Bill Text: AZ HB2587 | 2015 | Fifty-second Legislature 1st Regular | Engrossed
Bill Title: State agencies; credit cards
Spectrum: Strong Partisan Bill (Republican 13-1)
Status: (Vetoed) 2015-04-13 - Governor Vetoed [HB2587 Detail]
Download: Arizona-2015-HB2587-Engrossed.html
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Senate Engrossed House Bill |
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State of Arizona House of Representatives Fifty-second Legislature First Regular Session 2015
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HOUSE BILL 2587 |
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AN ACT
amending sections 35‑142 and 35‑315, Arizona Revised Statutes; amending title 35, chapter 2, article 7, Arizona Revised Statutes, by adding section 35‑391.01; relating to electronic transactions processing.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 35-142, Arizona Revised Statutes, is amended to read:
35-142. Monies kept in funds separate from state general fund; receipt and withdrawal
A. All monies received for and belonging to the state shall be deposited in the state treasury and credited to the state general fund except the following, which shall be placed and retained in separate funds:
1. The unexpendable principal of monies received from federal land grants shall be placed in separate funds and the account of each such separate fund shall bear a title indicating the source and the institution or purpose to which such fund belongs.
2. The interest, rentals and other expendable money received as income from federal land grants shall be placed in separate accounts, each account bearing a title indicating the source and the institution or purpose to which the fund belongs. Such expendable monies shall be expended only as authorized, regulated and controlled by the general appropriation act or other act of the legislature.
3. All private or quasi‑private monies authorized by law to be paid to or held by the state treasurer shall be placed in separate accounts, each account bearing a title indicating the source and purpose of such fund.
4. All monies legally pledged to retirement of building indebtedness or bonds issued by those institutions authorized to incur such indebtedness or to issue such bonds shall be placed in separate accounts.
5. Monies of a multi‑county water conservation district authorized by law to be paid to or held by the state treasurer shall be placed in separate accounts, each account bearing a title indicating the source and purpose of such fund.
6. All monies collected by the Arizona game and fish department shall be deposited in a special fund known as the state game and fish protection fund for the use of the Arizona game and fish commission in carrying out the provisions of title 17.
7. All federal monies that are received by the department of economic security for family assistance benefits and medical eligibility as a result of efficiencies developed by the department of economic security and that would otherwise revert to the state general fund pursuant to section 35‑190 shall be retained for use by the department of economic security in accordance with the terms and conditions imposed by the federal funding source in an account or accounts established or authorized by the state treasurer.
8. Monies designated by law as special state funds shall not be considered a part of the general fund. Unless otherwise prescribed by law, the state treasurer shall be the custodian of all such funds.
9. All monies received and any accounts established and maintained by the director of the Arizona state retirement system or the administrator of the public safety personnel retirement system, the corrections officer retirement plan and the elected officials' retirement plan.
10. Monies received by a state agency or institution as a gift, devise or donation shall not be considered a part of the state general fund or transferred to the state general fund unless the gift, devise or donation specifically authorizes a general state use for the monies. A state agency or institution that receives a monetary gift, devise or donation shall account for those monies separately.
B. No money shall be received or held by the state treasurer except as authorized by law, and in every instance the treasurer shall issue a receipt for money received and shall record the transaction in the statewide accounting system. No money shall be withdrawn from the treasury except on the warrant or electronic funds transfer voucher of the department of administration.
C. Monies received for and belonging to the state and resulting from compromises or settlements by or against this state, excluding restitution and reimbursement to state agencies for costs or attorney fees, shall be credited to the state general fund unless specifically credited to another fund by law. A fund consisting of monies other than monies received for restitution, costs or attorney fees shall not be established on the basis of a court order without prior legislative authorization. For the purposes of this subsection, "restitution" means monies intended to compensate a specific, identifiable person, including this state, for economic loss.
D. All federal monies granted and paid to the state by the federal government shall be accounted for in the accounts or funds of the state in the necessary detail to meet federal and state accounting, budgetary and auditing requirements, and all appropriations for matching such federal monies shall be transferred from the general fund to such separate funds as needed, except as otherwise required by the federal government.
E. Nothing in this section requires the establishment of separate accounts or funds for such federal monies unless otherwise required by federal or state law. The department of administration has the authority to use the most efficient system of accounts and records, consistent with legal requirements and standard and necessary fiscal safeguards.
F. Nothing in this section precludes the creation by the department of administration of a clearing account or other acceptable accounting method to effect prompt payment of claims from an approved budget or appropriation. The department of administration shall report each account or fund established or cancelled to the directors of the joint legislative budget committee and the governor's office of strategic planning and budgeting.
