BILL NUMBER: SB 250	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Corbett

                        FEBRUARY 14, 2007

   An act to amend Section 1749.5 of the Civil Code, relating to gift
certificates.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 250, as introduced, Corbett. Gift certificates.
   Existing law prohibits the sale of any gift certificate, as
defined, that contains an expiration date or service fee, with
specified exceptions, including, but not limited to, for a gift
certificate issued for a food product. Existing law also provides
that any gift certificate sold after January 1, 1997, is redeemable
in cash or subject to replacement with a new gift certificate.
   This bill would allow any gift certificate with a cash value of
less than $20 to be redeemed in cash for its cash value. The bill
would also delete the exception described above for food product gift
certificates, thereby prohibiting those gift certificates from
containing an expiration date or service fee.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1749.5 of the Civil Code is amended to read:
   1749.5.  (a) It is unlawful for any person or entity to sell a
gift certificate to a purchaser that contains any of the following:
   (1) An expiration date.
   (2) A service fee, including, but not limited to, a service fee
for dormancy, except as provided in subdivision (e).
   (b)  (1)    Any gift certificate sold after
January 1, 1997, is redeemable in cash for its cash value, or subject
to replacement with a new gift certificate at no cost to the
purchaser or holder. 
   (2) Notwithstanding paragraph (1), any gift certificate with a
cash value of less than twenty dollars ($20) is redeemable in cash
for its cash value. 
   (c) A gift certificate sold without an expiration date is valid
until redeemed or replaced.
   (d) This section does not apply to any of the following gift
certificates issued on or after January 1, 1998, provided the
expiration date appears in capital letters in at least 10-point font
on the front of the gift certificate:
   (1) Gift certificates that are distributed by the issuer to a
consumer pursuant to an awards, loyalty, or promotional program
without any money or other thing of value being given in exchange for
the gift certificate by the consumer.
   (2) Gift certificates that are sold below face value at a volume
discount to employers or to nonprofit and charitable organizations
for fundraising purposes if the expiration date on those gift
certificates is not more than 30 days after the date of sale.

   (3) Gift certificates that are issued for a food product.

   (e) Paragraph (2) of subdivision (a) does not apply to a dormancy
fee on a gift card that meets all of the following criteria:
   (1) The remaining value of the gift card is five dollars ($5) or
less each time the fee is assessed.
   (2) The fee does not exceed one dollar ($1) per month.
   (3) There has been no activity on the gift card for 24 consecutive
months, including, but not limited to, purchases, the adding of
value, or balance inquiries.
   (4) The holder may reload or add value to the gift card.
   (5) A statement is printed on the gift card in at least 10-point
font stating the amount of the fee, how often the fee will occur,
that the fee is triggered by inactivity of the gift card, and at what
point the fee will be charged. The statement may appear on the front
or back of the gift card, but shall appear in a location where it is
visible to any purchaser prior to the purchase thereof.
   (f) An issuer of gift certificates may accept funds from one or
more contributors toward the purchase of a gift certificate intended
to be a gift for a recipient, provided that each contributor is
provided with a full refund of the amount that he or she paid toward
the purchase of the gift certificate upon the occurrence of all of
the following:
   (1) The funds are contributed for the purpose of being redeemed by
the recipient by purchasing a gift certificate.
   (2) The time in which the recipient may redeem the funds by
purchasing a gift certificate is clearly disclosed in writing to the
contributors and the recipient.
   (3) The recipient does not redeem the funds within the time
described in paragraph (2).
   (g) The changes made to this section by the act adding this
subdivision shall apply only to gift certificates issued on or after
January 1, 2004.