requires two-thirds majority vote (§ 3)                                                                                                                 

                                                                                                  

 

Assembly Bill No. 496–Committee on
Commerce and Labor

 

(On Behalf of the Department of Administration)

 

March 24, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Revises provisions governing registration and security requirements applicable to sellers of travel, tour brokers and tour operators. (BDR 52‑1250)

 

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 deceptive trade practices; revising the provisions governing the registration and security requirements applicable to certain sellers of travel, tour brokers and tour operators; authorizing the Commissioner of Consumer Affairs to adopt certain regulations; 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 and 3 of this act.

1-3  Sec. 2.  The Commissioner may adopt such regulations as the

1-4  Commissioner determines are necessary to carry out and

1-5  administer the provisions of this section and NRS 598.305 to

1-6  598.395, inclusive.

1-7  Sec. 3.  1.  Before advertising its services or conducting

1-8  business in this state, a tour broker or tour operator must register

1-9  with the Division by:

1-10      (a) Submitting to the Division an application for registration

1-11  on a form prescribed by the Division;

1-12      (b) Paying to the Division a fee of $100; and

2-1  (c) Depositing the security required pursuant to NRS 598.495

2-2  with the Division.

2-3  2.  The Division shall issue a certificate of registration to the

2-4  tour broker or tour operator upon receipt of:

2-5  (a) The security in the proper form as required pursuant to

2-6  NRS 598.495; and

2-7  (b) The payment of the fee required by subsection 1.

2-8  3.  A certificate of registration:

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

2-10      (b) Expires 1 year after it is issued.

2-11      4.  A tour broker or tour operator must renew a certificate of

2-12  registration issued pursuant to this section before the certificate

2-13  expires by:

2-14      (a) Submitting to the Division an application for the renewal

2-15  of the certificate on a form prescribed by the Division; and

2-16      (b) Paying to the Division a renewal fee of $100.

2-17      Sec. 4.  NRS 598.0999 is hereby amended to read as follows:

2-18      598.0999  1.  A person who violates a court order or

2-19  injunction issued pursuant to the provisions of NRS 598.0903 to

2-20  598.0999, inclusive, upon a complaint brought by the

2-21  Commissioner, the Director, the district attorney of any county of

2-22  this state or the Attorney General shall forfeit and pay to the State

2-23  General Fund a civil penalty of not more than $10,000 for each

2-24  violation. For the purpose of this section, the court issuing the order

2-25  or injunction retains jurisdiction over the action or proceeding. Such

2-26  civil penalties are in addition to any other penalty or remedy

2-27  available for the enforcement of the provisions of NRS 598.0903 to

2-28  598.0999, inclusive.

2-29      2.  In any action brought pursuant to the provisions of NRS

2-30  598.0903 to 598.0999, inclusive, if the court finds that a person has

2-31  willfully engaged in a deceptive trade practice, the Commissioner,

2-32  the Director, the district attorney of any county in this state or the

2-33  Attorney General bringing the action may recover a civil penalty not

2-34  to exceed $2,500 for each violation. The court in any such action

2-35  may, in addition to any other relief or reimbursement, award

2-36  reasonable attorney’s fees and costs.

2-37      3.  A natural person, firm, or any officer or managing agent of

2-38  any corporation or association who knowingly and willfully engages

2-39  in a deceptive trade practice:

2-40      (a) For the first offense, is guilty of a misdemeanor.

2-41      (b) For the second offense, is guilty of a gross misdemeanor.

2-42      (c) For the third and all subsequent offenses, is guilty of a

2-43  category D felony and shall be punished as provided in

2-44  NRS 193.130.

3-1  4.  Any offense which occurred within 10 years immediately

3-2  preceding the date of the principal offense or after the principal

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

3-4  when evidenced by a conviction, without regard to the sequence of

3-5  the offenses and convictions.

