REPORT TITLE:
Charter Tour Operators


DESCRIPTION:
Provides for the licensing of charter tour operators.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           1513
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO CHARTER TOUR OPERATORS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature find that existing statutory
 
 2 requirements that charter tour operators maintain client trust
 
 3 accounts do not provide adequate assurances of compliance with
 
 4 those statutes, and, therefore, do not adequately protect
 
 5 consumers against the risk of loss.  The purpose of this Act is
 
 6 to protect consumers against the risk of loss from advance
 
 7 purchases of charter tours from charter tour operators by
 
 8 requiring that charter tour operators be licensed and that they
 
 9 provide evidence of their financial ability to perform their
 
10 contractual obligations, together with periodic financial
 
11 reporting which provides assurances of compliance with the client
 
12 trust account requirements.  This Act also provides for greater
 
13 regulatory supervision of charter tour operators by the State,
 
14 including enhanced authority to conduct audits and examinations
 
15 of charter tour operators.
 
16      SECTION 2.  Section 468L-1, Hawaii Revised Statutes, is
 
17 amended by adding six new definitions to be appropriately
 
18 inserted and to read as follows:
 
19      ""Charter tour" means any travel services in which the
 

 
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 1 charter tour operator charters air transportation, with or
 
 2 without related ground transportation or hotel accommodations.
 
 3      "Charter tour operator" means any person who sells or offers
 
 4 for sale charter tours, whether offered on a wholesale or retail
 
 5 basis, excluding, however, any direct air carrier as defined in
 
 6 14 CFR 380.2, as amended, or any other person to whom the
 
 7 provisions of this chapter do not apply.
 
 8      "Person" means any sole proprietorship, organization, trust,
 
 9 group, association, partnership, joint venture, corporation,
 
10 limited liability company, limited liability partnership,
 
11 society, or other entity, or any combination of any of the
 
12 foregoing.
 
13      "Qualified client trust assets" means cash or cash
 
14 equivalents held by a bank or a similar federally insured
 
15 financial institution in one or more separate client trust
 
16 accounts maintained in compliance with section 468L-5.  Qualified
 
17 client trust assets shall not be commingled with any other
 
18 accounts, funds, or moneys held by a charter tour operator.
 
19 Qualified client trust assets shall not include any of the
 
20 following:
 
21      (1)  Any notes receivable;
 
22      (2)  Federal or state bonds or letters of credit; or
 
23      (3)  Any other general or administrative expenditure which
 

 
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 1           is not directly related to the payment for travel
 
 2           services.
 
 3      "Qualified client trust liabilities" means all cash or cash
 
 4 equivalents received by a charter tour operator for travel
 
 5 services, and shall be accounted for in a trust liability account
 
 6 on the books and records of the charter tour operator.
 
 7      "Qualified pre-paid client trust assets" means the following
 
 8 cash expenditures for future travel services made in advance of
 
 9 the commencement of a charter tour:
 
10      (1)  Advance payments made for air transportation;
 
11      (2)  Advance payments made for hotel accommodations; or
 
12      (3)  Advance payments made for baggage handling or ground
 
13           transportation charges."
 
14      SECTION 3.  Chapter 468L, Hawaii Revised Statutes, is
 
15 amended by adding twelve new sections to be appropriately
 
16 designated and to read as follows:
 
17      "468L-A  Charter tour operator license required.  (a)  No
 
18 person shall engage in the business of a charter tour operator
 
19 unless that person has been issued a valid license to operate as
 
20 a charter tour operator under this chapter.
 
21      (b)  Each license shall expire on December 31 of each even-
 
22 numbered year.  Not later than sixty days before December 31 of
 
23 each even-numbered year, the department shall mail a renewal
 

 
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 1 application for registration to the address on record of the
 
 2 licensee.
 
