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1 / Section I Autonomous Community of the Balearic Islands 1.- General provisions PRESIDENCY OF THE BALEARIC ISLANDS No Law 8/2012 on Tourism in the Balearic Islands, dated the 19 th of July THE PRESIDENT OF THE BALEARIC ISLANDS All the citizens are hereby informed that the Parliament of the Balearic Islands has approved and that I, on behalf of the King and in accordance with the provisions contained in article 48.2 of the Statute on Autonomy, am pleased to promote the following LAW STATEMENT OF MOTIVES I Article of the Spanish constitution stipulates that the autonomous communities may take on the competences in the realm of tourism promotion within their territory. Article 24 of the Statute of Autonomy of the Balearic Islands states that the public authorities in the autonomous community shall recognise tourist activity as a strategic economic activity of the Balearic Islands, and it stipulates that the promotion and organisation of tourist activity should be performed with the goal of making it compatible with respect for the environment, the cultural heritage and the land, as well as with general and sectoral policies on economic promotion and organisation whose purpose is to foster economic growth in the middle and long term.

2 Likewise, article 30 of the Statute of Autonomy of the Balearic Islands states that the organisation and planning of the tourism sector, tourism promotion, tourist information, tourism promotion offices abroad, the regulation and classification of companies and tourist establishments and the regulation of the public lines to support and promote tourism are the exclusive competence of the autonomous community in tourism matters. The same article attributes it with exclusive competences on economic development matters in the territory of the autonomous community in accordance with the bases and general coordination of economic activity. Ever since Royal Decree 3401/1983 dated the 23 rd of November 1983 approved the transfer of the functions and services of tourism matters from the state to the Balearic Islands, the autonomous community of the Balearic Islands has been exercising this competence with no limitations other than the authorities that the constitution reserves for the state by the constitution. The sphere of these competences clearly includes legislative power in tourism matters, which is the underpinning of the approval of this law. Article 70 of the Statute of Autonomy of the Balearic Islands stipulates tourist information and the organisation and promotion of tourism as the competences of the island councils. However, the means needed to exercise these competences have not been fully transferred to the island councils, so some competences are exercised by the government of the Balearic Islands through the regional ministry which has been conferred the authority on tourism matters. II The development of the tourist industry sector in the Balearic Islands is characterised by the fact that many of the different establishments that are part of our tourism sector were built back in the 1960s, without detailed urban planning or regulations applicable to the sector, even until well into the 1970s. This construction was carried out on the Balearic Islands in a disorderly fashion based on regulations that have proven to be insufficient. Some kind of urban planning began to take shape in the 1980s, which encompassed the construction of all the establishments inherent to the tourism sector as an industry. In the 1990s, there was a proliferation of regulations, and this is when all kinds of complementary functions other than merely construction came to be regulated. In the 1990s, a general tourism law was concluded, which has been in force since then. As a result of this development outside the regulations, the modernisation of the tourist accommodations which was carried out in the 1990s was not constant, and part of what has been the goods and services regarded as complementary or the restaurant and entertainment venues are trapped by a regulatory framework that prevents them from undertaking any profitable action that could be competitive at the levels of service provision required in the 21 st century. We could say that the most important problem lies in the application of the current regulations to buildings and constructions which were not built to fulfil the current regulations, and at the same time the total overhaul or reconversion of the tourist accommodation establishments and other tourist establishments has not been facilitated since it was not framed along the lines of profitability. The reality of these recent years has shown us that the Balearic Islands tourism industry, even when it is clearly a consolidated destination, is in a situation of losing its competitiveness, which necessitates the adoption of measures to deal with this problem, which should be regarded as structural and not merely short-term. Other countries around the Mediterranean like Turkey, Greece, Croatia, Morocco, and others have chosen to view tourism as a source of revenue and have developed tourist areas with important tax incentives for investment, which has facilitated the construction of a new series of accommodations that clearly competes advantageously with the industry of the Balearic Islands in terms of both quality, because they are more modern, and profitability, because their cost structure and profit margins are more attractive for investment. What is more, there has been a major concentration of outgoing tourism businesses in recent years, which has led the outgoing market (tour operators) to become concentrated in three or four major groups Europe-wide, which in turn places them in an oligopoly in view of which the incoming market or destinations have little capacity to act, and tourism and its conditions are instead imposed by the side that sends the tourists. The lack of competitiveness of the tourism industry on the Balearic Islands has been further aggravated by the fact that for years compliance with the regulations that affected the sector raised the operating costs of the tourism industry drastically, in a setting in which the costs kept rising and rising and the revenues were dropping, with increasingly uncertain prospects, which did little to encourage investment. All of this has led to the fact that generally speaking, to stanch the decline in the profit margin, investments have not been made to improve and modernise the different establishments, which in short can be seen in a decline in the quality and image of some of the tourism