(Revised October 2014)
ASTA diligently monitors activities in all 50 state legislatures and speaks out on issues that directly affect our members.
However, success at the state level only happens when members like you become involved and committed to our grassroots activities. Whether advising ASTA when you become aware of important proposals in your state, writing or visiting your state representatives, or even testifying at relevant hearings, your voice makes a difference.
Below is a summary of the key state legislative initiatives that we have addressed and continue to monitor in 2014. If you would like more information on a specific issue, please contact us at firstname.lastname@example.org.
Travel insurance offers tremendous value to consumers, and offering insurance is a great revenue source for travel agents. In the past few years, working with the U.S. Travel Insurance Association (UStiA), ASTA was able to convince the National Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL) to create a set of state standards for agents to offer travel insurance to their clients, which will replace the outdated, confusing 50-state web of rules that costs considerable time and money to comply with.
ASTA has been working tirelessly with UStiA and other industry allies to put this standard into place across the country, and our success is showing. To date 31 states have adopted the NAIC/NCOIL standard, and we hope to have the remainder in the system in the near future. For more information, consult a recent ASTA member alert on travel insurance, and be advised that ASTA encourages travel agencies to consult with their travel insurance provider and/or attorney for guidance on the specific licensing obligations that apply to their business.
States seeing action on travel insurance reform in 2014 include:
ARIZONA, where after a strong grassroots push from ASTA’s Arizona Chapter in 2013 the NAIC/NCOIL bill (HB 2047) passed the House unanimously on February 3 and advanced out of a Senate committee on February 18. It was signed into law on April 15.
CALIFORNIA, which passed the NAIC/NCOIL standard in 2012 but has generated problems since as the California Department of Insurance (CDI) did something that no other state has done when enacting the standard – it eliminated the option of maintaining a low-cost limited lines travel insurance license. ASTA is working with UStiA and the California Coalition of Travel Organizations to pursue a legislative “fix” (see our May 29 member alert for more).
COLORADO, where Rich Sattizahn of RMA Travel & Tours (Denver, CO), President of ASTA’s Rocky Mountain Chapter, testified in support of legislation (HB 1185) that passed the House on March 12, the Senate on April 21 and was signed into law on May 15.
HAWAII, where Hawaii Chapter Vice President Rachel Shimamoto of Travel Ways, Inc. and Past President Wendy Goodenow of HNL Travel Associates made two separate trips to the state capitol last month to testify in support of reform legislation (HB 2215). That bill passed the House on March 4 and is pending in a Senate committee.
MARYLAND, where in January ASTA members Larry Swerdlin of Burton Travel (Owings Mills, MD) and Jay Ellenby of Safe Harbors Travel Group (Bel Air, MD) testified in support of legislation (HB 221) that subsequently passed the House and Senate unanimously and was signed into law on April 8.
Occupancy Tax Legislation
Over the past few years, state, county and municipal governments across the country have considered proposals to apply hotel occupancy tax on the full price paid by consumers for booking a hotel room. While purportedly aimed at the big online travel agencies, these proposals are always written so that they also apply to mark-ups and transactions fees that a traditional travel agency may charge for hotel bookings (or packages with a hotel component). These taxes can range anywhere from one to 15 percent. In addition to paying the tax, travel agents are often faced with the necessity of registering as a taxpayer in the hotel’s jurisdiction. Recent action on occupancy tax legislation includes:
MARYLAND. In February, the Chairwoman of the Maryland House Committee on Ways and Means introduced legislation, House Bill (HB) 1515, that would apply Maryland’s six percent sales tax to “all consideration paid by the transient guest…for the right to occupy the [hotel] room…including charges for services necessary to complete the retail transaction.” The bill was subsequently withdrawn.
RHODE ISLAND. On March 6, ASTA submitted testimony against a proposal in the Governor’s budget that would define hotel “room resellers” in a way that clearly captures traditional travel agents. Under the proposal, any fees travel agents – regardless of whether or not they are based in Rhode Island – charge their customers for hotel bookings in the state would be subject to new taxation totaling 13 percent. ASTA also issued an “action alert” to its Rhode Island members on April 17, urging them to contact state legislators. The bill was withdrawn before the legislature adjourned.
Washington Seller of Travel Revisions
Under current Washington law, a trust bank account must be established for all moneys received from customers as payment for retail travel services when these funds are held for more than five business days. The trust account provision does not apply for most credit card transactions or airline transactions processed through the Airlines Reporting Corporation (ARC). While the trust account provision does apply to cash/check funds that travel agents receive from their customers for some transactions (e.g. cruises, tours), the five-day provision typically provides travel agents with enough time to pass on the funds to a supplier without the need for a trust account.
Legislation to strike this five-day grace period (HB 2590) was introduced and passed through the Washington House on February 12 with little debate, but was stopped cold in the Senate. On February 19, the Senate Commerce and Labor Committee held a hearing on HB 2590, at which several Washington travel agents testified in opposition, including Dan Smith, Director of the Pacific Northwest Chapter of the National Association of Career Travel agents (NACTA) and a member of ASTA’s national Board of Directors.
To find out how you can participate in ASTAPAC, ASTA’s Political Action Committee, please see Support ASTAPAC.