3-6  5.  If a person violates any provision of NRS 598.0903 to

3-7  598.0999, inclusive, 598.100 to 598.2801, inclusive, 598.305 to

3-8  598.395, inclusive, and section 2 of this act, 598.405 to 598.525,

3-9  inclusive, and section 3 of this act, 598.741 to 598.787, inclusive,

3-10  or 598.840 to 598.966, inclusive, fails to comply with a judgment or

3-11  order of any court in this state concerning a violation of such a

3-12  provision, or fails to comply with an assurance of discontinuance or

3-13  other agreement concerning an alleged violation of such a provision,

3-14  the Commissioner or the district attorney of any county may bring

3-15  an action in the name of the State of Nevada seeking:

3-16      (a) The suspension of the person’s privilege to conduct business

3-17  within this state; or

3-18      (b) If the defendant is a corporation, dissolution of the

3-19  corporation.

3-20  The court may grant or deny the relief sought or may order other

3-21  appropriate relief.

3-22      Sec. 5.  NRS 598.305 is hereby amended to read as follows:

3-23      598.305  As used in NRS 598.305 to 598.395, inclusive, and

3-24  section 2 of this act, unless the context otherwise requires, the

3-25  words and terms defined in NRS 598.315 to 598.356, inclusive,

3-26  have the meanings ascribed to them in those sections.

3-27      Sec. 6.  NRS 598.335 is hereby amended to read as follows:

3-28      598.335  “Seller of travel” means a person who offers for sale,

3-29  directly or indirectly, transportation by air, land, rail or water, travel

3-30  services, vacation certificates , or any combination thereof, to a

3-31  person or group of persons for a fee, commission or other valuable

3-32  consideration. The term:

3-33      1.  Includes any person who offers membership in a travel club

3-34  or any services related to travel for an advance fee or payment.

3-35      2.  Does not include:

3-36      (a) A hotel that provides or arranges travel services for its

3-37  patrons or guests;

3-38      (b) A person who, for compensation, transports persons or

3-39  property by air, land, rail or water; or

3-40      (c) A tour broker or tour operator who is subject to the

3-41  provisions of NRS 598.405 to 598.525, inclusive[.] , and section 3

3-42  of this act.

 

 

 

4-1  Sec. 7.  NRS 598.365 is hereby amended to read as follows:

4-2  598.365  1.  Before advertising its services or conducting

4-3  business in this state, a seller of travel must register with the

4-4  Division by:

4-5  (a) Submitting to the Division an application for registration on

4-6  a form prescribed by the Division;

4-7  (b) Paying to the Division a fee of $25; and

4-8  (c) Depositing the security required pursuant to NRS 598.375[,

4-9  if any,] with the Division.

4-10      2.  The Division shall issue a certificate of registration to the

4-11  seller of travel upon receipt of:

4-12      (a) The security in the proper form [if the seller of travel is

4-13  required to deposit security] as required pursuant to NRS 598.375;

4-14  and

4-15      (b) The payment of the fee required by [this section.]

4-16  subsection 1.

4-17      3.  A certificate of registration:

4-18      (a) Is not transferable or assignable; and

4-19      (b) Expires 1 year after it is issued.

4-20      4.  A seller of travel must renew a certificate of registration

4-21  issued pursuant to this section before the certificate expires by:

4-22      (a) Submitting to the Division an application for the renewal of

4-23  the certificate on a form prescribed by the Division; and

4-24      (b) Paying to the Division a renewal fee of $25.

4-25      Sec. 8.  NRS 598.375 is hereby amended to read as follows:

4-26      598.375  1.  [Except as otherwise provided in subsection 8,

4-27  each] Each seller of travel shall deposit with the Division:

4-28      (a) A bond executed by a corporate surety approved by the

4-29  Commissioner and licensed to do business in this state;

4-30      (b) An irrevocable letter of credit for which the seller of travel is

4-31  the obligor, issued by a bank whose deposits are federally insured;

4-32  or

4-33      (c) A certificate of deposit in a financial institution which is

4-34  doing business in this state and which is federally insured or insured

4-35  by a private insurer approved pursuant to NRS 678.755. The

4-36  certificate of deposit may be withdrawn only on the order of the

4-37  Commissioner, except that the interest may accrue to the seller of

4-38  travel.

