Chapter 023

2008 -- S 2067

Enacted 06/06/08

A N A C T

RELATING TO BUSINESSES AND PROFESSIONS -- TRAVEL AGENCIES

Introduced By: Senators Ciccone, Jabour, Tassoni, McCaffrey, and Moura

Date Introduced: January 15, 2008

It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 5-52 of the General Laws entitled "Travel Agencies" is hereby

repealed in its entirety.

5-52-1. Definitions. -- The following words and phrases, when used in this chapter, shall

be construed as follows:

(1) "Advertisements" includes, but is not limited to, any written or graphic representation

in any card, brochure, newspaper, magazine, directory listing, or display if the listing or display is

obtained in exchange for valuable consideration as any oral, written or graphic representations

made by radio, television, or cable broadcast.

(2) "Department" means the department of business regulation.

(3) "License" means a license issued by the state pursuant to this chapter.

(4) "Travel agency" means any resident or nonresident person, firm, corporation, or

business entity maintaining a business location or branch office in this state who offers for sale,

directly or indirectly, at wholesale or retail, including advertisements as defined in this section,

prearranged travel services for individuals or groups, in exchange for a fee, commission, or other

consideration. "Travel agency" includes any business entity offering membership in a travel club

or travel service for an advance fee or payment, even if no travel contracts or certificates or

vacation or tour packages are sold by the business entity; and also includes a for-profit

organization which acts as a travel promoter marketing or offering for sale a coupon book or the

like for travel services.

(5) "Travel agent" or "travel manager" means any person employed by a travel agency

whose principal duties include consulting with and advising persons concerning travel

arrangements or accommodations but does not include a salaried employee of a licensed travel

agency who does not arrange the purchase, accommodations or sale of travel services.

(6) "Travel services" includes, but is not limited to, car rentals, transfers, lodging and all

other services which are reasonably related to air, sea, rail, motor coach, or other transportation,

or accommodations, which a traveler obtains directly or indirectly from a travel agency, whether

offered or sold on a wholesale or retail basis.

5-52-2. Qualifications for a travel agency's license. -- In order to be eligible for a travel

agency license under this chapter, a person, firm or corporation must:

(1) If an individual:

(i) Be not less than eighteen (18) years of age;

(ii) Be a person who has a good reputation for honesty, truthfulness, and fair dealing, and

who is competent and financially qualified to conduct the business of a travel agency in a manner

to safeguard the interest of the public;

(iii) Have not been convicted in any state of a felony involving theft, fraud, or breach of

a fiduciary relationship; and

(iv) Hold a valid travel manager's license as issued by the department.

(2) If a firm or corporation, it must employ an individual holding a valid travel manager's

license as issued by the department.

(3) All applicants for a travel agency license shall at all times maintain proper bond and

a fixed office as required by sections 5-52-4 and 5-52-4.1.

5-52-2.1. Qualifications for a travel manager license. -- In order to be eligible for a

travel manager license under this chapter, a person must:

(1) Be not less than eighteen (18) years of age;

(2) Be a person who has a good reputation for honesty, truthfulness, and fair dealing, and

who is competent and financially qualified to conduct the business of a travel agency in a manner

to safeguard the interest of the public;

(3) Have been a travel agent for at least one year prior to applying for a travel manager

license, during which year the applicant's time was devoted to sales work within an agency for

not less than thirty-five (35) hours per week; or furnish evidence satisfactory to the director that

the applicant is certified to have completed a course of study leading to qualification as a travel

agent at a recognized educational institution; and

(4) Have not been convicted in any state of a felony involving theft, fraud, or breach of a

fiduciary relationship.

5-52-3. Qualifications for a travel agent license. -- In order to be eligible for a travel

agent license under this chapter, a person must:

(1) Be not less than eighteen (18) years of age;

(2) Be a person who has a good reputation for honesty, truthfulness, and fair dealing, and

who is competent to act as a travel agent in a manner to safeguard the interest of the public;

(3) Have not been convicted in any state of a felony involving theft, fraud, or breach of a

fiduciary relationship; and

(4) Be an apprentice with a licensed travel agency, or furnish evidence satisfactory to the

director that the applicant is certified to have completed a course of study leading to qualification

as a travel agent at a recognized educational institution, or provide any other evidence that the

director may deem satisfactory.

