REQUIRES TWO-THIRDS MAJORITY VOTE (§§ 9, 14)         

                                                 (Reprinted with amendments adopted on April 21, 2003)

 

Assembly Bill No. 343–Assemblyman Carpenter
(by request)

 

March 17, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes related to sellers of travel. (BDR 52‑881)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to sellers of travel; requiring a seller of travel to include his registration number in his advertising; requiring a seller of travel to maintain a trust account for money received for the purchase of travel services; revising the definition of “seller of travel”; requiring the Division to mail to a seller of travel an application for the renewal of his certificate before the expiration of his current certificate; establishing an account for a consumer to recover damages for certain actions of a seller of travel; repealing the provisions that require a seller of travel to comply with certain financial security requirements; repealing the provisions allowing a consumer to recover damages from security deposited by a seller of travel with the Consumer Affairs Division of the Department of Business and Industry; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. Chapter 598 of NRS is hereby amended by adding

1-2  thereto the provisions set forth as sections 2 to 10, inclusive, of this

1-3  act.

1-4  Sec. 2.  “Account” means the account established pursuant to

1-5  section 6 of this act.

2-1  Sec. 3.  “Injured person” means a person who:

2-2  1.  Paid money to a seller of travel for the purchase of travel

2-3  services; and

2-4  2.  Is damaged by the failure of the seller of travel to provide

2-5  those services adequately.

2-6  Sec. 4.  A seller of travel shall include the registration

2-7  number from his certificate of registration in any advertising

2-8  conducted by, or on the behalf of, the seller of travel. The

2-9  statement must be prominently displayed in the advertisement and

2-10  be in substantially the following form in at least 14-point bold type

2-11  in a font that is easy to read:

 

2-12  Nevada Seller of Travel

2-13  Registration No. _____.

 

2-14      Sec. 5.  1.  A seller of travel shall maintain a trust account

2-15  in a bank, credit union or savings and loan association in this

2-16  state for the purpose of depositing money paid to the seller of

2-17  travel by a person for the purchase of travel services.

2-18      2.  A seller of travel shall deposit all money received by the

2-19  seller of travel from a person for the purchase of travel services

2-20  into the trust account within 1 business day after receiving the

2-21  money.

2-22      3.  The seller of travel shall pay out of the trust account the

2-23  money paid by a person for the purchase of travel services as

2-24  needed to complete the purchase of travel services purchased by

2-25  the person.

2-26      Sec. 6.  The Division shall administer and account separately

2-27  for the money received from each seller of travel pursuant to the

2-28  provisions of paragraph (c) of subsection 1 and paragraph (c) of

2-29  subsection 4 of NRS 598.365. The Division may refer to the money

2-30  in the account as the “Recovery Fund.”

2-31      Sec. 7.  1.  Except as otherwise provided in section 10 of this

2-32  act, the money in the account must be used to pay claims made by

2-33  persons who paid money to a seller of travel for the purchase of

2-34  travel services who are damaged by:

2-35      (a) The failure of a seller of travel to provide the travel services

2-36  satisfactorily; or

2-37      (b) The violation of a seller of travel of any provision of NRS

2-38  598.305 to 598.365, inclusive, and sections 2 to 10, inclusive, of

2-39  this act.

2-40      2.  Except as otherwise provided in subsection 3, an injured

2-41  person who wishes to recover from the account must file a

2-42  complaint with the Division or its designee, within 4 years after the

3-1  initial purchase of the travel services and on a form established

3-2  for this purpose by the Division.

3-3  3.  An injured person who has obtained a judgment in any

3-4  court of competent jurisdiction for recovery of damages against a

3-5  seller of travel for the failure of the seller of travel to provide the

3-6  travel services satisfactorily or the violation by the seller of travel

3-7  of any provision of NRS 598.305 to 598.365, inclusive, and

3-8  sections 2 to 10, inclusive, of this act, may file a complaint with the

3-9  Division, within 2 years of the entry of the judgment, with the

3-10  Division for satisfaction of the judgment from the account if:

3-11      (a) The proceedings in connection with the judgment,

3-12  including all appeals, have terminated;

3-13      (b) He submits an application on a form established for this

3-14  purpose by the Division;

3-15      (c) He submits proof satisfactory to the Division of the

3-16  judgment; and

3-17      (d) Upon obtaining payment from the account, he assigns his

3-18  rights to enforce the judgment to the Division.

