SRC-JEC H.B. 650 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 650
78R11598 ATP-DBy: Campbell (Williams)
Business & Commerce
5/21/2003
Engrossed


DIGEST AND PURPOSE 

Current law allows for the expiration of gift certificates and gift cards.
There is no law  requiring businesses that issue gift certificates to
disclose certain information about its value.  Consumers can purchase
these gift certificates or "gift cards" not knowing that the certificate
loses value over time, has an expiration date, or that there are
transaction fees charged after a certain amount of time.  H.B. 650
prohibits the expiration of most gift certificates and gift cards before
the second anniversary of the date on which the card was issued.  H.B. 650
also requires businesses and card issuers to disclose certain types of
information on or with a gift certificate or gift card. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter D, Chapter 35, Business & Commerce Code, by
adding Section 35.58, as follows: 

Sec. 35.58.  EXPIRATION OF GIFT CERTIFICATE PROHIBITED.  (a)  Defines
"gift certificate." 

(b)  Prohibits a person from issuing or selling a gift certificate that
provides that the certificate expires before the second anniversary of the
date on which the certificate is issued or sold.  Provides that a gift
certificate that contains an expiration date prohibited by this subsection
expires on the second anniversary of the date on which the certificate is
issued or sold. 

(c)  Sets forth gift certificates to which Subsection (b) does not apply.

(d)  Requires a condition relating to the use of a gift certificate to be
clearly stated on the certificate, the envelope or covering of the
certificate, or the receipt given to the purchaser of the certificate, if
the condition provides that the certificate decreases in value over a
period of time or that a fee is charged against the balance of the
certificate after a certain period of time.  Provides that a gift
certificate that does not clearly state a condition described by this
subsection may be redeemed at any time for the original value of the
certificate, less any amount charged against the balance of the
certificate by the consumer. 

SECTION 2.  Makes application of this Act prospective.

SECTION 3.  Effective date:  September 1, 2003.