I don't know what its like at other schools, but at my school (T2) your GPA does not reset, you have a transfer GPA and your new GPA works off of that. Your rnaked where ever your transfer GPA would put you at with a * next to your ranking that says "transfer GPA" then after that you go up or down based on the GPA you transfered in at and your new grades.
chances are if you are transferring you did really well your first year anyway, right? So if you bombed out bad enough that you want to reset your grades, how are you going to transfer anwhere anyway?