PRINTER'S NO. 1478
No. 1182 Session of 1999
INTRODUCED BY GREENLEAF, BOSCOLA, COSTA, LEMMOND AND SCHWARTZ,
NOVEMBER 8, 1999
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
NOVEMBER 8, 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. Registration.
14 Section 10. Prohibited practices by sellers of travel.
15 Section 11. Offenses.
16 Section 12. Burden of proof.
17 Section 13. Investigation.
18 Section 14. Authority.
1 Section 15. Venue.
2 Section 16. Regulations.
3 Section 17. Effective date.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Sellers of
8 Travel Act.
9 Section 2. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Accommodations." Any hotel or motel room, condominium or
14 cooperative unit, cabin, lodge or apartment; any other
15 commercial structure designed for occupancy by one or more
16 individuals; or any lodging establishment as provided by law.
17 "Advertise." To make a representation in the solicitation of
18 travel or tour services. The term includes communication with
19 other members of the same partnership, corporation, joint
20 venture, association, organization, group or other entity.
21 "Air carrier." A transporter of persons by air which is
22 subject to regulation as such by a governmental agency.
23 "Broker." Any person or corporation not included in the term
24 "motor carrier" and not a bona fide employee or agent of any
25 such carrier, or group of such carriers, who or which, as
26 principal or agent, sells or offers for sale any transportation
27 by a motor carrier, or the furnishing, providing, or procuring
28 of facilities therefor, or negotiates for, or holds out by
29 solicitation, advertisement, or otherwise, as one who sells,
30 provides, furnishes, contracts, or arranges for such
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1 transportation, or the furnishing, providing, or procuring of
2 facilities therefor, other than as a motor carrier directly or
3 jointly, or by arrangement with another motor carrier, and who
4 does not assume custody as a carrier.
5 "Bureau." The Bureau of Consumer Protection.
6 "Commission." The Pennsylvania Public Utility Commission.
7 "Contract." Any agreement, certificate, reservation request
8 or confirmation form, membership application or use agreement,
9 license or reservation confirmation whereby the purchaser
10 obtains the right to benefits and privileges of the prearranged
11 travel or tourist service, or to a vacation form committing the
12 seller of travel to provide transportation pertaining to
13 reservations, tour or travel arrangements and accommodations.
14 "Land carrier." A transporter of persons by land which is
15 subject to regulation as such by a governmental agency.
16 "Motor carrier." A common carrier by motor vehicle, and a
17 contract carrier by motor vehicle.
18 "Offer for sale." Any direct or indirect representation,
19 claim or statement or undertaking by any means or method to
20 arrange for, provide or acquire travel reservations or
21 accommodations, tickets for domestic or foreign travel by air,
22 rail, ship or any other medium of transportation or hotel and
23 motel accommodations or sightseeing tours.
24 "Seller of travel." Any resident or nonresident person,
25 firm, corporation or business entity who offers for sale,
26 directly or indirectly, at wholesale or retail travel or tour
27 services in exchange for a fee, commission or other
28 consideration.
29 "Subrogation." The substitution of one person in the place
30 of another with reference to a lawful claim, demand or right, so
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1 that he who is substituted succeeds to the rights of the other
2 in relation to the debt or claim.
3 "Travel or tour services." Any arrangement for individuals
4 or groups, including:
5 (1) vacation or travel packages, sightseeing tours,
6 prearranged travel services, travel reservations or
7 accommodations, tickets for domestic or foreign travel by
8 air, rail, ship, bus or other medium of transportation or
9 hotel or other accommodations;
10 (2) travel-related prizes or awards for which the
11 traveler must pay a fee or, in connection with the prize or
12 award, expend moneys for the direct or indirect monetary
13 benefits of the person or business entity making the award in
14 order for the traveler to collect or enjoy the benefits of
15 the prize or award;
16 (3) travel-related services provided in conjunction with
17 solicitations for the sale of any investments, goods,
18 products or services or in conjunction with promotional
19 opportunities, including, but not limited to, land and
20 interest in land, timeshare plans, housing, commodities or
21 securities; and
22 (4) vacation certificates and travel clubs.
