Assembly Bill No. 627–Committee on Commerce and Labor
CHAPTER..........
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. (Deleted by amendment.)
Sec. 2. Chapter 598 of NRS is hereby amended by adding thereto the
provisions set forth as sections 3 to 13, inclusive, of this act.
Sec. 3. As used in sections 3 to 12, inclusive, of this act, unless the
context otherwise requires, the words and terms defined in sections 4 to
8, inclusive, of this act have the meanings ascribed to them in those
sections.
Sec. 4. “Commissioner” means the commissioner of the consumer
affairs division of the department of business and industry.
Sec. 5. “Division” means the consumer affairs division of the
department of business and industry.
Sec. 6. “Seller of travel” means a person who offers for sale, directly
or indirectly, transportation by air, land, rail or water, travel services,
vacation certificates or any combination thereof, to a person or group of
persons for a fee, commission or other valuable consideration. The term:
1. Includes any person who offers membership in a travel club or
any services related to travel for an advance fee or payment.
2. Does not include:
(a) A hotel that provides or arranges travel services for its patrons or
guests;
(b) A person who, for compensation, transports persons or property by
air, land, rail or water; or
(c) A tour broker or tour operator who is subject to the provisions of
sections 2 to 14, inclusive, of Assembly Bill No. 245 of this session.
Sec. 7. “Travel services” includes, without limitation:
1. Short-term leases of passenger cars;
2. Lodging;
3. Transfers;
4. Sightseeing tours other than sightseeing tours for which a tour
broker or tour operator is regulated pursuant to sections 2 to 14,
inclusive, of Assembly Bill No. 245 of this session; and
5. Any other services that are related to travel by air, land, rail or
water or any other method of transportation.
Sec. 8. “Vacation certificate” means any document received by a
person for consideration paid in advance which evidences that the holder
of the document is entitled to:
1. Transportation by air, land, rail or water; or
2. The use of lodging or other facilities for a specified
period,
during the period for which the certificate is valid.
Sec. 9. 1. Before advertising its services or conducting business in
this state, a seller of travel must register with the division by:
(a) Submitting to the division an application for registration on a form
prescribed by the division;
(b) Paying to the division a fee of $25; and
(c) Depositing the security required pursuant to section 10 of this act,
if any, with the division.
2. The division shall issue a certificate of registration to the seller of
travel upon receipt of:
(a) The security in the proper form if the seller of travel is required to
deposit security pursuant to section 10 of this act; and
(b) The payment of the fee required by this section.
3. A certificate of registration:
(a) Is not transferable or assignable; and
(b) Expires 1 year after it is issued.
4. A seller of travel must renew a certificate of registration issued
pursuant to this section before the certificate expires by:
(a) Submitting to the division an application for the renewal of the
certificate on a form prescribed by the division; and
(b) Paying to the division a fee of $25.
Sec. 10. 1. Except as otherwise provided in subsection 8, each
seller of travel shall deposit with the division:
(a) A bond executed by a corporate surety approved by the
commissioner and licensed to do business in this state;
(b) An irrevocable letter of credit for which the seller of travel is the
obligor, issued by a bank whose deposits are federally insured; or
(c) A certificate of deposit in a financial institution which is doing
business in this state and which is federally insured or insured by a
private insurer approved pursuant to NRS 678.755. The certificate of
deposit may be withdrawn only on the order of the commissioner, except
that the interest may accrue to the seller of travel.
2. The term of the bond, letter of credit or certificate of deposit, or
any renewal thereof, must be not less than 1 year.
3. The amount of the bond, letter of credit or certificate of deposit, or
any renewal thereof, must be $50,000.
4. If the seller of travel deposits a bond, the seller of travel shall keep
accurate records of the bond and the payments made on the premium.
The records must be open to inspection by the division during business
hours. The seller of travel shall notify the division not later than 30 days
before the date of expiration of the bond and provide written proof of the
renewal of the bond to the division.
5. The commissioner may reject any bond, letter of credit or
certificate of deposit that fails to comply with the requirements of this
chapter.
6. A seller of travel may change the form of security that he has
deposited with the division. If the seller of travel changes the form of the
security, the commissioner may retain for not more than 1 year any
portion of the security previously deposited by the seller of travel as
security for claims arising during the time the previous security was in
effect.
7. If the amount of the deposited security falls below the amount
required by this chapter for that security, the seller of travel shall be
deemed not to be registered as required by section 9 of this act for the
purposes of this chapter.
