Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1361
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 1361 entitled: 


begs leave to report as follows:

     The purpose of this bill is to provide consumers who make
advance purchases from charter tour operators with protection
against the risk of loss resulting from the failure of these
businesses, by imposing statutory regulations on travel agencies
operating charter tours requiring:

     (1)  Licensure;

     (2)  Evidence of financial ability to perform contractual
          obligations; and

     (3)  Periodic financial reporting.

     Your Committee received testimony supporting this bill from
Boyd Gaming Corporation (BGC).  BGC stated that although current
law requires a travel agent to maintain a client trust account
into which advance payments must be deposited and disbursed for
payment of travel services and commissions, the law fails to
provide any means of detecting non-compliance.

     The Department of Consumer Protection and Commerce (DCPC)
testified in support of the intent of the bill with suggested
amendments.  DCPC stated that its proposed amendments, developed

                                 STAND. COM. REP. NO. 721
                                 Page 2

in cooperation with BGC, would replace burdensome application and
monitoring requirements and unequal treatment of existing and new
charter tour operators with a more balanced and fair body of

     Your Committee has adopted DCCA's suggested amendments that

     (1)  Require travel agencies who operate charter tours to:

          (A)  Maintain a charter tour client trust account
               solely for the purpose of the agency's charter
               tour business;

          (B)  Earmark charter tour funds as either qualified
               charter tour client trust assets, charter tour
               client trust liabilities, or pre-paid charter tour
               client trust assets;

          (C)  Comply with financial performance requirements in
               the form of a bond or irrevocable letter of
               credit; and

          (D)  Submit a quarterly report to DCCA, prepared by an
               independent certified public accountant and
               specifying whether or not the charter tour client
               trust account has been maintained in accordance
               with the law;


     (2)  Authorize DCCA to:

          (A)  Issue a citation directing noncomplying travel
               agencies to cease operations and pay a fine; and

          (B)  Audit a travel agency's records at the expense of
               the travel agency.

     Your Committee also notes that there was a question raised
regarding the necessity for a sunrise audit.  Your Committee
requests the Committee on Finance to examine this issue, which
DCCA states is resolved because the bill is a regulation of
travel agencies, not charter tours.

                                 STAND. COM. REP. NO. 721
                                 Page 3

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 1361, as amended herein, and recommends that
it be referred to the Committee on Finance in the form attached
hereto as H.B. No. 1361, H.D. 1.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,

                                   RON MENOR, Chair