23 "Traveler." The purchaser of travel or tour services, person
24 otherwise entitled to receive travel or tour services for a fee
25 or commission, person who has received a travel-related prize or
26 award or person who has been provided travel-related services in
27 conjunction with solicitations of the sale of any investments,
28 goods, products or services, or in conjunction with promotional
29 opportunities, including, but not limited to, land and interest
30 in land, time-share plans, housing commodities or securities.
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1 "Vacation certificate." Any arrangement, plan, program or
2 vacation package that promotes, discusses or discloses a
3 destination or itinerary or type of travel whereby a purchaser
4 for consideration paid in advance is entitled to the use of
5 travel, accommodations or facilities for any number of days,
6 whether certain or uncertain, during the period in which the
7 certificate can be exercised and no specific date or dates for
8 its use are designated. A vacation certificate does not include
9 prearranged travel, tourist-related services or tour-guide
10 services when a seller of travel remits full payment for the
11 cost of such services to the provider or supplier within ten
12 business days of the purchaser's initial payment to the seller
13 of travel.
14 Section 3. Legislative findings.
15 The General Assembly finds and declares as follows:
16 (1) Certain advertising, sales and business practices of
17 sellers of travel have worked financial hardship upon the
18 people of this Commonwealth.
19 (2) The travel business has a significant impact upon
20 the economy and well-being of this Commonwealth and its
21 people.
22 (3) Problems have arisen which are peculiar to the
23 seller of travel business.
24 (4) The public welfare requires regulation of sellers of
25 travel in order to eliminate unfair advertising, sales and
26 business practices.
27 (5) Standards are needed which will safeguard the people
28 against financial hardship and to encourage competition, fair
29 dealing and prosperity in the travel business.
30 Section 4. Construction and nonapplicability.
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1 (a) Construction.--The provisions of this act insofar as
2 they are in conflict with any statutory law or common law
3 relating to agency shall supersede the conflicting provisions
4 and principles.
5 (b) Nonapplicability.--This act does not apply to:
6 (1) Any direct common carrier of travelers or property
7 regulated by an agency of the Federal Government or employees
8 of such carrier when engaged solely in the transportation
9 business of the carrier.
10 (2) An interstate or intrastate common carrier of
11 travelers selling only transportation or employees of such
12 carrier when engaged solely in the transportation business of
13 the carrier.
14 (3) Hotels, motels or other places of public
15 accommodation selling public accommodations or employees of
16 such hotels, motels or other places of public accommodations
17 when engaged solely in making arrangements for
18 accommodations.
19 (4) Any resident or nonresident person, firm,
20 corporation or business entity maintaining or purporting to
21 maintain a business location or branch office in this
22 Commonwealth involved solely in the rental, leasing or sale
23 of transportation vehicles.
24 (5) Any resident or nonresident person, firm,
25 corporation or business entity maintaining or purporting to
26 maintain a business location or branch office in this
27 Commonwealth who makes travel arrangements only for
28 themselves, for their employees or agents, for the
29 distributors, franchisees or dealers of the person's products
30 or services or for the employees or agents of the
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1 distributor, franchise, dealer or financially related entity.
2 Section 5. Advertisements.
3 All price-related advertisements placed by a seller of travel
4 shall display or contain the registration number of the seller
5 of travel assigned by the bureau under section 9.
6 Section 6. Information required.
7 A seller of travel shall not deposit money or other valuable
8 consideration in payment for travel or tour services unless,
9 within five days of the time after the traveler's payment is
10 deposited, the seller of travel furnishes to the traveler a
11 written statement or electronic communication clearly and
12 conspicuously setting forth the following information:
13 (1) The name, business address and telephone number of
14 the seller of travel.
15 (2) The amount paid, the date of payment, the purpose of
16 the payment made and an itemized statement of the balance
17 due, if any.