8. The provisions of this section do not apply to a seller of travel who
is accredited by and appointed as an agent of the Airlines Reporting
Corporation.
Sec. 11. 1. The security required to be deposited by a seller of
travel pursuant to section 10 of this act must be held in trust for
consumers injured as a result of:
(a) Any act of fraud or misrepresentation by the seller of travel acting
in his capacity as a seller of travel;
(b) The bankruptcy of the seller of travel; or
(c) The breach of any contract entered into by the seller of travel in
his capacity as a seller of travel.
2. A consumer so injured may bring and maintain an action in any
court of competent jurisdiction to recover against the security.
3. The division may bring an action for interpleader against all
claimants upon the security. If the division brings such an action, the
division shall publish notice of the action at least once each week for 2
weeks in a newspaper of general circulation in the county in which the
seller of travel has its principal place of business. The division may
deduct its costs of the action, including the costs of the publication of the
notice, from the amount of the security. All claims against the security
have equal priority. If the security is insufficient to pay all the claims in
full, the claims must be paid pro rata. If the seller of travel has posted a
bond with the division, the surety is then relieved of all liability under
the bond.
4. The division may, in lieu of bringing an action for interpleader
pursuant to subsection 3, conduct a hearing to determine the
distribution of the security to claimants. The division shall adopt
regulations to provide for adequate notice and the conduct of the
hearing. If the seller of travel has posted a bond with the division,
distribution pursuant to this subsection relieves the surety of all liability
under the bond.
5. If the security is sufficient to pay all claims against the security in
full, the division may deduct from the amount of the security, the cost of
any investigation or hearing it conducted to determine the distribution of
the security.
Sec. 12. 1. If no claims have been filed against the security
deposited with the division pursuant to section 10 of this act within 6
months after the seller of travel ceases to operate or his registration
expires, whichever occurs later, the commissioner shall release the
security to the seller of travel and shall not audit any claims filed against
the security thereafter by consumers.
2. If one or more claims have been filed against the security within 6
months after the seller of travel ceases to operate or his registration
expires, whichever occurs later, the proceeds must not be released to the
seller of travel or distributed to any consumer earlier than 1 year after
the seller of travel ceases to operate or his registration expires,
whichever occurs later.
3. For the purposes of this section, the commissioner shall determine
the date on which a seller of travel ceases to operate.
Sec. 13. The public utilities commission of Nevada may adopt
regulations governing the disclosures that must be made by a provider to
a customer before the customer may be charged for a
telecommunications service.
Sec. 14. NRS 598.0915 is hereby amended to read as follows:
598.0915 A person engages in a “deceptive trade practice” if, in the
course of his business or occupation, he:
1. Knowingly passes off goods or services for sale or lease as those of
another[.] person.
2. Knowingly makes a false representation as to the source,
sponsorship, approval or certification of goods or services for sale or lease.
3. Knowingly makes a false representation as to affiliation, connection,
association with or certification by another[.] person.
4. Uses deceptive representations or designations of geographic origin
in connection with goods or services for sale or lease.
5. Knowingly makes a false representation as to the characteristics,
ingredients, uses, benefits, alterations or quantities of goods or services for
sale or lease or a false representation as to the sponsorship, approval,
status, affiliation or connection of a person therewith.
6. Represents that goods for sale or lease are original or new if he
knows or should know that they are deteriorated, altered, reconditioned,
reclaimed, used or secondhand.
7. Represents that goods or services for sale or lease are of a particular
standard, quality or grade, or that such goods are of a particular style or
model, if he knows or should know that they are of another[.] standard,
quality, grade, style or model.
8. Disparages the goods, services or business of another person by
false or misleading representation of fact.
9. Advertises goods or services with intent not to sell or lease them as
advertised.
10. Advertises goods or services for sale or lease with intent not to
supply reasonably expectable public demand, unless the advertisement
discloses a limitation of quantity.
11. Advertises goods or services as being available free of charge
with intent to require payment of undisclosed costs as a condition of
receiving the goods or services.
12. Advertises under the guise of obtaining sales personnel when [in
fact] the purpose is to first sell or lease goods or services to the sales
personnel applicant.
[12.] 13. Makes false or misleading statements of fact concerning the
price of goods or services for sale or lease, or the reasons for, existence of
or amounts of price reductions.
[13.] 14. Fraudulently alters any contract, written estimate of repair,
written statement of charges or other document in connection with the sale
or lease of goods or services.
[14.] 15. Knowingly makes any other false representation in a
transaction.
