[Federal Register Volume 59, Number 197 (Thursday, October 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25318]


[[Page Unknown]]

[Federal Register: October 13, 1994]


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DEPARTMENT OF TRANSPORTATION
Office of the Secretary

14 CFR, Parts 380, 381, 399

[Docket No. 49385; Notice 94-16]
RIN 2105-AC03

 

Special Event Tours

AGENCY: Office of the Secretary, DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department seeks comment on a proposal to expand its rules 
on Super Bowl tours to cover air tours to other types of special 
events. These Super Bowl rules require that operators of Super Bowl 
tours that are promoted as including game tickets must have those game 
tickets in hand or under contract before they advertise or sell the 
tours, and that they must refund the entire tour price to any customer 
who does not receive a promised game ticket. This proposed rule would 
also extend the charter rule's prohibition on last-minute price 
increases to non-charter tours to special events. This initiative 
arises as a result of problems on certain tours to the 1994 Rose Bowl 
on which participants did not receive game tickets that were promoted 
as being included in the package, or were required to make additional 
payments in order to receive tickets.

DATES: Comments should be received by November 14, 1994. Late-filed 
comments will be considered to the extent practicable.

ADDRESSES: Comments should be sent to Docket Clerk/C-55, Docket No. 
49385, Room 4107, Department of Transportation, 400 Seventh Street SW., 
Washington, DC 20590. For the convenience of persons who will be 
reviewing the docket, it is requested that commenters provide an 
original and three copies of their comments. Comments will be available 
for inspection at this address Monday through Friday from 9 a.m. 
through 5 p.m. Commenters who wish the receipt of their comments to be 
acknowledged should include a stamped, self-addressed postcard with 
their comments. The docket clerk will date-stamp the postcard and mail 
it to the commenter.

FOR FURTHER INFORMATION CONTACT: Tim Kelly, Consumer Affairs Division/
I-25, Office of the Secretary, Room 10405, Department of 
Transportation, 400 Seventh Street SW., Washington, DC 20590. Telephone 
(202) 366-5952.

SUPPLEMENTARY INFORMATION: In conjunction with the Rose Bowl football 
game that was played in Pasadena, California on January 1, 1994, a 
large number of fans of the University of Wisconsin (one of the two 
teams participating in the game) purchased package tours to California. 
Many of those tours were promoted as including a ticket to the Rose 
Bowl game. However, a significant number of these individuals either 
did not receive the game tickets that they had been promised and did 
not gain admission to the game, or were required to make an additional 
payment after they arrived in Pasadena in order to obtain their 
tickets. The Department is seeking comment on a proposal to extend its 
rules on Super Bowl tours to include air tours to other types of 
special events where admission to the event is advertised as being 
included in the package.
    The Department's rules on Super Bowl charters are contained in 
title 14, part 380 of the Code of Federal Regulations (14 CFR part 
380):
     Section 380.2 defines a Super Bowl charter as a charter 
flight that is represented by its charter operator as including tickets 
to the National Football League's Super Bowl game as part of its ground 
package.
     Section 380.18a states that a Super Bowl charter may not 
be advertised unless the operator has submitted verification to the 
Department\1\ that the operator (1) is in physical possession of enough 
Super Bowl game tickets to provide them for a substantial number of 
seats on the charter, or (2) has a contract with the NFL or with an NFL 
team for such a number of game tickets, or (3) has a contract with 
another person who has a contract with the NFL or an NFL team for such 
a number of game tickets.
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    \1\References to ``the Board'' in Part 380 refers to the Civil 
Aeronautics Board, the Department's predecessor in aviation economic 
and consumer matters. The Department of Transportation now 
administers this rule as authorized by the Civil Aeronautics Board 
Sunset Act of 1984 (P.L. 98-443; 98 Stat. 1703).
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     Section 380.18a also states that a Super Bowl charter may 
not be sold unless the operator has submitted verification to the 
Department that the operator has possession of, or contracts for, 
enough game tickets to provide one to every person who is to receive 
one under the terms of the operator/participant contract for the 
charter.
     Section 380.31(c) states that if an operator receives a 
booking for which he or she does not have possession of or a contract 
for a game ticket, the operator must return that participant's money 
within 3 days, unless the participant has authorized the operator in 
writing to retain the payment while the operator seeks additional 
tickets.
     Sections 380.32(s), 380.33(a)(5) and 380.33(e) state that 
if Super Bowl game tickets are not supplied when promised, the affected 
participant must be sent a refund of the price of the entire charter 
package within 14 days after the return flight.
    These rules came about following problems with game tickets for 
Super Bowl tours in the late 1970's (see 45 FR 1856, January 9, 1980). 
The rules were limited to the Super Bowl because that was the only 
event where such problems had surfaced.
    In addition to the Super Bowl rules in Part 380, the Department has 
a policy statement at 14 CFR 399.87 which states that it shall be an 
unfair or deceptive practice within the meaning of section 411 of the 
Federal Aviation Act (now 49 U.S.C. 41712) to advertise or sell an air 
tour that is promoted as including a ticket to the Super Bowl game 
unless the operator has tickets or contracts for tickets in the manner 
described in 14 CFR 380.18a (see above). The principal purpose of this 
policy statement is to reach tours operated on scheduled air service, 
which are not covered by the part 380 charter rules. The part 399 
policy statement mirrors Sec. 380.18a, but does not include the other 
part 380 provisions described above. Most importantly, it does not 
include the requirement that the entire tour price be refunded if a 
game ticket is not provided.
    On January 27, 1994, the Department issued an Advance Notice of 
Proposed Rulemaking in this proceeding (published February 1, 1994; 59 
FR 4614). In this notice, we stated that we were tentatively proposing 
to issue a new rule that would contain the procedures of the Super Bowl 
provisions of both part 380and part 399, and to extend this rule to 
other types of events. Like current Sec. 399.87, the new rule would 
apply to tours on all forms of air transportation, not just charters. 
Like the existing Super Bowl charter rules in part 380, the new 
regulation would require the tour operator to refund the entire tour 
price to any participant who does not receive a promised event ticket, 
even if the tour were not on a charter. The proposed rule would also 
pick up the procedures of Sec. 380.31(c) of the charter rule, which 
requires an operator to refund any money received for a booking within 
3 days if the operator has no contract for an event ticket for that 
person, unless the person has authorized the operator in writing to 
retain the payment while the operator seeks a ticket.
    In addition to setting out the Department's tentative rulemaking 
proposal, the January ANPRM asked commenters to address a number of 
questions about the types of issues that such a rule should apply to. 
The discussion of the comments that appears below is organized 
according to those questions.

