By:  Carona                                                       S.B. No. 446
	(In the Senate - Filed February 10, 2005; February 15, 2005,
read first time and referred to Committee on Business and Commerce; 
March 10, 2005, reported adversely, with favorable Committee 
Substitute by the following vote:  Yeas 8, Nays 0; March 10, 2005, 
sent to printer.)


COMMITTEE SUBSTITUTE FOR S.B. No. 446                                    By:  Lucio


A BILL TO BE ENTITLED

AN ACT


relating to the reduction in value of a gift card.                          
	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 35.42 to read as follows:
	Sec. 35.42.  REDUCTION IN VALUE OF GIFT CARD PROHIBITED.  
(a)  In this section, "gift card" includes a gift card, the value of 
which is intended to be electronically readable, or a gift 
certificate.
	(b)  A condition relating to the use of a gift card is void if 
it provides that:
		(1)  the value of the card decreases over a period of 
time; or       
		(2)  a fee is charged against the balance of the card 
after a certain period of time.
	(c)  Subsection (b) does not affect the validity of a gift 
card containing a condition that is void under Subsection (b).
	(d)  This section does not apply to:                                    
		(1)  a calling card issued by a prepaid calling card 
company regulated under Section 55.253, Utilities Code; or
		(2)  a gift card distributed by the issuer to a consumer 
under an awards, loyalty, or promotional program without the 
consumer giving money in exchange for the card.
	(e)  This section does not create a cause of action against a 
person who issues or sells a gift card.
	SECTION 2.  The change in law made by Section 35.42, Business &
 Commerce Code, as added by this Act, applies only to a gift card 
issued or activated on or after the effective date of this Act.  A 
gift card issued or activated before the effective date of this Act 
is governed by the law in effect when the card was issued or 
activated, and the former law is continued in effect for that 
purpose.
	SECTION 3.  This Act takes effect September 1, 2005.                           



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