establishments, especially in the more mature tourist zones, whose situation has been even further aggravated, which means that structural measures must be taken that encourage investment in the Balearic Islands tourism sector industry with the goal of gaining back the competitiveness needed by the islands main source of revenue. III Over all these years, we cannot ignore how European tourism policy has evolved, and in this sense we should highlight the Lisbon Treaty, which amended the Treaty of the European Union and the Treaty Establishing the European Community. The Lisbon Treaty was signed in the capital of Portugal on the 13 th of December 2007 (OJEU C 306, ), and its section XXII is devoted to Tourism, while article 195-TFEE states that the Union shall complement the actions of the member states in the tourism sector, in particular by promoting the competitiveness of the Union s companies in this sector. With this purpose in mind, the Union s goals are to foster the creation of an environment favourable to the development of companies in this sector and to encourage the cooperation among member states, in particular through the exchange of good practices. Likewise, the treaty stipulates that specific measures aimed at complementing the actions of the member states to achieve the stated objectives may be established (by the European Parliament and Council, through the ordinary legislative procedure), but it excludes all harmonisation of the legal and regulatory provisions of the member states. What is more, it should be borne in mind that the European Commission believes that European tourism policy needs a new impetus as it is facing challenges that call for specific responses and efforts at adaptation in order to make European tourism a competitive, modern, sustainable and responsible industry, thus determining the priorities provided by a true added value for Europe. Furthermore, the Commission believes that the success of this strategy will depend upon the commitment of all the stakeholders and their ability to work together to apply it. In accordance with the treaties and along the lines of the agreements reached at the high-level conference and the informal ministerial meeting held in Madrid on the 14 th and 15 th of April 2010, the main goal of European tourism policy is to foster the competitiveness of the sector, without losing sight of the fact that long-term competitiveness is closely related to the sustainability of the way the industry develops. This goal is clearly related to the Union s new economic strategy, Europe 2010, and more specifically with the emblematic initiatives in the realms of industry, innovation, digital affairs and new competences and jobs, while stressing that the development of a more active tourism policy based especially on the full exercise of the freedoms guaranteed by the treaties may contribute significantly to the relaunch of the single market. To reach these objectives, the actions in favour of tourism have been outlined along four strands: a) to foster the competitiveness of the tourism sector in Europe; b) to promote the diversification of tourism goods and services; c) to promote the development of sustainable, responsible and high-quality tourism; and d) to consolidate the image and visibility of Europe as a set of sustainable, high-quality destinations. The goal of this law is to comply with all of these avenues of action set forth by European tourism policy. All of these avenues of action should be understood within the framework of the principles of administrative simplification and economic promotion which result from the transposition of Directive 2006/123/EC on internal market services of the European Union, called the Bolkestein Directive, which is based on replacing prior authorisation with the declaration of responsibility and prior notification. IV The international economic crisis has aggravated the situation of the tourism sector, which has meant that in the past two years society has gained awareness of the seriousness of the situation which the Balearic Islands is currently experiencing, and that the public authorities have adopted the legislative measures that were needed yet insufficient, given the scope of the structural problem of the Balearic Islands tourism industry. In effect, at first the following were approved: Law 4/2010 dated the 16 th of June 2010 on urgent measures for investment in the Balearic Islands; and later Law 10/2010 dated the 27 th of July 2010 on urgent measures regarding certain infrastructures and facilities of general use in terms of territorial planning, urban development and the promotion of investment. Both of these laws have been complemented

3 by Decree 12/2011, dated the 25 th of February 2011, establishing the general provisions to facilitate the freedom of establishment and provision of tourist services, the regulation of the declaration of responsibility and the simplification of the administrative procedures in tourism matters; and Decree 20/2011, dated the 18 th of March 2011, establishing the general provisions for classifying the category of the tourist accommodation establishments into hotel, hotel-apartment and tourist apartment on the Balearic Islands. For the global reasons set forth above, it is understood that a deeper reform is needed than the mere adaptation of Law 2/1999, dated the 24 th of March 1999, the general tourism law of the Balearic Islands, and that it would be advisable to integrate the regulatory norms of the sector. For this reason, this Tourism Law of the Balearic Islands is being enacted, which repeals the previous law. V Tourism is the activity that generates the greatest repercussions, in terms of revenue, employment and activity, on the Balearic Islands. It is also unquestionably the leading resource on these islands, and must therefore be in constant transformation, innovation and development. Heavy international competition in an economic setting marked by globalisation, which includes tourism, as well as the new technologies and the social networks applied to productive activities, and specifically to tourism, requires much more attention to be paid to the concept of a much more demanding tourist, one that is more independent when planning his or her trips and more interested in seeking enriching experiences. For this reason, formulas should be made possible that develop the opportunities that the tourism resources on the Balearic Islands can offer to the utmost. In this scenario, it is crucial to provide incentives for the development of innovative, creative, competitive, modern, flexible and sustainable models