Legislature(2007 - 2008)BELTZ 211
04/03/2007 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB116 | |
| SB124 | |
| SB115 | |
| HB34 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 124 | TELECONFERENCED | |
| + | SB 115 | TELECONFERENCED | |
| + | HB 34 | TELECONFERENCED | |
| += | SB 116 | TELECONFERENCED | |
SB 115-GIFT CARDS
CHAIR ELLIS announced SB 115 to be up for consideration.
MARIT CARLSON-VAN DORT, staff to Senator McGuire, sponsor of SB
115, explained this bill was crafted in response to a dramatic
increase in consumer demand for gift options and increasing
consumer frustration with hidden or poorly disclosed fees and
restrictions.
She said in the last few years, several states have begun to
adopt measures to limit or restrict expiration dates and fees
associated with these gift cards. This bill will insure gift
cards that are purchased will retain their full purchase value
in perpetuity and will not be subject to a variety of fees such
as dormancy, latency, administrative and periodic fees - any fee
that will have the effect of reducing the total amount for which
the holder may redeem the card.
The bill excludes gift cards that are issued under an awards,
loyalty or promotional program that is donated to a non-profit
or a charitable organization or a card that is used to purchase
gifts or services through numerous sellers or vendors. This bill
also excludes bank-issued gift cards and telephone cards.
In addition, she said, gift cards that are issued in the
ordinary course of an issuer' business that remain unclaimed by
the owner for more than three years are presumed abandoned and
may be subject to reporting to the State of Alaska Department of
Revenue as unclaimed property.
2:05:55 PM
SENATOR STEVENS asked where they stand on the perpetuity issue.
MS. VAN DORT replied that "in perpetuity" was left in the bill,
because the sponsor and committee both felt that subjecting it
to the unclaimed property reporting requirement provided a "nice
balance" for consumers and for businesses. The business can get
it off their books and the consumer can still go to the state
for a redemption.
2:06:17 PM
SENATOR STEVENS asked if the state receives something eventually
for handling unclaimed property. How asked how it works.
2:06:32 PM
MS. VAN DORT replied if the issuer of the gift card reported the
balance of the gift to the state as unclaimed property, a
consumer could click on the Department of Revenue's website and
find it and the state would send him a check for the value of
the gift card. If it was not reported, his other option would be
to go directly to the vendor of the card.
2:07:27 PM
SENATOR STEVENS said at some point the state might have to
balance with the vendor.
MS. VAN DORT replied that one would receive the value of the
gift card from the State of Alaska if the vendor qualified and
reported it.
CHAIR ELLIS asked how this bill is similar to the bill
introduced by Representative Gardner.
MS. VAN DORT replied that it is identical to Representative
Gatto's legislation and Representative Gardner was a co-sponsor.
2:09:20 PM
RACHAEL LEWIS, Unclaimed Property Administrator, Department of
Revenue (DOR), gave the committee an overview of her
department's duties. She explained that in 1986 Alaska adopted
the Uniform Unclaimed Property Act. This means that any uncashed
payroll check, any uncashed health insurance reimbursement
check, stocks, bonds, bank accounts that have inactivity for
certain periods of time, rather than the business retaining that
money, it turns it over to the State of Alaska that acts as the
custodian. "We never take full title. We just hold it in
perpetuity 'til an owner or their heir comes forward."
MS. LEWIS said that gift cards and certificates are already in
the Act. This bill doesn't really change that; but it adds
definitions to the Unfair Trade Practices. She found that people
do not realize how much money adds up from just small uncashed
payroll checks. Since 1986, $88 million has been turned over as
unclaimed property. She has returned $23 million of unclaimed
property to people in Alaska and about $56 million has been put
into the general fund because it's an excess she doesn't believe
the owners will come forward to claim. So, they return about 30
percent and all Alaskans get to benefit from the state acting as
custodian.
2:11:26 PM
CHAIR ELLIS asked what efforts the department went through to
contact people to claim property.
MS. LEWIS replied that the department make efforts annually and
pools its searchable database with 38 other states. She doesn't
advertise in newspapers any more, because it costs $33,000 in
Alaska to advertise 1,100 claims. They list seven times the
claims on the Internet for free.
2:13:05 PM
SENATOR STEVENS asked what dollar amount they are talking about
in gift cards.
2:13:36 PM
MS. LEWIS replied that she is holding about $56,000 in gift
cards and certificates for 1,000 Alaskans. Last year an
estimated $58 billion worth of gift cards were sold nationwide
and 5 - 10 percent of those became unclaimed, lost or not
redeemed.
CHAIR ELLIS asked if passing the bill would be a net gain or a
net drain for her office.
MS. LEWIS replied it would be good public policy.
2:14:54 PM
MS. VAN DORT returned to the table and the chair asked her who
else had weighed in.
MS. VAN DORT replied no one.
CHAIR ELLIS asked her to contact Alaska Public Interest Research
Group (AKPIRG) and other consumer groups for their opinions.
MS. VAN DORT added that she had a conversation with Mr. Glen
Peterson, District Manager of Carrs/Safeway, who expressed
support. His one concern was whether or not the gift cards would
be redeemable for cash - language on page 3, lines 29 - 31. The
drafter said the language could stand clarification, but the
sponsor didn't think it took away the individual discretion of
the business owner. At this time they state whether or not their
certificate is redeemable at full cash value for cash or just
for goods and services. Her opinion was to let it lie.
2:17:07 PM
CHAIR ELLIS announced SB 115 would be held over.
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