Comments

    The Department received comments from 11 organizations and 7 
individuals. The great majority of the comments favored adoption of a 
rule in this area.
    Q. Should the rule apply only to major sports events which would be 
listed in the rule (for example, the Super Bowl, college bowl games, 
the NCAA Final Four, the World Cup finals, the Olympics)? To any sports 
event? To religious events (for instance, the Passion Play in 
Oberammergau)? To any event?
    Several of the comments discussed only sports events as the context 
for the rule. The National Collegiate Athletic Association (NCAA) 
recommended applying the rule to the Division I Final Four men's and 
women's basketball championships, the College World Series, and post-
season college football bowl games. The Football Bowl Association 
(FBA), an organization representing all 19 post-season college football 
bowl games, also felt that all post-season football bowl games should 
be covered, and stated that it offered no comment on whether other 
events should or should not be covered. The National Hockey League 
(NHL) commented that the rule should apply to all major professional 
and amateur sports events. Ms. Sara Shea said that the Super Bowl rule 
should be expanded to include other special sporting events.
    The Wisconsin Attorney General stated that the rule should not be 
limited to specifically named events, but perhaps could be limited to 
``competitive events'' where participants and locations are determined 
close to the date of the event. He said that for non-competitive events 
such as the Passion Play in Oberammergau, the dates, locations and 
participants are known well in advance and existing consumer 
protections should be adequate.
    Other commenters stated that the rule should not be limited to 
sports events. The American Society of Travel Agents (ASTA) said that 
it should apply to all events where a separately-purchased ticket is 
necessary for admission to the event. The RG Travel Companies, which 
were involved in sending 1,700 Wisconsin fans to the 1994 Rose Bowl, 
stated that the rule should cover any special event ``where a good 
possibility exists that the demand for tickets will exceed the supply * 
* *'' In a similar vein, the Pasadena Tournament of Roses commented 
that the rule should apply to any event with limited admission. The 
National Tour Association (NTA, representing motor coach tour 
operators) and Congressman Robert Andrews of New Jersey expressed the 
opinion that the rule should not be limited to sports events. Ms. 
Arlene Caldwell said that the rule should cover any tour that claims to 
include a ticket to the event, and Mr. Donald Hamilton stated that it 
should apply to any event for which tour packages are sold.
    Q. Should the rule apply to both charter and scheduled 
transportation?
    All of the commenters that expressed an opinion on this point felt 
that the rule should apply to both scheduled and charter air 
transportation. Those commenters were the RG Travel Companies, NACA, 
the NHL, ASTA, the NCAA, FBA, the Pasadena Tournament of Roses, and the 
Wisconsin Attorney General.
    Q. Should the rule contain only the advertising and sale 
restrictions of Secs. 380.18a and 399.87 (of the current Super Bowl 
rule), or should it also contain the ``money back guarantee'' of 
Secs. 380.32 and 380.33 and/or the ``booking rejection'' and 
``contingent booking'' procedures of Sec. 380.31(c)?
    Sections 380.18a and 399.87 prohibit advertising or sale of a 
``Super Bowl tour'' (defined as one which is held out as including a 
ticket to the Super Bowl game) until the operator has physical 
possession of game tickets or has a contract with the National Football 
League, with an NFL team, or with another person who has a contract 
with the league or a team. Sections 380.32 and 380.33 state that any 
participant on a Super Bowl tour who does not receive promised game 
tickets must be given a refund of the entire tour price, even if a 
portion of the services are used. Section 380.31(c) provides that if an 
operator receives a booking for which he or she does not have 
possession of or a contract for a game ticket, the operator must return 
that participant's money within 3 days, unless the participant has 
authorized the operator in writing to retain the payment while the 
operator seeks additional tickets.
    Except for NTA, all commenters that expressed a position on this 
question felt that some form of regulation along these lines was 
appropriate. NTA stated that the majority of its members that responded 
to a poll on this matter felt that regulation of special-event tours 
should not be a responsibility of the government, but the association 
said that in the event a rule is adopted it favors the ``booking 
rejection'' and''contingent booking'' procedures of Sec. 380.31(c).
    ASTA and the Wisconsin Attorney General also expressed support for 
the ``booking rejection'' and ``contingent booking'' procedures. They 
favored the ``money back guarantee'' as well, as did the RG Travel 
Companies, the National Air Carrier Association (NACA, an organization 
of charter airlines), the NHL, NCAA, FBA, and Pasadena Tournament of 
Roses. The Tournament of Roses stated that this guarantee should apply 
``at any time prior to departure'' if it is clear tickets will not be 
forthcoming. FBA commented ``the greater the remedy available, the less 
likely that tour packagers will create the problem by promoting 
packages that may not be legitimate.''
    NACA said that there should be an exception to the ``money back 
guarantee'' for situations of force majeure and acts of God, such as 
the earthquake in San Francisco that forced postponement of the World 
Series. Similarly, the NHL stated that if the event is canceled or 
substantially altered after the tour begins, consumers should be 
entitled only to a refund of the face value of the event ticket, but 
that if such cancellation or alteration takes place before departure, 
the operator should be required to inform the consumers, who would have 
the right to cancel (presumably with a full refund).
    Congressman Andrews was also in favor of the ``money back 
guarantee,'' as well as a requirement for tour operators to disclose 
whether event tickets are guaranteed or tentative. However, he stated 
that any rule that would totally prohibit marketing of a special-event 
tour until the tour operator has event tickets in hand would not be 
practical. Tickets for many such events are not available until less 
than two weeks before the event, he pointed out, but other arrangements 
(e.g., air and hotel) must be made before that. NTA, the NCAA and the 
Wisconsin Attorney General stated that the current restrictions against 
marketing Super Bowl tours until the operator has game tickets in hand 
