1999 Legislation
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SENATE BILL NO. 1179 – Travel agencies, fair treatment

SENATE BILL NO. 1179

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Daily Data Tracking History



S1179.......................................by COMMERCE AND HUMAN RESOURCES
TRAVEL AGENCIES - Adds to existing law to provide remedies for travel
agencies against travel service providers who unjustly cancel or alter
contracts.

02/12    Senate intro - 1st rdg - to printing
02/15    Rpt prt - to Com/HuRes

Bill Text


S1179


                                                                        
 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fifth Legislature                 First Regular Session - 1999
                                                                        

                                      IN THE SENATE

                                   SENATE BILL NO. 1179

                        BY COMMERCE AND HUMAN RESOURCES COMMITTEE

 1                                        AN ACT
 2    RELATING TO TRAVEL AGENCIES; AMENDING TITLE 48, IDAHO CODE, BY THE ADDITION OF
 3        A NEW CHAPTER 15, TITLE 48, IDAHO CODE, TO PROVIDE FINDINGS AND INTENT, TO
 4        DEFINE TERMS, AND TO PROVIDE CONSTRUCTION, TO PROHIBIT CANCELLATION, FAIL-
 5        URE TO RENEW OR ALTERATION OF APPOINTMENTS WITHOUT GOOD CAUSE, TO  REQUIRE
 6        NOTIFICATION  OF TERMINATION OR CHANGE IN APPOINTMENT, TO PROVIDE CONTENTS
 7        OF NOTICE AND TO PROVIDE APPLICABILITY OF NOTICE  PROVISIONS,  TO  PROVIDE
 8        APPLICATION  TO  ARBITRATION AGREEMENTS, TO PROVIDE DAMAGES AND TO PROVIDE
 9        FOR A TEMPORARY INJUNCTION.

10    Be it Enacted by the Legislature of the State of Idaho:

11        Section 1.  That Title 48, Idaho Code, be, and the same is hereby  amended
12    by  the addition thereto of a  NEW CHAPTER , to be known and desig-
13    nated as Chapter 15, Title 48, Idaho Code, and to read as follows:

14                                      CHAPTER 15
15                             TRAVEL AGENCY FAIR TREATMENT

16        48-1501.  LEGISLATIVE FINDINGS. The legislature finds and declares that:
17        (1)  The travel agency industry has a significant effect upon the  economy
18    and well-being of this state and its citizens;
19        (2)  The  traveling  public  is  dependent on travel agents as the primary
20    source of comprehensive and  unbiased  information  about  alternative  travel
21    arrangements and the value thereof;
22        (3)  The  public interest requires remedial action on the part of the leg-
23    islature to ensure the continued availability of that comprehensive and  unbi-
24    ased information to citizens of this state; and
25        (4)  The  continued availability of that comprehensive and unbiased infor-
26    mation is threatened by overreaching and predatory practices of travel service
27    suppliers whose economic power is vastly greater than those who sell transpor-
28    tation and related services under appointments and who offer objective  infor-
29    mation  and choices of arrangements from a variety of travel service providers
30    to the citizens of this state.

31        48-1502.  DEFINITIONS. As used in this chapter, unless the context  other-
32    wise  requires, the following words and phrases shall have the following mean-
33    ings:
34        (1)  "Appointment" means  a  contract  or  agreement,  either  express  or
35    implied, whether oral or written, by which one (1) or more travel service sup-
36    pliers, directly or through an intermediary, grants to one (1) or more persons
37    the right to sell or distribute travel or travel-related services, or to use a
38    travel  or travel-related trade name, trademark, service mark, logo, advertis-
39    ing, or other commercial symbol, in which there is a community of interest  in
40    the business of offering, selling, or distributing such services at retail, by
41    lease,  by  agreement,  or  otherwise.  The  term shall also include agencies,


                                      2

 1    distributorships, franchises, dealerships,  and  other  distribution  arrange-
 2    ments, regardless of how denominated.
 3        (2)  "Community of interest" means a continuing financial interest between
 4    the  travel  service supplier and the travel agency in either the operation of
 5    the retail business or the marketing of services.
 6        (3)  "Good cause" means the failure of a travel  agency  to  substantially
 7    comply  with  essential  and  reasonable requirements imposed, or sought to be
 8    imposed, upon the travel agency by a travel service,  which  requirements  are
 9    not  discriminatory,  either by their terms or in the manner of their enforce-
10    ment, when compared to requirements imposed on other similarly situated travel
11    agencies or requirements and practices under which the travel service supplier
12    conducts its own activities that are in competition with the travel agency.
13        (4)  "Person" means a natural person, partnership, joint venture, corpora-
14    tion, or other entity.
15        (5)  "Travel agency" means a seller of travel, with a principal  place  of
16    business  in  this state or organized under the laws of this state, who is the
17    grantee of one (1) or more appointments as defined in subsection (1)  of  this
18    section.  A  person  may, at the same time, be a travel agency with respect to
19    more than one (1) travel service supplier.
20        (6)  "Travel service supplier" means a person who grants an appointment as
21    defined in subsection (1) of this section.