which make investment in the tourism industry attractive, as this investment is so necessary for the reconversion of a model which has become obsolete and which in turn spurs the economy on the Balearic Islands. Upon this groundwork, it is crucial to rise to challenges with a high-minded, long-term perspective, and with a culture based on the recognition of sustainable development, innovation, quality, creativity and responsibility. This law aims to address the problem of seasonality by focusing on quality, innovation and research, taking advantage of the assets of a unique range of tourist products and bringing into the fold new operating formulas in which creativity, quality and excellence in service mark the difference compared to other tourism destinations, gaining back recognition for the Balearic Islands as a benchmark tourism destination internationally. Likewise, this law also focuses on cooperation among the different administrations in the autonomous community of the Balearic Islands, as well as with the most representative stakeholders in the sector, in order to allow a regulatory framework which makes it possible to reconvert the Balearic Islands tourism industry. Without the shadow of a doubt, one of the cornerstones of this law is land planning, the fostering and encouragement of tourism, through planning, training, constant innovation and investment in the reconversion and rehabilitation of saturated or mature tourist zones. For this reason, it imposes ongoing modernisation and quality controls. VI This law is organised into a preliminary section devoted to the general provisions, and into five subsequent sections. Section I refers to the competences and administrative organisation; Section II encompasses the rights and responsibilities of the users of tourist services and tourism companies; Section III covers the organisation of tourist activity; Section IV refers to fostering and promoting tourism; and Section V discusses control of tourism quality. The preliminary section contains general provisions that should be borne in mind to both determine the purpose and scope of application of the law and to establish the principles and purposes that inspire it and should be taken into consideration when interpreting the law. Likewise, the preliminary section also includes a set of definitions that aim to clarify concepts which are cited repeatedly in the law and which should, in any event, be interpreted in a broad as opposed to restrictive sense. It also stresses the organisation of the tourism sector by outlining both the intervention plans in tourism areas and the appropriate instruments to carry them out, which replace the current plans organising the tourism sector. It emphasises the need for the intervention plans in tourism areas to be fully coordinated with the island territorial plans for each of the islands. This action is based on what the Comprehensive Tourism Plan of the Balearic Islands should be, where the actions in the following spheres should converge: territory, product, quality, market intelligence, promotion and training. Section I of the law refers to administrative competences and organisation. In this respect, we should stress that even though the scheme of competences fits what is stipulated in the Statute of Autonomy, in reality the means needed to exercise all the competences in tourism matters have not been transferred to the island councils, so that until this transfer is made these competences will continue to be exercised by the regional ministry of the government of the Balearic Islands which has been assigned the competence in tourism matters. As an innovative aspect, we would like to stress the Municipal Tourism Board, whose purpose is to coordinate, consult with and advise the different municipalities on the Balearic Islands so that they can apply the regulations in a more uniform way, in an effort to eliminate the legal insecurity in this sector. Section II is devoted to the rights and responsibilities of the users of tourist services and tourism companies, with the aim of establishing a clear, easily accessible system which provides security to the commercial relations between tourism companies and their clients, in an effort to reduce to the utmost conflictive situations between both parties which in no way reflect the good image of a safe tourism sector that the Balearic Islands should offer as a benchmark, high-quality tourist destination. Specifically, this section regulates the effects and consequences of subcontracting, which, even when it is understandable that this happens in such a seasonal industry, does not mean that measures should not be taken to lower it to the utmost and to guarantee that any problems that arise will be resolved. Section III regulates the organisation of tourist activity, which makes it the broadest section in the law since it encompasses the system for establishing tourism companies, their registries, illegal activities, the system of tourism accommodation companies with special reference to new operating models or formulas, the new development of residential tourism companies, companies that commercialise tourist stays in homes, restaurant and tourism intermediation companies, companies providing entertainment, recreation, sports, cultural or free-time tourist activities, and tourist information, guides and assistance activities. In this section, the goal is to highlight the creation of single offices in the tourism administration of each island which depend on the administration and hold tourism organisation competences. The goal of these offices is to facilitate citizens interaction with the tourism administration to ensure that any actions or consultations can be performed before a single administrative interlocutor. In this way, the actions with the administration will become more user-friendly and the legal security in the relations that affect the administrative legal traffic among the different administrations and private individuals or tourism companies will be enhanced. This section also includes the regulation on the declaration of responsibility upon the start of a tourist activity, thus complying with Directive 2006/123/EC of the European Parliament on services in the internal market, a subject which has already been incorporated into the regional legislation. The regulation on exemptions contained in article 25 of the law deserves special mention. Its goal is to facilitate the particular analysis of certain situations which, due to the rigidity of the application of the regulations, might lead to absurd, senseless situations which run counter to the