2011 California Code
Business and Professions Code
DIVISION 7. GENERAL BUSINESS REGULATIONS [16000 - 18001]
ARTICLE 2.6. Sellers of Travel
Section 17550.27

(a) For the purposes of this section, the following terms shall have the following meanings:

(1) Seller of travel discount program means a membership, benefit program, or other arrangement that purports to entitle the purchaser of the seller of travel discount program to future transportation or any travel services at a discount or reduced price or preferential treatment not made generally available to the public. Seller of travel discount program does not include a travel business discount program as defined in Section 17550.26.

(2) Seller means any person who sells or offers for sale a seller of travel discount program but does not include any of the following:

(A) Any person excluded from the definition of seller of travel under subdivision (b) of Section 17550.1.

(B) An owner, developer, or operator of a time-share interest or time-share plan as described in subdivisions (x) and (z) of Section 11212 in connection with an offer as described in subdivision (o) of Section 11212 that complies with the Vacation Ownership and Time-Share Act of 2004 providing lodging at a time-share unit, including arranging transportation to the time-share unit.

(C) An exchange company as described in subdivision (k) of Section 11212 in connection with arranging lodging at a time-share unit, including arranging transportation to the time-share unit.

(D) A motor club subject to Part 5 (commencing with Section 12140) of Division 2 of the Insurance Code.

(E) A nonprofit organization described in Section 501(c)(3) of the Internal Revenue Code that, according to a final ruling or determination by the Internal Revenue Service, is both exempt from taxation under Section 501(a) of the Internal Revenue Code and not a private foundation as defined in Section 509 of the Internal Revenue Code. An advance ruling or determination of tax-exempt or foundation status by the Internal Revenue Service does not meet the requirements of this paragraph.

(F) An entity or a wholly owned subsidiary of an entity that maintains a tangible net equity exceeding five million dollars ($5,000,000) as reflected in an audited financial statement, prepared in accordance with generally accepted accounting principles, for the entity s most recent fiscal year.

(b) A seller may sell a seller of travel discount program if the following conditions are satisfied:

(1) The seller is a duly registered seller of travel.

(2) The annual charge for the seller of travel discount program does not exceed one hundred fifty dollars ($150).

(3) The term of the seller of travel discount program does not exceed one year. The purchaser may renew participation in the program at the end of each term for a period not to exceed one year by affirmatively providing the seller with a written express request to renew. The seller may not seek or accept the purchaser s authorization for an automatic renewal or the purchaser s renewal request more than 60 days before the expiration of an annual term or more than 15 days before the expiration of a shorter term program.

(4) The represented discounts or reduced prices offered under the seller of travel discount program are not made generally available to the public.

(5) The purchaser has the right to cancel the purchaser s participation in the seller of travel discount program and receive a full refund of all consideration paid for the pending term of the program at either of the following times:

(A) Within five business days of purchasing or renewing the seller of travel discount program or receiving the disclosure required by paragraph (6), whichever is later.

(B) At any time based on the seller s misrepresentation or violation of this article.

(6) The benefits and limitations of the seller of travel discount program and the purchaser s cancellation rights described in paragraph (5) are clearly and conspicuously disclosed, in writing, before any consideration is paid by the purchaser.

(7) The discounted or reduced price for any tour package, including transportation or any travel services, offered under the seller of travel discount program shall be at least 5 percent below the price that would have been paid by a purchaser without participation in the seller of travel discount program.

(8) The seller may not offer to arrange transportation or any travel services for a specified price, time, or location unless the seller has written evidence of the commitment of the provider of transportation, lodging, or any travel services to provide those services at the price, time, and location specified.

(9) The seller shall maintain a surety bond of one hundred thousand dollars ($100,000) issued by a surety company admitted to do business in this state. A copy of the bond shall be filed with the Secretary of State, with a copy provided to the Attorney General. The bond shall be in favor of the State of California for the benefit of purchasers of the seller of travel discount program harmed by a violation of this section, the seller s misrepresentation or misapplication of funds, or the failure of the seller to comply with the terms of the seller of travel discount program.

(10) The seller shall comply with the requirements for discount buying services pursuant to Title 2.6 (commencing with Section 1812.100) of Part 4 of Division 3 of the Civil Code.

(Added by Stats. 2006, Ch. 628, Sec. 8. Effective January 1, 2007.)