81R5721 JE-D

By: Leibowitz H.B. No. 3155

A BILL TO BE ENTITLED

AN ACT

relating to the expiration and abandonment of stored value cards.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 604.002, Business & Commerce Code, as effective April 1, 2009, is amended to read as follows:

Sec. 604.002. INAPPLICABILITY OF CHAPTER. This chapter does not apply to a stored value card [that]:

(1) that is issued by:

(A) a financial institution acting as a financial agent of the United States or this state;

(B) a federally insured financial institution, as defined by Section 201.101, Finance Code, if the financial institution is primarily liable for the card as the issuing principal; or

(C) an air carrier holding a certificate of public convenience and necessity under Title 49, United States Code;

(2) that is issued as a prepaid calling card by a prepaid calling card company regulated under Section 55.253, Utilities Code;

(3) that is distributed by the issuer to a person under an awards, rewards, loyalty, incentive, rebate, or promotional program and is not issued or reloaded in exchange for money tendered by the cardholder;

(4) that is sold below face value or donated to:

(A) an employee of the seller or issuer;

(B) a nonprofit or charitable organization; or

(C) an educational institution for fund-raising purposes; or

(5) [does not expire and] for which the seller does not charge a fee [other than a fee] described in Section 604.051.

SECTION 2. The heading to Subchapter B, Chapter 604, Business & Commerce Code, as effective April 1, 2009, is amended to read as follows:

SUBCHAPTER B. [PERMISSIBLE] FEES PROHIBITED

SECTION 3. Section 604.051, Business & Commerce Code, as effective April 1, 2009, is amended to read as follows:

Sec. 604.051. FEES AND CHARGES ASSOCIATED WITH [RELATED TO ISSUANCE AND HANDLING OF] CARD PROHIBITED. The [If disclosed as required by Subchapter C, the] issuer of a stored value card may not impose or [and] collect a fee associated with a stored value card, including [reasonable]:

(1) a handling fee in connection with the issuance of or adding of value to the card;

(2) an access fee for a card transaction conducted at an unmanned teller machine, as defined by Section 59.301, Finance Code; [and]

(3) a reissue or replacement charge if an expired or lost card is reissued or replaced; or

(4) a periodic fee or other charge that causes the unredeemed balance of the card to decrease over time.

SECTION 4. Section 604.101, Business & Commerce Code, as effective April 1, 2009, is amended to read as follows:

Sec. 604.101. REQUIRED DISCLOSURE OF CERTAIN MATTERS APPLICABLE TO CARD. An expiration date, [or] policy, [fee,] or other material restriction or contract term applicable to a stored value card must be clearly and conspicuously disclosed at the time the card is sold or issued to a person to enable the person to make an informed decision before purchasing the card.

SECTION 5. Section 604.102, Business & Commerce Code, as effective April 1, 2009, is amended to read as follows:

Sec. 604.102. REQUIRED PRINTING OF CERTAIN DISCLOSURES. In addition to the disclosure required under Section 604.101, a disclosure regarding the expiration of a stored value card [or a periodic fee that reduces the unredeemed value of a stored value card] must be legibly printed on the card.

SECTION 6. Section 604.103, Business & Commerce Code, as effective April 1, 2009, is amended to read as follows:

Sec. 604.103. VALIDITY OF CARD SOLD WITHOUT REQUIRED DISCLOSURES. A stored value card sold without the disclosure required by this subchapter of an expiration date, [or] policy, [fee,] or other material restriction or contract term applicable to the card is valid until the earlier of the date the card:

(1) expires as provided by Section 604.104; or

(2) is redeemed or replaced.

SECTION 7. The heading to Subchapter C, Chapter 604, Business & Commerce Code, as effective April 1, 2009, is amended to read as follows:

SUBCHAPTER C. STORED VALUE CARD REQUIREMENTS [REQUIRED

DISCLOSURES]

SECTION 8. Subchapter C, Chapter 604, Business & Commerce Code, as effective April 1, 2009, is amended by adding Section 604.104 to read as follows:

Sec. 604.104. EXPIRATION OF STORED VALUE CARD. A stored value card expires on the earlier of:

(1) the third anniversary of the date the card was issued or sold; or

(2) the card's expiration date.

SECTION 9. Sections 72.1016(a) and (b), Property Code, are amended to read as follows:

(a) This section applies to a stored value card, as defined by Section 604.001, Business & Commerce Code, other than a card:

(1) to which Chapter 604, Business & Commerce Code, does not apply by operation of Sections 604.002(1)(A) and (C) and 604.002(2)-(4) [604.002(2)-(5)] of that code; or

(2) that is linked to and draws its value solely from a deposit account subject to Chapter 73.

(b) The [If the existence and location of the owner of a stored value card is unknown to the holder of the property, the] stored value card is presumed abandoned to the extent of its unredeemed and uncharged value on the earlier of:

(1) the card's expiration date;

(2) the third anniversary of the date the card was issued [, if the card is not used after it is issued, or the date the card was last used or value was last added to the card]; or

(3) the first anniversary of the date the card was issued, [if the card is not used after it is issued, or the date the card was last used or value was last added to the card,] if the card's value represents wages, as defined by Section 61.001, Labor Code.

SECTION 10. The following provisions are repealed:

(1) Section 604.052, Business & Commerce Code; and

(2) Section 72.1016(d), Property Code.

SECTION 11. The changes in law made by this Act apply only to a stored value card issued or activated on or after the effective date of this Act. A stored value 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 12. This Act takes effect September 1, 2009.