[15.] 16. Knowingly falsifies an application for credit relating to a
retail installment transaction, as defined in NRS 97.115.
Sec. 15. NRS 598.0999 is hereby amended to read as follows:
598.0999 1. A person who violates a court order or injunction issued
pursuant to the provisions of NRS 598.0903 to 598.0999, inclusive, and
section 1 of Assembly Bill No. 337 of this session upon a complaint
brought by the commissioner, the director, the district attorney of any
county of this state or the attorney general shall forfeit and pay to the state
general fund a civil penalty of not more than $10,000 for each violation.
For the purpose of this section, the court issuing the order or injunction
retains jurisdiction over the action or proceeding. Such civil penalties are
in addition to any other penalty or remedy available for the enforcement of
the provisions of NRS 598.0903 to 598.0999, inclusive, and section 1 of
Assembly Bill No. 337 of this session.
2. In any action brought pursuant to the provisions of NRS 598.0903 to
598.0999, inclusive, and section 1 of Assembly Bill No. 337 of this
session, if the court finds that a person has willfully engaged in a
deceptive trade practice, the commissioner, the director, the district
attorney of any county in this state or the attorney general bringing the
action may recover a civil penalty not to exceed $2,500 for each violation.
The court in any such action may, in addition to any other relief or
reimbursement, award reasonable attorney’s fees and costs.
3. A natural person, firm, or any officer or managing agent of any
corporation or association who knowingly and willfully engages in a
deceptive trade practice : [, other than a deceptive trade practice described
in NRS 598.992:]
(a) For the first offense, is guilty of a misdemeanor.
(b) For the second offense, is guilty of a gross misdemeanor.
(c) For the third and all subsequent offenses, is guilty of a category D
felony and shall be punished as provided in NRS 193.130.
4. Any offense which occurred within 10 years immediately preceding
the date of the principal offense or after the principal offense constitutes a
prior offense for the purposes of subsection 3 when evidenced by a
conviction, without regard to the sequence of the offenses and convictions.
5. If a person violates any provision of NRS 598.0903 to 598.0999,
inclusive, and section 1 of Assembly Bill No. 337 of this session, 598.100
to 598.2801, inclusive, 598.281 to 598.289, inclusive, 598.840 to 598.966,
inclusive, sections 2 to 14, inclusive, of Assembly Bill No. 245 of this [act
or 598.992,] session or sections 3 to 12, inclusive, of this act, fails to
comply with a judgment or order of any court in this state concerning a
violation of such a provision, or fails to comply with an assurance of
discontinuance or other agreement concerning an alleged violation of such
a provision, the commissioner or the district attorney of any county may
bring an action in the name of the State of Nevada seeking:
(a) The suspension of the person’s privilege to conduct business within
this state; or
(b) If the defendant is a corporation, dissolution of the
corporation.
The court may grant or deny the relief sought or may order other
appropriate relief.
Sec. 16. NRS 598.2806 is hereby amended to read as follows:
598.2806 1. Each credit service organization, organization for
buying goods or services at a discount, dance studio and health club
regulated by the provisions of this chapter shall apply for registration on
the form prescribed by the division.
2. At the time of application for registration, the applicant [shall] must
pay to the division an administrative fee of $25 and deposit the required
security with the division.
3. Upon receipt of the security in the proper form and the payment of
the administrative fee required by this section, the division shall issue a
certificate of registration to the applicant. A certificate of registration [is] :
(a) Is not transferable or assignable[.] ; and
(b) Expires 1 year after it is issued.
4. A registrant must renew a certificate of registration issued
pursuant to this section before the certificate expires by submitting to the
division an application for the renewal of the certificate on a form
prescribed by the division.
Sec. 17. NRS 598.2808 is hereby amended to read as follows:
598.2808 1. The security required to be deposited by a registrant
pursuant to NRS 598.2807 must be held in trust for consumers injured by
the bankruptcy of the registrant or the registrant’s breach of any agreement
entered into in his capacity as a registrant.
2. A consumer so injured may bring and maintain an action in any
court of competent jurisdiction to recover against the security.
3. The division may bring an action for interpleader against all
claimants upon the security. If the division brings such an action, the
division shall publish notice of the action at least once each week for 2
weeks in a newspaper of general circulation in the county in which the
organization has its principal place of business. The division may deduct
its costs of the action, including the costs of the publication of the notice,
from the amount of the security. All claims against the security have equal
priority. If the security is insufficient to pay all the claims in full, the
claims must be paid pro rata. If the registrant has posted a bond with the
division, the surety is then relieved of all liability under the bond.