18 (3) The location of the bond required by this act.
19 (4) The method of transportation, the date and place of
20 each departure.
21 (5) The conditions, if any, upon which the contract
22 between the seller of travel and the traveler may be
23 canceled, and the rights and obligations of all parties in
24 the event of a cancellation.
25 (6) A statement in ten-point boldface type which clearly
26 and conspicuously states, "If travel and tour services or
27 other services are canceled by the seller of travel all sums
28 paid to the seller of travel for services not performed in
29 accordance with the contract between the seller of travel and
30 the traveler will be refunded within ten days of receipt of
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1 money from the travel service provider unless the traveler
2 requests the seller of travel to apply the money to another
3 travel or tour service, destination or date."
4 Section 7. Cancellation and refunds.
5 (a) Refunds.--In the event that travel services or tour
6 services contracted for are canceled through no fault of the
7 traveler or if the travel services or tour services are not
8 provided through no fault of the traveler and unless the
9 traveler otherwise advises the seller of travel in writing, the
10 seller of travel shall return to the traveler all moneys paid
11 for services not performed and goods not delivered in accordance
12 with the contract.
13 (b) Misrepresentation.--Any material misrepresentation with
14 respect to the date or place of all departures or arrivals or
15 type of aircraft or land or ocean carrier or similar occurrence
16 shall be reasons for cancellation by the consumer, which will
17 require the refund specified in this section. The seller of
18 travel has the right to substitute another ship, airline or
19 hotel of equal or greater value due to strike, bankruptcy or
20 condition making the accommodations uninhabitable.
21 (c) Subrogation.--Any seller of travel who makes any refund
22 under the provisions of this act shall be entitled to
23 subrogation as defined in this act.
24 Section 8. Evidence of financial security.
25 (a) Filing and amount.--Before offering, advertising,
26 selling or executing or causing to be executed any contract in
27 this Commonwealth for travel or tour services, every seller of
28 travel shall file and maintain with the bureau evidence of
29 financial security as follows:
30 (1) A bond issued by a surety authorized to do business
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1 in this Commonwealth and specifically authorized to issue
2 such surety bonds in this Commonwealth.
3 (i) The amount of the bond for sellers of travel
4 that offer vacation certificates shall be $50,000.
5 (ii) the amount of the bond for sellers of travel
6 that do not offer vacation certificates shall be $25,000.
7 However, the seller of travel may apply to the bureau for
8 a reduction in the amount of the bond. Along with the
9 application, the seller of travel shall submit a
10 financial statement prepared by an independent certified
11 public accountant in accordance with generally accepted
12 accounting principles for the immediately preceding
13 fiscal year. To apply for a reduction in the amount of
14 the bond, the seller of travel must have a satisfactory
15 complaint history. The seller of travel's dollar amount
16 of gross annual sales shall determine the amount of the
17 bond reduction, as follows:
18 (A) A business that has been in operation under
19 the same ownership and control for at least one year
20 with under $500,000 in gross annual sales may request
21 to reduce the amount of its bond to $10,000.
22 (B) A business that has been in operation under
23 the same ownership and control for at least one year
24 with gross annual sales between $500,000 and
25 $1,000,000 may request to reduce the amount of its
26 bond to $15,000.
27 (C) A business that has been in operation under
28 the same ownership and control for at least one year
29 with gross annual sales between $1,000,000 and
30 $2,000,000 may request to reduce the amount of its
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1 bond to $20,000.
2 (D) The amount of the bond for a newly
3 established business under new ownership shall be
4 $25,000. However, the seller of travel may apply to
5 reduce the amount of its bond to $10,000. To be
6 eligible for a reduction, a newly established seller
7 of travel must meet the following criteria:
8 (I) Has not been in operation for more one
9 year.
10 (II) None of its owners, directors, officers
11 or general partners have had any civil, criminal
12 or administrative action instituted against them
13 in the vacation or travel business, and none of
14 its owners, directors, officers or general
15 partners have been affiliated with any seller of
16 travel that has had any criminal or
17 administrative action instituted against it in
18 the vacation or travel business.