3-19      4.  If the Division receives a complaint pursuant to subsection

3-20  2, the Division or its designee shall hold a hearing on the

3-21  complaint. This Division shall:

3-22      (a) Affix the time and place for the hearing; and

3-23      (b) Notify the injured person, in writing at least 30 days before

3-24  the date affixed for the hearing, of the time and place of the

3-25  hearing.

3-26      5.  Any testimony taken at the hearing must be considered a

3-27  part of the record of the hearing before the Division or its

3-28  designee.

3-29      6.  The hearing must be public if a request is made for a

3-30  public hearing.

3-31      7.  The Division or its designee shall act upon the complaint

3-32  within 6 months after the complaint is filed with the Division.

3-33      Sec. 8.  1.  Except as otherwise provided in subsection 2, an

3-34  injured person is eligible for recovery from the account:

3-35      (a) If the Division or its designee, after conducting a hearing

3-36  on a complaint pursuant to the provisions of subsection 4 of

3-37  section 7 of this act, finds that the injured person suffered actual

3-38  damages as a result of:

3-39          (1) The failure of a seller of travel to provide the travel

3-40  services satisfactorily; or

3-41          (2) The violation of a seller of travel of any provision of

3-42  NRS 598.305 to 598.365, inclusive, and sections 2 to 10, inclusive,

3-43  of this act.

4-1  (b) If the injured person files a complaint pursuant to the

4-2  provisions of subsection 3 of section 7 of this act with the Division

4-3  for the satisfaction of a judgment from the account.

4-4  2.  An injured person is not eligible for recovery from the

4-5  account if:

4-6  (a) The injured person is the spouse of the seller of travel, or a

4-7  personal representative of the spouse of the seller of travel;

4-8  (b) The injured person was associated in a business

4-9  relationship with the seller of travel other than the travel services

4-10  at issue; or

4-11      (c) At the time the person paid the money for the purchase of

4-12  travel services, the seller of travel was not registered with the

4-13  Division as required by NRS 598.365.

4-14      3.  If the Division or its designee determines that an injured

4-15  person is eligible for recovery from the account pursuant to this

4-16  section, the Division or its designee may pay out of the account:

4-17      (a) If the complaint was filed pursuant to subsection 2 of

4-18  section 7 of this act, the amount of actual damages suffered, but

4-19  not to exceed $10,000; or

4-20      (b) If the complaint was filed pursuant to subsection 3 of

4-21  section 7 of this act, the amount of actual damages included in the

4-22  judgment and remaining unpaid, but not to exceed $10,000.

4-23      4.  The decision of the Division or its designee regarding

4-24  eligibility for recovery and all related issues is final and not

4-25  subject to judicial review.

4-26      5.  If the injured person has recovered a portion of his loss

4-27  from sources other than the account, the Division shall deduct the

4-28  amount recovered from the other sources from the amount

4-29  payable upon the claim and direct the difference to be paid from

4-30  the account.

4-31      6.  To the extent of payments made from the account, the

4-32  Division is subrogated to the rights of the injured person,

4-33  including, without limitation, the right to collect from a surety

4-34  bond or a cash bond. The Division and the Attorney General shall

4-35  promptly enforce all subrogation claims.

4-36      7.  The amount of recovery from the account based upon

4-37  claims made against any single seller of travel:

4-38      (a) Must not exceed $200,000; and

4-39      (b) For any single action of the seller of travel, must not

4-40  exceed 20 percent of the balance of the account.

4-41      8.  As used in this section, “actual damages” includes

4-42  attorney’s fees or costs in contested cases appealed to the Supreme

4-43  Court of this state. The term does not include any other attorney’s

4-44  fees or costs.

