HB95 By Representative Hill (M) RFD Education Policy Rd 1 03-MAR-15

SYNOPSIS: Under existing law, cities and counties may accept credit and debit card payments. Existing law does not specifically authorize city and county boards of education to accept credit and debit card payments.

This bill would authorize local boards of education to adopt rules providing for the acceptance of credit and debit cards for payments to boards and to schools.

A BILL TO BE ENTITLED AN ACT

Relating to local boards of education; to authorize local boards of education to adopt rules and procedures for the acceptance of credit and debit card payments for any payments made to the boards and schools.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. For the purposes of this act, the following words shall have the following meaning:

(1) CREDIT AND DEBIT CARDS. The term includes credit cards, charge cards, and debit cards issued by any bank, foreign lender, domestic lender, or credit card bank as defined in Section 5-20-3, Code of Alabama 1975.

(2) LOCAL BOARD OF EDUCATION. A city or county board of education.

(3) SCHOOL. A school under the jurisdiction of a local board of education.

(4) SUPERINTENDENT OF EDUCATION. The superintendent of education of a local school system.

Section 2. (a) A local board of education pursuant to rules adopted by the board may authorize the board and schools under the jurisdiction of the board to accept credit and debit card payments for any payment made to the board or school. Pursuant to the authority provided in this section, the superintendent of education may enter into appropriate agreements with credit and debit card issuers or other appropriate parties as needed to facilitate the acceptance of credit and debit card payments.

(b) Without limiting the generality of the foregoing, the agreements may provide for the receipt of credit and debit card payments at a discount from their face amount or the payment or withholding of administrative fees from the face amount of the payments. The local board of education may make any payment of discount or administrative fees by paying an invoice or allowing withholding of discounts or administrative fees from the face amount of the credit and debit card payments. The discount or administrative fees may be authorized when the board determines that any reduction of revenue resulting from the discount or administrative fees will be in the best interest of the board. Factors which may be considered in making that determination may include, but are not limited to, improved cash flow, reduction of overhead, improved financial security, or a combination of one or more of the foregoing together with the benefit of increased public convenience. Any agreement shall provide that it may be canceled at any time by the board or superintendent, but the agreement shall provide for a reasonable period of notice for cancellation.

(c) A local board of education authorizing acceptance of credit or debit card payments may impose a surcharge or convenience fee upon the person making a payment by credit or debit card to wholly or partially offset, but not to exceed, the amount of any discount or administrative fees charged to the board. The surcharge or convenience fee shall be applied only when allowed by the operating rules and regulations of the credit or debit card involved. When a party elects to make a payment by credit or debit card and a surcharge or convenience fee is imposed, the payment of the surcharge or convenience fee shall be deemed voluntary by the party and shall not be refundable.

(d) No person making any payment by credit or debit card to a local board of education shall be relieved from liability for the underlying obligation except to the extent that the board realizes final payment of the underlying obligation in cash or the equivalent. If final payment is not made by the credit or debit card issuer or other guarantor of payment in the credit or debit card transaction, then the underlying obligation shall survive and the board shall retain all remedies for enforcement which would have applied if the credit or debit card transaction had not occurred. No contract may modify the provisions of this subsection. This subsection shall not make the underlying obligor liable for any discount or administrative fees paid to a credit or debit card issuer or other party by the board.

(e) If an election is made to accept a discount or administrative fee, the local board of education may withhold the cost of any discount or administrative fee charged by the credit card issuer or processor from each local board entitled to any proceeds from the payment made by the credit or debit card issuer. In that event, each local board shall be assessed the percentage of the cost equivalent to its pro rata share of the payment.

(f) The rules adopted by the local board of education may authorize the superintendent of education of the school system to adopt additional rules and operating procedures concerning the acceptance of credit and debit card payments by the board or schools.

(g) An officer or employee of a local board of education who accepts a credit or debit card payment in accordance with this act and any applicable policies or rules of the local board of education or superintendent shall not thereby incur any personal liability for the final collection of any payments.

Section 3. The provision of this act are supplemental and shall not be construed to repeal any law that is not in conflict herewith.

Section 4. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Education

Schools

Board of Education, County

Board of Education, City

Banks and Banking

Credit Cards