By Hightower H.B. No. 2048
75R4053 JMM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of certain persons providing travel and
1-3 transportation-related services; providing a criminal penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. PURPOSE. The legislature finds that the public
1-6 interest requires the regulation of those who arrange for and
1-7 provide for transportation or transportation-related services and
1-8 those who make financial arrangements relating to those services
1-9 for the citizens of this state and declares that the travel
1-10 industry has a significant effect on the economy and the well-being
1-11 of the state.
1-12 SECTION 2. DEFINITIONS. In this Act:
1-13 (1) "Commission" means the Texas Commission of
1-14 Licensing and Regulation.
1-15 (2) "Commissioner" means the commissioner of licensing
1-16 and regulation.
1-17 (3) "Department" means the Texas Department of
1-18 Licensing and Regulation.
1-19 (4) "Offer for sale" means holding out an ability or
1-20 making an offer or undertaking, by any method, to arrange for,
1-21 provide, or acquire:
1-22 (A) travel reservations or accommodations;
1-23 (B) tickets for domestic or foreign travel by
1-24 air, rail, ship, or any other method of transportation; or
2-1 (C) transportation-related services.
2-2 (5) "Person" means an individual, partnership,
2-3 corporation, association, or other legal entity.
2-4 (6) "Seller of travel" means a person that offers for
2-5 sale, at wholesale or retail, transportation or
2-6 transportation-related services primarily for the benefit of an
2-7 individual or group of individuals for a fee, commission, or other
2-8 valuable consideration or with the reasonable expectation of
2-9 receiving a fee, commission, or other valuable consideration.
2-10 (7) "Transportation-related services" include
2-11 automobile rentals, lodging, transfers, sight-seeing tours, and any
2-12 other service primarily for the benefit of an individual or group
2-13 of individuals that are reasonably related to air, sea, rail, motor
2-14 coach, or any other means of transportation or accommodation.
2-15 (8) "Travel counselor" means an individual, including
2-16 a seller of travel, an employee of a seller of travel, or an
2-17 individual associated with a seller of travel, who provides to
2-18 persons in this state services, expertise, or advice in connection
2-19 with the purchase or sale of transportation or
2-20 transportation-related services primarily for the benefit of an
2-21 individual or a group of individuals.
2-22 (9) "Traveler" means a person that purchases or is
2-23 otherwise entitled to receive transportation or
2-24 transportation-related services primarily for the benefit of an
2-25 individual or a group of individuals.
2-26 SECTION 3. CERTIFICATE OF REGISTRATION REQUIRED. (a) A
2-27 person may not act as a seller of travel or a travel counselor in
3-1 this state unless the person holds a certificate of registration
3-2 under this Act.
3-3 (b) A person is eligible for registration as a seller of
3-4 travel if the person:
3-5 (1) is 18 years of age or older, if the person is an
3-6 individual or sole proprietorship;
3-7 (2) is authorized to do business in this state, if the
3-8 person is a corporation;
3-9 (3) is a citizen of the United States or a resident
3-10 legal alien, if the person is an individual; and
3-11 (4) has a fixed place for the conduct of business in
3-12 this state.
3-13 (c) An individual is eligible for registration as a travel
3-14 counselor if the person:
3-15 (1) is 18 years of age or older;
3-16 (2) is a citizen of the United States or a resident
3-17 legal alien; and
3-18 (3) is employed by a seller of travel registered under
3-19 this Act.
3-20 (d) The department shall issue a certificate of registration
3-21 on approval of the application and receipt of payment of all
3-22 registration fees.
3-23 SECTION 4. APPLICATION FOR CERTIFICATE OF REGISTRATION; TERM
3-24 AND RENEWAL. (a) A person applying for a certificate of
3-25 registration must apply to the department on a form prescribed by
3-26 the commissioner. The application must be accompanied by any
3-27 required bond and any required registration fee.
4-1 (b) An application for registration by a corporation shall:
4-2 (1) be signed by the president, secretary, or
4-3 treasurer of the corporation;
4-4 (2) specify the name, date, and place of incorporation
4-5 of the applicant; and
4-6 (3) specify the name and address of any person that
4-7 owns or controls not less than 10 percent of the voting stock of
4-8 the corporation.
4-9 (c) An application for registration by a person who is not a
4-10 resident of the state must be accompanied by:
4-11 (1) a certified copy of a certificate of registration
4-12 or license to act as a seller of travel or a travel counselor
4-13 issued to the applicant by the state, county, or political
4-14 subdivision in which the person resides; or
4-15 (2) if the state, county, or political subdivision in
4-16 which the person resides does not issue a certificate of
4-17 registration or license to act as a seller of travel or a travel
4-18 counselor, proof determined sufficient by the department that the
4-19 applicant is in compliance with all requirements for doing business
4-20 as a seller of travel or a travel counselor in the state in which
4-21 the person resides.
