Legislature(2007 - 2008)BELTZ 211

03/22/2007 09:00 AM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Moved CSHB 117(JUD) Out of Committee
Moved CSSB 33(STA) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSSB 92(STA) Out of Committee
Moved CSSB 115(STA) Out of Committee
                        SB 115-GIFT CARDS                                                                                   
9:13:28 AM                                                                                                                    
CHAIR MCGUIRE announced  the consideration of SB 115.  There is a                                                               
concern in combining the term  "certificate" with "gift card" and                                                               
so there should  be a definition of both in  the bill. There also                                                               
was a  question about  the value  of a  gift card  remaining into                                                               
perpetuity or not.                                                                                                              
9:14:57 AM                                                                                                                    
MARIT VAN DORT, Staff to  Senator McGuire, said leaving the value                                                               
in perpetuity  strikes a nice balance  between providing consumer                                                               
protection and giving business owners  the choice of issuing gift                                                               
cards. Alaska is making money  off of the unclaimed property, and                                                               
there is no reason to limit  it. She said Rachel Lewis noted that                                                               
the law  isn't being  changed; gift cards  are just  being added.                                                               
Instead of going through the  Attorney General's office, a person                                                               
can go to the Department of  Revenue website and get the value of                                                               
a gift card  back if it has been reported  as unclaimed property.                                                               
If someone held a gift card for  a long time and the business had                                                               
not recorded it  as unclaimed property, the person  with the gift                                                               
card can tell the business to  honor it or threaten to report the                                                               
business to the Department of Revenue.                                                                                          
9:17:24 AM                                                                                                                    
CHAIR MCGUIRE said a business  is required to report an aggregate                                                               
of  $750 worth  of unclaimed  property. The  bill doesn't  change                                                               
that, but it includes gift cards.  Whether a consumer buys a gift                                                               
card or  a product, "the  business can  choose, at that  point in                                                               
time, to  calculate it  for however they  want into  their profit                                                               
statements.  Later, if  they decide,  put  it off  the books  and                                                               
three  years  later report  it  as  unclaimed property."  If  the                                                               
business has reached an aggregate  $750, it is required to report                                                               
the  unclaimed property,  giving the  consumer the  right to  get                                                               
that  money  back.  "I  think   that's  a  really  nice  consumer                                                               
protection to have  in Alaska." She noted  elderly consumers, and                                                               
"somebody has  given their money toward  that gift to you,  so it                                                               
still ought to have a value."  This is a nationwide movement, she                                                               
noted.  The bill  also eliminates  fees  and interest.  Merchants                                                               
have  no  obligation to  issue  gift  cards,  she said,  but  she                                                               
believes they will because of the money they can make from them.                                                                
9:19:54 AM                                                                                                                    
SENATOR GREEN  said one store  has racks of cards  from different                                                               
venders,  so either  the store  receives a  cut from  selling the                                                               
card or it must add a fee.                                                                                                      
MS. VAN  DORT said unless  the gift card  is issued from  a bank,                                                               
the fees will not be allowed.                                                                                                   
SENATOR FRENCH  said Carrs has  $50 Nordstrom  gift certificates,                                                               
so there  must be an agreement  that Nordstrom gets $48  of those                                                               
dollars, for example, and Carrs gets $2.                                                                                        
CHAIR   MCGUIRE   said  the   two   companies   can  make   those                                                               
arrangements, but  the consumer  won't be  required to  pay more.                                                               
"So when you buy  the $50 card at the checkout  stand, you get 50                                                               
bucks worth  of merchandise. What  happens between  Nordstrom and                                                               
Carrs is not impacted by this."                                                                                                 
9:21:40 AM                                                                                                                    
SENATOR GREEN  said right now  a person  will pay about  $6.50 in                                                               
fees for a $150 gift card.                                                                                                      
CHAIR  MCGUIRE  said  the  merchants   will  have  to  make  that                                                               
decision. She  offered that  it has  been extremely  valuable for                                                               
Nordstrom  and others  to make  gift cards  available. She  got a                                                               
card  and  got  the  full  value, she  added,  but  the  bill  is                                                               
necessary because  of an  increasing trend to  tack on  fees that                                                               
the consumer pays.                                                                                                              
9:23:10 AM                                                                                                                    
SENATOR GREEN said the businesses  should be alerted in case they                                                               
want to testify. Gift cards are convenient, she stated.                                                                         
CHAIR  MCGUIRE suggested  reaching out  to Carrs  and Kroger  and                                                               
having them come and talk about the gift card structures.                                                                       
9:24:21 AM                                                                                                                    
MS. VAN DORT said gift  certificates are defined in statute under                                                               
gift cards, "so  we cannot add gift certificate  in there because                                                               
we would have two terms meaning the same thing."                                                                                
CHAIR  MCGUIRE said  the committee  sees the  gift card  and gift                                                               
certificate differently, although they do the same thing.                                                                       
