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For Immediate Release

Date: 05/04/11

Rep. Prescott's Gift Card Bill Wins Unanimous Committee Approval

AUGUSTA - The Judiciary Committee voted unanimous approval today for LD 247, a bill that would eliminate a process called "escheatment," in which the state demands 60 percent of the cash value of unused gift cards.

The legislation also changes the time limit on when a gift card is considered abandoned from two years to five years. The measure, which has bipartisan support, will now proceed to the full Legislature for consideration.

"I'm very pleased to see a unanimous vote from the Committee," said Rep. Kerri Prescott (R-Topsham), the sponsor of the legislation. "This is a pro-business bill. For retailers, restaurants and every other business that sells gift cards, it has turned into an accounting nightmare. Imagine trying to keep track of who uses the cards, who does not, how much money is left on the card, how long it has been inactive, and then sending 60 percent of the remaining value to the state. It is a tremendously complicated and cumbersome system."

Rep. Prescott, the House chair of the Committee on Labor, Commerce, Research and Economic Development, said Maine law declares that gift cards can never expire. "Whether it's five years, 10 years or longer, merchants must honor the face value of the card," she said. "If a card is used after escheatment has taken place, the business must honor the card and the State must re-pay the business."

"To make matters worse," she continued, "the current law only addresses Maine-based businesses. The national businesses that have locations in Maine but are headquartered elsewhere comply with the laws of the state where they are based. This has created an expensive and unlevel playing field for Maine commerce."

LD 247 seeks to eliminate escheatment. "It is money that does not belong to the state," Rep. Prescott said. "Think about that for a moment. If you received a check for your birthday for $100 and didn't deposit it for two years, the State of Maine would like $60. Why is that? Let's allow business to be between the consumer and business without the government getting in the way." ###

Contact:
Jay Finegan
Maine House Republicans
Tel: (207) 287-1445