Public Act 90-0518 of the 90th General Assembly

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Public Act 90-0518

SB680 Enrolled                                 LRB9003192LDdv

    AN ACT concerning the acceptance  by  local  governmental
entities of payment by credit card.

    Be  it  enacted  by  the People of the State of Illinois,
represented in the General Assembly:

    Section 1.  Short title.  This Act may be  cited  as  the
Local Governmental Acceptance of Credit Cards Act.

    Section 10.  Definitions.
    "Authorized  obligation"  means,  in  connection  with  a
county,  city, town, or other similar form of local municipal
government, any fine, fee, charge, tax, or cost  imposed  by,
owing  to,  or  collected  by or on behalf of a unit of local
government.  In connection with a community college district,
"authorized obligation" means tuition costs,  books,  charges
for  meals,  and  other  education  or college-related fines,
fees, charges, or costs imposed upon or incurred by  students
or pupils.
    "Credit  card"  means  an  instrument  or device, whether
known as a credit card, bank card, charge card,  debit  card,
automated  teller  machine  card,  secured credit card, smart
card, electronic purse, prepaid card, affinity  card,  or  by
any  other  name, issued with or without fee by an issuer for
the use  of  the  holder  to  obtain  credit,  money,  goods,
services, or anything else of value.

    Section  15.   Local  government  credit  card acceptance
program.
    (a)  Any unit  of  local  government  and  any  community
college district that has the authority to accept the payment
of  funds for any purpose is authorized, but not required, to
accept payment by credit card.
    (b)  This Act shall be broadly  construed  to  authorize,
but  not  require,  acceptance of credit card payments by all
units of local government and community college districts.
    (c)  This Act authorizes the acceptance  of  credit  card
payments for all types of authorized obligations.
    (d)  This  Act  does not limit the authority of clerks of
court to accept payment by credit card pursuant to the Clerks
of Court Act or the Unified Code of Corrections.
    (e)  A local governmental  entity  may  not  receive  and
retain,   directly   or   indirectly,  any  convenience  fee,
surcharge, or other fee in  excess  of  the  amount  paid  in
connection  with the credit card transaction.  In addition, a
financial  institution  or  service  provider  may  not  pay,
refund, rebate, or return, directly or indirectly, to a local
governmental entity for final  retention  any  portion  of  a
surcharge,  convenience  fee, or other fee paid in connection
with a credit card transaction.

    Section 20.  Election by local governmental  entities  to
accept credit cards.
    (a)  The  decision whether to accept credit card payments
for any particular type of obligation shall be  made  by  the
governing  body  of  the  local  governmental entity that has
general discretionary authority over the manner of acceptance
of payments. The governing body may  adopt  reasonable  rules
governing  the  manner  of  acceptance  of payments by credit
card. No decision to accept credit card payments  under  this
Act  shall  be  made until the governing body has determined,
following a public hearing held not sooner than 10 nor  later
than 30 days following public notice of the hearing, that the
acceptance   of   credit  card  payments  for  the  types  of
authorized obligations specified in the public notice  is  in
the   best   interests   of  the  citizens  and  governmental
administration of the local governmental entity or  community
college and of the students and taxpayers thereof.
    (b)  The  governing  body of the entity accepting payment
by credit card may enter into agreements  with  one  or  more
financial   institutions   or   other  service  providers  to
facilitate the  acceptance  and  processing  of  credit  card
payments.   Such   agreements  shall  identify  the  specific
services to  be  provided,  an  itemized  list  of  the  fees
charged,  and the means by which each such fee shall be paid.
Such agreements may include a discount fee to cover the costs
of interchange, assessments and authorizations,  a  per  item
processing  fee  for the service provider, and any other fee,
including a payment of a surcharge or convenience  fee,  that
may  be  applicable  to specific circumstances. Any agreement
for acceptance of payments by credit cards may be canceled by
the governmental entity  upon  giving  reasonable  notice  of
intent to cancel.
    (c)  An  entity accepting payments by credit card may pay
amounts due a financial institution or other service provider
by (i) paying the  financial  institution  or  other  service
provider upon presentation of an invoice or (ii) allowing the
financial  institution  or other service provider to withhold
the amount of the fees  from  the  credit  card  payment.   A
discount  or  processing  fee  may be authorized whenever the
governing body of the entity determines that any reduction of
revenue resulting from the discount or processing fee will be
in the best  interest  of  the  entity.  Items  that  may  be
considered in making a determination to authorize the payment
of  fees or the acceptance of a discount include, but are not
limited to, improved governmental cash  flows,  reduction  of
governmental   overhead,   improved   governmental  financial
security, a combination of these items, and  the  benefit  of
increased  public convenience. No payment to or withheld by a
financial institution or other service  provider  may  exceed
the amounts authorized under subsection (b) of Section 25.
    (d)  Unless  specifically  prohibited  by an ordinance or
rule adopted by the governing body of the local  governmental
entity,  a  person  may  pay  multiple  tax bills in a single
transaction.

