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1. What is the Seller of Travel Law?

   The Law is a series of statutes, which first took effect in 1995, that provide certain protections to consumers. In the past, a “seller of travel” provided or arranged air or sea travel. The law has been expanded to include sellers of travel who provide or arrange land and water vessel transportation services that exceed $300. The Law applies to all purchases made from sellers who are located in California, as well as purchases by persons located in California from vendors who sell or offer to sell from locations outside the state. It includes both retail and wholesale transactions, and covers sales to tour operators, consolidators, and wholesalers. Airlines, cruise lines, and lodging establishments that book travel for their guests and accept no money for doing so are also not covered by the Law. Some motor clubs have to register, but otherwise are exempt from the Law's requirements.

2. Who needs to register as a “Seller of Travel” (SOT)?

   The definition of "seller of travel" is not limited to sellers of air or sea travel. New legislation includes sellers of land or water vessel transportation who provide or arrange land or water vessel transportation in which the total cost exceeds $300. “Sells or markets” means providing, furnishing, contracting, for, or advertising that you can, may, or have arranged, either wholesale or retail, air or sea transportation, or land or water vessel transportation exceeding $300, separately or in conjunction with other travel services.

3. Who does not need to register as a Seller of Travel?

   • Anyone who sells travel only as an employee of a registered seller of travel;
   • Any air carrier (for example, an airline) and ocean carrier (for example, a cruise line);
   • Any governmental entity;
   • Any hotel, motel, or similar lodging establishment which incidentally arranges for accommodations, air or sea transportation, and related services for its registered guests and never directly or indirectly receives any money or other valuable consideration for arranging or providing that air or sea transportation; or
   • An outside sales representative. However, in order to qualify as an outside sales representative, an applicant must be a natural person who meets all of the following conditions:
   1. Has a written contract with a registered seller of travel to sell travel and services only, on that registered seller’s behalf; and
   2. If providing air transportation, only sell through a registered seller of travel who uses an official appointment from a particular airline, the Airline Reporting Corporation (“ARC”), or the International Air Transport Association (“IATA”) to issue that ticket; and
   3. Receives no payment for transaction or service fees directly from any passenger; regardless of how such payment is named (e.g., “tip”); and
   4. Receives no payment directly from any passenger in the form of cash, and only receives or directs passenger payments in the following manner:
   1. If in the form of checks, cashiers' checks, or money orders, the payment is made payable to the registered seller of travel or directly to the air carrier, or ocean carrier, and/or
   2. If in the form of a credit card charge, the information necessary for a credit card purchase is relayed, without processing, to the registered seller of travel or directly to the air carrier, or ocean carrier.

   (See Business and Professions Code section 17550.20(g)

4. Can the Seller of Travel Program determine whether I need to register or not?

   This Office represents the People of the State of California, as a whole, and cannot provide legal advice to individuals. We recommend that you seek the counsel of a licensed attorney regarding your business and to review the Seller of Travel statutes. All sellers of travel who are covered within the statute must register with the Attorney General's Office, Seller of Travel Program, before they can lawfully market to persons, businesses, or retail vendors located within the state.

5. What are the Seller of Travel requirements to register?

   Registration requires, among other things, disclosure by the seller of business addresses, fictitious business names (dbas) used, identifying information as to principals and owners, relationship with the airlines, the location of a trust account or information about a surety bond (if one of these protections is required). Registration is not the same as licensing. So long as the seller fits within statutory requirements, a registration number will be issued.

   The registration number must be clearly and conspicuously displayed by the seller of travel on all advertising materials including newspaper advertisements, flyers, mailers, television and radio broadcasts, faxes, and websites. For model disclosure language, please review the document prepared by the Seller of Travel Program located at http://ag.ca.gov/travel/pdf/disclosure.pdf. Registration is good for one year and must be renewed annually.

6. How do I apply as a Seller of Travel?

   Accurately complete and submit the Seller of Travel Registration Application, any required additional forms, your annual registration fee of $100 for each business location, plus any required late fee to the Seller of Travel Program in Los Angeles. This must be mailed not less than ten (10) days prior to doing business in California. All seller of travel forms are located on our website: http://ag.ca.gov/travel/forms.htm. If you have questions, you may e-mail the Seller of Travel Program at Sellers.Travel@doj.ca.gov.

   An application with no registration fee will be rejected and your late fee will increase until your registration fee is received by the Seller of Travel Program. Late fees are determined by the postmark date or the date of receipt for applications sent by a private delivery service. All past unpaid registration fees must be fully paid before your Seller of Travel number will be issued. Your registration will not be complete until we issue an Acknowledgment of Registration with a Seller of Travel certificate.