G. Nothing in this section or any other section precludes the use of monies kept in funds separate from the general fund, the interest from which accrues to the general fund, for payment of claims against the general fund, provided sufficient monies remain available for payment of claims against such funds.
H. The department of administration may issue warrants for qualified expenditures of federal program monies before they are deposited in the state treasury. The receipt of federal monies shall be timed to coincide, as closely as administratively feasible, with the redemption of warrants by the state treasurer. The department of administration shall limit expenditures to the amount that has been made available for the use under the grant award by the federal government. The state agency initiating the expenditures is responsible for ensuring that expenditures qualify for coverage under the guidelines of the federal grant award.
I. The department of administration shall establish the policies and procedures for all state agencies for drawing federal monies. When the established method results in federal monies being held by this state, the department of administration may use the interest earned on the monies to pay the federal government for any related interest liability. If an interest liability is incurred due to a state agency varying from the established policies and procedures, the department of administration shall charge the appropriate agency account or fund. Any federal interest liability owed to this state as a result of the delayed federal disbursements shall be used to offset this state's interest liability to the federal government. Any remaining interest earnings shall be deposited in the state general fund.
J. Any state agency or authorized agent of a state agency may accept credit cards pursuant to an agreement entered into by the state treasurer pursuant to section 35‑315 for the payment of any amount due to that agency or agent or this state.
K. Except for the department of revenue, agencies or authorized agents on behalf of state agencies that accept credit cards shall deduct any applicable discount fee and processing fee associated with the transaction amount before depositing the net amount in the appropriate state fund. No other reduction is permitted against the transaction amount. The net amount deposited in the appropriate state fund shall be considered as the full deposit required by law of monies received by the agency or the authorized agent. Payment of any applicable discount fee and processing fee shall be accounted for in the annual report submitted to the governor's office of strategic planning and budgeting in accordance with section 41‑1273. The transaction amount of any credit card transaction shall not be reduced by any discount fee or processing fee in an amount in excess of the merchant card settlement fees reflected in the state banking contract with the state treasurer's office.
L. Any state agency that If the state treasurer contracts with an authorized agent for the electronic processing of transactions pursuant to title 41, chapter 23, the state treasurer may include a provision in the contract to allow the authorized agent to impose a convenience fee. The selection of an authorized agent for the electronic processing of transactions is exempt from title 41, chapter 23 but shall be conducted by a process that is substantially similar to procedures prescribed by title 41, chapter 23. If allowed, the convenience fee shall be charged to the cardholder in addition to the transaction amount, except for the following:
1. Except as provided in subsection S of this section, any permits, licenses or other authorizations needed to pursue a trade or occupation in this state.
2. Except as provided in subsection S of this section, any permits, licenses or other authorizations needed to establish, expand or operate a business in this state.
3. Except as provided in subsection S of this section, any permits, licenses or other authorizations needed to register a vehicle or license a driver in this state.
M. Each state agency or its authorized agent shall:
1. Deduct the amount of the convenience fee before depositing the transaction amount or the transaction amount reduced by the discount fee or the processing fee, or both, into the appropriate state fund.
2. Not deduct any part of the convenience fee from the transaction amount before depositing the net amount into the appropriate state fund.
3. Deduct the amount of the discount fee or the processing fee, or both, from the transaction amount before depositing the net amount into the appropriate state fund.
N. The net amount deposited in the appropriate state fund pursuant to subsection L or M of this section shall be considered as the full deposit of monies that is required by law and that is received by the agency.
O. Notwithstanding section 35‑142.01, convenience fees received by a state agency or its authorized agent are limited to, and may be used to offset, the costs imposed by the authorized agent in processing the transactions.
P. When the percentage of electronic transactions first exceeds at least thirty per cent percent of a state agency's total transactions, the state agency shall perform a cost benefit report, including costs of convenience fees, the amount of revenue generated and any realized cost savings.
Q. State agencies shall report the number of transactions, the number of electronic transactions, the total dollar amount of transactions processed, the total dollar amount of any discount fee, the total dollar amount of any processing fee and the total dollar amount of any convenience fee charged, deducted or paid pursuant to subsections K and L of this section annually by October 1 to the governor, the department of administration and the joint legislative budget committee.
R. Nothing in this section or any other provision of law authorizes any state agency, authorized agent of any state agency or budget unit to establish a bank account for any government monies. All monies received by or on behalf of this state shall be deposited with and in the custody of the state treasurer or in an account that is authorized by the state treasurer pursuant to this section. This subsection does not apply to monies received and any accounts established and maintained by the director of the Arizona state retirement system or the administrator of the public safety personnel retirement system, the corrections officer retirement plan and the elected officials' retirement plan.