or under contract should be included in the new rule.
    Q. If the scope of the type of event covered by the rule is broad, 
and the rule contains the ``money back guarantee,'' should procedures 
be included that would protect the operator from having to refund the 
entire tour price if a participant doesn't receive promised admission 
to something like a welcoming cocktail party?
    No commenters spoke in favor of a requirement to apply the ``money 
back guarantee'' to events such as a welcoming cocktail party. Of those 
who commented on the issue, NTA, the NHL, ASTA, the Pasadena Tournament 
of Roses said that operators should not be required to refund the 
entire tour price over failure to provide something like a promised 
welcoming cocktail party. NACA and the Wisconsin Attorney General 
stated that the rule should require the value of undelivered ancillary 
events to be refunded, but should not require a refund of the entire 
tour price. FBA and the Wisconsin Attorney General both pointed out 
that certain events on a special event tour (e.g., the Tournament of 
Roses parade on a Rose Bowl tour) are integral to the experience for 
which the tour was organized while other events on the same tour (e.g., 
a side trip to Disneyland) are not. These two commenters suggest that 
integral events be protected by the'' money back guarantee'' of the 
total tour price, but not other events.
    Q. Should the rule specifically ban last-minute or post-departure 
price increases for admission to the event, one of the problems that 
allegedly occurred on the 1994 Rose Bowl tours?
    All commenters who offered an opinion on this subject felt that 
last-minute price increases should be regulated in some manner. The RG 
Travel Companies, NACA, the NCAA, ASTA, the Wisconsin Attorney General 
and Mr. Donald Hamilton stated that last-minute price increases should 
be banned. FBA and the Pasadena Tournament of Roses said that price 
increases at any time following purchase should be prohibited unless 
the consumer receives written notice that the operator reserves this 
right. The Pasadena Tournament of Roses also suggested that 
participants who cancel within a few days of notification of a price 
increase be entitled to a full refund. The Wisconsin Attorney General 
commented that on tours to special events, ``last-minute or post-
departure price increases are common and are tantamount to extortion'' 
because other options may be sold out.
    The NHL stated that, in general, price increases should be banned 
unless the face value of the ticket has been increased subsequent to 
departure of the tour. However, for events with short lead times such 
as the Stanley Cup playoffs, the NHL said that the rule should permit 
tours on which participants are required to agree to purchase event 
tickets at the yet-unknown face price plus a service fee, as long as 
the consumer is given prominent notice of this fact.
    Q. Some tours are promoted in conjunction with a special event, but 
do not include, and do not represent that they include, admission to 
the event. For example, there have been tours to the Super Bowl host 
city during the Super Bowl weekend that prominently feature ``Super 
Bowl'' in the headline of advertisements and flyers, but which do not 
include game tickets. Should the new rule ban this practice, or require 
affirmative, prominent disclosure that admission to the event is not 
included?
    All of the commenters that expressed an opinion on this issue felt 
that it should be regulated in some manner. The RG Travel Companies 
stated that they favored either banning the practice or requiring 
disclosure. The NCAA urged affirmative, prominent disclosure, ``if such 
tours are to be allowed at all.'' All others who commented on this 
point (the NHL, ASTA, FBA, the Pasadena Tournament of Roses, and the 
Wisconsin Attorney General) recommended prominent disclosure. The NHL 
suggested a requirement that text disclosing the absence of event 
tickets from event-oriented tours should be at least 75 percent of the 
size of the name of the event in advertising material. The Pasadena 
Tournament of Roses said that such disclosures should be at least twice 
the size of the smallest text elsewhere in the ad or flyer, but in no 
case less than 12-point type, and that disclosure during verbal 
contacts should also be required.
    Q. What would be the economic burdens of such a rule? Would the 
rule be impractical for events where the participants are known only a 
week in advance, e.g. the NCAA Final Four?
    All of the parties that commented on this issue agreed that the 
rule can and should apply to events in which the participants are not 
known until shortly before the event. The RG Travel Companies commented 
that the rule would not be impractical because commitments centering 
around a particular team could be made contingent on that team 
qualifying for the event. NACA said the ``money back guarantee'' should 
apply regardless of the timing of the event. The NHL stated that the 
rule may be burdensome for organizers of short-lead-time tours, but 
that this is justified by the benefit to consumers. (Note also the 
NHL's earlier suggestion that on events where the participants become 
known only shortly beforehand, the rule should permit tours in which 
the participants must agree to purchase an event ticket whose face 
value is not yet known.)
    ASTA, like NACA, said that the degree of advance notice is not 
relevant, and that an operator who markets an event-oriented tour 
before the participants are known should simply disclose that event 
tickets are not included in the advertised price. FBA commented that 
participating teams in college bowl games are generally known at least 
a month in advance, and also that any experience the Department has had 
with Super Bowl tours would be instructive, as the competing teams in 
that game are sometimes determined only a week before the game.
    The Pasadena Tournament of Roses, the NCAA and the Wisconsin 
Attorney General all pointed out that even though the participating 
teams in the NCAA Final Four (the example in this question) are 
determined only the weekend before, the tickets are sold out months 
beforehand. Thus, the fact that the participants are not known until 
the final week has minimal impact on the availability of tickets and 
the feasibility of tours. The Pasadena Tournament of Roses asserted 
that any economic burden resulting from this rule would fall on ticket 
brokers and tour operators who buy event tickets from individuals in 
order to resell them. The Wisconsin Attorney General stated that 
consumer protection may be even more important in cases where event 
participants are determined at the last minute, because consumers have 
less time to investigate their options.

