HOUSE BILL REPORT

HB 1313

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 13 members: Representatives Kirby, Chair; Reeves, Vice Chair; Vick, Ranking Minority Member; Hoff, Assistant Ranking Minority Member; Barkis, Blake, Dufault, Ryu, Santos, Stanford, Volz, Walen and Ybarra.

Background:

Gift Certificates and Gift Cards.

A "gift certificate" is defined as an instrument evidencing a promise by the seller that consumer goods or services will be provided to the bearer of the record to the value or credit shown in the record. A "gift card" is a gift certificate in the form of a card, or a stored value card or other physical medium, containing stored value primarily intended to be exchanged for consumer goods and services.

Unclaimed Property.

The Uniform Unclaimed Property Act governs the disposition of intangible property that is unclaimed by its owner. A business that holds unclaimed intangible property must transfer it to the Department of Revenue (DOR) after a holding period set by statute. The holding period varies by type of property, but for most unclaimed property the holding period is three years. After the holding period has passed, the business in possession of the property transfers the property to the DOR. Abandoned property on gift certificates is exempt from the Uniform Unclaimed Property Act under certain conditions. A "gift certificate" is defined to mean a record evidencing a promise by a seller to provide goods or services for the value of the record, and includes gift cards.

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Summary of Substitute Bill:

"Rewards card" is defined as any loyalty, incentive, or promotional program managed by a financial organization, whether represented by a card or electronic record, and established for the purpose of providing cardholder awards, rewards, rebates, or other amounts to compensate the cardholder for the cardholder's relationship with the entity sponsoring the rewards card. No direct money can be paid by the cardholder for the rewards card. A rewards card is not a gift card or a gift certificate.

The issuer of a rewards card has no obligation to pay interest on the value of the rewards card held in trust and there is no fiduciary or quasi-fiduciary relationship between the beneficiary of the rewards card and the issuer of the rewards card however, a minimum annual fee is not considered direct money paid.

Rewards cards are added to the list of property exempt from the Uniform Unclaimed Property Act.

Substitute Bill Compared to Original Bill:

The substitute bill removes all revisions to the chapter related to gift cards and adds definitions of "cardholder" and "rewards card" to the Uniform Unclaimed Property Act. The rewards card definition is updated to only include rewards cards issued by financial institutions.

Staff Summary of Public Testimony:

(In support) Rewards typically offer points or rewards that can be flexibly redeemed. Cash back and airline miles are popular with consumers. The law related to abandoned property has not kept up with this type of business practice. Loyalty programs should not be required to follow the process for abandoned property. This bill would help clarify the treatment of these programs and allow financial institutions to manage these programs efficiently.

(Opposed) None.