SB 274 -- TRAVEL CLUBS

SPONSOR:  Taylor (Richard)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Tourism by
a vote of 14 to 0.

This bill prohibits travel clubs from selling vacation benefits
unless the club maintains an effective registration statement
with the Attorney General.  The requirements of the registration
statement, which includes a $50 fee, are specified.  The Attorney
General must approve or disapprove a travel club's registration
statement within 30 days of its submission.  If the registration
is incomplete, the Attorney General must advise the club about
what is missing in writing within 15 days from its submission.
Travel clubs may submit registration renewal statements annually.
The bill gives an individual who has purchased travel benefits
from a travel club the right to rescind and cancel the travel
club purchase within three business days.  This right cannot be
waived.  If an individual exercises this right, a full refund
must be issued within 15 business days.  If an individual
purchased a travel club membership from a club that is not
registered in Missouri, he or she has three years from the date
of purchase to rescind and cancel the membership and to receive a
full refund within 15 business days.

Individuals who have purchased a travel club membership and have
a complaint regarding the purchase can file a written complaint
with the Attorney General or the county prosecuting attorney.
The office that receives the complaint must forward it to the
travel club by registered mail within 10 working days.  The
travel club has 30 days from the date on which the complaint was
filed to remedy the grievance.  If the complaint is settled, the
parties will execute a written mutual release containing the
terms of the settlement.  Payments arising from any settlement
must be made within 15 business days of the settlement's signing
date.

A person who violates these provisions is guilty of a class D
felony and will be fined $10,000.  Fines collected will be
transferred to the State School Moneys Fund and distributed to
Missouri's public schools.

Any travel club which a court determines has failed to provide
the required refund or failed to honor a settlement agreement
must post a $50,000 surety bond with the Attorney General.

FISCAL NOTE:  No impact on state funds in FY 2006, FY 2007, and
FY 2008.

PROPONENTS:  Supporters say that the bill regulates travel clubs,
which are very important to Branson.  The bill doesn't impose too
much on the industry or on the enforcement side, but it does
provide a safety net for consumers by giving them the option to
rescind their membership within three business days.

Testifying for the bill were Senator Taylor; Grand Crowne
Resorts; American Council of Travel; Branson/Lakes Area Chamber
of Commerce and Convention and Visitors Bureau; and Cendant
Corporation.

OPPONENTS:  Those who oppose the bill say that travel clubs are
very problematic for consumers because they often don't provide
their expected benefits. Complaints submitted to the Attorney
General's Office pertaining to travel clubs are numerous, and bad
clubs cost consumers millions of dollars annually.  The bill has
too many exemptions, making it easier to operate outside the law
rather than within it.  People who have a bad experience with a
Branson travel club end up having a negative opinion about the
state as a whole which is bad for tourism.

Testifying against the bill was Office of the Attorney General.

Alice Hurley, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:21 pm