4-22 (d) A nonresident applicant must comply with all other
4-23 application requirements under this Act. In addition, a
4-24 nonresident's application must be accompanied by a written
4-25 irrevocable consent to service of process. The consent must
4-26 provide that an action arising out of any transaction subject to
4-27 this Act may be commenced against the registrant in the proper
5-1 court in the state in which either the cause of action arose or in
5-2 which the plaintiff resides by service of process on the department
5-3 as the registrant's agent and stipulating that service of process
5-4 in that manner is valid and binding as if service had been made on
5-5 the person according to the laws of this or any other state. The
5-6 consent to service of process must be in the form prescribed by the
5-7 commissioner and accompanied by additional information required by
5-8 rule of the commissioner.
5-9 (e) A certificate of registration issued under this Act is
5-10 valid for one year from the date of issuance. A certificate of
5-11 registration issued under this Act must be renewed before the 30th
5-12 day after the expiration date of the certificate by written request
5-13 by the registrant and the payment of the required registration fee.
5-14 SECTION 5. FEES; RULES. (a) The commission shall adopt
5-15 fees under this Act in amounts necessary for the administration of
5-16 this Act.
5-17 (b) The commissioner shall:
5-18 (1) adopt rules relating to registering as a seller of
5-19 travel or a travel counselor under this Act; and
5-20 (2) prescribe any form required under this Act.
5-21 SECTION 6. EVIDENCE OF FINANCIAL SECURITY. (a) An
5-22 application for a certificate of registration as a seller of travel
5-23 must be accompanied by a cash performance bond or surety issued in
5-24 accordance with the insurance laws of this state in the amount
5-25 prescribed by rule of the commissioner.
5-26 (b) A bond under this section shall be payable to the state
5-27 for the use and benefit of any traveler who is injured by the
6-1 fraud, misrepresentation, or financial failure of the seller of
6-2 travel and conditioned that the registrant will pay any judgment
6-3 recovered by any traveler in any suit for actual damages, including
6-4 reasonable attorney's fees, resulting from a cause of action
6-5 involving the registrant's seller of travel activities. The bond
6-6 is open to successive claims, but the aggregate amount may not
6-7 exceed the penalty of the bond.
6-8 (c) If a registered seller of travel is engaged exclusively
6-9 in the sale of transportation and transportation-related services
6-10 in connection with charter air transportation, in lieu of the bond
6-11 required under this section, the seller of travel may file with the
6-12 department:
6-13 (1) a copy of the person's application to the United
6-14 States Department of Transportation for each public offering;
6-15 (2) a copy of the notice of receipt by the Department
6-16 of Transportation; and
6-17 (3) a statement by the seller of travel that the
6-18 application was not disapproved.
6-19 (d) If a registered seller of travel has contracted with the
6-20 Airlines Reporting Corporation or the Passenger Network Services
6-21 Corporation, in lieu of the bond required by this section, the
6-22 seller of travel may file with the department a certified copy of
6-23 the official approval and appointment of the seller of travel from
6-24 the Airlines Reporting Corporation or the Passenger Network
6-25 Services Corporation.
6-26 (e) In lieu of any bond or guarantee required to be provided
6-27 by this section, a seller of travel may:
7-1 (1) file with the department proof of professional
7-2 liability and errors and omissions insurance in an amount of at
7-3 least $1,000,000 annually; or
7-4 (2) deposit with the department cash, securities, or a
7-5 statement from a licensed financial institution guaranteeing the
7-6 performance of the seller of travel in a similar amount or evidence
7-7 satisfactory to the department of the deposit of the collateral to
7-8 be held or applied to the purposes to which the proceeds of the
7-9 bond would otherwise be applied.
7-10 SECTION 7. EXEMPTIONS. This Act does not apply to:
7-11 (1) an employee of a seller of travel who is engaged
7-12 solely in the business of the person's employer and who does not
7-13 act as a travel counselor;
7-14 (2) a direct common carrier of passengers or property
7-15 regulated by an agency of the federal government or an employee of
7-16 the carrier engaged solely in the transportation business of the
7-17 carrier as identified in the carrier's certificate;
7-18 (3) an intrastate common carrier of passengers or
7-19 property selling only transportation as defined in the applicable
7-20 state or local registration or certification or an employee of the
7-21 carrier engaged solely in the transportation business of the
7-22 carrier;
7-23 (4) a hotel, motel, or other place of public
7-24 accommodation selling public accommodation or an employee of the
7-25 hotel, motel, or other place of public accommodation engaged solely
7-26 in making arrangements for accommodations;
7-27 (5) a person involved solely in the rental, leasing,
8-1 or sale of transportation vehicles;
8-2 (6) a person involved solely in the rental, leasing,
8-3 or sale of residential property;
8-4 (7) a person engaged in making travel arrangements for
8-5 the person or a financially related entity or employee of the
8-6 person, for which a fee, commission, or other valuable
8-7 consideration is not received, directly or indirectly, from the
8-8 supplier of the travel arrangements; or
8-9 (8) a seller of travel otherwise required to be
8-10 registered under this Act if the person offers for sale all
8-11 transportation and transportation-related services to citizens of
8-12 this state through a resident registered seller of travel.