19 (III) None of its owners, directors,
20 officers or general partners have an
21 unsatisfactory consumer complaint history with
22 the bureau or have been affiliated with any
23 seller of travel that has had an unsatisfactory
24 consumer complaint history with the bureau.
25 (iii) The bureau shall deny or revoke the bond
26 reduction if the seller of travel:
27 (A) Fails to timely register as a seller of
28 travel.
29 (B) Fails to timely post bond.
30 (C) Has an unsatisfactory consumer complaint
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1 history.
2 (D) Violates any provision of this act.
3 (2) A seller of travel filing the bond shall maintain
4 the bond in force in the proper amount as a condition of
5 continuing to engage in business. Evidence of the bond must
6 be filed with the bureau.
7 (3) The bond shall be in favor of the bureau for the
8 benefit of:
9 (i) any traveler injured by having paid money for
10 travel or tour services to a person or entity that fails
11 to provide the travel or tour service; or
12 (ii) any traveler injured as a result of a violation
13 of this act.
14 (4) The bond requirement may be waived on an annual
15 basis if any of the following apply:
16 (i) sellers of travel who have:
17 (A) contracted with the Airlines Reporting
18 Corporation for the most recent consecutive three
19 years or more under the same ownership and control
20 and who do not offer vacation certificates;
21 (B) contracted with the Airlines Reporting
22 Corporation for the most recent consecutive five
23 years or more under the same ownership and control
24 and who do offer vacation certificates; and
25 (C) had three or more consecutive years of
26 experience as a seller of travel under the same
27 ownership and control, unless acquired or formed by a
28 registered seller of travel that has been in business
29 under the same ownership and control for a period of
30 three or more consecutive years and has not had any
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1 civil, criminal or administrative action instituted
2 against it in the vacation or travel business; or
3 (ii) the seller of travel is a broker who has
4 complied with 52 Pa. Code § 39.15 (relating to security
5 for the protection of the public) and has furnished a
6 bond or other security approved by the commission.
7 Such waiver may be revoked if the seller of travel
8 violates any provision of this act.
9 (b) Consent for cancellation.--An adequate bond shall not be
10 canceled without the consent of the bureau.
11 Section 9. Registration.
12 (a) Registration.--A seller of travel shall file a statement
13 with the bureau, indicating name, home address and business
14 address and, where applicable, the name and address of the
15 financial institution where the bond is located and any other
16 information required by the bureau under this act. The bureau
17 shall assign a registration number to each seller of travel.
18 (b) Registration fee.--Registration fees shall be $150 for
19 the first year and $50 for each subsequent year. Registration
20 costs have been calculated to be equal to the costs of
21 implementing and enforcing this act. For sellers of travel which
22 have more than one office, registration fees shall be assessed
23 at the main location which maintains the principal banking
24 relationship for the branch offices.
25 (c) Additional material to be filed.--Sellers of travel who
26 offer vacation certificates must also submit and disclose to the
27 bureau with the application for registration, and any time such
28 document is changed but prior to the sale of any vacation
29 certificate, the following:
30 (1) A copy of the contract by which the rights,
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1 obligations, benefits and privileges resulting from purchase
2 of a vacation certificate are established.
3 (2) A copy of each promotional brochure, pamphlet, form
4 letter, registration form or any other written material
5 disseminated in connection with the advertising, promotion or
6 sale of any vacation certificate.
7 (3) A verbatim script of each radio, television or movie
8 or other similar advertisement broadcast to the public in
9 connection with the advertising, promotion or sale of any
10 vacation certificate.
11 (4) A transcript of any standard verbal sales
12 presentation utilized in connection with the advertising,
13 promotion or sale of vacation certificates.
14 (5) A copy of all rules, regulations, conditions or
15 limitations upon the use of, or obtaining reservations for
16 the use of, accommodations or facilities available pursuant
17 to the vacation certificate.
