Chapter 639 Oregon Laws 2001

AN ACT

SB 334

Relating to sellers of travel; creating new provisions; amending ORS 646.185 and 646.189; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 646.185 is amended to read:

646.185. As used in ORS 646.185 to 646.195:

(1) “Accommodations” means the provision of land, sea or air transportation or a combination of transportation and any goods and services sold in conjunction with that transportation, including but not limited to lodging, meals and entertainment.

(2) “Adequate financial security” means a bond executed by an authorized surety insurer or an irrevocable letter of credit issued by an insured institution as defined in ORS 706.008 for the benefit of every person for whom services have not been delivered by the wrongful act of the seller of travel acting in the course and scope of the seller’s occupation or business or by any official, agent or employee of the seller acting in the course or scope of that person’s employment or agency. The financial security shall be in an amount not less than $10,000. The financial security shall be continuous until canceled and shall remain in full force and unimpaired at all times to comply with this subsection. If the financial security is a bond, the surety insurer shall give the Director of the Department of Consumer and Business Services at least 30 days’ written notice before it cancels or terminates its liability under the bond.

(3) “Consumer” means a person in Oregon that purchases accommodations [in Oregon] and on whose behalf money or other consideration has been given to another, including another member of the same partnership, corporation, joint venture, association, organization, group or other entity, for procuring accommodations.

(4) “Department” means the Department of Consumer and Business Services.

(5) “Director” means the Director of the Department of Consumer and Business Services.

(6) “Seller of travel” or “seller” means a person that sells, provides, furnishes, contracts for, arranges or advertises in this state that the person can or may arrange or has arranged accommodations either separately or in conjunction with other services.

(7) “State of Oregon certified association” or “certified association” means an association of sellers of travel that has been certified by the director as described in ORS 656.191.

SECTION 2. ORS 646.189 is amended to read:

646.189. (1) An association of sellers of travel shall be eligible for certification as a certified association if the Director of the Department of Consumer and Business Services determines that:

(a) The rules or bylaws of the association require members of the association to:

(A) Maintain adequate financial security [as defined in ORS 646.185 or maintain a client trust account. A client trust account shall be established and verified as provided in the rules or bylaws of the association and shall be used solely for the purpose of depositing and disbursing funds received from consumers for the purchase of accommodations];

(B) Maintain errors and omissions insurance; or

[(C) Participate in a program for mediation of disputes between sellers of travel and consumers under which members of the association agree to submit all unresolved consumer complaints to an independent mediator agreed to by all parties and where costs of the mediation are paid by the seller, subject to a final determination of costs by the mediator; and]

[(D) Comply with a written code of ethics;]

(C) Maintain accreditation by the Airlines Reporting Corporation, its successor or a similar entity designated by the association and approved by the director.

(b) The rules or bylaws of the association require members of the association to participate in a program of mediation of disputes between members and consumers. [contain provisions for the suspension or revocation of members of the association who do not comply with the rules or bylaws of the association or with the provisions of ORS 646.185 to 646.195 or rules adopted by the director under ORS 646.185 to 646.195; and]

[(c) The association has complied with any other requirements for certification as set by rule by the director.]

[(2)] (c) The rules or bylaws of the association require members of the association to comply with a written code of ethics [referred to in subsection (1) of this section shall set] that sets requirements for at least:

[(a)] (A) Advertising and promotion policies;

[(b)] (B) Disclosure of consumer rights[, responsibilities and risks];

[(c)] (C) Disclosure of policies and procedures for refunds to consumers; and

[(d)] (D) Disclosure of the limits of liability of the seller of travel in all transactions.[;]

[(e) Disclosure of mediation rights; and]

[(f) Disclosure of actions filed against the seller of travel and other enforcement actions taken against the seller of travel as described in subsection (3) of this section.]

