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

1.7 	Section 1. [325E.59] GIFT CERTIFICATES AND GIFT CARDS.
1.8 		Subdivision 1.Definition of gift certificate or gift
1.9 	card. For purposes of this section and section 325E.60, "gift
1.10 	certificate" or "gift card" means a prefunded tangible or
1.11 	electronic record evidencing an issuer's agreement to provide
1.12 	goods, services, credit, money, or anything of value.  The terms
1.13 	include but are not limited to a tangible card, electronic card,
1.14 	store-valued card, or certificate or similar instrument, card,
1.15 	or tangible record that contains a microprocessor chip, magnetic
1.16 	chip, or other means for the storage of information and for
1.17 	which the value is reduced upon each use.
1.18 		Subd. 2.Prohibited sales. It is unlawful for any person
1.19 	to sell a gift certificate or gift card to a purchaser that
1.20 	contains:
1.21 	(1) an expiration date; or 
1.22 	(2) a service fee, including, but not limited to, a service
1.23 	fee for dormancy.
1.24 		Subd. 3.How redeemed. Any gift certificate or gift card
1.25 	sold on or after August 1, 2005, is redeemable in cash for its
2.1 	cash value, or subject to replacement with a new gift
2.2 	certificate or gift card at no cost to the purchaser or holder.
2.3 		Subd. 4.Validity. A gift certificate or gift card sold
2.4 	without an expiration date is valid until redeemed or replaced.
2.5 		Subd. 5.Nonapplication. This section does not apply to
2.6 	any of the following gift certificates or gift cards issued on
2.7 	or after August 1, 2005, provided the expiration date appears in
2.8 	capital letters in at least 10-point font on the front of the
2.9 	gift certificate or gift card:
2.10 	(1) gift certificates or gift cards that are distributed by
2.11 	the issuer to a consumer pursuant to an awards, loyalty, or
2.12 	promotional program without any money or other thing of value
2.13 	being given in exchange for the gift certificate or gift card by
2.14 	the consumer; and 
2.15 	(2) gift certificates or gift cards that are sold below
2.16 	face value at a volume discount to employers or nonprofit and
2.17 	charitable organizations for fund-raising purposes if the
2.18 	expiration date on those gift certificates or gift cards is not
2.19 	more than 30 days after the date of sale.
2.20 		Subd. 6.Exception. Nothing in subdivision 2, clause
2.21 	(1), prevents an issuer of gift certificates or gift cards from
2.22 	including on any gift certificate or gift card a provision that
2.23 	entitles the purchaser to a full refund of the amount that the
2.24 	purchaser paid for that gift certificate or gift card upon the
2.25 	occurrence of the following circumstances:
2.26 	(1) the gift certificate or gift card is purchased as a
2.27 	gift for another person;
2.28 	(2) the time in which the gift certificate or gift card may
2.29 	be redeemed is disclosed on the gift certificate or gift card;
2.30 	and 
2.31 	(3) the holder of the gift certificate or gift card does
2.32 	not redeem the gift certificate or gift card within the time
2.33 	described in clause (2).

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

3.35 	Sec. 3. [325E.61] PENALTIES AND REMEDIES.
3.36 	Any person found to have violated section 325E.59 or
4.1 	325E.60 is subject to the penalties and remedies provided in
4.2 	section 8.31.