principle of encouraging investment for greater competitiveness of the tourism industry, fostering sustainable development. In short, it is nothing other than invoking equitability for any particular initiatives that may be trapped by excessively rigid legislation. Yet another goal is to facilitate projects with a clear interest and worthiness due to the appeal they may entail for the community of the Balearic Islands. With regard to accommodation companies, the main generic new development in this law is the added flexibility in the kinds and forms in which companies can engage in tourist accommodation activities. The principles of exclusive use and operating unit remain intact, but they have become more flexible so that no interpretations can be made that prevent certain complementary or secondary uses that may be enormously beneficial for tourist accommodation companies, and they especially allow for new operating formulas for the accommodation establishments which they have been requesting for some time and which in other primarily tourist-oriented countries are already in operation. One of the main new features of this law is the regulation of the tourist accommodation establishments that are co-financed or shared, or other similar ways of operating tourist accommodation establishments, with the understanding that these formulas are regarded as essential for attracting investment, contributing to deseasonality, improving the quality of the establishments and the services provided in them and purposefully expressing that these forms of operation

4 are incompatible with residential use in a single establishment. We believe that these new forms of operation are an opportunity to facilitate the update of the hotels on the Balearic Islands, and that they generate jobs because of both the improvements in service and the complementary services that arise around these new forms of operation, such as the occupancy generated by the very update, modernisation and reconversion of our tourism industry, in addition to the business that is generated by the lengthening of the tourism season. The law also stipulates, as a new feature, the compatibility of different kinds or groups of establishments within the same building, as well as the joint operation of different establishments. It also regulates comprehensive full pension services in an effort to replace the concept of all-inclusive, whose lack of regulation has caused conflictive situations in the tourism sector. There are no changes in the concept, classification and categories of hotel establishments and tourist apartments with regard to the ones already stipulated in the previous regional regulations, especially since the recent Decree 20/2011, dated the 18 th of March 2011, is in effect, which establishes the general provisions for classifying the category of the tourist accommodation establishments into hotels, apartment-hotels and tourist apartments on the Balearic Islands. This decree should be adapted to the provisions of this law. With regard to rural tourism accommodations, the main new developments consist of changing the areas required for the rural hotels and agricultural tourism establishments and, likewise, providing greater flexibility for expansions and the use of existing structures of the same age to provide a wide range of services at these establishments. Likewise, this kind of establishment is permitted on any kind of rural land regardless of its degree of protection without it being necessarily declared to be of general interest. For the first time, the law includes hostels, refuges and inns; although they existed before, there was a legal gap in the previous law. The major new development is that chapter 3 of Section III regulates residential tourism companies, which may be quite widespread in other countries and enjoy widespread recognition as vacation destinations, but have not been developed in this autonomous community due to the rigidity of the previous regional legislation. It states that those tourist accommodation companies may also provide the same services as those provided in the accommodation establishments, and in certain circumstances at residential accommodation units. With regard to companies that commercialise tourist stays in homes, the law aims to integrate, with minor changes, Law 2/2005 dated the 22 nd of March 2005 on the commercialisation of tourist stays in homes. Tourism restaurant companies have a similar system to what they have had until now, although the exercise of complementary activities has been rendered more flexible by eliminating the requirement to secure an activity licence for each of the complementary services to be offered. Likewise, the distinction between bar and cafe has been eliminated, and these establishments are now called bar-cafeterias. Travel agencies retain the same system they had in the previous law. Tour guides now have a regulation more aligned with Directive 2006/123/EC on internal market services in the European Union, while the concept and scope of action of what was previously called complementary products and services has been expanded so they are now called tourism, entertainment, recreational, sporting, cultural or free-time activity companies. Section IV of the law regulates the fostering and promotion of tourism and sets forth as the general principles the improvement in competitiveness through the development of sustainable tourism; the need to plan the promotion and quality of tourism to encourage deseasonalisation; and the need for research, development and innovation and continuous training in tourism, regarding Mallorca, Menorca, Ibiza and Formentera as tourism venues and stipulating the possibility of declarations of tourist interest. Special emphasis is placed on approving the different tourism development plans of both the islands and the municipalities, which should adapt to the comprehensive or strategic plan of the Balearic Islands, which must in turn include the basic strands or directives of the state-wide Comprehensive National Tourism Plan. These plans, which shall be aimed at improving the image and competitiveness of the users final destination, will become fundamental tools in repositioning Mallorca, Menorca, Ibiza and Formentera internationally. Chapter 2 of Section IV regulates the investment, reconversion and rehabilitation of tourist zones and is one of the major focal points of this law aimed at regenerating and modernising certain zones. To do this, in certain cases, after a study of the feasibility and advisability of the project, a change in use is allowed. The fear of dealing with