TERRY BANNISTER, Attorney, Legislative  Affairs, said a different                                                               
term, like  "gift device",  could be  used to  cover certificates                                                               
and cards, but right now gift  card is the main definition and it                                                               
is used throughout  the bill. Adding gift  certificate, "we would                                                               
have a  separate term being used,  but gift card covers  it." The                                                               
title  uses the  term gift  certificate because  "we're affecting                                                               
gift certificates;  we're changing  the names  and all  that, and                                                               
that's why  I was  trying to  be very careful  to say:  oh, we're                                                               
talking about gift certificates to  the extent that we're kind of                                                               
replacing  the  terminology with  gift  cards.  So we  wanted  to                                                               
notify everybody that we were  addressing this." She said on page                                                               
1, line  5, the section  title should  be corrected to  read gift                                                               
card and  credit memos, and  that could  be done by  the revisor.                                                               
"Whenever  we  delete  something  or  change a  term  we  try  to                                                               
evaluate whether  or not  we need  to alert  people to  tell them                                                               
that this has been affected."                                                                                                   
9:27:04 AM                                                                                                                    
CHAIR  MCGUIRE said  prior  to this  bill,  gift certificate  was                                                               
defined and  not gift card. "So  now the question is  whether you                                                               
define  them both  separately, or  whether you  replace the  term                                                               
gift certificate  with gift card,  or whether  we call it  a gift                                                               
SENATOR STEVENS asked  how it differs from a credit  memo, and he                                                               
gave an  example of selling  something to a second-hand  store in                                                               
return for credit in the store.                                                                                                 
MS. BANNISTER said she will have  to check the uniform act to see                                                               
how credit  memo is defined.  She assumes that wouldn't  fit, but                                                               
it could  be included under gift  card. It seems to  be a totally                                                               
different  item, she  stated. "It  is not  affected by  the bill;                                                               
we've left it as it is."                                                                                                        
9:29:24 AM                                                                                                                    
SENATOR  BUNDE  said there  is  no  simple  issue that  we  can't                                                               
convolute.  The bill  is focused  on  the new  phenomena of  gift                                                               
cards, "and  I would say  that gift certificate is  a distinction                                                               
that  doesn't make  a difference."  He said,  "Go ahead  with the                                                               
card," which is  electronic and is used like a  credit card. Some                                                               
merchants charge a fee for using a credit card, he noted.                                                                       
CHAIR MCGUIRE  said her inclination  is to  keep the bill  as is,                                                               
but also to  make the technical change. She  offered Amendment 1,                                                               
as follows:                                                                                                                     
     Page 1, line 5:                                                                                                            
          Delete "certificates"                                                                                               
          Insert "cards"                                                                                                      
Hearing no objection, Amendment 1 carried.                                                                                      
9:31:08 AM                                                                                                                    
SENATOR GREEN  said she doesn't  see where a gift  certificate is                                                               
defined under  gift card. It looks  like it only applies  to gift                                                               
cards, she stated.                                                                                                              
MS. BANNISTER said gift card is  a broad definition, and it means                                                               
a device-any  kind of device. It  could be a certificate.  By its                                                               
terms, the gift card definition includes gift certificates.                                                                     
SENATOR FRENCH  said line 26  defines the device as  including an                                                               
electronic card but doesn't say  it could be a hand-written piece                                                               
of paper issued by a store.                                                                                                     
MS. BANNISTER said, "You may want  to do that." The language uses                                                               
the term "includes," so it is not limited to an electronic card.                                                                
9:33:17 AM                                                                                                                    
CHAIR  MCGUIRE   suggested  the   following:  includes   a  paper                                                               
certificate or an electronic card.                                                                                              
9:34:20 AM                                                                                                                    
CHAIR MCGUIRE asked  about any other material  that a certificate                                                               
could  be  written   on  besides  paper.  "Should   we  just  say                                                               
certificate?"  There may  be another  kind of  material, and  she                                                               
noted a business card made out of metal.                                                                                        
SENATOR FRENCH said he liked using the term "paper."                                                                            
MS. BANNISTER said since the  language starts with "includes," it                                                               
does not exclude a metal certificate.                                                                                           
CHAIR MCGUIRE offered Amendment 2, as follows:                                                                                  
     Page 2, line 26, following "includes":                                                                                     
          Insert "a paper certificate or"                                                                                     
Hearing no objection, Amendment 2 carried.                                                                                      
SENATOR  FRENCH moved  SB 115,  as amended,  from committee  with                                                               
individual  recommendations and  the attached  zero fiscal  note.                                                               
There being  no objection,  CSSB 115(STA)  moved from  the Senate                                                               
State Affairs Committee.                                                                                                        

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