On Jan. 1, California's new Seller
of Travel Law expanded the class of persons who must register with
the state's attorney general's office. This revised law amounts to
an additional bureaucratic layer of enforcement against financially
secure travel agents.
fails to take into account objective travel agency input
illustrating how the law is not applicable to its intended purpose
of protecting consumers.
The new law
includes sellers of land or water vessel transportation, but
contrary to the original industry agreement, it exempts numerous
charities that are directly competing against travel
Now, if an entity
wants to get out of the requirements of the law, it merely needs to
set itself up as a charity. In the words of the statute, a seller
of travel is an exempt charity if it "is both exempt from taxation
under Section 5012(a) of the Internal Revenue Code and not a
private foundation as defined in Section 509."
delivery of the ticket or voucher to a passenger within 72 hours,
the new law ignores the custom and practice of the travel industry
in relation to consolidator tickets and additional secondary
sources of tickets.
For a new class of
travel seller, a "seller of travel discount program," the law
demands a $100,000 surety bond that, obviously, most agents cannot
not afford or obtain in today's litigious market.
A "travel business
discount program" is defined as a membership, benefit program,
identification card, identification number or other arrangement
that identifies the purchaser of the travel business discount as
engaged in the travel business or otherwise qualified to received
discounts or reduce prices made available to persons involved in
the travel business.
classification ignores the trend in the industry to utilize host
agencies and Internet sources of distribution that are seeking
independent agent utilization.
The amusing part of
the 2007 law is that IATA can be recognized under this to be
probably the largest card mill operating in the U.S.
Who of you as
agents would bother to send the millions of dollars that IATA has
received for IATAN credentials if it was not for receiving the
discounts? Are you buying an "identification card"? Of course you
benevolent it has been in the past towards agents, I don't think
IATA plans to become a 501(c)(3) charity. Normally, I would be
looking forward to seeing IATA register as a seller of travel in
California or to see the state prosecute it for misdemeanors and/or
felonies, thereby instilling in IATA the same fears that our other
agents live with every day.
However, since the
law added the "Big Boys" exemption, a $5 million net equity
exemption specifically for companies and organizations like IATA,
it is likely to make IATA the largest "legal" card mill in the
My advice to Travel
Weekly readers is this: Don't allow additional harassment and
dangerous state legislation to hinder your duty to service the
consumer through the travel agent that is providing the only
objective assistance to consumers.
is a lawyer specializing in travel law. E-mail him at[email protected].