Other Comments

    The Air Transport Association (ATA, an association of large 
scheduled airlines) filed a comment stating that it expressed no 
opinion about whether, or to what extent, the current Super Bowl rules 
should be made applicable to tours to other special events. However, 
ATA said that DOT should not make air carriers responsible for assuring 
that tour operators comply with the new rule. NACA echoed this view, 
stating that carriers should not be made the guarantors of tour 
operators.

Discussion

    We have decided to propose a rule very similar to that described in 
the ANPRM, which in turn closely tracks the existing rules for Super 
Bowl tours.
    The rule that we are proposing would apply to any tour that is 
organized for the purpose of attending a sporting, social, religious, 
educational, cultural, political or other event of a special nature and 
limited duration, which exists for reasons apart from the tour itself, 
and which is represented by the operator of the tour as including 
admission to that event. The Department does not wish to engage in 
line-drawing ofthe type that would be required were we to publish a 
list of specific events that would be covered by the rule. In addition, 
we see no justification for limiting the applicability of the rule to 
sporting events. Few commenters specifically suggested such a 
limitation, although a number of them offered sports contests as 
examples of the type of event that should be covered. While the 
Wisconsin Attorney General is of course correct when he comments that 
the date and location of a non-competitive event such as the Passion 
Play in Oberammergau is known well in advance, this in itself does not 
lessen the likelihood of ticket shortages.
    We agree with the comments that suggested that the rule should 
apply to any event where a separate ticket is required for admission to 
the event or where there is limited admission. The rule that we are 
proposing will apply to any tour to an event of the type described at 
the beginning of the previous paragraph in which the tour operator has 
represented that the tour includes admission to the event. If the event 
is free, or attendance is unlimited, the operator should have no 
trouble furnishing tickets and this rule will impose no burden. On the 
other hand, if tours are promoted to an unusually popular event of a 
non-sporting nature, those tour participants would be just as 
disappointed at not receiving the promised admission to the event that 
constituted the entire purpose of their trip as would a fan traveling 
to a bowl game.
    We have tentatively concluded that the rule should apply to both 
charter and scheduled air transportation, as well as to any other form 
of air service meeting the statutory definition of ``air 
transportation'' that may develop in the future. Thus, we are proposing 
to apply it to ``scheduled, charter, and other air transportation.''
    The proposed rule would apply to all interstate (i.e., domestic)\2\ 
air transportation, and to foreign (i.e., international) air 
transportation originating at a point within the United States. 
Applying the rule only to outbound international flights is consistent 
with the approach taken in the existing Public Charter rule (see 14 CFR 
380.23) and with the'' country of origin'' concept of regulation of 
international air transportation. As a policy matter, the Department 
has no interest in applying this rule to tours originating in foreign 
countries whose participants are largely or exclusively foreign 
citizens.
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    \2\The statutory term ``overseas air transportation,'' which 
referred to domestic transportation to or from U.S. territories or 
possessions, was abolished in a recent recodification of 
transportation laws. Such transportation is now included in the 
definition of ``interstate air transportation,'' and consequently 
would be covered by this proposed rule.
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    The rule that we are proposing would apply to any operator of a 
tour that meets the definition of a Special Event Tour, regardless of 
whether that operator is a direct air carrier (i.e., an airline), an 
indirect air carrier (e.g., a Public Charter operator), or a ticket 
agent (e.g., a scheduled-service tour operator, including a travel 
agent acting as a tour operator). The proposed rule would apply to both 
U.S. and foreign entities that act as operators of Special Event Tours, 
just as current Sec. 399.87 does.
    With regard to the comments of ATA and NACA, the ANPRM did not 
propose, and wedo not propose here, that this rule should include 
provisions that obligate direct air carriers to assure that tour 
operators comply with the rule. Except where an airline might choose to 
directly operate a Special Event Tour (i.e., to become the tour 
operator), a direct air carrier of a Special Event Tour will incur no 
greater or lesser obligations under this rule than it has in its 
capacity as a common carrier either certificated under 49 U.S.C. 41101 
or holding a foreign air carrier permit issued under 49 U.S.C. 41301 
(formerly sections 401 and 402 ofthe Federal Aviation Act).
    As we suggested in the ANPRM, we are proposing to carry over the 
provisions from the existing Super Bowl rule that prohibit advertising 
or sale of such tours before game tickets are in hand or under 
contract. In the rule we are proposing here, these provisions will be 
expanded to apply to all special events. This approach was supported by 
the comments, and involves no novel processes since the existing 
procedures have been in place in the Super Bowl rule for 15 years.
    In addition to the provision that prohibits advertising or sale of 
a Super Bowl tour until game tickets are in hand or under contract, the 
Super Bowl charter rule requires Super Bowl charter operators to 
include in the prospect us that is required to be filed with the 
Department for all Public Charters a certification that they have the 
game tickets in hand or else a copy of the contract for the game 
tickets. We do not propose to carry over this additional filing 
requirement to the new rule. The underlying requirement to have the 
tickets or ticket contracts before advertising or sales commence will 
remain and is enforceable. The Super Bowl rules that apply to 
scheduled-service tours have never required a filing of this type. Now 
that regulation of this type of tour is being consolidated in a single 
rule, we see no justification for having a filing requirement for 
charter tours but not scheduled-service tours, nor do we see a need to 
impose a new paperwork burden on scheduled-service tour operators. This 
action is consistent with the Paperwork Reduction Act and with the 
