50 for each subsequent year. Registration
19 costs have been calculated to be equal to the costs of
20 implementing and enforcing this act. For sellers of travel which
21 have more than one office, registration fees shall be assessed
22 at the main location which maintains the principal banking
23 relationship for the branch offices.
24 (c) Additional material to be filed.--Sellers of travel who
25 offer vacation certificates must also submit and disclose to the
26 bureau with the application for registration, and any time such
27 document is changed but prior to the sale of any vacation
28 certificate, the following:
29 (1) A copy of the contract by which the rights,
30 obligations, benefits and privileges resulting from purchase
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1 of a vacation certificate are established.
2 (2) A copy of each promotional brochure, pamphlet, form
3 letter, registration form or any other written material
4 disseminated in connection with the advertising, promotion or
5 sale of any vacation certificate.
6 (3) A verbatim script of each radio, television or movie
7 or other similar advertisement broadcast to the public in
8 connection with the advertising, promotion or sale of any
9 vacation certificate.
10 (4) A transcript of any standard verbal sales
11 presentation utilized in connection with the advertising,
12 promotion or sale of vacation certificates.
13 (5) A copy of all rules, regulations, conditions or
14 limitations upon the use of, or obtaining reservations for
15 the use of, accommodations or facilities available pursuant
16 to the vacation certificate.
17 (6) A copy of a written authorization for the use of any
18 registered trademark, trade name or trade logo utilized in
19 promotional brochures, pamphlets, form letters, registration
20 forms or other written materials disseminated in connection
21 with the advertising, promotion or sale of vacation
22 certificates from the holder of each trademark, trade name or
23 trade logo so used.
24 (7) A complete copy of the original of each testimonial
25 letter from previous vacation certificate purchasers utilized
26 in advertisements disseminated in connection with
27 advertising, promotion or sale of vacation certificates.
28 (8) Where discount or complimentary coupons or tickets
29 are to be provided to purchasers, a copy of such ticket or
30 coupon which shall include a statement of the names and
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1 addresses of businesses where the coupons or tickets are
2 honored, the goods, services or amenities provided and any
3 additional charges, limitations or conditions.
4 (9) Where other goods, services or amenities are
5 provided to the purchasers, a copy of such ticket or coupon
6 which shall include a statement of the names and addresses of
7 businesses where the coupons or tickets are honored, the
8 goods, services or amenities provided and any additional
9 charges, limitations or conditions.
10 (10) A statement of the number of certificates to be
11 issued and the date of their expiration.
12 (11) A copy of the vacation certificate and its
13 component parts, including, but not limited to, any
14 registration card, form letter, reservation form,
15 confirmation form and lodging directory.
16 (12) A copy of all agreements between the seller and
17 business entities providing accommodations or facilities to
18 purchasers.
19 (13) A copy of all agreements between the seller and
20 each business entity providing or honoring discount or
21 complimentary coupons or tickets or providing other goods,
22 services or amenities to the purchaser.
23 (14) A listing of the full name, address and telephone
24 number of each person through which the distribution and sale
25 of vacation certificates is to be carried out, including the
26 number of vacation certificates allocated or sold to each
27 person and the name and address of a registered agent for
28 service of process in this Commonwealth.
29 (15) A financial statement prepared by an independent
30 certified public accountant in accordance with generally
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1 accepted accounting principles. Such statement shall be
2 submitted annually at the close of each fiscal year. A seller
3 which has not yet begun operations shall submit a balance
4 sheet prepared by an independent certified public accountant
5 in accordance with generally accepted auditing principles in
6 lieu of an initial financial statement, thereafter annually
7 submitting a financial statement or Federal income tax return
8 at the close of the fiscal year.
9 Section 11. Prohibited practices by sellers of travel.
10 It shall be illegal for any seller of travel and, if such
11 seller of travel is a corporation, any officer or director
12 thereof to engage in any or all of the following enumerated
13 practices:
14 (1) Make a material misrepresentation regarding the
15 quality of aircraft, vehicle, ship or train, day of departure
16 or arrival, points served, quality of lodging, time share or
17 other accommodation or other services available, reserved or
18 contracted for in connection with any trip, tour or other
19 travel services, unless such misrepresentation was based upon
20 a reasonable belief as to the services available based upon
21 representations made by the person, company, corporation,
22 common carrier or other entity offering such services.
23 (2) Misrepresent the fares and charges for
24 transportation or services, unless such misrepresentation was
25 based upon a reasonable belief as to the fares and charges
26 applicable based upon representations made by the person,
27 company, corporation, common carrier or other entity offering
28 such services.