this measure, which does not envision widespread changes in uses, have led certain tourist zones to deteriorate and degenerate over the years simply because no feasible solution was given in terms of the profitability for the owners of the abandoned buildings that the administration was unable to purchase. For this reason, it is understood that specific actions must be made possible which are rational from the standpoint of urban planning and which enable investment to be attracted, and which ultimately will result in the improvement of mature, saturated or degraded tourist zones. Chapter 3 includes the improvement plans for infrastructures and tourist establishments which were regulated in the general tourism law 2/1999 dated the 24 th of March 1999, along with certain precepts contained in Law 4/2010 dated the 16 th of June 2010, on urgent measures for investment in the Balearic Islands, to confer greater flexibility on the system of facilitating investment and making it more attractive. The system of closure of establishments is regulated in chapter 4 of Section IV, leaving in place the dual system of temporary and permanent closure. Where there are innovations is both in the exceptions to the general provision on permanent closure as a requirement to start an activity or to expand the number of places, and in the system for permanently closed establishments, where the possibilities for reopening these establishments are made more flexible if the goal is to boost their category, pass modernisation plans and, in short, attract investment while improving competitiveness and generating jobs. Finally, Section V of the law refers to tourism quality control, which contains the system of tourism inspection, the classification of infractions and sanctions, the sanctioning process and the registration of infractions. The emphasis in this section is on the hardening of sanctions and the adoption of measures against illegal products and services, such as collaboration with and transmission of information from the administrations involved that detect cases of illegal products and services, as well as the limits on the gradation of the sanctions imposed on infractions due to the commercialisation of illegal products and services. Among the provisions that have been repealed are the plans to organise the tourist products and services, which should be replaced by the tourism intervention plans referred to in article 5 of this law. The reason for their repeal lies in the fact that not only are they obsolete, but also while implementing them in different local plans, compliance with these plans was extraordinarily low and their effectiveness was practically zero. What is more, the majority of parameters contained in these plans are included in the different islands territorial plans. PRELIMINARY SECTION, GENERAL PROVISIONS Article 1 Objective and purpose of the law 1. The objective of this law is to organise, plan, promote, foster and confer discipline on tourism and the quality of the provision of tourist services on the Balearic Islands within the framework of the Statute of Autonomy and any other applicable legal regulations. 2. The purpose of this law is to: a) Promote sustainable tourism as the most important strategic sector of the economy of the Balearic Islands, a generator of jobs and economic development. b) Promote the Balearic Islands as a benchmark tourist destination in the Mediterranean Sea, bearing in mind its uniqueness as islands and its cultural, environmental and social reality, while promoting deseasonalisation and fostering the values that are the hallmark of the identity of each of the islands. c) Promote Mallorca, Menorca, Ibiza and Formentera as tourist venues, ensuring that they are dealt with in such a way as to ensure their maximum domestic and international dissemination. d) Improve the competitiveness of the tourism sector by including criteria of organisation and planning, innovation, professionalization, specialisation and training of human resources and tourism quality guarantees which improve the profitability of the Balearic Islands tourism industry without neglecting sustainability and the utmost protection of the environment. e) Eradicate disloyal competition and the sale of illegal or clandestine products or services. f) Encourage research, development and technological innovation as priorities driving the progress of the tourism sector in the autonomous community of the Balearic Islands. g) Defend and protect the users of tourist services. h) Encourage the diversification of tourist products and services. i) Improve the accessibility of tourism resources and services. j) Protect, conserve and disseminate tourism resources in accordance with the principles of sustainable development and environmental quality. Article 2 Scope of application The provisions of this law shall be applicable to:

5 a) Public administrations, public bodies, publicly owned private bodies, consortia and other organisations in the public sector that exercise their activity in the territory of the autonomous community of the Balearic Islands on tourism matters, without prejudice to the competences held by the general state administration. b) Users of tourist activities and services. c) Tourism companies, non-business tourism entities, tourist establishments and workers employed in any of them. d) Tourism professionals and tourism intermediation activities. e) Any other person, entity or activity directly or indirectly related to the tourism sector. Article 3 Concepts and definitions The following definitions shall be used for the purposes of this law: a) Tourism: Any activity performed by individuals during their trips and stays in places other than their usual environment, regardless of their purpose and for determined periods of time. This includes the combination of activities, services and industries that complete the tourist experience, such as transport, accommodation, restaurants, shops, shows, entertainment venues, free-time and recreational activities and any other facility used for a wide range of activities. b) Tourist activity: Any activity aimed at providing users with accommodation, restaurant, intermediation, information and assistance services and other activities involving entertainment, recreation and sports and the provision of any other service related to tourism. c) Tourism sector: All the physical or legal persons who perform some kind of tourist activity or who participate in these activities. d) Tourism resources: Any good, asset or expression of the physical, geographic, natural, social, economic or cultural reality