 3      468L-B  Charter tour operator license requirements.  (a)
 
 4 An application for licensing shall be made under oath on a form
 
 5 provided by the department.  The form shall require the applicant
 
 6 to provide:
 
 7      (1)  The applicant's full name and any trade names being
 
 8           used;
 
 9      (2)  The residence address of the applicant if the applicant
 
10           is a sole proprietorship; the names and respective
 
11           residence addresses of all constituent partners of the
 
12           applicant if the applicant is a partnership; the names
 
13           and respective residence addresses of all constituent
 
14           members of the applicant if the applicant is a limited
 
15           liability company; the names and residence addresses of
 
16           the applicant's officers and directors, and the names
 
17           of all stockholders owning ten per cent or more of the
 
18           outstanding capital stock of the applicant if the
 
19           applicant is a corporation or joint-stock company; or
 
20           the names and respective residence addresses of the
 
21           applicant's officers and other principals, including
 
22           any persons owning ten per cent or more of the
 
23           ownership interest of the applicant, if the applicant
 

 
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 1           is any other type of organization or association of
 
 2           individuals;
 
 3      (3)  If the applicant is a corporation, partnership, limited
 
 4           liability company, organization, association, or other
 
 5           entity to whom registration with the department is
 
 6           applicable, evidence of registration of the applicant
 
 7           and any trade names with the department;
 
 8      (4)  The applicant's business address and phone number and
 
 9           the business addresses and phone numbers of each branch
 
10           office;
 
11      (5)  Evidence that a client trust account has been
 
12           established in accordance with section 468L-5;
 
13      (6)  The annual number of charter tours which the applicant
 
14           intends to operate during the license period;
 
15      (7)  In the case of an initial application for a license
 
16           filed by an applicant engaged in the business of a
 
17           charter tour operator prior to October 1, 1999, if the
 
18           applicant requests an exemption immediately upon
 
19           issuance of its license from filing monthly client
 
20           trust reconciliation reports pursuant to section
 
21           468L-F(d), evidence that the applicant has continuously
 
22           operated not less than four charter tours per month for
 
23           a period of not less than twelve successive months
 

 
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 1           immediately preceding the date of the application;
 
 2      (8)  In the case of an initial application for a license
 
 3           filed by an applicant engaged in the business of a
 
 4           charter tour operator prior to October 1, 1999, if the
 
 5           applicant requests to be permitted immediately upon
 
 6           issuance of its license to file compilation reports
 
 7           every six months, rather than quarterly, pursuant to
 
 8           section 468L-G(b), evidence that the applicant has
 
 9           continuously operated not less than four charter tours
 
10           per month for a period of not less than eighteen
 
11           successive months immediately preceding the date of the
 
12           application; and
 
13      (9)  Evidence that the applicant has complied with the
 
14           financial performance requirements of section 468L-
 
15           C(a), including, if the applicant requests to be exempt
 
16           from furnishing a bond under section 468L-C(a)(1) or a
 
17           letter of credit under section 468L-C(a)(2), evidence
 
18           that the applicant has continuously operated not less
 
19           than four charter tours per month during the twelve
 
20           month period immediately preceding the effective date
 
21           of this Act.
 
22      (b)  Each application shall be accompanied by the
 
23 appropriate fees.
 

 
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 1      (c)  A license shall be issued only to charter tour
 
 2 operators meeting the requirements of this chapter, and shall
 
 3 specify the annual number of charter tours which the licensee is
 
 4 permitted to operate.
 
 5      (d)  It shall be each applicant's responsibility to furnish
 
 6 the information or documentation required.  An application for
 
 7 issuance of a license shall be denied if an application is
 
 8 insufficient or incomplete.  In addition, the director may deny
 
 9 issuance of a license if any of the following exist:
 
10      (1)  Any other license or registration, as the case may be,
 
11           of the applicant or any officer, director, partner, or
 
12           other personnel of the applicant has been terminated
 
13           under this chapter;
 
14      (2)  Any other license or registration, as the case may be,
 
15           of the applicant or any officer, director, partner, or
 
16           other personnel of the applicant required to be
 
17           identified in section 468L-B(a)(2) has been revoked or
 
18           suspended under any provision of this chapter; or
 
19      (3)  An applicant fails to submit evidence of establishment
 
20           of a client trust account, or evidence of compliance
 
21           with the financial performance requirements of section
 
22           468L-C(a).
 