29 (3) Misrepresent that special priorities for
30 reservations are available when such special considerations
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1 are in fact granted to members of the public generally.
2 (4) Sell transportation to a person or persons on a
3 reservation or charter basis for specified space, flight or
4 time or represent that such definite reservations or charter
5 is or will be available or has been arranged without a
6 binding commitment with a carrier for the furnishing of such
7 definite reservation or charter as represented or sold.
8 (5) Sell or issue tickets or other documents to
9 passengers to be exchanged or used for transportation if such
10 tickets or other documents will not be or cannot be legally
11 honored by carriers for transportation.
12 (6) Misrepresent the requirements that must be met by a
13 person or persons in order to qualify for charter or group
14 fare rates, unless such misrepresentation was based upon a
15 reasonable belief as to the requirements applicable based
16 upon representations made by the person, company corporation,
17 common carrier or other entity offering such charter or group
18 fare.
19 (7) Fail or refuse to honor a purchaser's vacation
20 certificate request to cancel if such request is made:
21 (i) within 30 days from the date of purchase or
22 receipt of the vacation certificate, whichever occurs
23 later; or
24 (ii) at any time accommodations or facilities are
25 not available pursuant to a request for use as provided
26 in the contract, provided that the contract shall not
27 require notice greater than 60 days in advance of the
28 date requested, if acceptable to the purchaser,
29 comparable alternate accommodations or facilities in a
30 city, or reservations for a date different than that
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1 requested, may be provided.
2 Section 12. Offenses.
3 A violation of the provisions of this act constitutes a
4 violation of the act of December 17, 1968 (P.L.1224, No.387),
5 known as the Unfair Trade Practices and Consumer Protection Law.
6 In addition to the penalties provided in this act, any seller of
7 travel who violates the provisions of this act shall be subject
8 to a civil penalty of up to $5,000 for each violation. The
9 Attorney General, a district attorney or the traveler may seek
10 such penalties in addition to any other penalty or remedy
11 permitted under the Unfair Trade Practices and Consumer
12 Protection Law or any other laws of this Commonwealth.
13 Section 13. Burden of proof.
14 (a) Proceeding under this act.--In any civil proceeding
15 alleging a violation of this act, the burden of proving an
16 exemption is upon the person claiming it. In any criminal
17 proceeding alleging a violation of this act, the burden of
18 producing evidence to support a defense based upon an exemption
19 or an exception is upon the person claiming it.
20 (b) Other proceedings.--Compliance with this act does not
21 satisfy nor substitute for any requirements for license,
22 registration or regulation mandated by other laws.
23 Section 14. Investigation.
24 (a) Authority.--If the Attorney General has reason to
25 believe that a violation of this act has occurred, the Attorney
26 General shall have the authority to investigate, on behalf of
27 the Commonwealth, its citizens or a political subdivision.
28 (b) Procedure.--Prior to the institution of a civil action,
29 the Attorney General is authorized to require the attendance and
30 testimony of witnesses and the production of documents. For this
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1 purpose, the Attorney General may issue subpoenas, examine
2 witnesses and receive evidence. If a person objects to or
3 otherwise fails to comply with a subpoena or request for
4 testimony, the Attorney General may file in Commonwealth Court
5 an action to enforce the subpoena or request. Notice of hearing
6 the action and a copy of all pleadings shall be served upon the
7 person who may appear in opposition.
8 Section 15. Authority.
9 (a) Authority of bureau.--The bureau shall have all powers,
10 rights and duties as are provided in this act to seek penalties,
11 remedies and procedures against any seller of travel that is
12 engaged in practices that are unlawful according to the
13 provisions of this act.
14 (b) Other remedies preserved.--The provisions of this act
15 are not exclusive and do not relieve sellers of travel or
16 contracts subject thereto from compliance with all other
17 applicable provisions of law nor shall these provisions provide
18 immunity for any civil claim against any seller of travel which
19 has acquired any moneys or property, real or personal, by means
20 of any practice declared unlawful by this act.
21 Section 16. Venue.
22 An offense under this act is deemed to have been committed in
23 any county where the seller of travel has a place of business,
24 the county from which payment by the traveler was made or the
25 county where money was collected by the seller of travel.
26 Section 17. Regulations.
27 The bureau may adopt rules and regulations necessary to
28 enforce and administer this act. These rules and regulations,
29 when promulgated pursuant to the act of July 31, 1968 (P.L.769,
30 No.240), referred to as the Commonwealth Documents Law, shall
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1 have the force and effect of law.
2 Section 18. Effective date.
3 This act shall take effect in 90 days.
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