5-52-4. License required -- Duplicate licenses -- Bond for travel agencies. -- (a) No

person, firm, or corporation shall act or hold himself or herself out as a travel agency or travel

agent or travel manager unless he or she holds an unsuspended, unrevoked, license issued by the

department pursuant to the provisions of this chapter and rules and regulations adopted pursuant

to it.

(b) The license shall be conspicuously posted in the place of business. Duplicate licenses

shall be issued by the department without additional fees to valid license holders operating more

than one office.

(c) The travel agency's license issued to any corporation, partnership or association shall

designate the name of the one principal active officer of the corporation, partnership, or

association for whom that license is valid. Every other employee of that corporation, partnership,

or association other than salaried employees who do not arrange the purchase, accommodations

or sale of travel services, shall be obliged to obtain an individual license as a travel agent or

manager.

(d) All offices of travel agencies shall be managed by a person holding a valid travel

manager license.

(e) (1) Each travel agency shall deliver and file with the department of business

regulation before a license is issued or reissued, a surety company bond in the principal sum of

ten thousand dollars ($10,000).

(2) The bond shall be written by a company recognized and approved by the

commissioner of insurance, and shall be approved by the department with respect to its form,

manner of execution, and sufficiency in due form to the state.

(3) The liability of the surety on the bond shall be limited to indemnify the claimant only

for his or her actual damage. The bond shall not limit or impair any right of recovery otherwise

available pursuant to law nor shall the amount of the bond be relevant in determining the amount

of damage or other relief to which any claimant shall be entitled. The bond shall be accessible

only after all other legal remedies have been exhausted.

(4) In the event the bond is exhausted, the travel agency shall immediately notify the

department, which causes any public notice that it deems appropriate, to be immediately given

notice.

5-52-4.1. Fixed office for travel agency required. -- (a) Each licensed travel agency

shall maintain a fixed office within this state which shall be located to conform with zoning laws.

(b) Each travel agency and travel agent shall state in each of its advertisements its name

and license number.

5-52-4.2. Examination of applicants -- Fee. -- (a) The director shall require any

applicant for a travel agency or travel agent's license to submit to a written examination to show

the applicant's knowledge of reading, writing, spelling, elementary arithmetic, geography, and in

general, the means and method to arrange or book travel reservations or accommodations, tickets

for domestic or foreign travel by air, rail, ship, bus, or other medium of transportation, or hotel or

other lodging accommodations, and of the state and federal statutes and regulations relating to the

travel business. An applicant for a travel agency or travel agent's license, prior to taking the

examination, shall pay to the director an examination fee of ten dollars ($10.00).

(b) A person shall be permitted to apply for re-examination at any time upon payment of

the required fee as provided in subsection (a) of this section; the director may require that

applicant to present evidence of further study and preparation, prior to permitting a re-

examination.

(c) Any travel agency and travel agent holding a valid license on July 1, 1981, shall be

exempt from the examination provisions of this section.

5-52-4.3. Apprentice permits. -- (a) The department shall be authorized to issue an

apprentice permit to any person, without examination, who is qualified by reason of age and

reputation, to assist in the performance of a travel agency while under the strict supervision of

that travel agency or of a travel agent, for whose performance that travel agency and/or travel

agent shall be liable as if that performance was undertaken by that travel agency or travel agent.

(b) An apprentice permit shall be valid for a period of six (6) months from the date of

issue and may be renewed for cause shown upon proper application to the director.

(c) The fee for an apprentice permit and for each renewal shall be twenty-five dollars

($25.00).

5-52-5. License fees -- Transfer and renewal of licenses. -- (a) All licenses issued under

this chapter shall be for a period of one year. No license shall be issued until all license fees due

are paid in full.

(b) The per annum fee for the issuance of a travel agency license for any person, firm,

partnership, or corporation shall be one hundred twenty-five dollars ($125).

(c) The per annum fee for the issuance of a travel agent or travel manager license is fifty

dollars ($50.00). The fee for a travel agent or manager license to be transferred to another travel

agency is fifteen dollars ($15.00). The fee for a duplicate license that is destroyed or mutilated is

five dollars ($5.00).

(d) No license shall be assignable or transferable except on the prior approval of the

department of business regulation.