23      (e)  An application shall be automatically rejected when the
 

 
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 1 applicant, after receiving notice:
 
 2      (1)  Fails to pay the appropriate fees; or
 
 3      (2)  Fails to submit any information requested by the
 
 4           department within thirty days of notification.
 
 5      (f)  Any application which has been denied or rejected shall
 
 6 remain in the possession of the department and shall not be
 
 7 returned.
 
 8      (g)  An applicant whose application has been denied may file
 
 9 a request for an administrative hearing under chapter 91.
 
10      (h)  Unless provided otherwise, a charter tour operator
 
11 shall notify the department in writing within thirty days of any
 
12 material change in any information set forth in the charter tour
 
13 operator's license application or in any documentation submitted
 
14 by the charter tour operator with its application.
 
15      468L-C  Charter tour operator financial performance
 
16 requirements.  (a)  No charter tour operator shall be licensed
 
17 and permitted to operate in this State unless the charter tour
 
18 operator provides to the department the applicant's most recent
 
19 audited financial statements showing that the assets of the
 
20 charter tour operator exceed its liabilities, and, unless exempt
 
21 under subsection (i), either:
 
22      (1)  Posts a bond which is a performance or financial
 
23           guaranty type bond naming the director as the obligee
 

 
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 1           and which may be canceled only if the charter tour
 
 2           operator gives ninety days' prior written notice to the
 
 3           surety and if the surety gives sixty days' prior
 
 4           written notice to the director of cancellation of the
 
 5           bond; or
 
 6      (2)  Obtains an irrevocable letter of credit which is a
 
 7           guarantee of payment for a term of one year naming the
 
 8           director as beneficiary, with a provision for automatic
 
 9           extension for additional annual periods, and which may
 
10           be canceled only if the charter tour operator gives
 
11           prior written notice by certified mail to the director
 
12           and to the issuer at least ninety days before the
 
13           letter's expiration date or the date on which the
 
14           charter tour operator intends the letter to cease being
 
15           effective or the issuer gives prior written notice by
 
16           certified mail to the director at least sixty days
 
17           before the expiration date.
 
18      (b)  The bond or letter of credit shall be issued by a
 
19 surety or federally insured lending institution authorized to do
 
20 business in the State to indemnify any consumer who may suffer
 
21 loss as a result of nonperformance by a charter tour operator.
 
22      (c)  A charter tour operator shall not provide the required
 
23 coverage through multiple bonds or irrevocable letters of credit
 

 
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 1 but shall provide either a single bond or a single irrevocable
 
 2 letter of credit.  A charter tour operator may substitute the
 
 3 bond with an irrevocable letter of credit and vice versa pursuant
 
 4 to subsection (h), but shall not provide one in addition to the
 
 5 other to reach the required aggregate amount of coverage.
 
 6      (d)  Upon cancellation or expiration of the bond or letter
 
 7 of credit, the surety or insurer shall remain liable for any
 
 8 claims against the bond or letter of credit for a period of six
 
 9 months; provided that:
 
10      (1)  The debts were incurred while the bond or letter of
 
11           credit was in effect; and
 
12      (2)  The director notifies the surety or insurer, as the
 
13           case may be, of any claims within ninety days of
 
14           discovery of any claims.
 
15      (e)  The surety or insurer shall not be required to release
 
16 any moneys or collateral to the charter tour operator during the
 
17 six months after cancellation of the bond or expiration of the
 
18 letter of credit.
 
19      (f)  If applicable, the amount of coverage of the bond or
 
20 irrevocable letter of credit shall be equal to fifty per cent of
 
21 the amount determined by:
 
22      (1)  Dividing by twelve the annual number of charter tours
 
23           specified in the charter tour operator's license; and
 

 
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 1      (2)  Multiplying the result by $200,000;
 
 2 provided that the amount of coverage of the bond or irrevocable
 
 3 letter of credit shall not be less than $500,000 and shall not be
 
 4 more than $2,500,000.
 