7. How do I make a material change during the registration year?

   Your registration expiration date will be shown on the registration certificate issued by the Seller of Travel Program. You must file an amendment updating your registration information with the Seller of Travel Program if there is a change in any of the information requested in your original registration papers and in any subsequent renewal forms. There is no filing fee for an amendment to your registration.

   The amendment may be submitted in letter form or you may use Form 500. It must be submitted within ten (10) days of the change if the material change does not involve the sale or transfer of an ownership interest in the registered seller of travel business.

   If an owner intends to transfer or sell any interest in the seller of travel business, the owner must file Form 600 with the Seller of Travel Program not less than ten (10) days prior to the transfer. All seller of travel forms are located at: http://ag.ca.gov/travel/forms.htm.

8. What is the Travel Consumer Restitution Corporation (TCRC)?

   TCRC is a non-profit organization that administers the Travel Consumer Restitution Fund (TCRF) and refunds travel costs to consumers from California when a participating travel agent does not provide travel services due to business closure, bankruptcy, or default of a registered Seller of Travel. Additional information is located on TCRC’s website at: www.tcrcinfo.org.

9. Who Must Participate in the Travel Consumer Restitution Corporation (TCRC)?

   • Any seller of travel with its principal place of business in California and doing business with persons in California;
   • Any seller of travel which does business in California from at least one location in California and which has its stock publicly traded on a stock market (specifically, a national securities quotation system or stock exchange); or
   • Any seller of travel which does business in California from at least one location in California, which is a subsidiary of a corporation that is publicly traded on a national stock exchange, where at least 60% of the stock of the seller of travel is owned by the publicly traded parent corporation(s).

   No other businesses are eligible to participate in the TCRF. (Bus. & Prof. Code §17550.7)

10. How do I register with the Travel Consumer Restitution Corporation (TCRC)?

    The registration application for the TCRC is a separate document. Submit the short TCRC application, any required attachments, registration fees, applicable late fees, and the appropriate assessment (as indicated in the application’s schedule) to the Travel Consumer Restitution Corporation. This must be submitted not less than ten (10) days prior to doing business in California. Your proof of payment to TCRC will be forwarded by TCRC directly to the Seller of Travel Program. To avoid TCRC late fees, you must include your registration fees. Additional information is located on TCRC’s website at: www.tcrcinfo.org.

11. What are the requirements to protect consumer funds?

    YOU MUST CHOOSE ONE OF THE FOLLOWING OPTIONS TO FULFILL THE REQUIREMENT

    Financial requirement pursuant to Bus. & Prof. Code §§17550.15 and 17550.16:

    OPTION 1:

    Trust Account: A trust account is separate from an operating or general account. The trust account is used to deposit consumer funds and to pay your travel service providers (i.e. consolidators, wholesalers, airline companies, etc.). The trust account cannot be used for business and personal expenses, or to pay the seller of travel registration fee (Bus. & Prof. Code §17550.15). After you pay all travel service providers, for each client, you may withdraw your commissions. The operating account is used to pay out salaries, utilities, and such other operational expenses. Disbursement of trust funds for purposes other than payment for goods and services, or to make refunds, may constitute a crime. In addition, you may not pay your Seller of Travel registration fee from any trust account established pursuant to Bus. & Prof. Code §17550.15.

    To view Bus. & Prof. Code §17550.15(b), simply link to http://ag.ca.gov/travel/statute.php.

    OPTION 2:

    Surety Bond: You may purchase a surety bond to protect customer payments instead of using a trust account. Your surety bond must be “adequate” to cover the amount that would be required to be held in a trust account. Estimate the amount of your surety bond by determining the highest single day’s balance of customer money you hold and adding 10%. You should make appropriate upward adjustments to your estimates and surety bond as circumstances change. To learn more about the surety bond requirement, please see Bus. & Prof. Code §17550.11 at http://ag.ca.gov/travel/statute.php.

    Your surety bond issuer must be a company that is admitted by the State of California to issue surety bonds in California. Such a company is known as an “Admitted Surety Bond Company.” Check with any prospective issuer of a surety bond which you intend to use to see if it is admitted to write surety bonds in California or contact the California Department of Insurance at www.insurance.ca.gov.

    OPTION 3:

    Consumer Protection Deposit Plan: Sellers of Travel who are otherwise required to maintain a trust account or surety bond may instead elect to participate in the United States Tour Operators Association Consumer Protection Deposit Plan or any other Consumer Protection Deposit Plan which must be approved by the Attorney General’s office. A Consumer Protection Deposit Plan, by statute, requires depositing with the Administrator of the Plan a minimum of $1,000,000. As of August 28, 2002, participation in the Deposit Plan is only by application to the United States Tour Operators Association.