22        48-1503.  PURPOSES -- RULES OF CONSTRUCTION -- VARIATION BY CONTRACT.  (1)
23    The underlying purposes of this chapter are:
24        (a)  To  promote the compelling public interest in fair business relations
25        between travel agencies and travel service suppliers, and in the continua-
26        tion of appointments on a fair basis;
27        (b)  To protect travel agencies against unfair treatment by travel service
28        suppliers who inherently have superior economic power  and  superior  bar-
29        gaining power in the granting of appointments;
30        (c)  To  provide  travel  agencies with rights and remedies in addition to
31        those existing by contract or common law;
32        (d)  To govern all appointments, including any renewals or amendments,  to
33        the  full  extent  consistent with the constitutions of this state and the
34        United States;
35        (e)  To preserve for the public the convenience and efficiency  of  access
36        to multiple sources for travel and travel-related services;
37        (f)  To  recognize  and  protect  travel agencies' investments of time and
38        effort in creating goodwill for their travel service suppliers.
39        (2)  This chapter shall be liberally construed and applied to promote  its
40    underlying  remedial purposes and policies. The effect of this chapter may not
41    be varied by contract or agreement. Any contract or agreement purporting to do
42    so is void and unenforceable to that extent only.

43        48-1504.  CANCELLATION AND ALTERATION OF APPOINTMENTS. No  travel  service
44    supplier,  directly or through any officer, agent, employee or other represen-
45    tative, shall terminate, cancel, fail to renew, or  substantially  change  the
46    competitive  circumstances of an appointment without good cause. The burden of
47    proving good cause is on the travel service supplier. For the purposes of this
48    chapter, the terms "terminate," "cancel,"  and  "fail  to  renew"  shall  mean
49    either actual or constructive termination, cancellation, or failure to renew.

50        48-1505.  NOTICE  OF  TERMINATION  OR CHANGE IN APPOINTMENT. (1) Except as
51    provided in subsection (2) of this section, a travel  service  supplier  shall
52    provide  a  travel agency not less than ninety (90) days' prior written notice


                                      3

 1    of termination, cancellation, nonrenewal or substantial change in the competi-
 2    tive circumstances of the appointment. The notice shall state all the  reasons
 3    for termination, cancellation, nonrenewal or substantial change in competitive
 4    circumstances  and shall provide that the travel agency has sixty (60) days in
 5    which to rectify any claimed deficiency. If the deficiency is rectified within
 6    sixty (60) days, the notice shall be voided.
 7        (2)  The notice provisions of this section shall not apply if  the  reason
 8    for termination, cancellation, nonrenewal or substantial change in competitive
 9    circumstances is insolvency, the occurrence of an assignment of the benefit of
10    creditors,  or  bankruptcy.  If the reason for termination, cancellation, non-
11    renewal or substantial change in competitive circumstances  is  nonpayment  of
12    sums due under the appointment, the travel agency shall be entitled to written
13    notice  of  such default, and shall have ten (10) days in which to remedy such
14    default from the date of delivery or posting of such notice,  or  such  longer
15    time  as  is  provided for in any written agreement between the travel service
16    supplier or its representative.
17        (3)  The notice provisions of this  section  shall  not  apply  where  the
18    travel service supplier asserts that:
19        (a)  The travel agency has engaged in fraudulent conduct; and
20        (b)  There is a clear and present danger of substantial loss to the travel
21        service  supplier  unless  action otherwise regulated by the notice provi-
22        sions of subsection (1) of this  section  is  taken  without  giving  such
23        notice.
24        (4)  If a proceeding under section 48-1507, Idaho Code, results in finding
25    that there was no fraudulent conduct on the part of  the  travel  agency,  and
26    there  was  no clear and present danger of substantial loss to the travel ser-
27    vice supplier, the damages recoverable by  the  travel  agency  under  section
28    48-1507,  Idaho Code, shall be five (5) times the actual damages or five thou-
29    sand dollars ($5,000), whichever is greater, together with actual costs of the
30    action, including a reasonable attorney's fee.

31        48-1506.  APPLICATION TO ARBITRATION AGREEMENTS. This  chapter  shall  not
32    affect  provisions  for  the  binding  arbitration of disputes contained in an
33    appointment if the criteria for determining whether good cause existed  for  a
34    termination,  cancellation,  nonrenewal,  or substantial change in competitive
35    circumstances, and the relief provided thereunder, are no less than those pro-
36    vided for in this chapter.

37        48-1507.  ACTION FOR DAMAGES. Any travel agency who suffers  damage  as  a
38    result  of a violation of this chapter may file a petition or complaint in any
39    court of competent jurisdiction  in  the  state,  and,  if  successful,  shall
40    recover  three  (3) times the actual damages or one thousand dollars ($1,000),
41    whichever is greater, together with actual costs of the action, including rea-
42    sonable attorney's fees.
43        Appointments shall continue in effect until  final  determination  of  the
44    issues raised in such petition or complaint by the travel agency.

45        48-1508.  TEMPORARY  INJUNCTION.  In any action brought by a travel agency
46    against a travel service supplier under this chapter, any  violation  of  this
47    chapter  by the travel service supplier is deemed an irreparable injury to the
48    travel agency for determining whether a temporary injunction should be issued.

Statement of Purpose / Fiscal Impact


                        STATEMENT OF PURPOSE

                              RS08423

The purpose of this bill is to stabilize the travel industry by
defining termination rights between a travel service supplier
and a travel agency.








                            FISCAL NOTE

No fiscal impact to the state.











CONTACT: Senator Bart Davis
          208-332-1343
          


STATEMENT OF PURPOSE/ FISCAL NOTE      S1179