 5      (g)  A licensed charter tour operator shall not operate more
 
 6 charter tours than the number specified in its license; provided
 
 7 that the department may amend a charter tour operator's license
 
 8 to amend the number of charter tours permitted upon submission by
 
 9 the charter tour operator of an application for amendment
 
10 together with evidence of the charter tour operator's compliance
 
11 with the financial performance requirements applicable to the
 
12 amended number of charter tours requested and the applicable
 
13 fees, and upon the condition that the charter tour operator shall
 
14 be in substantial compliance with this chapter.
 
15      (h)  A bond shall be accepted as replacement for another
 
16 bond or an irrevocable letter of credit and an irrevocable letter
 
17 of credit shall be accepted as replacement for another
 
18 irrevocable letter of credit or a bond if:
 
19      (1)  The effective date of a replacement bond is prior to or
 
20           on the cancellation date of the bond being replaced or
 
21           the expiration date of the irrevocable letter of credit
 
22           being replaced, as the case may be, and the replacement
 
23           bond is received by the director before the
 

 
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 1           cancellation date or the expiration date, as the case
 
 2           may be; or
 
 3      (2)  The replacement irrevocable letter of credit is
 
 4           received by the director at least fifteen days prior to
 
 5           the expiration date of the irrevocable letter of credit
 
 6           being replaced or is received by the director on or
 
 7           before the cancellation date of the bond being
 
 8           replaced, as the case may be.
 
 9      (i)  Any charter tour operator which has continuously
 
10 operated not less than four charter tours per month during the
 
11 twelve-month period immediately preceding October 1, 1999, shall
 
12 be exempt from the requirement of furnishing a bond under
 
13 subsection (a)(1) or a letter of credit under subsection (a)(2).
 
14      468L-D  Maintenance of charter tour operator accounts.  (a)
 
15 Every charter tour operator shall maintain adequate books and
 
16 records which provide for a proper accounting of total qualified
 
17 client trust assets and qualified client trust liabilities for
 
18 all charter tours for which funds have been accepted.
 
19      (b)  Every charter tour operator shall maintain on its books
 
20 and records a trust liability account for the purpose of
 
21 accounting for qualified client trust liabilities.
 
22      (c)  The trust liability account shall only be adjusted in
 
23 the following manner:
 

 
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 1      (1)  The trust liability account shall be reduced by the
 
 2           amount of actual payments made by the charter tour
 
 3           operator for air transportation, hotel accommodations,
 
 4           baggage handling, or ground transportation charges with
 
 5           respect to the charter tour operator's current
 
 6           obligations to provide travel services or to past
 
 7           travel services provide by the charter tour operator;
 
 8           provided that the trust liability account shall not be
 
 9           reduced for any expenditure which constitutes a
 
10           qualified pre-paid client trust asset;
 
11      (2)  The trust liability account also shall be reduced by
 
12           the amount of payments made by the charter tour
 
13           operator of federal transportation taxes which are
 
14           payable as a result of a charter tour and for
 
15           commissions payable to third party travel agents; and
 
16      (3)  Only after:
 
17           (A)  All of the liabilities described in subsections
 
18                (1) and (2) with respect to a specific charter
 
19                tour have been satisfied through payment;
 
20           (B)  The obligation to provide travel services has been
 
21                fully provided; and
 
22           (C)  The travel has been completed;
 
23      then and only then, may any funds remaining in the client
 

 
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 1      trust account relating to the specific charter tour be
 
 2      withdrawn from the client trust account and deposited into
 
 3      the general accounts of the charter tour operator, and the
 
 4      trust liability account shall be reduced by the amount so
 
 5      withdrawn from the client trust account.
 
 6      468L-E  Maintenance of qualified client trust assets by
 
 7 charter tour operators.  A charter tour operator shall regularly
 
 8 maintain qualified client trust assets in an amount which is
 
 9 equal to or exceeds the qualified client trust liabilities of the
 
10 charter tour operator.  A charter tour operator shall be deemed
 
11 to be in substantial compliance with this section even if, during
 
12 any twelve-month period, qualified client trust liabilities
 
13 exceed qualified client trust assets for any one, but not more
 
14 than one, reporting period applicable under section 468L-F or
 
15 486L-G other than the annual report required under section
 
16 468L-H; provided that qualified client trust assets at all times
 
17 shall be equal to or exceed not less than ninety per cent of
 
18 qualified client trust liabilities.
 
