09 Credit Card Acceptance§ 131.005
LOCAL GOVERNMENT CODE
§ 131,005. State Funds
(a) The comptroller shall determine the amount of
state hinds held by a county depository that suspends
business or is taken charge of by a state or federal
bank regulatory agency. The comptroller may:
(1) contract with a special depository selected by
the county authorities as provided by this subchap-
ter for the custody and payment of those funds;
and
(2) approve a bond for the deposit contract.
(b) State funds placed in a special depository as
pro~4ded by Subsection (a) shall bear the average rate
of interest received by tbc state on state funds placed
Mth regularly selected state depositories.
(c) The comptroller may proceed with available le-
gal remedios against a suspended bank that is a
dcposito~w fi)r state funds if the comptroller consklers
that action to be in the best interest of the public.
Added bv Acts 1993, 73rd Leg., ch. 268, § 35, eft. Sept. 1,
1993. A~nended by Acts 1999, 76th Leg., ch. 344, § 5.011,
eft. Sept. 1, 1999.
[Sections 131.006 to 131.900 rese~wed for expansion]
SUBCHAPTER Z. MISCELLANEOUS
pi.'OVISIONS
§ 131.901. Oat-of-State Depository Prohibited
(a) The governing body of a political subdMsion,
including a county, municipality, school district, or
other district, may not designate a financial institution
located outside the state as a depository for funds
under the governing body's jurisdiction. An out-of-
state financial institution is not considered to be locat-
ed outside tids stale to thc extent the governing body
deslgnales a branch office of sech institution that is
located in this state.
(b) An institution selected as a pa~ng agent or
trastee for specific bonds or obligations or an institu-
tion selected by tbe govarning body to provide safe-
keeping setwices is not considered a depository for
purposes of this section.
Acts 19S7, 70th Leg., ch. 149. § 1, eft. Sept. 1, 1987. Amend-
ed by Acts 1993, 73rd Leg., ch. 234, § 3, elf. Sept. 1, 1993;
Acts 1999, 76th Leg., eh. 344, § 5.012, elf. Sept. 1, 1999.
§ 131.902. Pnrsuit of Legal Remedies Against
Suspended Bank
A county, municipality, or district authority may
proceed ,~Sth available legal remedies against a sus-
ponded bank that is a depository for public funds of
208
the authority ff the authority considem that action to
be in the best interest of the public.
Acts 1987, 70th Leg., ch. 149, § 1, eft. Sept. 1, 1987.
§ 131.903. Conflict of Interest
(a) A bank is not disqualified from serving as a
depository for funds of a political subdivision if:
(1) an officer or employee of the political subdivi-
sion who does not have the duty to select the
political su[a'livlslon's depository is an officer, di-
rector, or shareholder of the bank; or
(2) one or more officers or employees of the
political subdivision who have the duty' to select the
political subdivision's depositow are officers m' di-
reetors of the bank or o~xm or have a beneficial
interest, individually or collectively, in 10 percent or
less of the outstanding capital stock of thc bank, if:
(A) a majotqty of the meinbers of the imm'd,
commission, or other body of the political sul)dM-
siou vote to select the bank as a depository; and
(B) the interested officer or employee does not
vote or take part in the proceedings.
(b) This section may ,lot be construed as changSng
or snperseding a conflicting provision in the charter of
a home-role municipality.
Added by Acts 1993, 73rd Leg., ch. 268, § 36. eft. Sept. 1,
1993.
CI1APTER 132. PAYMENT OF FEES AND OTH-
ER COSTS BY CREDIT CARD OR ELEC-
TRONIC MEANS IN MUNICIPA[ATIES AND
COUNTIES
Section
132.001.
132.002.
132.003.
132.004.
132.005.
132.006.
Definitions.
Payment at' Fees or Cost~ by Ct~,dit ('m'd or
Electronic Means.
Processing or Handling Fee.
Smwice Charge.
Encumbrance of Credit Cards; Fee,
Disposition of Fees and Charges.
Acts 1997, 75th Leg., ch. 14& § 4, cff Sept.
1, 1997 amended the chapter headb~g
§ 132.001. Definitions
In this chapter:
(1) "Credit card" means a cat~l, plate, or simltar
device used to make purchases on credit oc to
bo~'ow money.
(2)"
ment b
pa.mne~
Acts 1987.
ed by Act
§ 132.092
(a) Th,
of a re,'
connnissi
precinct ~
lng the p
(b) Th,
thorize ;
(1) ~
(2) *
credit ,
(c) Ti~
ty or pr
state to:
to collect
paymenl
(d) A,
Acts 19:~7
ed by
§ 132.00.
