78R11598 ATP-D


By:  Campbell                                                     H.B. No. 650

Substitute the following for H.B. No. 650:                                    

By:  Oliveira                                                 C.S.H.B. No. 650


A BILL TO BE ENTITLED
AN ACT
relating to the expiration or reduction in value of a gift certificate. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Subchapter D, Chapter 35, Business & Commerce Code, is amended by adding Section 35.58 to read as follows: Sec. 35.58. EXPIRATION OF GIFT CERTIFICATE PROHIBITED. (a) In this section, "gift certificate" means a certificate that is issued or sold by a person engaged in the business of offering goods or services for sale at retail and that entitles a recipient of the certificate to the delivery of goods or services from the person who issued or sold the certificate. The term includes a gift card used for the same purpose as a gift certificate. (b) A person may not issue or sell a gift certificate that provides that the certificate expires before the second anniversary of the date on which the certificate is issued or sold. 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) Subsection (b) does not apply to a gift certificate: (1) that states the expiration date on the front of the certificate in capitalized letters in at least 10-point type; and (2) that is: (A) distributed by the issuer to a consumer under an awards, loyalty, or promotional program without the consumer giving money in exchange for the certificate; (B) sold below face value at a volume discount to an employer or a nonprofit or charitable organization for fund–raising purposes, if the expiration date is not more than 30 days after the date of the sale; or (C) issued for a food product. (d) A condition relating to the use of a gift certificate must 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. 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. The change in law made by Section 35.58, Business & Commerce Code, as added by this Act, applies only to a gift certificate issued or sold on or after the effective date of this Act. A gift certificate issued or sold before the effective date of this Act is governed by the law in effect when the certificate was issued or sold, and the former law is continued in effect for that purpose. SECTION 3. This Act takes effect September 1, 2003.