4-39      2.  The term of the bond, letter of credit or certificate of deposit,

4-40  or any renewal thereof, must be not less than 1 year.

4-41      3.  [The] Except as otherwise provided in this section, the

4-42  amount of the bond, letter of credit or certificate of deposit, or any

4-43  renewal thereof, must be [$50,000.] $25,000.

4-44      4.  A seller of travel that has been in operation as a seller of

4-45  travel in this state under the same ownership and control for at

5-1  least 2 years may apply for a reduction in the amount of required

5-2  security by:

5-3  (a) Submitting to the Division on a form prescribed by the

5-4  Division an application for a reduction in required security; and

5-5  (b) Providing to the Division a copy of the federal income tax

5-6  return or an audited financial statement of the seller of travel for

5-7  its immediately preceding fiscal year.

5-8  5.  If the gross annual sales of the seller of travel for its

5-9  immediately preceding fiscal year are:

5-10      (a) Less than $100,000, the seller of travel may request that its

5-11  required security be reduced to $10,000.

5-12      (b) At least $100,000 but less than $250,000, the seller of travel

5-13  may request that its required security be reduced to $15,000.

5-14      (c) At least $250,000 but less than $500,000, the seller of travel

5-15  may request that its required security be reduced to $20,000.

5-16      6.  The Division may deny the request of a seller of travel for a

5-17  reduction in required security or revoke such a reduction if the

5-18  seller of travel:

5-19      (a) Fails to register timely with the Division as a seller of travel

5-20  pursuant to NRS 598.365;

5-21      (b) Fails to deposit timely with the Division the security

5-22  required pursuant to this section; or

5-23      (c) Violates any other provision of this chapter or any

5-24  regulation adopted pursuant thereto.

5-25      7.  If the seller of travel deposits a bond, the seller of travel

5-26  shall keep accurate records of the bond and the payments made on

5-27  the premium. The records must be open to inspection by the

5-28  Division during business hours. The seller of travel shall notify

5-29  the Division not later than 30 days before the date of expiration of

5-30  the bond and provide written proof of the renewal of the bond to the

5-31  Division.

5-32      [5.] 8. The Commissioner may reject any bond, letter of credit

5-33  or certificate of deposit that fails to comply with the requirements of

5-34  this chapter.

5-35      [6.] 9. A seller of travel may change the form of security that

5-36  he has deposited with the Division. If the seller of travel changes the

5-37  form of the security, the Commissioner may retain for not more than

5-38  1 year any portion of the security previously deposited by the seller

5-39  of travel as security for claims arising during the time the previous

5-40  security was in effect.

5-41      [7.] 10. If the amount of the deposited security falls below the

5-42  amount required by this chapter for that security, the seller of travel

5-43  shall be deemed not to be registered as required by NRS 598.365 for

5-44  the purposes of this chapter.

6-1  [8.  The provisions of this section do not apply to a seller of

6-2  travel who is accredited by and appointed as an agent of the Airlines

6-3  Reporting Corporation.]

6-4  Sec. 9.  NRS 598.405 is hereby amended to read as follows:

6-5  598.405  As used in NRS 598.405 to 598.525, inclusive, and

6-6  section 3 of this act, unless the context otherwise requires, the

6-7  words and terms defined in NRS 598.416 to 598.465, inclusive,

6-8  have the meanings ascribed to them in those sections.

6-9  Sec. 10.  NRS 598.485 is hereby amended to read as follows:

6-10      598.485  The provisions of NRS 598.495, 598.506 and 598.515

6-11  and section 3 of this act do not apply to a tour broker whose

6-12  business is confined to advertising, or a tour operator whose

6-13  business is confined to advertising and conducting, sightseeing tours

6-14  that originate in a county other than a county whose population is

6-15  400,000 or more.