19      468L-F  Monthly client trust account reconciliation
 
20 statement filing requirements for charter tour operators; waiver.
 
21 (a)  On or before the twentieth day of each month, every licensed
 
22 charter tour operator, at its own expense, shall file a client
 
23 trust account reconciliation statement as of the last day of the
 

 
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                                     S.B. NO.           1513
                                                        
                                                        


 1 prior month, on a form prescribed by the director, together with
 
 2 the applicable fees.
 
 3      (b)  As part of the client trust account reconciliation
 
 4 statement, the charter tour operator shall attach copies of the
 
 5 statements of account from the financial institution holding the
 
 6 funds in the client trust account maintained by the charter tour
 
 7 operator in compliance with section 468L-5.
 
 8      (c)  The client trust account reconciliation statement shall
 
 9 affirmatively state that the client trust account of the charter
 
10 tour operator is in compliance with this chapter and shall be
 
11 signed by an authorized agent of the charter tour operator under
 
12 penalty of perjury.
 
13      (d)  Upon written application by a charter tour operator
 
14 which has continuously operated not less than four charter tours
 
15 per month for a period of not less than twelve successive months,
 
16 including any period prior to October 1, 1999, and provided that
 
17 the charter tour operator is in substantial compliance with this
 
18 chapter, the director shall grant an exemption from the monthly
 
19 client trust account reconciliation statement filing requirement
 
20 under this section.
 
21      468L-G  Quarterly or semi-annual compilation report filing
 
22 requirements for charter tour operators.  (a)  Not later than
 
23 forty-five days after the end of each quarter, each licensed
 

 
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                                     S.B. NO.           1513
                                                        
                                                        


 1 charter tour operator, at its own expense, shall file, together
 
 2 with the applicable fees, a quarterly compilation report and a
 
 3 year-to-date compilation report, each of which shall be prepared
 
 4 by an independent certified public accountant and shall cover the
 
 5 immediately preceding quarter.  Each report shall include a
 
 6 statement by an independent certified public accountant that the
 
 7 client trust account of the charter tour operator has been
 
 8 maintained in accordance with the requirements of this chapter,
 
 9 or specifying the grounds on which such a statement cannot be
 
10 made.
 
11      (b)  Upon written application by a charter tour operator
 
12 which has operated not less than four charter tours per month for
 
13 a period of not less than eighteen successive months, including
 
14 any period prior to October 1, 1999, and provided that the
 
15 charter tour operator is in substantial compliance with this
 
16 chapter, the director shall permit the charter tour operator to
 
17 file compilation reports pursuant to this section every six
 
18 months, rather than quarterly.
 
19      468L-H  Annual audit report filing requirements for charter
 
20 tour operators.  (a)  Ninety days after the end of the year, each
 
21 licensed charter tour operator, at its own expense, shall file an
 
22 independent audit report prepared by an independent certified
 
23 public accountant for the immediately preceding year with the
 

 
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                                     S.B. NO.           1513
                                                        
                                                        


 1 director, together with the applicable fees.
 
 2      (b)  The independent audit report shall contain the
 
 3 following:
 
 4      (1)  Audited financial statements prepared in accordance
 
 5           with generally accepted accounting principles;
 
 6      (2)  A report by the independent certified public account on
 
 7           the fair presentation of the financial statements and
 
 8           any qualifications to the report, management
 
 9           representation letter or any other report; and
 
10      (3)  A statement that the client trust account has been
 
11           maintained in accordance with the requirements of this
 
12           chapter, or specifying the grounds upon which such a
 
13           statement cannot be made.
 
14      468L-I  Inadequate charter tour operator reports; failure
 
15 to file required report; notification; remedies.  (a)  If the
 
16 director determines that any statement or report is inadequate,
 
17 the statement or report shall be returned to the charter tour
 
18 operator, with directions to correct the inadequacies within the
 
19 time specified by the director which shall not be longer than
 
20 thirty days; provided that the director for good cause shown may
 
21 grant a reasonable extension of not more than thirty additional
 
22 days for making and filing the statement or report.
 