Department's proposal in Docket 48341 (57 FR 42864) to eliminate 
unnecessary paperwork burdens on charters.
    Congressman Andrews expressed concern that any rule that would 
prohibit marketing of a tour until tickets are in hand would not be 
practical, since tickets for many events are not available until a 
couple of weeks in advance but other arrangements (e.g., air and hotel) 
must be made before that. However, neither the existing nor proposed 
rules requires that tickets be in hand before marketing is allowed; the 
operator must simply have a written contract for the tickets.
    The proposed rule also incorporates the so-called ``booking 
rejection'' and ``contingent booking'' procedures currently found in 
Sec. 380.31(c) of the Super Bowl charter rule, and expands them to 
apply to all events and to all forms of air transportation. These 
provisions require operators to return unsolicited bookings for which 
they don't have event tickets unless a tour participant authorizes the 
operator in writing to retain the participant's payment while the 
operator attempts to obtain more event tickets. We are modifying this 
slightly to allow for situations in which participants agree to take 
the tour without an event ticket; the operator would be required to 
obtain the participant's written acknowledgment of this understanding.
    One of the key provisions of the Super Bowl charter rule is the 
requirement for the operator to refund the total tour price to any 
participant who does not receive a promised game ticket, even if the 
participant uses all of the other tour features. The ANPRM tentatively 
proposed to incorporate this provision in the new rule, but also asked 
for comment on whether the rule should contain only the ``booking 
rejection'' and ``contingent booking'' procedures without the ``money 
back guarantee.'' However, the comments solidly supported the ``money 
back guarantee,'' and we have incorporated it in the proposed rule. We 
agree with the Football Bowl Association that strong consumer remedies 
will also have the effect of deterring the promotion of non-legitimate 
tour packages.
    NACA commented that there should be an exception to the ``money 
back guarantee'' for situations of force majeure and acts of God, such 
as the earthquake in San Francisco that caused postponement of the 
World Series. The NHL suggested that if the event is canceled or 
substantially altered, participants should be entitled only to a refund 
of the face value of the event, not the total tour price. It was never 
our intent to make the tour operator the guarantor of the event itself. 
The ``money back guarantee'' in the existing Super Bowl charter rule 
kicks in ``if game tickets are not supplied.'' The rule we are 
proposing here would require refunds ``. . . if promised admission to 
the [event] is not furnished by the tour operator . . .'' These 
provisions are directed toward potential problems with ticket 
distribution, not with the event itself. If people who have tickets are 
able to attend the event and Special Event Tour participants are shut 
out because they don't have tickets, the ``money back guarantee'' 
applies. On the other hand, if nobody with a ticket can use it during 
the period of the tour because the event itself was canceled or 
postponed, the ``money back guarantee'' does not apply.
    We wish to make it clear that we are talking only about problems 
with the event itself, not about any or all problems that the tour 
operator might view as beyond its control. Failure of a ticket broker 
to deliver tickets to the tour operator does not invalidate the ``money 
back guarantee.''
    We agree with the NHL that if the event is canceled consumers 
should receive a refund for the portion of their tour price that 
applied to the event that they paid for but did not receive. However, 
mandating such a partial refund in a situation where the event itself 
did not take place and where there were no problems with ticket 
distribution is beyond the scope of this proceeding. This is a matter 
best dealt with in the context of contract law or other applicable 
existing law.
    The ANPRM solicited comment on whether the rule should include 
procedures to protect the tour operator from having to refund the total 
tour price to participants who don't receive promised admission to an 
``event'' like a welcoming cocktail party. Most commenters who 
addressed this issue were opposed to requiring a refund of the entire 
tour price in these circumstances. Some suggested that participants so 
affected simply be entitled to a refund of the value of that ancillary 
event. Two commenters urged that a tour operator's failure to deliver 
admission to ancillary events that are integral to the experience for 
which the tour was organized (e.g., the Tournament of Roses parade on a 
Rose Bowl tour) should entitle the participant to a refund of the total 
tour price.
    In raising this issue in the ANPRM, the Department had intended to 
focus on the situation of a tour that would not normally be thought of 
as a Special Event Tour but which held out admission to an ``event'' as 
one of its features, e.g., a welcoming cocktail party on a 5-day 
package to the Bahamas. If the definition of ``special event'' had been 
broad, we were concerned that the rule might have the effect of 
requiring refunds of the entire price on such tours after failure to 
deliver a relatively minor and low-value component. The comments have 
shed light on another issue: multiple ``events'' on a true Special 
Event Tour.
    We agree with the commenters that failure to deliver a relatively 
minor feature should not result in a refund of the total tour price. We 
also feel that this rule should be limited to tours that are organized 
around an event, not to events that occur in the normal course of the 
typical vacation tour. Accordingly, we have limited the scope of the 
proposed rule in two ways. First, there will be a definition of 
``Special Event Tour'' in proposed Sec. 381.5 which is broad yet 
specific; it will limit the applicability of the rule to tours to 
sporting, social, religious, educational, cultural, political or other 
event of a special nature and limited duration, which exist for reasons 
apart from the tour itself. Second, the ``money back guarantee'' in 
proposed Sec. 381.11 will apply only to the primary event for which a 
Special Event Tour is organized.
    Limiting the ``money back guarantee'' to the primary event on the 
tour will solve the problem of having this guarantee cover minor events 
on a true Special Event Tour. However, it will also have the effect of 
excluding some more significant events such as the Tournament of Roses 
parade. Nonetheless, we have tentatively decided to move in this 
