Unless the New Jersey Legislature acts quickly and Governor Chris Christie has a change of heart, some unused gift cards will soon become the property of the state of New Jersey. A law passed in 2010, set to kick in this summer, would allow the state to claim any gift card balances that remain two years after purchase.

The proposal was made by the Governor during his first year in office as a way to add to the state’s general revenue stream.

On Thursday, the Senate Budget & Appropriations Committee advanced legislation that would overturn the law. If a repeal doesn’t occur in the current budget cycle, the law takes effect.

“This is our last opportunity to overturn this,” said Democratic Senator Paul Sarlo. “Otherwise, those gift cards that are currently on the street – the government will begin to seize that money.”

Sarlo said the unused gift card law is an example of state government overstepping its boundaries.

He continued, “It’s seizing one’s gift. The government has no business going in and reaching in and taking these gift cards if they’re not redeemed in a timely manner.”

Sarlo noted the bill is having a “chilling effect by driving retailers out of the market.”

In April, American Express announced that it would cease selling its gift cards in New Jersey. Shortly after, Blackhawk Network and InComm, two companies that act as third-party retailers for gift cards from multiple suppliers, announced they would also exit the state’s market rather than comply with the law.

Governor Christie said he was not worried by the companies’ announcements.

“I’m not losing sleep over that one,” he said during an April press conference. “If they want to move out, move out.”

The New Jersey Retail Merchants Association and the Retail Gift Card Association released an analysis estimating New Jersey would lose out on $64-94 million in sales tax revenue. In the current FY2012 state budget, the Christie Administration estimated the law would net the state $500,000.

“It’s incredible that the administration would so strongly defend a policy that is having a chilling effect across the state, all for less than two-one-thousandths of one-percent of a $29.7 billion budget,” said Sarlo.

In March, the full Assembly approved a measure to repeal the unused gift card law. The next step for the bill in the Senate is a vote in the full house. Governor Christie, though, has the final say.