23      (b)  Any licensed charter tour operator that fails to file
 

 
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                                     S.B. NO.           1513
                                                        
                                                        


 1 any report required to be filed under this chapter, including any
 
 2 report that is returned to the charter tour operator pursuant to
 
 3 subsection (a), shall be deemed not to be in substantial
 
 4 compliance with the requirements of this chapter.
 
 5      (c)  The director shall send by mail to any licensed charter
 
 6 tour operator that fails to file any report required to be filed
 
 7 under this chapter a written notice notifying the charter tour
 
 8 operator of the failure.  The notice shall be sent to the address
 
 9 specified by the charter tour operator in its license
 
10 application, as the same may be amended.  If the written notice
 
11 is undeliverable at the address specified by the charter tour
 
12 operator, the charter tour operator shall be deemed to have
 
13 failed to take corrective action as of the date that the written
 
14 notice was mailed.
 
15      (d)  The director may take one or more of the following
 
16 actions against any charter tour operator who fails to take
 
17 corrective action within five business days after receipt of a
 
18 written notice from the director pursuant to subsection (c):
 
19      (1)  The director may impose a fine of up to $1,000 for each
 
20           day in excess of five days that the charter tour
 
21           operator fails to take corrective action after receipt
 
22           of the written notice; provided that the total amount
 
23           of the fine shall not exceed $25,000;
 

 
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 1      (2)  The director may order to be conducted at the expense
 
 2           of the charter tour operator an independent audit of
 
 3           the books and records of the charter tour operator;
 
 4      (3)  If the director determines that there may be a risk
 
 5           that the charter tour operator is in violation of this
 
 6           chapter, the director may temporarily suspend the
 
 7           license of a charter tour operator for up to ninety
 
 8           days pending a final determination as to revocation of
 
 9           the charter tour operator's license.  Without
 
10           limitation to the foregoing, the failure of a charter
 
11           tour operator to make available its books and records
 
12           for any audit ordered by the director pursuant to
 
13           paragraph (2) shall constitute sufficient cause for the
 
14           suspension of the charter tour operator's license
 
15           pursuant to this subsection; and
 
16      (4)  Upon application by the director and a showing that
 
17           there is a likelihood that the charter tour operator
 
18           has violated this chapter and that there is a risk of
 
19           imminent harm to the consumers of the charter tour
 
20           operator, any court of competent jurisdiction may order
 
21           the provisional appointment of a receiver to take
 
22           charge of the business and assets of a charter tour
 
23           operator pending determination of whether the charter
 

 
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 1           tour operator has violated this chapter, together with
 
 2           any other relief as the court may deem to be
 
 3           appropriate.
 
 4      (e)  A charter tour operator whose license has been
 
 5 suspended pursuant to subsection (d)(2) may file a written
 
 6 application for reinstatement of its charter tour operator
 
 7 license with the director, together with the applicable fees, not
 
 8 later than ninety days after the date of the suspension.  The
 
 9 application for reinstatement shall state the reasons for the
 
10 applicant's failure to comply with this chapter, together with
 
11 the measures which the applicant has taken to assure compliance
 
12 with this chapter in the event that the applicant's license is
 
13 reinstated.  Upon review of the application for reinstatement,
 
14 the director may reinstate the license of the applicant if the
 
15 director determines that the failure of the applicant to comply
 
16 with this chapter was not intentional or knowing, and that the
 
17 applicant has taken adequate measures to assure compliance with
 
18 this chapter in the event that the license is reinstated.
 
19      468L-J  Examination and audit of charter tour operators.
 
20 (a)  In the event that the director determines upon the basis of
 
21 any of the financial reports or statements submitted to the
 
22 director that there is a risk that a charter tour operator may
 
23 not be in compliance with the provisions of this chapter
 

 
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                                     S.B. NO.           1513
                                                        
                                                        


 1 applicable to the maintenance of client trust accounts or to
 
 2 financial performance requirements, the director may conduct or
 
 3 contract for an audit of the charter tour operator to be
 
 4 conducted at the expense of the charter tour operator.
 