18 (6) A copy of a written authorization for the use of any
19 registered trademark, trade name or trade logo utilized in
20 promotional brochures, pamphlets, form letters, registration
21 forms or other written materials disseminated in connection
22 with the advertising, promotion or sale of vacation
23 certificates from the holder of each trademark, trade name or
24 trade logo so used.
25 (7) A complete copy of the original of each testimonial
26 letter from previous vacation certificate purchasers utilized
27 in advertisements disseminated in connection with
28 advertising, promotion or sale of vacation certificates.
29 (8) Where discount or complimentary coupons or tickets
30 are to be provided to purchasers, a copy of such ticket or
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1 coupon which shall include a statement of the names and
2 addresses of businesses where the coupons or tickets are
3 honored, the goods, services, or amenities provided and any
4 additional charges, limitations or conditions.
5 (9) Where other goods, services or amenities are
6 provided to the purchasers, a copy of such ticket or coupon
7 which shall include a statement of the names and addresses of
8 businesses where the coupons or tickets are honored, the
9 goods, services or amenities provided and any additional
10 charges, limitations or conditions.
11 (10) A statement of the number of certificates to be
12 issued and the date of their expiration.
13 (11) A copy of the vacation certificate and its
14 component parts, including, but not limited to, any
15 registration card, form letter, reservation form,
16 confirmation form and lodging directory.
17 (12) A copy of all agreements between the seller and
18 business entities providing accommodations or facilities to
19 purchasers.
20 (13) A copy of all agreements between the seller and
21 each business entity providing or honoring discount or
22 complimentary coupons or tickets or providing other goods,
23 services or amenities to the purchaser.
24 (14) A listing of the full name, address and telephone
25 number of each person through which the distribution and sale
26 of vacation certificates is to be carried out, including the
27 number of vacation certificates allocated or sold to each
28 person and the name and address of a registered agent for
29 service of process in this Commonwealth.
30 (15) A financial statement prepared by an independent
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1 certified public accountant in accordance with generally
2 accepted accounting principles. Such statement shall be
3 submitted annually at the close of each fiscal year. A seller
4 which has not yet begun operations shall submit a balance
5 sheet prepared by an independent certified public accountant
6 in accordance with generally accepted auditing principles in
7 lieu of an initial financial statement, thereafter annually
8 submitting a financial statement or Federal income tax return
9 at the close of the fiscal year.
10 Section 10. Prohibited practices by sellers of travel.
11 It shall be illegal for any seller of travel and, if such
12 seller of travel is a corporation, any officer or director
13 thereof to engage in any or all of the following enumerated
14 practices:
15 (1) Make a material misrepresentation regarding the
16 quality of aircraft, vehicle, ship or train, day of departure
17 or arrival, points served, quality of lodging, time share or
18 other accommodation or other services available, reserved or
19 contracted for in connection with any trip, tour or other
20 travel services, unless such misrepresentation was based upon
21 a reasonable belief as to the services available based upon
22 representations made by the person, company, corporation,
23 common carrier or other entity offering such services.
24 (2) Misrepresent the fares and charges for
25 transportation or services, unless such misrepresentation was
26 based upon a reasonable belief as to the fares and charges
27 applicable based upon representations made by the person,
28 company, corporation, common carrier or other entity offering
29 such services.
30 (3) Misrepresent that special priorities for
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1 reservations are available when such special considerations
2 are in fact granted to members of the public generally.
3 (4) Sell transportation to a person or persons on a
4 reservation or charter basis for specified space, flight or
5 time or represent that such definite reservations or charter
6 is or will be available or has been arranged without a
7 binding commitment with a carrier for the furnishing of such
8 definite reservation or charter as represented or sold.
9 (5) Sell or issue tickets or other documents to
10 passengers to be exchanged or used for transportation if such
11 tickets or other documents will not be or cannot be legally
12 honored by carriers for transportation.