(e) (1) Application for renewal of a license must be received by the licensing authority

no less than twenty-one (21) days prior to expiration date, subject to the right of the licensing

authority to permit late filing upon good cause shown.

(2) Any renewal of a license shall be subject to the same provisions covering issuance,

suspension, and revocation of any license originally issued.

(3) The licensing authority may refuse to renew a license for any of the grounds stated in

section 5-52-7 and where the past conduct of the applicant affords reasonable grounds for belief

that he or she will not carry out his or her duties in accordance with law and with integrity and

honesty.

(4) The authority shall promptly notify the licensee, in writing, by certified mail of its

intent to refuse to renew the license.

(5) The licensee may, within twenty-one (21) days after receipt of that notice of intent,

request a hearing on the refusal.

(6) The licensee shall be permitted to honor commitments already made to its customers

provided that no new commitments are incurred, unless those new commitments are completely

bonded to insure that the general public is protected from loss of monies paid to the licensee.

(7) Where an applicant does not request a hearing in accordance with section 42-35-14,

the licensing authority may carry out the proposal stated in its notice.

5-52-6. Obligations of a travel agency. -- (a) A travel agency shall be obligated to

perform its duties reasonably and with ordinary care in providing travel services.

(b) A travel agency shall notify, or make reasonable or good faith efforts to notify, the

purchaser of travel services of any change or variation of the travel services purchased. The

notice shall be given immediately, or within a reasonable time as practicably possible, after the

travel agency is notified of each change or variation of the travel services purchased.

(c) A travel agency shall refund to any person with whom it contracts for a trip, moneys

lost by that person as a result of the breach of the duty of care pursuant to this section. The refund

shall be made within forty-five (45) days from the date it is requested.

(d) Nothing contained in this section shall restrict the right of a travel agency to refuse to

provide a refund, and to require ordinary civil adjudication of the dispute. This section does not

limit the right of the travel agency to recover from, or be indemnified by, any other party which

was responsible for the failure of all or part of the monies it refunded to the consumer pursuant to

this section.

5-52-6.1. Administrative remedies -- Penalties. -- (a) The department may, after

opportunity for a hearing, enter an order imposing one or more of the penalties stated in

subsection (b) of this section if the department finds that a travel agency, agent, or manager has:

(1) Violated, or is operating in violation of, any of the provisions of this chapter or of the

rules and regulations adopted or orders issued pursuant to this chapter;

(2) Made a material false statement in any application, document, or record required to

be submitted or retained pursuant to this chapter or order or regulation of the department;

(3) Refused or failed, or any of its principal officers refused or failed, after notice, to

produce any document or record or disclose any information required to be produced or disclosed

under this chapter or order or regulation of the department; or

(4) Made a material false statement in response to any request or investigation by the

department or the department of attorney general.

(b) Upon a finding as stated in subsection (a) of this section the department may order

one or more of the following:

(1) Impose an administrative fine not less than one hundred dollars ($100) nor more than

five hundred dollars ($500) for each act or omission which constitutes a violation of this chapter

or the rules and regulations of the department;

(2) Direct that the travel agency, agent, or manager cease and desist specified activities;

(3) Refuse to register, or cancel, or suspend a registration;

(4) Place the registrant on probation for a period of time, subject to any conditions that

the department may specify; or

(5) Cancel an exemption granted under section 5-52-11.

(c) Administrative proceedings which may result in the entry of an order imposing any

of the sanctions specified in subsection (b) of this section shall be governed by the Administrative

Procedures Act, chapter 35 of title 42.

5-52-7. Grounds for suspension or revocation of licenses. -- A license issued pursuant

to this chapter may be suspended or revoked by the department of business regulation for any one

or more of the following causes:

(1) Conviction of any crime involving moral turpitude;

(2) Fraud or bribery in securing a license issued pursuant to this chapter;

(3) Failing to display the license as provided in this chapter;

(4) Violating any provision of this chapter or of any rule or regulation adopted under it;

(5) Publishing or circulating any statement with the intent to deceive, misrepresent, or

mislead the public;

(6) Committing any fraud or fraudulent practice in the operation and conduct of a travel

agency business, including, but not limited to, intentionally misleading advertising;

(7) Aiding or abetting any person, firm, or corporation not licensed in this state in the

business of conducting a travel agency.