of the Balearic Islands which may generate tourist flows or currents with repercussions on the economic reality of the collective. e) Tourism administration: The public bodies or entities with specific competences on tourism matters, tourist activity or tourism resources. f) Tourism company: Any physical or legal person who, on his or her own behalf, regularly and for profit works to provide some tourist service or exploit some resource or operate any tourist establishment. g) Tourist service: Any activity whose purpose is to provide for any separately identifiable interest or need of the users of activities when sold to consumers or users and which is not necessarily linked to other products and services in the performance of the tourist activity. h) Tourist establishments: All the movable and unmovable goods that as an autonomous functional unit are organised, directed and made available by their owner for the proper provision of one or several tourist services. i) Workers in the tourism sector: People who provide their services for a tourist company or non-business tourism entity and are paid for by an employer. j) Users of tourist services: Physical persons who either are or are not displaced from their usual environment and are the end recipients of the provision of tourist services. k) Non-business tourism entity: Any not for profit entity whose purpose is to somehow promote the development of tourism or certain tourist activities. l) Tourism professions: The professions which regularly and for pay perform orientation, information and assistance activities in the field of tourism, as well as all professions deemed tourism professions by the regulations. m) Tourism intermediation activities: Any activities whose purpose is to perform mediation activities or to organise tourist services. Article 4 Principles and criteria of administrative action b) Harmonisation of the regulations on tourist products and services and urban planning regulations through environmental conservation following the postulates of sustainable development. c) The shaping of a framework that fosters greater competitiveness of tourism companies and which serves as an instrument to combat disloyal competition or other illegal practices. d) The planning of tourist products and services bearing in mind the requirements of the current and future demand by spearheading the diversification and deseasonalisation of the sector. e) Promotion, support and cooperation with the different social and economic stakeholders in the tourism sector. f) The consolidation, stability and growth of employment in the tourism sector. g) The raising of citizens awareness of the benefits of tourism and the importance of respectful, friendly treatment of tourists, as well as the preservation of the tourist assets and resources of the Balearic Islands. h) The promotion of academic programmes and studies related to the tourism sector. i) The reduction of paperwork and the simplification of procedures as the backbone of tourism administrations actions. j) Training, research, development and innovation in all subjects related to the tourism industry. k) The adaptation of tourist activities to the recommendations of international declarations in areas of special interest. Article 5 Organisation of tourist products and services 1. In accordance with the provisions of chapter 3 of Section II of Law 14/2000 on territorial development, dated the 21 st of December 2000, the intervention plans in tourist areas (PIATs) are sectoral steering plans whose goal is to regulate the planning, execution and management of general systems of the infrastructures, facilities, services and activities to exploit resources in the realm of tourism organisation. 2. In accordance with article 11.2 of Law 14/2000 on territorial development, dated the 21 st of December 2000, the respective island councils must draw up and approve the intervention plans in tourist areas (PIATs), which shall be coordinated through the general organisational instruments and more specifically by the territorial development directives and the island territorial plans (PTIs). 3. The intervention plans in tourist areas (PIATs) and, if applicable, island territorial plans (PTIs), may set forth the overall maximum population density, delimit tourist and protection zones and areas and determine their size and characteristics, and establish minimum parameters on area, volume, buildable areas and facilities. They may also note the exceptions due to location or special characteristics, if deemed applicable. They may also determine any parameters with regard to residential areas located adjacent to tourist zones. 4. These instruments shall determine the tourist ratio in accordance with the special characteristics of the islands and the municipalities. Any municipalities which have not adapted to the sectoral steering plans on tourism organisation or, if applicable, the island territorial plans, must respect a minimum ratio of 60 m2 of land per place until they have adapted to these plans, and new tourist accommodation establishments and expansions of the number of accommodation places may be required to respect this ratio as well, except in reconversion operations. 5. Urban, interior, agricultural tourism and rural hotels, along with hostels, refuges and inns and any other hotel establishments with at least four stars which are permanently open all twelve months of the year shall permanently be exonerated from applying the tourist ratio referred to in the paragraph above. 6. The general planning instruments shall delimit zones appropriate for tourism uses and interrelated uses and shall be subjected to the provisions of this law. The tourism policy of the Balearic Islands is subjected to the following principles and action criteria: a) The organisation of tourist products and services through rectifications of the shortcomings and imbalances in the tourism industry in order to raise the overall quality of the services, facilities, establishments and equipment. SECTION I ADMINISTRATIVE COMPETENCES AND ORGANISATION Chapter I, Competences