13 (6) Misrepresent the requirements that must be met by a
14 person or persons in order to qualify for charter or group
15 fare rates, unless such misrepresentation was based upon a
16 reasonable belief as to the requirements applicable based
17 upon representations made by the person, company corporation,
18 common carrier or other entity offering such charter or group
19 fare.
20 (7) Fail or refuse to honor a purchaser's vacation
21 certificate request to cancel if such request is made:
22 (i) within 30 days from the date of purchase or
23 receipt of the vacation certificate, whichever occurs
24 later; or
25 (ii) at any time accommodations or facilities are
26 not available pursuant to a request for use as provided
27 in the contract, provided that the contract shall not
28 require notice greater than 60 days in advance of the
29 date requested, if acceptable to the purchaser,
30 comparable alternate accommodations or facilities in a
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1 city, or reservations for a date different than that
2 requested, may be provided.
3 Section 11. Offenses.
4 A violation of the provisions of this act constitutes a
5 violation of the act of December 17, 1968 (P.L.1224, No.387),
6 known as the Unfair Trade Practices and Consumer Protection Law.
7 In addition to the penalties provided in this act, any seller of
8 travel who violates the provisions of this act shall be subject
9 to a civil penalty of up to $5,000 for each violation. The
10 Attorney General, a district attorney or the traveler may seek
11 such penalties in addition to any other penalty or remedy
12 permitted under the Unfair Trade Practices and Consumer
13 Protection Law or any other laws of this Commonwealth.
14 Section 12. Burden of proof.
15 (a) Proceeding under this act.--In any civil proceeding
16 alleging a violation of this act, the burden of proving an
17 exemption is upon the person claiming it. In any criminal
18 proceeding alleging a violation of this act, the burden of
19 producing evidence to support a defense based upon an exemption
20 or an exception is upon the person claiming it.
21 (b) Other proceedings.--Compliance with this act does not
22 satisfy nor substitute for any requirements for license,
23 registration or regulation mandated by other laws.
24 Section 13. Investigation.
25 (a) Authority.--If the Attorney General has reason to
26 believe that a violation of this act has occurred, the Attorney
27 General shall have the authority to investigate, on behalf of
28 the Commonwealth, its citizens or a political subdivision.
29 (b) Procedure.--Prior to the institution of a civil action,
30 the Attorney General is authorized to require the attendance and
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1 testimony of witnesses and the production of documents. For this
2 purpose, the Attorney General may issue subpoenas, examine
3 witnesses and receive evidence. If a person objects to or
4 otherwise fails to comply with a subpoena or request for
5 testimony, the Attorney General may file in Commonwealth Court
6 an action to enforce the subpoena or request. Notice of hearing
7 the action and a copy of all pleadings shall be served upon the
8 person who may appear in opposition.
9 Section 14. Authority.
10 (a) Authority of bureau.--The bureau shall have all powers,
11 rights and duties as are provided in this act to seek penalties,
12 remedies and procedures against any seller of travel that is
13 engaged in practices that are unlawful according to the
14 provisions of this act.
15 (b) Other remedies preserved.--The provisions of this act
16 are not exclusive and do not relieve sellers of travel or
17 contracts subject thereto from compliance with all other
18 applicable provisions of law nor shall these provisions provide
19 immunity for any civil claim against any seller of travel which
20 has acquired any moneys or property, real or personal, by means
21 of any practice declared unlawful by this act.
22 Section 15. Venue.
23 An offense under this act is deemed to have been committed in
24 any county where the seller of travel has a place of business,
25 the county from which payment by the traveler was made, or the
26 county where money was collected by the seller of travel.
27 Section 16. Regulations.
28 The bureau may adopt rules and regulations necessary to
29 enforce and administer this act. These rules and regulations,
30 when promulgated pursuant to the act of July 31, 1968 (P.L.769,
19990S1182B1478 - 18 -
1 No.240), referred to as the Commonwealth Documents Law, shall
2 have the force and effect of law.
3 Section 17. Effective date.
4 This act shall take effect in 90 days.
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