5-1  Sec. 9.  1.  A seller of travel shall notify each purchaser of

5-2  travel services from whom he accepts money of the rights of the

5-3  purchaser pursuant to NRS 598.305 to 598.365, inclusive, and

5-4  sections 2 to 10, inclusive, of this act, including, without

5-5  limitation, providing a written statement explaining those rights in

5-6  any agreement or contract for travel services. The written

5-7  statement must be in substantially the following form:

 

5-8  RECOVERY FUND FOR CUSTOMERS

5-9  OF SELLERS OF TRAVEL

 

5-10      Payment may be available from the Recovery Fund if

5-11  you are damaged financially by the failure of a seller of

5-12  travel to provide satisfactorily the travel services for which

5-13  you paid and the damage resulted from certain specified

5-14  violations of Nevada law by a seller of travel registered in

5-15  this state. To obtain information relating to the Recovery

5-16  Fund and filing a claim for recovery from the Recovery

5-17  Fund, you may contact the Consumer Affairs Division of

5-18  the Department of Business and Industry at the following

5-19  locations:

 

5-20  SOUTHERN NEVADA:  1850 East Sahara Avenue

5-21  Suite 101

5-22  Las Vegas, Nevada 89104

5-23  Phone: 702.486.7355

5-24  Fax: 702.486.7371

5-25  [email protected]

 

5-26  NORTHERN NEVADA:  4600 Kietzke Lane

5-27  Building B, Suite 113

5-28  Reno, Nevada 89502

5-29  Phone: 775.688.1800

5-30  Fax: 775.688.1803

 

5-31      2.  The Division may impose upon a seller of travel an

5-32  administrative fine of not more than:

5-33      (a) For the first violation of subsection 1, $100; and

5-34      (b) For a second or subsequent violation of subsection 1, $250.

5-35      3.  The Division shall deposit any money received pursuant to

5-36  this section in the account established pursuant to section 6 of this

5-37  act.

5-38      4.  The provisions of NRS 598.305 to 598.365, inclusive, and

5-39  sections 2 to 10, inclusive, of this act do not limit the authority of

5-40  the Division to take disciplinary action against a seller of travel.

6-1  Sec. 10.  1.  The Division shall:

6-2  (a) On or before February 1 of each year, prepare and submit

6-3  to the Director of the Legislative Counsel Bureau for transmittal

6-4  to the appropriate legislative committee if the Legislature is in

6-5  session, or to the Interim Finance Committee if the Legislature is

6-6  not in session, a statement of the condition of the account that is

6-7  prepared in accordance with generally accepted accounting

6-8  principles.

6-9  (b) Employ accountants as necessary for the performance of

6-10  the duties set forth in this section and pay any related expenses

6-11  from the money in the account. Except as otherwise provided in

6-12  subsection 3, the expenditures made by the Division pursuant to

6-13  this paragraph must not exceed $10,000 in any fiscal year.

6-14      (c) Employ or contract with persons and procure necessary

6-15  equipment, supplies and services to be paid from or purchased

6-16  with the money in the account as may be necessary to monitor or

6-17  process claims filed by injured persons that may result in a

6-18  recovery from the account.

6-19      2.  Any interest earned on the money in the account must be

6-20  credited to the account. The Division may expend the interest

6-21  earned on the money in the account to increase public awareness

6-22  of the account. Except as otherwise provided in subsection 3, the

6-23  expenditures made by the Division for this purpose must not

6-24  exceed $50,000 in any fiscal year.

6-25      3.  The total expenditures made by the Division pursuant to

6-26  this section must not exceed 10 percent of the account in any fiscal

6-27  year.

6-28      4.  Once an initial balance of $200,000 exists in the account,

6-29  the Division shall maintain a minimum balance of $200,000 in the

6-30  account.

6-31      5.  The Division shall adopt such regulations as are necessary

6-32  to carry out the provisions of NRS 598.305 to 598.365, inclusive,

6-33  and sections 2 to 10, inclusive, of this act, including, without

6-34  limitation, regulations governing:

6-35      (a) The disbursement of money from the account; and

6-36      (b) The manner in which a complaint is filed with the Division

6-37  or its designee pursuant to the provisions of section 7 of this act.

6-38      Sec. 11.  NRS 598.0999 is hereby amended to read as follows:

6-39      598.0999  1.  A person who violates a court order or

6-40  injunction issued pursuant to the provisions of NRS 598.0903 to

6-41  598.0999, inclusive, upon a complaint brought by the

6-42  Commissioner, the Director, the district attorney of any county of

6-43  this state or the Attorney General shall forfeit and pay to the State

6-44  General Fund a civil penalty of not more than $10,000 for each

6-45  violation. For the purpose of this section, the court issuing the order

7-1  or injunction retains jurisdiction over the action or proceeding. Such

7-2  civil penalties are in addition to any other penalty or remedy

7-3  available for the enforcement of the provisions of NRS 598.0903 to

7-4  598.0999, inclusive.