6-16      Sec. 11.  NRS 598.495 is hereby amended to read as follows:

6-17      598.495  1.  Each tour broker and tour operator shall deposit

6-18  with the Division:

6-19      (a) A bond executed by a corporate surety approved by the

6-20  Commissioner and licensed to do business in this state;

6-21      (b) An irrevocable letter of credit for which the tour broker or

6-22  tour operator is the obligor, issued by a bank whose deposits are

6-23  federally insured; or

6-24      (c) A certificate of deposit in a financial institution which is

6-25  doing business in this state and which is federally insured or insured

6-26  by a private insurer approved pursuant to NRS 678.755. The

6-27  certificate of deposit may be withdrawn only on the order of the

6-28  Commissioner, except that the interest may accrue to the tour broker

6-29  or tour operator.

6-30      2.  The term of the bond, letter of credit or certificate of deposit,

6-31  or any renewal thereof, must be not less than 1 year.

6-32      3.  [The] Except as otherwise provided in this section, the

6-33  amount of the bond, letter of credit or certificate of deposit, or any

6-34  renewal thereof, must be [$10,000.] $25,000.

6-35      4.  A tour broker or tour operator that has been in operation

6-36  as a tour broker or tour operator in this state under the same

6-37  ownership and control for at least 2 years may apply for a

6-38  reduction in the amount of required security by:

6-39      (a) Submitting to the Division on a form prescribed by the

6-40  Division an application for a reduction in required security; and

6-41      (b) Providing to the Division a copy of the federal income tax

6-42  return or an audited financial statement of the tour broker or tour

6-43  operator, as appropriate, for its immediately preceding fiscal year.

6-44      5.  If the gross annual sales of the tour broker or tour

6-45  operator for its immediately preceding fiscal year are:

7-1  (a) Less than $100,000, the tour broker or tour operator may

7-2  request that its required security be reduced to $10,000.

7-3  (b) At least $100,000 but less than $250,000, the tour broker or

7-4  tour operator may request that its required security be reduced to

7-5  $15,000.

7-6  (c) At least $250,000 but less than $500,000, the tour broker or

7-7  tour operator may request that its required security be reduced to

7-8  $20,000.

7-9  6.  The Division may deny the request of a tour broker or tour

7-10  operator for a reduction in required security or revoke such a

7-11  reduction if the tour broker or tour operator:

7-12      (a) Fails to register timely with the Division as a tour broker or

7-13  tour operator pursuant to section 3 of this act;

7-14      (b) Fails to deposit timely with the Division the security

7-15  required pursuant to this section; or

7-16      (c) Violates any other provision of this chapter or any

7-17  regulation adopted pursuant thereto.

7-18      7.  If the tour broker or tour operator deposits a bond, the tour

7-19  broker or tour operator shall keep accurate records of the bond and

7-20  the payments made on the premium. The records must be open to

7-21  inspection by the Division during business hours. The tour broker or

7-22  tour operator shall notify the Division not later than 30 days before

7-23  the date of expiration of the bond and provide written proof of the

7-24  renewal of the bond to the Division.

7-25      [5.] 8. The Commissioner may reject any bond, letter of credit

7-26  or certificate of deposit that fails to conform to the requirements of

7-27  this chapter.

7-28      [6.] 9. A tour broker or tour operator may change the form of

7-29  security that he has deposited with the Division. If the tour broker or

7-30  tour operator changes the form of the security, the Commissioner

7-31  may retain for not more than 1 year any portion of the security

7-32  previously deposited by the tour broker or tour operator as security

7-33  for claims arising during the time the previous security was in

7-34  effect.

7-35      [7.] 10. If the amount of the bond, letter of credit or certificate

7-36  of deposit falls below the amount required by this section, the tour

7-37  broker or tour operator shall, within 30 days, increase the amount of

7-38  the bond, letter of credit or certificate of deposit to the amount

7-39  required by this section.

7-40      Sec. 12.  NRS 598.525 is hereby amended to read as follows:

7-41      598.525  The Commissioner may adopt such regulations as the

7-42  Commissioner determines are necessary to carry out [the intent] and

7-43  administer the provisions of NRS 598.405 to 598.525, inclusive[.] ,

7-44  and section 3 of this act.

 

8-1  Sec. 13.  This act becomes effective on January 1, 2004.

 

8-2  H