S. If a state agency provides an alternative method of payment, The convenience fee may be charged to the cardholder in addition to the transaction amount pursuant to the payment processing network's rules.
Sec. 2. Section 35-315, Arizona Revised Statutes, is amended to read:
35-315. Servicing banks; qualifications; proposals
A. Any bank eligible to become an eligible depository having a total capital structure of ten million dollars or more and assets of two hundred million dollars or more and being otherwise in a sound condition is eligible to be the servicing bank for the state.
B. On the first Monday in March of each year of award, the state board of investment shall provide for public notice to the banks qualified to be a servicing bank of the time and place at which servicing proposals will be received. Requests for proposals shall clearly specify all services required to be performed by the servicing bank. The servicing proposal submitted shall be the compensation for which the qualified bank will agree to perform the required services as a servicing bank for the ensuing period of designation as established by the board of investment. The award shall be made for a period not to exceed five years and may be paid from general fund interest earnings according to rules adopted by the board of investment.
C. On the fourth Monday in April of the year of the award, the state treasurer shall receive the servicing proposals in writing. Only those proposals that conform to the specifications set forth in the request for proposals shall be considered. The qualified bank submitting the proposal with the highest value to this state, as determined by the state treasurer and the board of investment, shall be designated as the servicing bank. Designations shall be evidenced by the signing of the final proposal by the state treasurer, the board of investment and the designee bank. The state treasurer may maintain a bank account in conjunction with the servicing bank account, which must have on deposit at all times a sum of money approximating the average dollar value of daily warrants paid by the bank the previous month.
D. The state treasurer may request and qualified banks may submit proposals for any or all of the services required. The state treasurer may specify differing contract periods for any or all of the services required.
E. The state treasurer or servicing bank may terminate a servicing bank contract at any time after sixty days' prior written notice is given.
F. In addition to the services required of the servicing bank, the state treasurer shall contract for all other banking services required by any state agency. No state agency shall contract for banking services except with the written permission of the state treasurer. The state treasurer shall contract with an authorized agent for the electronic processing of transactions. The selection of an authorized agent for the electronic processing of transactions is exempt from title 41, chapter 23 but shall be conducted by a process that is substantially similar to procedures prescribed by title 41, chapter 23.
G. This section does not require the state treasurer to utilize a servicing bank.
H. This section or the specifications set forth in the request for proposals shall not be construed to require the servicing bank to purchase warrants.
I. Deposits and withdrawals of monies shall be made by the state treasurer on the servicing bank.
Sec. 3. Heading change
The article heading of title 35, chapter 2, article 7, Arizona Revised Statutes, is changed from "CREDIT CARD PAYMENTS BY GOVERNMENTAL ENTITIES" to "CREDIT CARD TRANSACTIONS".
Sec. 4. Title 35, chapter 2, article 7, Arizona Revised Statutes, is amended by adding section 35-391.01, to read:
35-391.01. Acceptance of credit cards; fees; definitions
A. On a majority vote of the governing body, a local government may accept credit cards for the payment of any amount due to the local government.
B. A local government that accepts credit cards may enter into an agreement with one or more financial institutions or other service providers for processing of credit cards. The agreement shall provide for the fees charged and the means by which the fees shall be paid. A local government may also use the contract or contracts that the state treasurer has negotiated for electronic processing of transactions pursuant to section 35‑315 on written notice to the state treasurer.
C. A local government that accepts credit cards may not receive and retain, directly or indirectly, any convenience fee, surcharge or other fee in excess of the payment for the amount due to the local government. A financial institution or service provider may not pay, refund, rebate or return, directly or indirectly, to a local government for final retention any portion of a convenience fee, surcharge or other fee paid in connection with a credit card transaction.
D. Notwithstanding subsection C of this section, a local government that accepts credit cards may charge a convenience fee or surcharge on the cardholder making a payment by credit card in an amount to wholly or partially offset, but not exceed, the amount of any discount or processing fee incurred by the local government. The convenience fee or surcharge is nonrefundable.
E. For the purposes of this section:
1. "Credit card" has the same meaning prescribed in section 35‑101.
2. "Local government" means a city, town, county or community college.
Sec. 5. State treasurer; request for proposals; prohibition
A. On or before January 1, 2017, the state treasurer shall issue a request for proposals for the electronic processing of transactions for all state agencies that accept credit cards for payment. The state treasurer shall award a contract to one or more separate entities.
B. On expiration of any outstanding contract for the electronic processing of transactions, a state agency may not enter into a contract or renew any contract for the electronic processing of transactions unless authorized by the state treasurer.
C. Notwithstanding section 35-142, Arizona Revised Statutes, a state agency may continue to allow an authorized agent to impose a convenience fee until the expiration of the state agency's contract.