5-52-7.1. Nonresident travel agency -- Designated attorney for service of process. --

Every nonresident travel agency and travel agent soliciting business in the state, by mail,

telephone, or otherwise, either directly or indirectly, shall be deemed to have appointed the

director of business regulation as his or her true and lawful attorney upon whom may be served

all lawful processes in any action or proceeding against that nonresident arising or growing out of

any transaction involving travel and related services as stated in section 5-52-1(4). That

solicitation shall be a signification of the nonresident's agreement that any process against him or

her which is served as provided in this section is of the same legal force and validity as if served

on him or her personally.

5-52-7.2. Service on nonresident. -- (a) Service of process upon a nonresident travel

agency or travel agent shall be made by leaving a copy of the process with a fee of five dollars

($5.00) in the hands of the director, or in his or her office with some one acting in his stead as the

director, and that service shall be sufficient service upon the nonresident

(b) Notice of that service and a copy of the process shall be sent by registered or certified

mail prior to service, or immediately after service, by the plaintiff or his or her attorney of record

to the defendant at the address given by the nonresident in any solicitation furnished by him or

her.

(c) The sender's post office receipt of sending, and the plaintiff's or his or her attorney's

affidavit of compliance with this section shall be returned with the process in accordance with

applicable procedural rules.

(d) Notwithstanding the preceding requirements, once service has been made on the

director as provided in subsection (a) of this section, the court shall have the authority, in the

event of failure to comply with the requirement of notice to that nonresident, to order that notice

as is sufficient to apprise him or her of the pendency of the suit against him or her; and in

addition, may extend the time for answering by that nonresident.

(e) It is also sufficient if that notice and a copy of the process are served upon the

defendant outside the state in accordance with applicable procedural rules.

5-52-7.3. Nonresident travel agencies. -- Nonresident travel agencies who do not

maintain a business location or branch office in this state and who offer for sale, directly or

indirectly at wholesale or retail including advertisements as defined in this chapter, prearranged

travel services for individuals or groups in this state, in exchange for a fee, commission, or other

consideration shall not be required to be licensed under the provisions of this chapter. These

nonresident travel agencies shall include in all advertisements pertaining to the offering of travel

services the following disclaimer: " NOTICE. (name of firm) IS NOT LICENSED OR BONDED

AS A TRAVEL AGENCY IN THE STATE OF RHODE ISLAND". This section does not apply

to advertisements, which are disseminated or distributed on a national level.

5-52-8. Report of agents employed to department of business regulation. -- (a) Any

licensed travel agency, within thirty (30) days after issuance of a license, shall file with the

department of business regulation a list of names and addresses of licensed travel agents

employed by that travel agency. Notice of any change in these employees shall be given to the

department of business regulation within ten (10) days after that change.

(b) Travel agent or travel manager licenses issued by the department must be surrendered

to the department by the agent or manager upon termination of employment. Willful and knowing

refusal upon request of the department or the agency to return an agent or manager license shall

be a misdemeanor punishable by a fine of not more than five hundred dollars ($500).

5-52-9. Penalty for operating without license. -- Any person, firm, or corporation who

engages in the business of conducting a travel agency or acts as a travel agent without obtaining a

license as provided by this chapter, is guilty of a misdemeanor and upon conviction shall be fined

not more than five hundred dollars ($500).

5-52-10. Revocation of license for breach of fiduciary relationship. -- If any person

recovers any amount in settlement of a claim or toward satisfaction of a judgment against a

licensed travel agency or travel agent involving the breach of a fiduciary relationship between the

customer and a travel agency or travel agent, the license of that travel agency or travel agent shall

be automatically revoked and this travel agency or travel agent shall not be eligible to receive a

new license until they have repaid in full. A discharge of bankruptcy or receivership does not

relieve a person from the penalties of this section.

