First Regular Session Sixty-sixth General Assembly STATE OF COLORADO INTRODUCED HOUSE SPONSORSHIP

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1 First Regular Session Sixty-sixth General Assembly STATE OF COLORADO INTRODUCED LLS NO Dan Cartin SENATE BILL 0- SENATE SPONSORSHIP Hagedorn, Gagliardi, HOUSE SPONSORSHIP Senate Committees State, Veterans & Military Affairs House Committees 1 A BILL FOR AN ACT CONCERNING A PROHIBITION ON THE REVOCATION OF FREQUENT FLYER MILEAGE AWARDED IN CONNECTION WITH CERTAIN CONSUMER TRANSACTIONS. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Specifies that, on and after the effective date of the act, no frequent flyer mileage awarded or accumulated in connection with the issuance of a credit card to or the utilization of an online travel agency by a consumer shall be subject to expiration or revocation by the commercial airline awarding that mileage. Exempts any frequent flyer mileage awarded by a commercial airline on or before the effective date of the act or that is Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment. Capital letters indicate new material to be added to existing statute. Dashes through the words indicate deletions from existing statute.

PROHIBITION ON THE REVOCATION OF FREQUENT FLYER MILEAGE AWARDED IN CONNECTION WITH CERTAIN CONSUMER TRANSACTIONS.

2 not awarded in connection with the issuance of a credit card or utilization of an online travel agency. Makes a violation of the prohibition on expiration or revocation of frequent flyer mileage a deceptive trade practice. Makes legislative findings and declarations. Defines terms Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. (1) The general assembly hereby finds and declares that: (a) Commercial airlines offer frequent flyer mileage programs to promote the sale of airline tickets and to induce consumers to purchase the tickets. (b) Credit card banks and financial institutions and online travel agencies increasingly act in concert with commercial airlines to offer frequent flyer mileage as an incentive and inducement to consumers to enter into credit card agreements with those banks and institutions and to purchase airline tickets and other travel services through those online travel agencies. (c) Consumers enter into credit card agreements with credit card banks and financial institutions and purchase airline tickets and other travel services from online travel agencies in reliance on the offer and award of frequent flyer mileage and with the expectation that the accumulation and retention of that mileage may be utilized by the consumer for future air travel on a particular airline. (d) Frequent flyer mileage offered and awarded to consumers pursuant to such credit card agreements and online travel services is often subject to forfeiture or revocation if not utilized by the consumer within the time prescribed by commercial airlines, notwithstanding that those offers and the award of the mileage serve as the basis for the consumer's -- SB0-

1 1 1 1 1 1 1 1 0 1 Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration.

3 acceptance of the credit card or utilization of a particular online travel agency and the resulting financial benefit that flows to credit card banks and financial institutions, online travel agencies, and commercial airlines from such agreements and travel services. (e) Because the offer of frequent flyer mileage serves as the basis for such consumer transactions, the unilateral forfeiture or revocation of that mileage takes advantage of and results in a detriment to consumers, thereby constituting a misleading and unfair trade practice. (f) The federal "Airline Deregulation Act of 1", U.S.C. sec. (b), referred to in this section as the "act", prohibits states from enacting or enforcing any law related to "a price, route, or service of an air carrier that may provide air transportation". (g) The act does not prohibit states from enacting or enforcing any law that is peripheral or tangential to the prices, routes, and services of commercial airlines or preempt any such state law. (h) A prohibition on the forfeiture or revocation of frequent flyer mileage that is offered by credit card banks and financial institutions in connection with the offer and issuance of credit cards and by online travel agencies in connection with the purchase of airline tickets and other travel services is peripheral or tangential to the prices, routes, and services of commercial airlines, is not prohibited or preempted by the act, and is appropriate for the protection of Colorado's consumers. SECTION. Part of article 1 of title, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: Frequent flyer miles - credit card and online travel offers - revocation - prohibition - definitions. (1) AS USED IN THIS -- SB0-

(e) Because the offer of frequent flyer mileage serves as the basis for such consumer transactions, the unilateral forfeiture or revocation of that mileage takes advantage of and results in a

4 SECTION, UNLESS THE CONTEXT OTHERWISE REQUIRES: (a) "CREDIT CARD" SHALL HAVE THE SAME MEANING AS PROVIDED IN SECTION (1.), C.R.S. (b) "FREQUENT FLYER MILEAGE" MEANS THE POINTS OR CREDITS AWARDED BY OR ACCRUED THROUGH A PROGRAM OF A COMMERCIAL AIRLINE THAT BASES THE AWARD OR ACCRUAL ON THE DISTANCE FLOWN WITH THE AIRLINE AND THAT ALLOWS THE POINTS OR CREDITS TO BE REDEEMED FOR FREE AIR TRAVEL OR OTHER GOODS OR SERVICES PROVIDED BY THE AIRLINE. (c) "ONLINE TRAVEL AGENCY" MEANS A BUSINESS ENTITY THAT OFFERS CONSUMERS THE ABILITY TO BOOK OR PURCHASE AIRLINE TICKETS, LODGING ACCOMMODATIONS, RENTAL CARS, CRUISES, AND VACATION PACKAGES UTILIZING AN INTERNET WEBSITE MAINTAINED BY THE ENTITY. () (a) ON AND AFTER JULY 1, 00, NO FREQUENT FLYER MILEAGE THAT IS AWARDED TO OR ACCUMULATED BY A CONSUMER IN CONNECTION WITH THE ISSUANCE OF A CREDIT CARD TO OR THE UTILIZATION OF AN ONLINE TRAVEL AGENCY BY THAT CONSUMER SHALL BE SUBJECT TO EXPIRATION OR REVOCATION BY THE COMMERCIAL AIRLINE AWARDING THE FREQUENT FLYER MILEAGE. (b) PARAGRAPH (a) OF THIS SUBSECTION () SHALL NOT APPLY TO ANY FREQUENT FLYER MILEAGE AWARDED BY A COMMERCIAL AIRLINE ON OR BEFORE JULY 1, 00, OR THAT IS NOT AWARDED IN CONNECTION WITH THE ISSUANCE OF A CREDIT CARD TO A CONSUMER OR THE UTILIZATION OF AN ONLINE TRAVEL AGENCY BY A CONSUMER. () NOTHING IN THIS SECTION SHALL BE DEEMED TO REGULATE THE PRICE, ROUTES, OR SERVICE OF A COMMERCIAL AIRLINE OR AIR CARRIER THAT PROVIDES AIR TRANSPORTATION THAT IS OTHERWISE SUBJECT TO -- SB0-

5 THE FEDERAL "AIRLINE DEREGULATION ACT OF 1", U.S.C. SEC.. () A VIOLATION OF THE PROVISIONS OF THIS SECTION SHALL BE DEEMED A DECEPTIVE TRADE PRACTICE AS PROVIDED IN SECTION -1- (1) (yy). SECTION. -1- (1), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH to read: -1-. Deceptive trade practices. (1) A person engages in a deceptive trade practice when, in the course of such person's business, vocation, or occupation, such person: (yy) VIOLATES THE PROVISIONS OF SECTION SECTION. Effective date. This act shall take effect July 1, 00. SECTION. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety. -- SB0-

First Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED SENATE SPONSORSHIP

First Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 1-0.01 Ed DeCecco x1 HOUSE BILL 1- HOUSE SPONSORSHIP Kagan, (None), SENATE SPONSORSHIP House Committees Finance Appropriations