7-5  2.  In any action brought pursuant to the provisions of NRS

7-6  598.0903 to 598.0999, inclusive, if the court finds that a person has

7-7  willfully engaged in a deceptive trade practice, the Commissioner,

7-8  the Director, the district attorney of any county in this state or the

7-9  Attorney General bringing the action may recover a civil penalty not

7-10  to exceed $2,500 for each violation. The court in any such action

7-11  may, in addition to any other relief or reimbursement, award

7-12  reasonable attorney’s fees and costs.

7-13      3.  A natural person, firm, or any officer or managing agent of

7-14  any corporation or association who knowingly and willfully engages

7-15  in a deceptive trade practice:

7-16      (a) For the first offense, is guilty of a misdemeanor.

7-17      (b) For the second offense, is guilty of a gross misdemeanor.

7-18      (c) For the third and all subsequent offenses, is guilty of a

7-19  category D felony and shall be punished as provided in

7-20  NRS 193.130.

7-21      4.  Any offense which occurred within 10 years immediately

7-22  preceding the date of the principal offense or after the principal

7-23  offense constitutes a prior offense for the purposes of subsection 3

7-24  when evidenced by a conviction, without regard to the sequence of

7-25  the offenses and convictions.

7-26      5.  If a person violates any provision of NRS 598.0903 to

7-27  598.0999, inclusive, 598.100 to 598.2801, inclusive, 598.305

7-28  to [598.395,] 598.365, inclusive, and sections 2 to 10, inclusive, of

7-29  this act, 598.405 to 598.525, inclusive, 598.741 to 598.787,

7-30  inclusive, or 598.840 to 598.966, inclusive, fails to comply with a

7-31  judgment or order of any court in this state concerning a violation of

7-32  such a provision, or fails to comply with an assurance of

7-33  discontinuance or other agreement concerning an alleged violation

7-34  of such a provision, the Commissioner or the district attorney of any

7-35  county may bring an action in the name of the State of Nevada

7-36  seeking:

7-37      (a) The suspension of the person’s privilege to conduct business

7-38  within this state; or

7-39      (b) If the defendant is a corporation, dissolution of the

7-40  corporation.

7-41  The court may grant or deny the relief sought or may order other

7-42  appropriate relief.

7-43      Sec. 12.  NRS 598.305 is hereby amended to read as follows:

7-44      598.305  As used in NRS 598.305 to [598.395,] 598.365,

7-45  inclusive, and sections 2 to 10, inclusive, of this act, unless the

8-1  context otherwise requires, the words and terms defined in NRS

8-2  [598.315] 598.325 to 598.356, inclusive, and sections 2 and 3 of

8-3  this act have the meanings ascribed to them in those sections.

8-4  Sec. 13.  NRS 598.335 is hereby amended to read as follows:

8-5  598.335  “Seller of travel” means a person , including, without

8-6  limitation, a business entity, who offers for sale, directly or

8-7  indirectly, transportation by air, land, rail or water, travel services,

8-8  vacation certificates or any combination thereof, to a person or

8-9  group of persons for a fee, commission or other valuable

8-10  consideration. The term:

8-11      1.  Includes any person who offers membership in a travel club

8-12  or any services related to travel for an advance fee [or payment.] ,

8-13  payment or deposit.

8-14      2.  Does not include:

8-15      (a) A person who:

8-16          (1) Contracts with a seller of travel to sell travel services on

8-17  behalf of the seller of travel;

8-18          (2) Receives compensation for selling the travel services

8-19  only from the seller of travel; and

8-20          (3) Requires a purchaser of travel services to pay for the

8-21  travel services by transmitting payment directly to the provider of

8-22  the travel services or the seller of travel;

8-23      (b) A hotel that provides or arranges travel services for its

8-24  patrons or guests;

8-25      [(b)] (c) A person who, for compensation, transports persons or

8-26  property by air, land, rail or water; [or

8-27      (c)] (d) A tour broker or tour operator who is subject to the

8-28  provisions of NRS 598.405 to 598.525, inclusive [.] ; or

8-29      (e) A motor club as defined in NRS 696A.050.

