Print Friendly SENATE BILL NO. 1179 – Travel agencies, fair treatment
SENATE BILL NO. 1179
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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
02/12 Senate intro - 1st rdg - to printing
02/15 Rpt prt - to Com/HuRes
|||| 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-
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,
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
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
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
The purpose of this bill is to stabilize the travel industry by
defining termination rights between a travel service supplier
and a travel agency.
No fiscal impact to the state.
CONTACT: Senator Bart Davis
STATEMENT OF PURPOSE/ FISCAL NOTE S1179