    OPTION 4:

    Consumer Protection Escrow Plan: Sellers of Travel who are otherwise required to maintain a trust account or surety bond may instead elect to participate in an approved Consumer Protection Escrow Plan which requires full compliance with Bus. & Prof. Code §17550.16(c). As of August 28, 2002, participation in the Escrow Plan is only through National City Bank.

12. What is a seller of travel trust account?

    A trust account is separate from an operating or general account. A trust account is simply a business checking account which you designate as your seller of travel trust account. The trust account is used to deposit consumer funds and to pay your travel service providers (i.e. consolidators, wholesalers, airline companies, etc.). The trust account cannot be used for business and personal expenses, or to pay the seller of travel registration fee. Only after you have paid your travel service providers, you may withdraw your commissions. The operating account is used to pay out salaries, utilities, and such other operational expenses. You may not co-mingle the two accounts. For example, you may not pay salaries out of your trust account. Disbursement of trust funds for purposes other than payment for goods and services, or to make refunds, may constitute a crime. In addition, you may not pay your registration fee from any seller of travel trust account.

    To view Bus. & Prof. Code §17550.15(b), simply link to http://ag.ca.gov/travel/statute.php.

13. What is an adequate seller of travel bond?

    Estimate the amount that your surety bond should cover by determining the highest single day’s balance of customer money, which would be held by you before being forwarded to the providers of transportation or travel services and adding 10%. You should make appropriate upward adjustments to your estimates and surety bond as circumstances change. The Attorney General’s Office may require documentation of your sales volume to prove your surety bond amount is sufficient.

    As an example: If your highest single day’s balance is $10,000 then the amount of the bond should be $10,000 plus 10%. If you are just starting your business, you will need to make a projection of the amount that will adequately cover and protect your clients' financial interest (funds).

    Your surety bond issuer must be a company that is admitted by the State of California to issue surety bonds in California. Such a company is known as an “Admitted Surety Bond Company.” Check with any prospective issuer of a surety bond which you intend to use to see if it is admitted to write surety bonds in California or contact the California Department of Insurance at www.insurance.ca.gov.

    Maintenance of a United States Tour Operators Association (USTOA) bond meets the seller of travel financial requirement as well. (For more information please see FAQs question 11, option 3)

    To learn more about the surety bond requirement, please see Bus. & Prof. Code §17550.11 at http://ag.ca.gov/travel/statute.php.

14. How can I be exempt from the financial requirement?

    You must meet all of the following requirements to be exempt from the financial requirement:

    1. You are an officially appointed as an ARC agent in good standing and only sell or provide air transportation pursuant to that agency appointment;
    2. All of your sales are made directly to the end user, the traveler or passenger and are not made through a reseller or another travel agent, and the travel services sold are to be furnished by other providers not related to you;
    3. You sell travel to customers who are located in California, only from sales locations in California;
    4. You are a registered seller of travel and are in compliance with the requirements pertaining to the Travel Consumer Restitution Corporation (TCRC); and
    5. You send all of the passengers' funds, without offsetting or reducing the amount, directly to either:
       • the provider of transportation or travel services;
       • ARC;
       • the trust account identified in the registration certificate of another seller of travel and you must obtain and keep a copy of the supplier's registration certificate; and/or
       • a registered seller of travel who is exempt from the trust account or surety bond requirement under Bus. & Prof. Code §17550.16(a) of the Law and you must obtain and keep a copy of the supplier's registration certificate if you are making payment to another registered seller of travel.

    
    In addition, you do not qualify for the exemption outlined in Bus. & Prof. Code §17550.16(a) of the Seller of Travel Law (1) if you sell to customers located in California from business locations that are located outside California, (2) if your business is less than three years old, or (3) if your business has added new business owners during the previous three years.

15. What is a Seller of Travel Attestation?

    Beginning January 1, 2007, it became easier for sellers of travel to file annual renewals, as long as the information they previously provided had not changed. A seller of travel can simply file the State of California Seller of Travel Attestation, which is a statement under penalty of perjury attesting to the continued accuracy of the information in the last filed registration application (Bus. & Prof. Code §17550.21(j)). Please note that Form 100 or Form 100-A, is required with the Attestation, depending on the type of business entity.

    The statute allowing an Attestation only applies if there are no changes the information provided on the latest Seller of Travel Registration Application or Renewal Form on file. If your company has made a change, you are required to complete the Registration Renewal Form. If there have been no changes at the time of your renewal date, the Seller of Travel Attestation may be submitted.