79R743 CLG-D

By:  Gallegos                                                     S.B. No. 192



A BILL TO BE ENTITLED

AN ACT

relating to the expiration of or a fee charged in relation to a gift 
certificate.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Title 4, Business & Commerce Code, is amended by 
adding Chapter 48 to read as follows:

CHAPTER 48.  ISSUANCE OR SALE OF GIFT CERTIFICATES
	Sec. 48.001.  DEFINITIONS.   In this chapter:                           
		(1)  "Artistic or cultural organization" means a 
nonprofit organization operating exclusively to provide artistic 
or cultural exhibitions, presentations, or performances for 
viewing by the public, including:
			(A)  an exhibition or presentation of works of 
art;                 
			(B)  an object of cultural or historical 
significance displayed in an art or history museum;
			(C)  a musical or dramatic performance; or                            
			(D)  an educational seminar or program on an 
artistic, cultural, or historical subject.
		(2)  "Financial institution" means a state or national 
bank, state or federal savings and loan association, state or 
federal savings bank, or state or federal credit union doing 
business in this state.
		(3)  "Gift certificate" includes a gift card used for 
the same purpose as a gift certificate.
		(4)  "Value of a gift certificate" means the original 
value of the gift certificate, less any amount charged against the 
balance of the certificate.
	Sec. 48.002.  EXPIRATION OF GIFT CERTIFICATE PROHIBITED.  
(a)  A person may not issue or sell a gift certificate that provides 
that the certificate expires after a certain date.
	(b)  This section does not apply to a gift certificate:                 
		(1)  that states the expiration date on the front of the 
certificate or on the back of the certificate in at least 10-point 
type; and
		(2)  that is:                                                          
			(A)  distributed by the issuer to a consumer under 
an awards or loyalty program or by other means without the consumer 
giving money or any other thing of value in exchange for the 
certificate;
			(B)  donated by the issuer to a nonprofit or 
charitable organization without the organization giving money or 
any other thing of value in exchange for the certificate if the 
certificate:
				(i)  is used to provide charitable services; 
or                    
				(ii)  is used for fund-raising purposes and 
expires on or after the first anniversary of the date on which the 
certificate is issued by the organization; or
			(C)  issued by an artistic or cultural 
organization to a consumer if:
				(i)  the certificate is redeemable solely 
for goods or services provided in this state by the organization;
				(ii)  the value of the certificate at the 
time of expiration will accrue solely to the benefit of the 
organization; and
				(iii)  the certificate expires on or after 
the third anniversary of the date on which the certificate is issued 
by the organization.
	Sec. 48.003.  SERVICE OR INACTIVITY FEES PROHIBITED.  (a)  A 
person may not issue or sell a gift certificate that:
		(1)  provides for a fee in connection with the sale or 
issuance of the certificate; or
		(2)  provides that a fee is charged against the value of 
the certificate, including a fee charged after a certain period of 
time because the holder of the certificate has not used the 
certificate within that period.
	(b)  Subsection (a)(2) does not apply to a gift certificate 
if:       
		(1)  the issuer permits the holder of the certificate  
to add value to the certificate;
		(2)  the value of the gift certificate is $5 or less 
each time the fee is charged;
		(3)  the amount of the fee does not exceed $1 per month;               
		(4)  there has been no activity with respect to the gift 
certificate, including a purchase, balance inquiry, or the adding 
of value to the certificate, for at least 24 consecutive months 
after the date of sale or issuance; and
		(5)  the issuer discloses on the front or back of the 
certificate a statement in at least 6-point type that:
			(A)  a fee will be charged against the value of the 
certificate if there has been no activity with respect to the 
certificate for at least 24 consecutive months after the date of 
sale or issuance; and
			(B)  contains the amount of the fee and how often 
the fee will be charged.
	(c)  If a holder of a gift certificate makes a purchase for an 
amount that is less than the value of the gift certificate, the 
holder may, after the amount of the purchase is charged against the 
balance of the certificate:
		(1)  redeem the remaining value of the certificate in 
cash; or       
		(2)  replace the gift certificate at no additional cost 
to the holder, unless the remaining value of the certificate is less 
than $5.
	Sec. 48.004.  CONFLICTING PROVISION VOID.  A provision of a 
gift certificate that violates this chapter is void but does not 
affect the validity of the certificate.
	Sec. 48.005.  INJUNCTIVE RELIEF.  The attorney general or 
the prosecuting attorney in the county in which a violation of this 
chapter occurs may bring an action in the name of the state to 
restrain or enjoin a person from violating this chapter.
	Sec. 48.006.  APPLICABILITY OF CHAPTER.  This chapter does 
not apply to a gift certificate that is:
		(1)  issued or sold by a financial institution or a 
subsidiary of the institution; and
		(2)  usable with multiple unaffiliated sellers of goods 
or services. 
	SECTION 2.  Chapter 48, Business & Commerce Code, as added by 
this Act, applies only to a gift certificate or gift card issued or 
sold on or after the effective date of this Act.  A gift certificate 
or gift card issued or sold before the effective date of this Act is 
governed by the law in effect when the certificate or card was 
issued or sold, and the former law is continued in effect for that 
purpose.
	SECTION 3.  This Act takes effect September 1, 2005.