(a) Th
fee in a,
expense
that ext,
(b) TI
the pro~
related
official i
lng fee i
FINANCES
§ 132.006
(2) "Payment by electronic means" means pay-
ment by telephone or computer but does not include
payment in person or by mail.
Acts 19S7, 7(Irl~ Leg., ch. 149, § 1, cfr. Sept. l, 1987. Amend-
ed by Acts 1997. 75th Leg., ch. 14~q, § 5, elf. Sept. L 1997.
§ 132.002. Paymen/[ of Fees or Costs by Credit
Card or Electronic Means
(al Thp commissione~ court of a county may autho-
~ze a cotmty or precinct officer who collects fees,
fines, com't cost& or other charges on behalf of the
~unty or the state to accept payment by credit card
of a fcc, finp, court cos~% or other charge. The
c0mmissi-mq's eoul't may also authorize a county or
(b) The governing body of a municipality may
thorizc ;t imlnicipal official who erfllcck~ li~es, filleS,
(1) acucpt payment hy credit card of a fee, fine,
(2) c.lh,ct a fee fin' processing the payment by
to collect and retain a handling fee for processing the
pa~ent IV' elccWonic means.
I 132.093. Processing or Handling Fee
(al The c.mmissioners cou~ shah set a processing
fee in an anumnt that is reasonably related to tbe
expense them'red hy thc courtW or precinct officer
processing the pa>qnent by credit card. However, the
that exceeds five percent of the amount of the fee,
Court cost, or oth~ charge being paid.
(b) Thc governing body of a municipality shall set
the processing fee in an mnount that is reasonably
related W the expense incnn'ed by the municipal
official in processing the pa~ent by credit card.
HOwever, the governing body may not set the process-
ing fee in an amount that exceeds five percent of the
amount of the fee, fine, court cost, ur other charge
being paid.
(c) If the commissioners court authorizes collection
of a handling fee under Section 132.002(c), the fee
shall be set:
(1) at a fiat rate that does not exceed $5 for each
payment transaction; or
(2) at a rate that is reasonably related to the
cxpense incun'ed by the county or precinct officer
in processing a payment by electronic means and
that does not exceed five percent of the amount of
the fee, court cost, or other chm'ge being pakh
Acts lfl~7, 70th Leg., ch. 149, § 1. cfi. Sept. 1, 19,~7. Amcud-
§ 132.004. Sclwice Charge
If, for lilly i'(!asoIi, a payment by credit card is not
honored by the credit card company on which the
funds are drawn, the county or mnnicipality nmy
collect a service charge from the pm-son who owes the
fee, fine, colu~t cost, or othm' charge. The selwice
charge is in sddition to the m-ikdnal lk~e, fine, court
cost, or other charge and is fl~r thp collection of lhat
original amount. The amount of the smwice charge is
the same amount as the fee chm'ged fro' the collection
of a check drawn on an accmmt with inmffficient funds.
Acts 1987, 70th Leg., ch. 149, § 1, ell Sept. 1, 19~7.
§ 132.005. Encumbrance of Credit Cards; Fee
A county or manicipality may contract x~th a com-
pany that issues credit cards to collect and seize credit
cards issued by the company that are outdated or
othem~ise unauthorized. The emmty or municipality
may charge the company a fee for the return of the
credit pards.
Acts 1987, 70th Leg., ch. 149, § 1, eft. Sept. 1, 1987.
§ 132.006. Disposition of Fees and Charges
(al The county or precinct officer collecting a fee or
charge under thk~ chapter shall deposit the fee or
charge in the general fund of the count,,/.
(b) The municipal official collecting a fee or charge
under this chapter shall deposit the fee or charge in
the general fund of the municipality.
Acts 1987, 70th Leg.. ch. 149. § 1, eft. Sept. 1, 1957.
[Chapters 133 to 139 reserved for expansion]
209
'i
MEMO
May 22, 2001
TO:
FROM:
SUBJECT:
Gene Anderson
Larry 5chenk
Credit Card Payrnent~ of City Utility Bill~
Gene - regarding your inquiry on your pilot project for taking credit card
payments, and your question concerning fees the City may charge for processing such
payments, I direct your attention to the attached Chapter 132 of the Local
Government Code. I believe this will answer all of your issues regarding that
question.
~dith regard to your question about Visa having a policy against passing the fee
cost on to the customer, I again direct your attention to Chapter 132. My suggestion
would be that we advise Visa as to our statutory authority to assess such fees, and if
their position is unchanged, we simply do not accept Visa cards. Perhaps we could
have a little handout to explain to the customer that because of statutory authority
to assess a processing fee (which arguably would also be mandated by our bond
covenants to not give away water revenues), we cannot accept Visa card.
I hope this adequately responds to your inquiry; if you have any additional
questions, please do not hesitate to contact me.
LYX,'S/ap
Attachment
cc: Mike Malone