5-52-11. Persons exempt. -- (a) (1) This chapter does not prohibit any group or

association from conducting four (4) or less tours within a year nor does this chapter prohibit any

school system, fraternal organization or similar type of group to conduct a tour where tours are

conducted without remuneration in any form to the organization or to any individual and does not

include the general public. Exempt groups, when conducting a tour, shall register with the

department and give to each member of the group written notice that may be deemed appropriate

by the department to include a warning that the group is not licensed, bonded or regulated by this

chapter. Remuneration shall include but is not limited to: commissions, free trips, reduced rates

for future trips, rebates and bonuses or any other valuable consideration. The provisions of this

chapter do not apply to federal, state, city, or town-sponsored tours and tours sponsored by

regional tourism development organizations pursuant to any provisions of the general or public

laws or local ordinance.

(2) Nothing in this chapter shall prohibit a licensed travel agent or manager from

conducting a tour and receiving remuneration.

(b) This chapter shall not apply to:

(1) Any direct common carrier of passengers or property regulated by an agency of the

federal government or employees of the carrier when engaged solely in the transportation

business of the carrier as identified in the carrier's certificate;

(2) An intrastate common carrier of passengers or property selling only transportation as

defined in the applicable state or local registration or certification, or employees of the carrier

when engaged solely in the transportation business of the carrier;

(3) Hotels, motels, or other places of public accommodation selling public

accommodations, or employees of the hotels, motels, or other places of public accommodations,

when engaged solely in making arrangements for lodging, accommodations, or sightseeing tours

within the state, or taking reservations for the traveler with times, dates, locations, and

accommodations certain at the time the reservations are made;

(4) Persons involved solely in the rental, leasing, or sale of residential property;

(5) Persons involved solely in the rental, leasing, or sale of transportation vehicles;

(6) Persons who make travel arrangements for themselves or their employees or agents.

5-52-12. Restraining orders. -- The attorney general of the state may bring an action on

behalf of the state or the general public to restrain or prevent any violation of this chapter.

5-52-13. Regulations promulgated by department. -- The department of business

regulation shall make other administrative regulations and guidelines which they deem necessary

to remove fraud and deception under those covered by this chapter, and for the examination and

determination of the qualification of applicants as provided in sections 5-52-4.2 and 5-52-4.3.

Those regulations and guidelines shall be established pursuant to chapter 35 of title 42 relating to

administrative procedures.

5-52-14. Severability. -- If any provision of this chapter or of any rule or regulation

made under this chapter, or the application of this chapter to any person or circumstances, is held

invalid by a court of competent jurisdiction, the remainder of the chapter, rule, or regulation, and

the application of that provision to other persons or circumstances, shall not be affected.

5-52-15. Commission -- Creation -- Composition -- Appointment and terms of

members. -- (a) Within the department of business regulation, there is created the Rhode Island

travel commission, referred to as "the commission", consisting of seven (7) persons, one from

each county to be appointed by the governor, and each of whom has been a citizen of this state for

at least ten (10) years prior to the date of appointment, and has been engaged as a licensed travel

agent or manager in this state for at least five (5) years prior to the date of appointment. One

member shall be a licensed travel tour operator appointed by the governor. Two (2) members

shall be appointed for one year; two (2) members shall be appointed for two (2) years; and two

(2) members shall be appointed for three (3) years; beginning on December 31, 1994. Successors

of all members shall be appointed by the governor for terms of three (3) years each and until their

successors are appointed and qualify by subscribing to the constitutional oath of office, which

shall be filed with the secretary of state. Members to fill vacancies shall be appointed for the

unexpired term. No member may be appointed to succeed himself or herself for more than two

(2) full terms. The director of the department or his or her designee shall serve as an ex-officio

member of the commission and shall have full voting powers. Upon qualification of the members

appointed, the commission shall organize by selecting from its members a chairperson. The

members of the commission shall serve without compensation.

(b) The commission shall adopt reasonable rules and regulations to carry out its

purposes. The department with the assistance of the commission shall implement a re-

certification program on or before January 1, 1996 and shall establish the reasonable rules and

regulations that may be appropriate for that program to insure that education and practice

requirements of license holders meet the public interest.

(c) All records of the commission shall be open to public inspection under the reasonable

rules and regulations that it prescribes.

(d) The commission has a policy-making role in the preparation and composition of the

examinations to be administered by the department. Subsequent to the administration of the

examination, the commission shall review the examinations to evaluate their effectiveness. All

travel agents and travel agencies licensed as of June 22, 1994 shall be exempt from the continuing

education requirements stated in this chapter.

     SECTION 2. This act shall take effect upon passage.

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LC00675

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