1.1 	A bill for an act
1.2 	relating to consumer protection; regulating gift
1.3 	certificates and gift cards; proposing coding for new
1.4 	law in Minnesota Statutes, chapter 325E.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. [325E.59] GIFT CERTIFICATES AND GIFT CARDS.
1.7 		Subdivision 1.Prohibited sales. It is unlawful for any
1.8 	person or entity to sell a gift certificate or gift card to a
1.9 	purchaser that contains:
1.10 	(1) an expiration date; or 
1.11 	(2) a service fee, including, but not limited to, a service
1.12 	fee for dormancy, except as provided in subdivision 5.
1.13 		Subd. 2.How redeemed. Any gift certificate or gift card
1.14 	sold after January 1, 2006, is redeemable in cash for its cash
1.15 	value, or subject to replacement with a new gift certificate or
1.16 	gift card at no cost to the purchaser or holder.
1.17 		Subd. 3.Validity. A gift certificate or gift card sold
1.18 	without an expiration date is valid until redeemed or replaced.
1.19 		Subd. 4.Nonapplication. This section does not apply to
1.20 	any of the following gift certificates or gift cards issued on
1.21 	or after January 1, 2006, provided the expiration date appears
1.22 	in capital letters in at least 10-point font on the front of the
1.23 	gift certificate or gift card:
1.24 	(1) gift certificates or gift cards that are distributed by
1.25 	the issuer to a consumer pursuant to an awards, loyalty, or
2.1 	promotional program without any money or other thing of value
2.2 	being given in exchange for the gift certificate or gift card by
2.3 	the consumer;
2.4 	(2) gift certificates or gift cards that are sold below
2.5 	face value at a volume discount to employers or nonprofit and
2.6 	charitable organizations for fund-raising purposes if the
2.7 	expiration date on those gift certificates or gift cards is not
2.8 	more than 30 days after the date of sale; and 
2.9 	(3) gift certificates or gift cards that are issued for a
2.10 	food product.
2.11 		Subd. 5.Gift card dormancy fee. Subdivision 1, clause
2.12 	(2), does not apply to a dormancy fee on a gift card that meets
2.13 	all of the following criteria:
2.14 	(1) the remaining value of the gift card is $5 or less each
2.15 	time the fee is assessed;
2.16 	(2) the fee does not exceed $1 per month;
2.17 	(3) there has been no activity on the gift card for 24
2.18 	consecutive months, including, but not limited to, purchases,
2.19 	the adding of value, or balance inquiries;
2.20 	(4) the holder may reload or add value to the gift card;
2.21 	and 
2.22 	(5) a statement is printed on the gift card in at least
2.23 	10-point font stating the amount of the fee, how often the fee
2.24 	will occur, that the fee is triggered by inactivity of the gift
2.25 	card, and at what point the fee will be charged.  The statement
2.26 	may appear on the front or back of the gift card, but shall
2.27 	appear in a location where it is visible to any purchaser prior
2.28 	to the purchase thereof.
2.29 		Subd. 6.Exception. Nothing in subdivision 1, clause
2.30 	(1), prevents an issuer of gift certificates or gift cards from
2.31 	including on any gift certificate or gift card a provision that
2.32 	entitles the purchaser to a full refund of the amount that the
2.33 	purchaser paid for that gift certificate or gift card upon the
2.34 	occurrence of the following circumstances:
2.35 	(1) the gift certificate or gift card is purchased as a
2.36 	gift for another person;
3.1 	(2) the time in which the gift certificate or gift card may
3.2 	be redeemed is disclosed on the gift certificate or gift card;
3.3 	and 
3.4 	(3) the holder of the gift certificate or gift card does
3.5 	not redeem the gift certificate or gift card within the time
3.6 	described in clause (2).

3.7 	Sec. 2. [325E.60] GIFT CERTIFICATE OR GIFT CARD AS
3.8 	TRUST.
3.9 	(a) A gift certificate or gift card constitutes value held
3.10 	in trust by the issuer of the gift certificate or gift card on
3.11 	behalf of the beneficiary of the gift certificate or gift card.
3.12 	The value represented by the gift certificate or gift card
3.13 	belongs to the beneficiary, or to the legal representative of
3.14 	the beneficiary to the extent provided by law, and not to the
3.15 	issuer.
3.16 	(b) An issuer of a gift certificate or gift card who is in
3.17 	bankruptcy shall continue to honor a gift certificate or gift
3.18 	card issued before the date of the bankruptcy filing on the
3.19 	grounds that the value of the gift certificate or gift card
3.20 	constitutes trust property of the beneficiary.
3.21 	(c)(1) This section does not alter the terms of a gift
3.22 	certificate or gift card.  The terms of a gift certificate or
3.23 	gift card may not make its redemption or other use invalid in
3.24 	the event of a bankruptcy.
3.25 	(2) This section does not require, unless otherwise
3.26 	required by law, the issuer of a gift certificate or gift card
3.27 	to:
3.28 	(i) redeem a gift certificate or gift card for cash;
3.29 	(ii) replace a gift certificate or gift card that has been
3.30 	lost or stolen; or 
3.31 	(iii) maintain a separate account for the funds used to
3.32 	purchase the gift certificate or gift card.
3.33 	(d)(1) This section does not create an interest in favor of
3.34 	the beneficiary of the gift certificate or gift card in any
3.35 	specific property of the issuer.
3.36 	(2) This section does not create a fiduciary or
4.1 	quasi-fiduciary relationship between the beneficiary of the gift
4.2 	certificates or gift cards and the issuer, unless otherwise
4.3 	provided by law.
4.4 	(3) The issuer of a gift certificate or gift card has no
4.5 	obligation to pay interest on the value of the gift certificate
4.6 	or gift card held in trust under this section, unless otherwise
4.7 	provided by law.