(d) The rules, bylaws or code of ethics of the association provides that a seller of travel may not be admitted to the association or maintain membership in the association if, during the three years prior to application for membership in the association or at any time after admission to the association, the seller of travel, or the owner, principal or any person having control over the seller of travel, has been:

(A) Convicted of any offense involving fraud, deception, misrepresentation, misappropriation of property or breach of trust or other fiduciary obligation;

(B) The subject of an order of any federal, state or local court or administrative agency denying, suspending or revoking any license or any other authority to engage in business as a seller of travel; or

(C) The subject of any civil judgment or penalty imposed by any federal, state or local court or administrative agency.

(e) The rules or bylaws of the association provide for the suspension or revocation of membership in the association if a member does not comply with the rules or bylaws of the association, ORS 646.185 to 646.195 or rules adopted by the director under ORS 646.185 to 646.195.

[(3)(a) For purposes of this subsection:]

[(A) “Owner” means a person who owns or controls 10 percent or more of the equity of, or otherwise has claim to 10 percent or more of the net income of, the seller of travel.]

[(B) “Principal” means an owner, an officer of a corporation, a general partner of a partnership or a sole proprietor of a sole proprietorship.]

[(b) The disclosure required under subsection (2)(f) of this section shall include whether the seller of travel or any principal of the seller of travel, or any other seller of travel owned or managed by the seller of travel or by any principal of the seller of travel:]

[(A) Has had entered against the seller of travel or principal any judgment, including a stipulated judgment, or order or has made a plea of nolo contendere;]

[(B) Is the subject of an order of any federal, state or local administrative agency denying, suspending or revoking any license or other indicator of authority to engage in business as a seller of travel;]

[(C) Is subject to any civil penalties imposed by any federal, state or local administrative agency;]

[(D) Has been the subject of any civil action involving allegations of financial misconduct and damages in an amount of $1,000 or more, or a lower amount adopted by the director by rule. For purposes of this subparagraph, “civil action” includes actions filed in any court, arbitration or alternative dispute resolution proceedings and administrative actions initiated by a state, a subdivision of a state, the United States or any agency of the United States; or]

[(E) Has been convicted of any criminal violation.]

[(c) Actions described in paragraph (b) of this subsection must be disclosed only if they occur:]

[(A) In connection with the conduct of business as a seller of travel; and]

[(B) During the period beginning 10 years prior to the date the disclosure is made.]

[(d) The disclosures described under this subsection shall identify:]

[(A) The person, the court or the federal, state or local administrative agency rendering the judgment, order, civil penalty or conviction or before which the plea of nolo contendere was made;]

[(B) The person, the court or the federal, state or local administrative agency that filed the civil action or with which any civil action has been filed;]

[(C) The docket number, if any, of the action;]

[(D) The date of the judgment, order, civil penalty, conviction or plea;]

[(E) The date and location of the filing of the civil action;]

[(F) The location where the judgment, order, civil penalty or record of conviction or plea was filed or was imposed; and]

[(G) The nature of the case, civil action or judgment.]

[(4)] (2) The director by rule may establish additional requirements for certification [as a certified association].

(3) As used in this section:

(a) “Conviction” includes, but is not limited to, a plea of nolo contendere, a consent judgment, a judicial or administrative decree or order and assurances of voluntary compliance.

(b) “Owner” means a person who owns or controls 10 percent or more of the equity of, or otherwise has claim to 10 percent or more of the net income of, the seller of travel.

(c) “Principal” means an owner, an officer of a corporation, a general partner of a partnership or a sole proprietor of a sole proprietorship.

SECTION 3. If the Director of the Department of Consumer and Business Services certifies an association of sellers of travel under ORS 646.191 prior to the effective date of this 2001 Act, the certification remains in effect until the certificate is surrendered by the association or revoked or suspended by the director as provided in ORS 646.193.

SECTION 4. This 2001 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2001 Act takes effect on its passage.

Approved by the Governor June 27, 2001

Filed in the office of Secretary of State June 27, 2001

Effective date June 27, 2001

__________