8-13 SECTION 8. DENIAL, SUSPENSION, OR REVOCATION OF CERTIFICATE
8-14 OF REGISTRATION. (a) The commissioner may deny, suspend, or
8-15 revoke the certificate of registration of a seller of travel or a
8-16 travel counselor for:
8-17 (1) obtaining a certificate of registration through
8-18 bribery or false or fraudulent representation;
8-19 (2) making a substantial misrepresentation in an
8-20 application for registration;
8-21 (3) engaging in a continued and flagrant course of
8-22 misrepresentation or making false promises through agents,
8-23 advertising, or otherwise;
8-24 (4) failing to account for or failing to remit, within
8-25 a reasonable time, any money belonging to another person that comes
8-26 into the person's possession;
8-27 (5) entering a plea of guilty or no contest to or
9-1 being convicted in this state or another state of a felony in which
9-2 fraud is an essential element, if the time for appeal has elapsed
9-3 or the judgment or conviction has become final;
9-4 (6) being the subject of a judgment in a court of
9-5 competent jurisdiction of this state or another state related to
9-6 financial activities or committing a breach of a fiduciary duty
9-7 involving the use of the funds of another person;
9-8 (7) being the subject of an entry of a final money
9-9 judgment against the registrant resulting from a contractual
9-10 obligation of the registrant incurred in the pursuit of the
9-11 registrant's business, if the judgment remains unsatisfied for at
9-12 least six months after the date it becomes final;
9-13 (8) failing to display the registration certificate as
9-14 prescribed in this Act;
9-15 (9) failing to maintain the guarantee or bond required
9-16 by this Act; or
9-17 (10) violating this Act or a rule adopted under this
9-18 Act.
9-19 (b) A proceeding under this Act is subject to Chapter 2001,
9-20 Government Code.
9-21 (c) This section does not relieve a person from civil
9-22 liability or from criminal prosecution under this Act or under the
9-23 laws of this state.
9-24 SECTION 9. TEMPORARY SUSPENSION OF REGISTRATION. If the
9-25 department determines that the public health, safety, or welfare
9-26 requires emergency action to prevent immediate and irreparable harm
9-27 to any person or to the public because of any act or practice of a
10-1 registrant, the commissioner may temporarily suspend a certificate
10-2 of registration issued under this Act pending further proceedings
10-3 under this Act.
10-4 SECTION 10. ADVERTISING; DISPLAY OF CERTIFICATE. (a) A
10-5 seller of travel that advertises in this state shall indicate in
10-6 the advertisement the name and registration number of the person.
10-7 (b) Each seller of travel shall display the person's
10-8 certificate of registration in a prominent place in the location
10-9 where the travel business is conducted.
10-10 (c) If a seller of travel conducts business in more than one
10-11 location, the registrant shall apply and pay the fee for an
10-12 additional certificate designated as a branch office certificate to
10-13 comply with Subsection (b) of this section.
10-14 SECTION 11. EMPLOYMENT BY SELLER OF TRAVEL. (a) A
10-15 registered travel counselor may not act as a travel counselor for a
10-16 seller of travel unless the seller of travel is registered under
10-17 this Act.
10-18 (b) A registered seller of travel may not employ a person as
10-19 a travel counselor unless the travel counselor is registered under
10-20 this Act.
10-21 SECTION 12. SUBSTITUTED SERVICE OF PROCESS. The
10-22 commissioner shall adopt rules providing for the substituted
10-23 service of process on a person registered under this Act.
10-24 SECTION 13. PREEMPTION. A municipality or other political
10-25 subdivision of this state may not levy or collect a registration
10-26 tax or fee, as a regulatory or revenue measure, or require the
10-27 registration in any manner of a seller of travel or travel
11-1 counselor registered under this Act.
11-2 SECTION 14. OFFENSE. (a) A person commits an offense if
11-3 the person acts as a seller of travel or a travel counselor without
11-4 holding a certificate of registration under this Act.
11-5 (b) An offense under this section is a Class A misdemeanor.
11-6 SECTION 15. EFFECTIVE DATE; TRANSITION. (a) Except as
11-7 provided by Subsection (b) of this section, this Act takes effect
11-8 September 1, 1997.
11-9 (b) Sections 3 and 14 of this Act take effect January 1,
11-10 1998.
11-11 (c) The commissioner of licensing and regulation and the
11-12 Texas Commission of Licensing and Regulation shall adopt rules as
11-13 required by this Act and Article 9100, Revised Statutes, not later
11-14 than November 1, 1998.
11-15 SECTION 16. EMERGENCY. The importance of this legislation
11-16 and the crowded condition of the calendars in both houses create an
11-17 emergency and an imperative public necessity that the
11-18 constitutional rule requiring bills to be read on three several
11-19 days in each house be suspended, and this rule is hereby suspended.