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The California Seller of Travel Law
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by Daniel J. Soeder | 2007

Changes in California law create some new requirements for our group outings leaders

I spend a fair amount of time in California for the Sierra Club. It is a fabulous place, with the best scenery in the country combined with the best climate. Most of the people who live there don’t know how good they have it. After growing up in Cleveland and living in Chicago for a decade, I couldn’t believe that people actually complain about living in California!  I speak from experience, having lived next door in southern Nevada for nearly a decade. Las Vegas is so full of California transplants that it is basically the farthest suburb of Los Angeles. Probably the only thing I don’t like about California is the pizza – they put things like tofu, broccoli and goat cheese on it, and it’s just weird compared to real Chicago deep dish or the pizza you get in Fells Point.       

Laws passed in California set trends for the rest of the nation. They were the first state to ban smoking in restaurants more than 10 years ago, and now it is unusual to go into a restaurant anywhere in the country and still have them ask “smoking or non?”  The state is also well-known for passing strict vehicle emission standards, innovative tax rules, and consumer protection laws.

One of those consumer protection laws now affecting us in the Sierra Club outdoor activity program is called the “California Seller of Travel Law,” and it applies to any organization operating in California that sells “land or water vessel transportation, either separately or in conjunction with other travel services.”  The law is intended to protect consumers from unscrupulous travel agencies and tour operators. Sierra Club falls under it because both Local and National Outings programs have some activities that often include some form of land, sea or air transportation. Since the entire Sierra Club is a single corporation chartered in California, all Club outings and activities nationwide are subject to the California Seller of Travel law, regardless of whether or not fees are charged.

Just to make sure, the Sierra Club engaged the services of an expert travel law attorney to confirm that the law pertains to the Club. It does. Even an activity as simple as guiding an organized hiking trip can be considered “travel.”  The report from the attorney makes it clear that there are a number of  basic obligations imposed on the Club by the law. These include:

 

1. Separate Bank Account

All money collected for any outdoor activity must be deposited directly into a separate bank account. This means that outings funds must be kept separate from funds used for day-to-day chapter or group operations. For practical purposes, even though all outings that charge money are subject to the separate bank account requirement, the Club has set a materiality threshold and only outings charging more than $25 per person must adhere to the separate bank account requirement. This would apply to big events like camping trips or cabin rentals where a fee would be collected in advance to cover the cost of using the facilities.

Part of the reason for this rule is to ensure that consumer payments for travel are readily available and identifiable in case of refund. The other reason for a separate travel account is to prevent what auditors call “commingled funds.”  Commingling of funds is an old trick of unscrupulous characters who want some leeway on handling other people’s money. When funds from different sources are all mixed together in the same pot, it is extremely difficult for an auditor to trace if the money paid in for a particular product or service was actually spent on that or something else.

 

2. Travel Confirmation

If air or sea transportation is provided as part of the outing, tickets or equivalent travel confirmations must be sent to the participant within three business days of full payment.

 

3. Marketing and Advertising

All outing marketing and advertising materials must include the Club’s Seller of Travel identification number. In addition, a statement that the Club does not participate in the Travel Consumer Restitution Fund (TCRA) must also be included. These requirements pertain to print, email, and web marketing and advertising.

 

The national outings committees are still figuring out how to implement the requirements imposed by this law. There will be a 90-day “phase-in” period when Club headquarters in San Francisco will send guidance and additional information out to the chapters. So there is no need to be overly-concerned about this – I think in most cases for eastern chapters like ours, the amount of money we collect for outings is usually well below the $25 per person threshold, and most of this won’t even apply. However, if you want to lead a ski trip, or charter a boat, please talk to me first.

If we do need to set up separate bank accounts for outings, this should be fairly easy and straightforward. Most banks are used to dealing with this sort of thing, and often provide “linked” accounts that allow separate deposits to be made without charging extra fees.

So chill out, dudes and dudettes…it’s laid-back, mellow and relaxed California. Yes, they do have more attorneys there than grains of sand on the beach, and apparently they are all keeping busy. In the meantime, go enjoy one of the many activities planned for you from the list below. Surf’s up!  See you outside!

 

Daniel J. Soeder, MD Chapter Outings Chair, Dan.Soeder@sierraclub.org

> 2007 Table of Contents

   
   

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