6 Article 6 Competences of the autonomous community of the Balearic Islands 1. In accordance with the provisions contained in sections 11, 21 and 47 of article 30, in article 31.6 and in section 3 of article 58 of the Statute of Autonomy of the Balearic Islands, the administration of the autonomous community of the Balearic Islands holds the following competences with regard to tourism: a) The formulation and application of the tourism policy of the autonomous community. b) The regulation of tourist activity and the provision of tourist services, including the determination of the rights and responsibilities of the users of tourist services. c) The authority to issue regulations on tourism matters within its scope of competences. d) Cooperation on tourism matters with other public administrations. e) Regional declarations of tourist interest. f) The wording of the Comprehensive Tourism Plan. g) Any other competences it may be attributed by this law or any other regulations that may be applicable. 2. In the exercise of the aforementioned competences, the administration of the autonomous community shall always strive, when necessary, to coordinate with the general state administration, the island councils and the local entities. Article 7 Competences of the island councils In accordance with the provision of article 70.3 of the Statute of Autonomy of the Balearic Islands, the island councils of Mallorca, Menorca, Ibiza and Formentera hold the following competences in relation to their own territory: a) The organisation and planning of tourism through, among others, the drawing up of the corresponding intervention plans in tourist areas, island territorial plans and island tourism development plans. b) The administration and management of tourism resources. c) The authority to issue regulations on tourism matters within its scope of competences. d) The organisation and management of the Island Registry of Tourism Companies, Activities and Establishments. e) The domestic and international promotion and protection of the tourist image of the island on which its competences rest, by the determination of criteria, the regulation of the conditions and the execution and control of the public lines of aid and tourism promotion. f) The promotion of any measures and actions that make it possible to develop and implement tourism quality policies in the tourist destinations, resources, services and companies within their territorial scope. g) The protection and preservation of tourism resources. h) The advice and technical support of municipalities within their territorial scope in any aspect that improves their competitiveness in tourism. i) The development of tourism infrastructure policies and the coordination of actions conducted by municipalities on tourism matters. j) The promotion and coordination of tourist information. k) Island declarations of tourist interest. l) The awarding of tourism prizes and distinctions. m) Inspections and sanctions in tourism matters in alignment with the terms established in this law. n) Any other competences it may be attributed by this law or any other regulations that may be applicable. Article 8 Competences of the town halls The municipalities in the autonomous community of the Balearic Islands hold the following competences on tourism matters within their territorial scope: a) The protection and conservation of tourism resources, as well as the adoption of measures that aim to ensure their effective use and enjoyment. b) Tourism promotion of the municipality in the context of the promotion of each of the Balearic Islands. c) The promotion of tourist activities within the municipality. d) Cooperation with other public administration on tourism matters. e) Municipal declarations of tourist interest. f) The approval of municipal tourism development plans. g) Any other competences that they are attributed by this or any other law, or that have been transferred or delegated in accordance with the provisions of the legislation on local organisation. Article 9 Inter-administrative relations The different administrations in the autonomous community which hold competences in tourism matters, within the scope of their autonomy, shall fit their reciprocal relations within the principles of mutual information, coordination, collaboration and cooperation with respect to the respective spheres of competence and the weight of the public interests involved, with the emphasis placed on administrative efficacy and efficiency. In application of these principles, the techniques legally provided for may be used, especially the signing of agreements and the holding of sectoral conferences, the creation of inter-administrative or inter-island commissions, the creation of consortia and the drawing up of planning instruments, especially the writing of intervention plans in tourist areas. Chapter II Administrative organisation Article 10 Organisation of the tourism administration 1. The administration of the autonomous community shall exercise its competences in tourism matters through the regional ministry that has been assigned these competences, without prejudice to the competences that correspond to the governing council or other public administrations. 2. The regional ministry with competences in tourism matters shall consist of the following bodies and entities: a) The Tourism Advisory Council of the Balearic Islands. b) The Interdepartmental Tourism Commission. c) The Municipal Tourism Board. d) Regional tourism consortia. e) Any other bodies or entities that may be created. 3. The island and municipal councils shall exercise their competences on tourism matters through the organs that are assigned to them and may have any other bodies or entities that may be created. Article 11 Tourism Advisory Council of the Balearic Islands The Tourism Advisory Council of the Balearic Islands is a collegial and consultative organisation within the tourism administration of the government of the Balearic Islands, with the functions, composition and a system of operation determined by the pertinent regulations. Its members must include representatives of the social stakeholders and the economic-business sector, as well as the island councils, the town halls and other non-productive groups or entities of interest that are directly or indirectly linked to tourism. Article 12 Interdepartmental Tourism Commission 1. The Interdepartmental Tourism Commission is the internal body of the government of the Balearic Islands which coordinates and consults on matters that affect or have repercussions on the tourism sector. 2. The commission shall act under the presidency of the president of the government of the Balearic Islands and the vice presidency of the holder of the regional ministry assigned the competences on tourism matters. Representatives on the commission shall include at least the different regional ministries whose portfolios have a direct or indirect relationship with tourism organisation, promotion or activity. 3. The Interdepartmental Tourism Commission shall have the composition, competences and functions that are outlined by the relevant regulations.