direction. Identifying the primary event on a Special Event Tour will 
seldom be a matter of debate. However, identifying secondary events 
that are ``integral to the experience'' of the tour would be a far more 
subjective exercise, and in any event is beyond the scope of this 
proceeding as set forth in the ANPRM. Tour participants who do not 
receive promised admission to a secondary event may have a contractual 
right to a refund of the value of that event, and they can pursue that 
with the tour operator.
    In the ANPRM, the Department solicited comment on whether the rule 
should ban last-minute or post-departure price increases, something 
which occurred on certain tours to the 1994 Rose Bowl. The great 
majority of the comments on this subject favored banning such 
increases. Some commenters said no price increase should be permitted 
unless the tour operator has reserved this right in writing and allows 
participants to cancel and receive a full refund in the event of a 
price increase.
    We have decided to incorporate into the proposed rule the price 
increase provisions of the Department's Public Charter rule (14 CFR 
Sec. 380.33). While it is not our intent in this proceeding to address 
all potential sources of consumer harm on Special Event Tours, the 
issue of price increases is directly related to the issue of ticket 
availability. Almost any event ticket is procurable if the price is 
right; if we did not regulate price increases in the Special Event Tour 
rule, tour operators would always be able to acquire event tickets at 
greatly inflated prices and then simply increase the price to the 
participant to cover it. Since a ticket has been offered in this 
situation, the ``money back guarantee'' would not come into play.
    The proposed provisions on price increases, modeled on similar 
provisions in the charter rule, state that if a given participant is 
assessed price increases for the tour that in the aggregate are more 
than 10 percent above his or her original tour price, the participant 
shall have the right to cancel and receive a full refund (i.e., no 
cancellation penalties would apply). No price increases in any amount 
would be permitted less than 5 days before departure (as opposed to 10 
days in the charter rule, recognizing the fact that Special Event Tours 
often have shorter lead times than the typical charter). This would 
eliminate both last-minute and post-departure price hikes. Finally, 
proposed Sec. 381.11 specifies that the promised event ticket must be 
furnished at the price agreed to before departure or else the operator 
is subject to the ``money back guarantee'' just as if he had not 
provided the ticket at all.
    The NHL commented that for events with short lead times such as the 
Stanley Cup playoffs, the rule should permit tours on which 
participants are required to agree to purchase event tickets at the 
yet-unknown face price plus a service fee, as long as the consumer is 
given prominent notice of this fact. As an initial matter, we would 
point out that a tour would not be covered under this rule at all if 
the event ticket were simply held out as an option rather than as a 
mandatory feature. However, where the participant must agree to buy the 
event ticket, such tours are clearly Special Event Tours since the tour 
operator is representing that admission to the event is included in the 
tour (even if the price of that admission is not yet known and 
consequently any price that is advertised for that tour is not the full 
tour price).
    However, nothing in the proposed rule would explicitly prohibit a 
transaction of this type. The operator would still have to have the 
requisite number of event tickets under contract before advertising or 
sales could begin; in other words, the variable must be price, not 
availability. Beyond that, the proposed rule requires that tour 
participants must receive promised event tickets ``at the tour price 
agreed to before departure'' or else the participant is entitled to a 
refund of the total tour price. If a participant agrees to a price 
consisting of a known value p plus an unknown value x, and the operator 
delivers the tour (including the event ticket) at that price, the 
operator has satisfied the requirements of the rule.
    The ANPRM noted that some tours are promoted in conjunction with a 
special event, but do not include, and do not represent that they 
include, admission to the event. We solicited comment on whether the 
new rule should ban this practice, or whether it should specify a form 
of required disclosure. Most of the comments favored requiring 
disclosure of the fact that an event ticket is not included. However, 
we have tentatively decided not to include such a requirement in the 
proposed rule. Consumers solicited for these tours are able to 
determine from the advertising material that an event ticket is not 
held out as included; this is distinguishable from the situation of a 
tour participant who paid for an event ticket and then did not receive 
it. Should any particular tour deceptively imply that event tickets are 
included when in reality they are not, the Department has authority to 
take enforcement action against deceptive practices.
    The ANPRM sought comment on whether the rule would be impractical 
for events where the participants are known only a week in advance, 
such as the NCAA Final Four. All of the parties that commented on this 
issue thought that this should not be a problem, and that the rule 
should apply. As noted in the Comments section above, several 
commenters pointed out that the Final Four sells out months in advance 
even though the participating teams are not determined until the week 
before. Also, as FBA noted, the contestants in the Super Bowl have been 
determined only the week before on several occasions, and that does not 
appear to have either harmed the marketability of Super Bowl tours or 
resulted in additional consumer problems.
    While the period for comment on a Notice of Proposed Rulemaking is 
normally 60 days, the Department is requesting comment on this notice 
within 30 days after it has been published in the Federal Register. The 
rule proposed in this notice has changed little from the tentative 
proposal that the Department discussed in detail in the Advance Notice 
of Proposed Rulemaking in this proceeding (59 FR 4614, February 1, 
1994). The Comments on the ANPRM were largely supportive of the 
proposal, and we do not anticipate controversy over this NPRM. The 
proposed rules are drawn from existing regulations on charters and 
Super Bowl tours, and the industry is familiar with the procedures in 
those rules. If the volume or nature of the NPRM comments should 
warrant, the Department can extend the comment period.