4. The division may, in lieu of bringing an action for interpleader
pursuant to subsection 3, conduct a hearing to determine the distribution of
the security to claimants. The division shall adopt regulations to provide
for adequate notice and the conduct of the hearing. If the registrant has
posted a bond with the division, distribution pursuant to this subsection
relieves the surety of all liability under the bond.
5. If the security is sufficient to pay all claims against the security in
full, the division may deduct from the amount of the security, the cost of
any investigation or hearing it conducted to determine the distribution of
the security.
Sec. 18. NRS 598.946 is hereby amended to read as follows:
598.946 1. Except as otherwise provided in subsection 5, before
advertising its services or conducting business in this state, the owner of a
dance studio or a health club must register pursuant to NRS 598.2806 and
598.944 and deposit security with the division pursuant to NRS 598.2807.
The security must [be] :
(a) Be conditioned on compliance by the owner with the provisions of
NRS 598.940 to 598.966, inclusive, and the terms of the contract with a
buyer [.] ; and
(b) Remain on deposit with the division until the release of the
security is authorized or required pursuant to NRS 598.2809, except that
the dance studio or health club may change the form of the security as
provided in NRS 598.2807.
2. Except as otherwise provided in subsection 3, the amount of the
security to be deposited must be:
(a) Ten thousand dollars, if the dance studio or health club has less than
400 members;
(b) Fifteen thousand dollars, if the dance studio or health club has 400
members or more but less than 800 members;
(c) Twenty thousand dollars, if the dance studio or health club has 800
members or more but less than 1,200 members;
(d) Twenty-five thousand dollars, if the dance studio or health club has
1,200 members or more but less than 1,500 members;
(e) Thirty-five thousand dollars, if the dance studio or health club has
1,500 members or more but less than 4,000 members; [and]
(f) Fifty thousand dollars, if the dance studio or health club has 4,000
members or more but less than 25,000 members[.] ; and
(g) Two hundred and fifty thousand dollars, if the dance studio or
health club has 25,000 or more members.
3. If a dance studio or health club conducts any pre-sale of dance
lessons, the use of facilities or other services, the amount of the security
required by this section is $100,000[.] unless a greater amount is
required pursuant to paragraph (g) of subsection 2.
4. A dance studio or health club shall report to the division on a
quarterly basis the size of its membership and shall, on the basis of any
change in the size of that membership, adjust accordingly the amount of
the security deposited with the division.
5. [If a dance studio or health club has actively conducted business for
not less than 4 consecutive years and has not changed ownership or, in the
case of a corporation, not more than 25 percent of its authorized shares
have been transferred, it is not required to deposit security with the
division pursuant to NRS 598.2807.] If , on October 1, 2001, a dance
studio or health club [does not deposit such security, it shall] has not
deposited security with the division pursuant to NRS 598.2807 because it
was not required to do so pursuant to this section, the dance studio or
health club:
(a) Is not required to deposit security with the division pursuant to
NRS 598.2807; and
(b) Shall obtain a written acknowledgment from each member and
prominently post a notice on its premises stating that no security for
refunds or reimbursement has been deposited with the State of Nevada.
Sec. 19. NRS 598.968 is hereby amended to read as follows:
598.968 As used in NRS 598.968 to 598.9694, inclusive, and section
13 of this act, unless the context otherwise requires, the words and terms
defined in NRS 598.9682 and 598.9684 have the meanings ascribed to
them in those sections.
Sec. 20. NRS 598.992 is hereby repealed.
Sec. 21. 1. Notwithstanding the provisions of section 16 of this act,
a registrant that:
(a) Is doing business in this state; and
(b) Has a certificate of registration that was issued by the division
pursuant to NRS 598.2806 before October 1, 2000,
must submit to the division an application for the renewal of the certificate
of registration on a form prescribed by the division not later than
October 1, 2001.
2. A registrant that:
(a) Is doing business in this state; and
(b) Has a certificate of registration that was issued by the division
pursuant to NRS 598.2806 on or after October 1, 2000,
must submit to the division an application for the renewal of the certificate
of registration on a form prescribed by the division not later than 1 year
after the certificate of registration was issued by the division.
3. As used in this section, “registrant” has the meaning ascribed to it in
NRS 598.2805.
Sec. 22. 1. This section, sections 1 to 13, inclusive, and 16 to 21,
inclusive, of this act become effective on October 1, 2001.
2. Sections 14 and 15 of this act become effective at 12:01 a.m. on
October 1, 2001.
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