State Sen. Alan Bates will be in the untenable position today of deciding whether he will support a bill aimed at giving more money to public schools at the risk of offending the largest employer in his Jackson County district.
"This is a fight between two of my friends: the Oregon Education Association and Harry David," said Bates, an Ashland Democrat.
At issue is Senate Bill 460 &
introduced by Bates' political ally and fellow Democrat Sen. Ben Westlund of Tumalo &
which would require retailers to transfer money to the state that consumers do not spend on their gift cards after three years of inactivity. The Senate is scheduled to vote on the proposal today. If approved, the bill will advance to the House for consideration.
Retailers, including gourmet food and gift company Harry David Holdings, say the bill tacks on a three-year expiration date to gift cards, and that is not fair to their customers.
Leigh Johnson, director of government relations for Medford-based Harry David, said if approved, should a consumer find a gift card that they have not used in three years, they would be unable to use it because the state had in essence put an expiration date on the card.
Cardholders would have to write to the Department of State Lands, which oversees lost property, to request reimbursement for the card's remaining value.
"We don't think that's what you'd call a consumer protection bill," Johnson said, adding that the bill would create a "bureaucratic nightmare" for the company, which sells thousands of gift cards annually.
The proposal, backed by Democratic Gov. Ted Kulongoski, would not extend to debit or prepaid debit cards, paper gift certificates or calling cards. The bill would affect gift cards issued after January 2008.
The unclaimed money would sit in the Common Schools Fund. While the principal remaining on the card would be untouched and held for consumers to reclaim, the interest accrued would go to schools.
According to estimates by the Legislative Revenue Office, beginning in the 2011-13 budget cycle, the interest &
as much as $35 million &
would be distributed to schools, in addition to the money that the fund already gives schools from such things as oil and natural gas tax revenues, and proceeds from the sale of federal lands. In 2005, $45.4 million was distributed to Oregon schools.
One of the bill's chief sponsors, the Oregon Education Association, which represents K-12 schools, says there is no reason why classrooms should not be the beneficiaries of unclaimed gift cards in the same way they benefit now from other unclaimed property under Oregon's escheat laws.
"The value of the gift card is the people's money, so why not have K-12 ... while that money is being held?" asked OEA government relations consultant Laurie Wimmer Whelan.
She said Senate Bill 460 is an "inventive way" to boost schools' funding while protecting consumers.
Bates, who said Monday he is "torn" over whether to support the bill, said he hopes that if the bill makes it to the House it is amended to affect gift cards that haven't been used in seven years rather than three, as the bill is written.
"I may just hold my nose and vote for the bill," Bates said, "but it really does put Harry David in a terrible public relations position having to tell people that they can't use their gift card because it's too old."
covers the state Legislature for The Daily Tidings. Reach him at firstname.lastname@example.org.
Bates feels the squeeze on gift card bill