Regulatory Analyses and Notices

    This NPRM is considered to be a non-significant rulemaking under 
DOT regulatory policies and procedures, 44 FR 11034. The proposal would 
have minimal economic impact, and accordingly no regulatory evaluation 
has been prepared. The NPRM was not subject to review by the Office of 
Information and Regulatory Affairs pursuant to Executive Order 12866.
    The NPRM has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612, and it has been determined 
that it does not have sufficient federalism implications to warrant the 
preparation of a Federalism Assessment.
    I certify that the proposal, if adopted, would not have a 
significant economic impact on a substantial number of small entities.
    For the reasons set forth in the preamble, the Department proposes 
the following:
    1. To amend title 14, chapter II, subchapter D by adding a new part 
381, to read as follows:

PART 381--SPECIAL EVENT TOURS

Sec.
381.1  Purpose.
381.3  Applicability.
381.5  Definition.
381.7  Advertising.
381.9  Sales.
381.11  Refunds.
381.13  Price increases.

    Authority: 49 U.S.C. 40113(a) and 41712 (formerly sections 
204(a) and 411 of the Federal Aviation Act of 1958, as amended).


Sec. 381.1  Purpose.

    The purpose of this part is ensure that air travelers who have 
purchased tours to special events will receive the promised admission 
to the event. This rule expands the ``Super Bowl rule'' (formerly 
contained in part 380 and Secs. 399.87 of this subchapter) to other 
events.


Sec. 381.3  Applicability.

    This rule applies to Special Event Tours that are (a) in interstate 
or overseas air transportation, or (b) in foreign air transportation 
originating at a point in the United States. It applies to U.S. and 
foreign operators of Special Event Tours, whether they be air carriers 
or ticket agents. It applies to scheduled, charter, and other air 
transportation.


Sec. 381.5  Definition.

    Special Event Tour means a tour that is organized for the purpose 
of attending a sporting, social, religious, educational, cultural, 
political or other event of a special nature and limited duration, 
which exists for reasons apart from the tour itself, and which is 
represented by the operator of the tour as including admission to that 
event. Examples of such events include, but are not limited to, college 
and professional sporting events, the Olympics, concerts, the Passion 
Play in Oberammergau, etc.


