Nevada panel won’t ease rules for travel agents

Friday, Sept. 7, 2001 | 11:06 a.m.

CARSON CITY -- An attempt to soften the financial burden on small travel agencies and independent agents from a new law governing the industry was rejected Thursday by the Legislative Commission.

State Consumer Affairs Commissioner Patricia Jarman-Manning proposed a regulation that would have allowed travel agencies and operators to post bonds ranging from $10,000 to $50,000 based on the amount of their business. That would help smaller companies that couldn't post a $50,000 bond, as a new law now requires.

The new law goes into effect Oct. 1 requiring travel agencies, independent operators, those who operate such businesses out of their homes or anyone who takes money in advance for travel arrangements to register with the Consumer Affairs Division and post the $50,000 bond. The bond money would reimburse consumers should the bond holder go out of business.

Jarman-Manning told the Legislative Commission that so far this year she has received 940 consumer complaints by people who have lost more than $260,000. The individuals paid in advance for vacation travel but when they were ready to leave, they found their travel agencies closed or that their independent agent had skipped town.

In other cases, she said such businesses file for bankruptcy so would-be travelers are left out in the cold. In one instance, the business filed bankruptcy three times.

Many small operators told Jarman-Manning the new bonding rule may put them out of business.

So she drafted a regulation easing the bonding requirement. But the Legislative Commission refused to approve her regulation.

Sen. Mark James, R-Las Vegas, told Jarman-Manning there was nothing in the law to set the bond on a sliding scale and there was nothing the legislative commission could do. That problem will have to be addressed at the 2003 Legislature, he said.

"We have to wait for next time," James said.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, expressed support for some relief. She said the law "might harm a small business that is doing a good job." She said there was not enough work done by the Legislature in getting the views of the travel agency businesses in drafting the law.

Without the regulations, Jarman-Manning has no choice but to require the $50,000 bond. She said a Tennessee firm was willing to write the bonds for credit worthy applicants for a fee ranging from 1 to 3 percent of the $50,000.

The problem, she said, is with "store front" operations that collect advance money from the public and then disappear. She said there are few complaints, if any, about small-tour bookers who work out of their home.

After the meeting of the legislative commission, Jarman-Manning said she would return to Las Vegas to meet with her attorney to see if there was any way the regulation might be written to provide relief. She added however, she doubted there was a chance to come up with a new regulation that might meet legal muster.

"I'm very disheartened," she said. But Jarman-Manning added that she would vigorously enforce the new law.