 5      (b)  In addition to an audit or examination conducted
 
 6 pursuant to subsection (a), the director, or an independent
 
 7 contractor retained for that purpose, periodically may examine
 
 8 and audit the books and accounts of each licensed charter tour
 
 9 operator for the purpose of determining whether any provisions of
 
10 this chapter applicable to client trust accounts or to financial
 
11 performance requirements have been or are being violated.  The
 
12 cost of the audit or examination shall be borne by the charter
 
13 tour operator; provided that no charter tour operator shall be
 
14 required to pay for the cost of more than one audit or
 
15 examination pursuant to this subsection within a twenty-four-
 
16 month period, unless the director, on the basis of evidence of
 
17 possible noncompliance with this chapter, reasonably determines
 
18 that additional audits or examinations are required to determine
 
19 whether the charter tour operator is in compliance with this
 
20 chapter, in which case the charter tour operator may be required
 
21 by the director to pay for the costs of the additional audits or
 
22 examination so required.
 
23      (c)  The director, upon notice and hearing pursuant to
 

 
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                                     S.B. NO.           1513
                                                        
                                                        


 1 chapter 91, may temporarily suspend or may revoke the license of
 
 2 any charter tour operator who fails to cooperate with the
 
 3 department in any examination or audit of the charter tour
 
 4 operator conducted or contracted for by the director.
 
 5      468L-K  Charter tour operator license fees.  (a)  The fees
 
 6 for applications, licenses, amendments, renewal, and reports
 
 7 shall be as follows:
 
 8      (1)  Application fee:  $1,000;
 
 9      (2)  Application fee for amendment of number of charter
 
10           tours permitted:  $500;
 
11      (3)  Annual license fee:  $500;
 
12      (4)  License amendment fee for amendment of number of
 
13           charter tours permitted:  $500;
 
14      (5)  License reinstatement fee:  $2,500; and
 
15      (6)  Report review fees:
 
16           (A)  Monthly client trust reconciliation statement
 
17                report review fee:  $250;
 
18           (B)  Quarterly or semi-annual compilation report review
 
19                fee:  $250; and
 
20           (C)  Annual report review fee:  $250.
 
21      (b)  The application fees shall be non-refundable.
 
22      (c)  Fees, if paid in the form of money order or check,
 
23 shall be made payable to the department.  The dishonoring of any
 

 
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 1 check upon first presentment shall be considered a failure to
 
 2 meet the requirements of this chapter.
 
 3      468L-L  Violation of charter tour operator provisions.
 
 4 Without limitation to any other remedies or penalties which may
 
 5 be applicable, any person who knowingly accepts moneys for travel
 
 6 services without a charter tour operator's license or a charter
 
 7 tour operator that knowingly is not in compliance with this
 
 8 chapter and continues to accept moneys for travel services, shall
 
 9 be guilty of a misdemeanor."
 
10      SECTION 4.  Section 468L-1, Hawaii Revised Statutes, is
 
11 amended by amending the definition of "travel agency" to read as
 
12 follows:
 
13      ""Travel agency" means any [sole proprietorship,
 
14 organization, trust, group, association, partnership,
 
15 corporation, society, or combination of such, which] person who,
 
16 for compensation or other consideration, acts or attempts to act
 
17 as an intermediary between a person seeking to purchase travel
 
18 services and any person seeking to sell travel services."
 
19      SECTION 5.  In codifying the new sections added to chapter
 
20 468L, Hawaii Revised Statutes, by section 3 of this Act, the
 
21 revisor of statutes shall substitute appropriate section numbers
 
22 for the letters used in the new sections designated in this Act.
 
23      SECTION 6.  Statutory material to be repealed is bracketed.
 

 
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                                     S.B. NO.           1513
                                                        
                                                        


 1 New statutory material is underscored.
 
 2      SECTION 7.  This Act shall take effect on October 1, 1999.
 
 3 
 
 4                              INTRODUCED BY:______________________