7 Article 13 Municipal Tourism Board 1. The Municipal Tourism Board is the body which coordinates, debates, consults and provides advice to facilitate cooperation between the government of the Balearic Islands and the different municipalities on the Balearic Islands. 2. The Municipal Tourism Board shall act under the presidency of the president of the government of the Balearic Islands and the vice presidency of the current holder of the regional ministry with competences on tourism matters. Its representatives shall include the island councils and all the municipalities on the Balearic Islands. 3. The purpose of the Municipal Tourism Board is the following: a) To jointly plan the tourism policy of the Balearic Islands. b) To facilitate and speed up the coordination of the municipalities tourism management. c) To optimise the resources. d) To improve the position of the Balearic Islands as a tourist destination. e) To boost the quality level of the tourist destination and to update the image of the Balearic Islands abroad. f) To speed up administrative paperwork in an effort to encourage the development and competitiveness of the tourism sector. 4. The structure, system of operation, composition and functions of the municipal tourism boards be established via regulations. 5. Every island council may create another Municipal Tourism Board in its territorial sphere. Article 14 Regional tourism consortia Tourism consortia are organisations of encounter, coordination and work shared by the different administrations or public or private non profit entities in the tourism sector. They shall have a legal personality of their own and may hold the tourism competences that the public entities belonging to the consortium determine, always subject to the legislation in force. SECTION II RIGHTS AND RESPONSIBILITIES OF USERS OF TOURIST SERVICES AND TOURISM COMPANIES Chapter I Rights and responsibilities of users of tourist services Article 15 Rights of users of tourist services Without prejudice to the provisions contained in the regulations on the defence and protection of consumers or users, or any other applicable regulations, the users of tourist services have the right to: a) Receive sufficient, truthful, understandable, effective, objective, unequivocal and comprehensive information on the price, conditions and characteristics of the tourist goods and services that they are offered before purchasing them. b) Obtain all the documents that accredit the terms of the purchase of the tourist services and receipts of payment. c) Receive the tourist services and their quality in accordance with the category of the company, service or establishment purchased. d) Access tourist establishments open to the public and be able to freely enter and remain in them, with no more or fewer limitations than the ones established by the specific regulations for each activity and by the internal rules of the establishment. There may not be discrimination of any kind for reasons of birth, race, sex, religion, opinion or other personal or social circumstances, and each user must be treated politely and with respect for their personal dignity. e) Enjoy the safety of their own person and their belongings, and receive from the provider of tourist services information on any risk that may derive from the normal use of the facilities, resources or services according to their nature and the characteristics of the activity, along with any safety measures adopted. f) Enjoy peace and quiet and privacy in the terms established in the legislation in force and be informed of any momentary inconvenience that may alter the tranquillity and restfulness. They also have the right not to be disturbed by any advertising-related practices that run counter to the legislation currently in force. g) Identify in an easily visible spot the different accreditations regarding the classification, category and specialisation of the establishment, as well as any quality seals and notifications of maximum capacity or any other information related to the exercise of the activity, in accordance with the provisions of the regulations currently in force. h) File any grievances and complaints. i) Obtain from the tourism administration up-to-date, detailed information on the different aspects of the products and services and tourism resources available on the Balearic Islands. j) Ensure that their personal information is protected in the terms set forth in the legal system. Article 16 Responsibilities of users of tourist services For the purposes of this law, without prejudice to the provisions contained in any other laws that may be applicable, the users of tourist services have the obligation to: a) Respect the rules on use or the internal system of the tourist establishments and the particular rules of the sites they may visit or where they may perform tourist activities. b) Observe the rules on hygiene, politeness, peaceful social coexistence, dress and respect for people, institutions and customs for the proper use of the different tourist services. c) Pay the price of the service purchased at the time that the invoice is issued or, if applicable, in the time, place and way agreed upon; under no circumstances shall filing a complaint or grievance make the user exempt from paying for the services rendered. d) Respect the environment, historical and cultural heritage and tourism resources on the Balearic Islands. e) Respect the facilities and equipment of the tourism companies and establishments. f) Comply with the system of reservations in accordance with the provisions of the applicable regulations and, in the case of accommodations, respect the departure date agreed upon by leaving the occupied unit free. g) Treat everyone working in tourist activities with respect and dignity. h) Never grant to third parties the right to use the services purchased unless this is allowed by the legal system. Article 17 Conflict resolution Without prejudice to the freedom of users of tourist services and tourism companies to choose the legal means to resolve any discrepancies and conflicts that might arise between them, the tourism administration shall encourage consumer arbitration. Chapter II Rights and responsibilities of tourism companies Article 18 Rights of tourism companies For the purposes of this law, without prejudice to the contents of any other provisions that may be applicable, tourism companies have the following rights: a) To freely perform their activity without any further limitations than those contained in the legal system. b) To receive from the bodies which hold the competences in tourism matters the information needed, prior to the start of their activity and during its performance, on fulfilment of the requirements contained in the tourist regulations. This right includes remote access to both information on the procedures needed to access and exercise their activity and the possibility of completing the paperwork needed for this in the terms legally established. c) To be informed of any relevant measures and actions in tourism matters that the tourism administration is performing. d) To participate through their most representative organisations and sectoral organisations in the procedures to adopt any relevant public decisions related to tourism which may affect them. e) To keep included the information on their facilities, characteristics and specific goods and services in the catalogues, guides, directories and IT systems of the tourism administration, according to the tourist resource or service or the scope to which these promotional instruments extend.