8-30      Sec. 14.  NRS 598.365 is hereby amended to read as follows:

8-31      598.365  1.  Before advertising its services or conducting

8-32  business in this state, a seller of travel must register with the

8-33  Division by:

8-34      (a) Submitting to the Division an application for registration on

8-35  a form prescribed by the Division;

8-36      (b) Paying to the Division a fee of $25; and

8-37      (c) [Depositing the security required pursuant to NRS 598.375,

8-38  if any, with the Division.] Paying to the Division a fee of $100 for

8-39  deposit to the account established pursuant to section 6 of this act.

8-40      2.  The Division shall issue a certificate of registration to the

8-41  seller of travel upon receipt of [:

8-42      (a) The security in the proper form if the seller of travel is

8-43  required to deposit security pursuant to NRS 598.375; and

8-44      (b) The] the payment of [the fee] any fees required by this

8-45  section.

9-1  3.  A certificate of registration:

9-2  (a) Is not transferable or assignable; and

9-3  (b) Expires 1 year after it is issued.

9-4  4.  A seller of travel must renew a certificate of registration

9-5  issued pursuant to this section before the certificate expires by:

9-6  (a) Submitting to the Division an application for the renewal of

9-7  the certificate on a form prescribed by the Division; [and]

9-8  (b) Paying to the Division a fee of $25 [.] ; and

9-9  (c) Paying to the Division a fee of $100 for deposit to the

9-10  account established pursuant to section 6 of this act.

9-11      5.  The Division shall mail an application for the renewal of a

9-12  certificate to the last known address of a seller of travel at least 30

9-13  days before the expiration of the certificate.

9-14      6.  The provisions of this section do not require a person

9-15  described in paragraph (a) of subsection 2 of NRS 598.335 to

9-16  register with the Division.

9-17      Sec. 15.  NRS 598.315, 598.375, 598.385 and 598.395 are

9-18  hereby repealed.

9-19      Sec. 16.  1.  Except as otherwise provided in subsections 2

9-20  and 3, the Consumer Affairs Division of the Department of Business

9-21  and Industry shall return any security deposited with the Division by

9-22  a seller of travel pursuant to NRS 598.365, as the provisions of that

9-23  section existed before July 1, 2003.

9-24      2.  The Consumer Affairs Division of the Department of

9-25  Business and Industry shall not return any security deposited with

9-26  the Division by a seller of travel pursuant to NRS 598.365, as the

9-27  provisions of that section existed before July 1, 2003, if:

9-28      (a) Before July 1, 2003, a consumer has brought an action to

9-29  recover from the security pursuant to the provisions of NRS

9-30  598.385, as the provisions of that section existed before July 1,

9-31  2003; and

9-32      (b) The proceedings in connection with the action, including all

9-33  appeals, have not terminated.

9-34      3.  If, pursuant to the provisions of subsection 2, the Consumer

9-35  Affairs Division of the Department of Business and Industry does

9-36  not return the security deposited with the Division by a seller of

9-37  travel pursuant to NRS 598.365, as the provisions of that section

9-38  existed before July 1, 2003, the Division shall return the security to

9-39  the seller of travel when all proceedings in connection with all

9-40  actions, including all appeals, brought pursuant to the provisions of

9-41  NRS 598.385 against the seller of travel have terminated.

9-42      4.  If, before July 1, 2003, a consumer files an action to recover

9-43  from the security of a seller of travel pursuant to the provisions of

9-44  NRS 598.385, as the provisions of that section existed before

 

10-1  July 1, 2003, the provisions of that section shall apply, for all

10-2  purposes, to that action.

10-3      Sec. 17.  This act becomes effective on July 1, 2003.

 

10-4  LEADLINES OF REPEALED SECTIONS

 

10-5      598.315  “Commissioner” defined.

10-6      598.375  Security required for registration: Form; term;

10-7   amount; records; rejection for nonconformance; change in

10-8   form; inadequate amount; exception.

10-9      598.385  Rights and remedies of injured consumers;

10-10   resolution by Division of claims against security; regulations.

10-11     598.395  Release of security if seller ceases to operate or

10-12   registration expires.

10-13  H