Sec. 381.7  Advertising.

    No operator of a Special Event Tour or agent of such an operator 
shall conduct, or cause or allow to be conducted, any advertising, 
solicitation or other promotion for a Special Event Tour unless:
    (a) The operator is in physical possession of enough tickets for 
admission to the event to provide such tickets for a substantial number 
of seats on the tour, or
    (b) The operator has entered into a written contract with an 
organization that is the distributor of such tickets or an organization 
that receives such tickets directly from the distributor (e.g., a bowl 
committee; football conference, league or team; concert promoter or 
arena; etc.), the terms of which provide for that organization to 
furnish the operator enough admission tickets to provide such tickets 
for a substantial number of seats on the tour, or
    (c) The operator has entered into a written contract with another 
person or organization that has a written contract or series of written 
contracts with the distributor of such tickets or with an organization 
that receives such tickets directly from the distributor, the terms of 
which provide for that organization to furnish the operator enough 
admission tickets to provide such tickets for a substantial number of 
seats on the tour.


Sec. 381.9  Sales.

    (a) Except as provided in Sec. 381.9(b):
    (1) No operator of a Special Event Tour shall accept money for a 
seat on a Special Event Tour, or authorize an agent to accept such 
money, unless the operator has physical possession of, or written 
contracts (in the manner described in Sec. 381.7) for, a ticket for 
admission to the event for that individual. To the extent that the 
operator receives an unsolicited booking for which the operator does 
not have physical possession of or written contracts for a ticket for 
admission to the event, any payment accompanying that booking must be 
returned within 3 business days.
    (2) Upon acceptance of the money for a sale, the operator must 
reserve one event ticket for that individual. An operator may not sell 
more seats on the tour than it has event tickets in hand or under 
contract. (An operator need not continue to reserve an event ticket for 
an individual who withdraws from the tour by providing notice to the 
operator or by being notified by the operator that the individuals 
participation has been canceled due to failure to remit a required 
installment payment.)
    (b) An operator of a Special Event Tour may accept a booking and 
payment from an individual for whom the operator does not have an event 
ticket in hand or under contract if that individual agrees in writing 
that he or she understands that no event ticket has been reserved for 
him or her. This agreement shall specify whether the person has agreed 
to participate in the tour without an event ticket and/or the operator 
has agreed to attempt to acquire an event ticket for this person. If 
the two parties agree that the operator will attempt to acquire an 
event ticket, the agreement shall specify any penalties that will apply 
if the individual later cancels because an event ticket did not become 
available. If the operator notifies this person that an event ticket 
has become available, that person shall enjoy all the other protections 
of this rule from that time.


Sec. 381.11  Refunds.

    If promised admission to the primary event for which a Special 
Event Tour was organized is not furnished by the tour operator, at the 
tour price agreed to before departure (including any increases that the 
participant has accepted pursuant to Sec. 381.13(a)), the operator must 
provide each tour participant affected in this way a refund of the 
total tour price. This refund is to be provided within 14 calendar days 
after the scheduled return date of the tour.


Sec. 381.13  Price increases.

    (a) Should the tour operator increase a participant's tour price by 
more than 10 percent (aggregate of all increases to that participant), 
that participant shall have the option of canceling his or her 
participation in the tour and receiving a full refund within 14 days 
after the cancellation.
    (b) The tour operator shall not increase the tour price to any 
participant less than 5 days before departure.
    2. To amend Title 14, Chapter II, Subchapter D, Part 380 as 
follows:
    A. Remove the term Super Bowl charter from the definitions in 
Sec. 380.2.
    B. Amend Sec. 380.18, ``Charters for special events,'' to add a new 
paragraph (f):
* * * * *
    (d) Where the charter operator represents that the charter includes 
admission to the special event, the charter shall comply with part 381 
of this subchapter.
    C. Remove Sec. 380.18a and its reference in the table of contents 
at the beginning of the part.
    D. Remove Sec. 380.28(a)(4).
    E. In Sec. 380.31(b), end the sentence after the phrase `` * * * on 
specific alternative flights they have requested.'' Remove the 
remainder of the original sentence, which begins `` * * * or, in the 
case of Super Bowl charters * * *.''
    F. In Sec. 380.31(c), remove the phrase ``* * * or in the case of 
Super Bowl charters, if the operator does not have either possession of 
or written contracts for any game tickets, * * * .''
    G. In Sec. 380.31(c), remove the phrase ``* * * (3 days for Super 
Bowl charters) * * * '' in the two locations where it appears.
    H. In Sec. 380.31(c), remove the phrase ``* * * or in the case of 
Super Bowl charters, attempts to obtain more game tickets, * * *.''
    I. In Sec. 380.32(s), remove the second sentence.
    J. Remove Sec. 380.33(a)(5).
    3. To amend title 14, chapter II, subchapter D by removing and 
reserving Sec. 399.87.

    Issued this 6th day of October, 1994 at Washington, DC.
Patrick V. Murphy,
Acting Assistant Secretary for Policy and International Affairs.
[FR Doc. 94-25318 Filed 10-12-94; 8:45 am]
BILLING CODE 4910-62-U