The Honorable Thomas J. Deadrick
Speaker of the House
Pierre, SD 57501-5070
Dear Speaker Deadrick and Members of the House:
I herewith return House Bill 1258 and VETO the same.
House Bill 1258 is entitled, "An Act to require that certain gift certificates conspicuously disclose information regarding fees and expiration dates."
The bill first proposes to define gift certificates as:
a tangible record evidencing a promise, made for consideration, by the seller or issuer of the record that goods or services will be provided to the owner of the record to the value shown in the record and includes a gift card, stored-value card, store card, or a similar record or card that contains a microprocessor chip, magnetic stripe, or other means for the storage of information, and for which the value is decreased upon each use.
The bill goes on to require that any gift certificate with a fee must contain a statement on the gift certificate or on a separate form stating there is a fee, the amount of the fee, how often the fee will occur, how the fee is triggered, and when the fee will be assessed. In addition, any gift certificate subject to an expiration date is required to contain a statement on the gift certificate visible to a purchaser prior to the purchase, stating the expiration date.
While this legislation is well intended and appears to protect the interests of the consumer, I believe the bill has the opposite effect because the language defining gift certificates in HB1258 is in conflict with language found in the Uniform Unclaimed
Property Act, Chapter 43-41B.
SDCL 43-41B-1, specifically includes, "gift certificates" within the definition of, intangible property," as used within that chapter. SDCL 43-41B-2, states that all intangible property, including any income or increment derived therefrom, less any lawful charges, that is held, issued, or owing which remains unclaimed by the owner for more than 5 years after it became payable or distributable is presumed abandoned.
That chapter goes on to state in 43-41B-3, unless provided by other statute, intangible property is subject to the custody of the state as unclaimed property if the conditions raising a presumption of abandonment under that chapter are met. Those conditions would include where the gift certificate was purchased in this state, and the last known address of the apparent owner or other person entitled to the property is unknown, which would generally be the case with gift
certificates and gift cards.
No where does chapter 43-41B authorize the business issuing the gift certificate to fix expiration dates. In fact, it seems clear 43-41B envisions that the property identified as covered by the chapter, including gift certificates, is to be held for a period of 5 years at which point the property, if unclaimed, reverts to the state treasury and held in trust as unclaimed property.
This conclusion is reinforced by the language of 43-41B-15, which provides:
A gift certificate or a credit memo issued in the ordinary course of an issuer's business which remains unclaimed by the owner for more than five years after becoming payable or distributable is presumed abandoned.
Again, it appears that an expiration date short of 5 years is not contemplated by current law. Thus, this bill would tacitly authorize the fixing of expiration dates short of the 5-year time frame in Chapter 43-41B, thereby denying the owner the opportunity to use the gift certificate or gift card for a full 5 years. I do not believe this is good public policy. Citizens should not be further restricted in their ability to redeem gift certificates.
Therefore, I respectfully request that you concur with my action.
M. Michael Rounds
cc: The Honorable Dennis Daugaard
The Honorable Chris Nelson
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