(a) The department shall not approve the initial registration or the renewal of registration of a travel agency that wishes to engage in the business of a charter tour operator and to operate not more than six charter tours during any twelve-month period of the registration period, or during the remainder of the registration period if less than twelve months, for which application is made unless the applicant provides proof that the applicant has obtained a bond, letter of credit, or other security in compliance with title 14, Code of Federal Regulations, section 380.34, as the same may be amended, or any successor or replacement federal statute or regulation thereto.
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Terms Used In Hawaii Revised Statutes 468L-22

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Charter tour: means any travel services in which a travel agency contracts with an air carrier and offers for sale a charter, with or without related ground transportation or hotel accommodations. See Hawaii Revised Statutes 468L-1
  • Charter tour operator: means any person who sells or offers for sale charter tours, whether offered on a wholesale or retail basis, excluding any direct air carrier as defined by title 14, Code of Federal Regulations, section 380. See Hawaii Revised Statutes 468L-1
  • Consumer: means any purchaser of travel services other than a retailer or wholesaler of travel services. See Hawaii Revised Statutes 468L-1
  • Department: means the department of commerce and consumer affairs. See Hawaii Revised Statutes 468L-1
  • Director: means the director of commerce and consumer affairs. See Hawaii Revised Statutes 468L-1
  • Discovery: Lawyers' examination, before trial, of facts and documents in possession of the opponents to help the lawyers prepare for trial.
  • Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
  • Statute: A law passed by a legislature.
  • Travel agency: means any person who for compensation or other consideration, acts or attempts to act as an intermediary between a person seeking to purchase travel services and any person seeking to sell travel services. See Hawaii Revised Statutes 468L-1
(b) The department shall not approve the initial registration or the renewal of registration of a travel agency that wishes to engage in the business of a charter tour operator and to operate seven or more charter tours during any twelve months or shorter period of the registration period for which application is made unless the applicant either:

(1) Posts a performance or financial guaranty-type bond naming the director as the obligee that may be canceled only if the charter tour operator gives ninety days’ prior written notice to the surety and the surety gives sixty days’ prior written notice to the director of cancellation of the bond; or
(2) Obtains an irrevocable letter of credit that is a guarantee of payment for a term of one year naming the director as beneficiary, with a provision for automatic extension for additional annual periods, and that may be canceled only if the charter tour operator gives prior written notice by certified mail to the director and to the issuer at least ninety days before the letter’s expiration date or the date on which the charter tour operator intends the letter to cease being effective, or the issuer gives prior written notice by certified mail to the director at least sixty days before the expiration date.
(c) The bond or letter of credit shall be issued by a surety or federally-insured lending institution authorized to do business in the State to indemnify any consumer who may suffer loss as a result of nonperformance by a charter tour operator.
(d) A charter tour operator shall not provide the required coverage through multiple bonds or irrevocable letters of credit but shall provide either a single bond or a single irrevocable letter of credit. A charter tour operator may substitute the bond with an irrevocable letter of credit and vice versa pursuant to subsection (h), but shall not provide one in addition to the other to reach the required aggregate amount of coverage.
(e) Upon cancellation or expiration of the bond or letter of credit, the surety or insurer shall remain liable for any claims against the bond or letter of credit for a period of six months; provided that:

(1) The debts were incurred while the bond or letter of credit was in effect; and
(2) The director notifies the surety or insurer, as the case may be, of any claims within ninety days of discovery of any claims.
(f) The surety or insurer shall not be required to release any moneys or collateral to the charter tour operator during the six months after cancellation of the bond or expiration of the letter of credit.
(g) The amount of coverage of the bond or irrevocable letter of credit shall be:

(1) Equal to $300,000, less the amount of any security provided by the applicant under title 14, Code of Federal Regulations, section 380.34, as the same may be amended, or any successor or replacement federal statute or regulation thereto, for a travel agency planning to engage in the business of a charter tour operator and to operate seven to fifteen charter tours during any twelve months or shorter period of the registration period for which application is made; or
(2) Equal to $1,000,000, less the amount of any security provided by the applicant under title 14, Code of Federal Regulations, section 380.34, as the same may be amended, or any successor or replacement federal statute or regulation thereto, for a travel agency planning to engage in the business of a charter tour operator and to operate more than fifteen charter tours during any twelve months or shorter period of the registration period for which application is made.
(h) A bond shall be accepted as replacement for another bond or an irrevocable letter of credit and an irrevocable letter of credit shall be accepted as replacement for another irrevocable letter of credit or a bond if:

(1) The effective date of a replacement bond is prior to or on the cancellation date of the bond being replaced or the expiration date of the irrevocable letter of credit being replaced, as the case may be, and the replacement bond is received by the director before the cancellation date or the expiration date, as the case may be; or
(2) The replacement irrevocable letter of credit is received by the director at least fifteen days prior to the expiration date of the irrevocable letter of credit being replaced or is received by the director on or before the cancellation date of the bond being replaced, as the case may be.
(i) A charter tour operator shall not operate more than six charter tours during any twelve-month period unless the charter tour operator has provided and maintains in effect a bond or letter of credit in accordance with subsection (b), in the amount specified in subsection (g)(1), if the charter tour operator operates between seven and fifteen charter tours, or in the amount specified in subsection (g)(2), if the charter tour operator operates more than fifteen charter tours.

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