    Section 25.  Payment of fees by cardholders.
    (a)  The governing body of a  local  governmental  entity
authorizing  acceptance of payment by credit card may, but is
not required to, impose a convenience fee or surcharge upon a
cardholder making payment by credit  card  in  an  amount  to
wholly  or  partially  offset,  but  in  no event exceed, the
amount of any discount or  processing  fee  incurred  by  the
local governmental entity.  This convenience fee or surcharge
may  be  applied  only when allowed under the operating rules
and  regulations  of  the  credit  card  involved.   When   a
cardholder elects to make a payment by credit card to a local
governmental  entity  and  a  convenience fee or surcharge is
imposed, the payment of  the  convenience  fee  or  surcharge
shall  be  deemed  voluntary  by  the person and shall not be
refundable.
    (b)  No fee, or accumulation of fees,  that  exceeds  the
lesser  of  $20  or 5% of the principal amount charged may be
imposed in connection  with  the  issuance  of  any  license,
sticker,  or  permit,  or  with  respect to any other similar
transaction.  No fee, or accumulation of fees,  that  exceeds
the  lesser  of  $5  or 5% of the transaction involved may be
imposed in connection with the payment of any fine.  No  fee,
or accumulation of fees, in excess of the lesser of $40 or 3%
of  the principal amount charged may be imposed in connection
with the payment of any real estate or other tax.
    (c)  Notwithstanding the provisions of subsection (b),  a
minimum  fee  of  $1  may  be  imposed  with  respect  to any
transaction.

    Section 30.  Relief from underlying obligation.  A person

who makes a payment by credit card to  a  local  governmental
entity   shall   not  be  relieved  from  liability  for  the
underlying obligation except to the  extent  that  the  local
governmental  entity realizes final payment of the underlying
obligation in cash or the equivalent.  If  final  payment  is
not  made  by  the  credit  card issuer or other guarantor of
payment in the credit card transaction, then  the  underlying
obligation  shall  survive  and the local governmental entity
shall retain all remedies for  enforcement  that  would  have
applied  if  the credit card transaction had not occurred.  A
person making payment by credit card is not  liable  for  any
discount  or  fee paid to a credit card issuer or other party
by a local governmental entity.

    Section 35.  Liability of local  governmental  employees.
A  local  governmental employee who accepts payment by credit
card in accordance with this Act  and  any  applicable  rules
shall  not  incur personal liability for the final collection
of the payment.

    Section 95.  The Property Tax Code is amended by changing
Section 20-25 as follows:

    (35 ILCS 200/20-25)
    Sec. 20-25.  Forms of payment.  Taxes  levied  by  taxing
districts  may  be satisfied by payment in legal money of the
United States, cashier's check, certified check, post  office
money  order,  bank money order issued by a national or state
bank  that  is  insured  by  the  Federal  Deposit  Insurance
Corporation, or by a personal or  corporate  check  drawn  on
such  a  bank,  to the respective collection officers who are
entitled by law to receive the tax payments or by credit card
in accordance  with  the  Local  Governmental  Acceptance  of
Credit  Cards  Act. A county collector may refuse to accept a
personal check within 30 days before a tax sale.
(Source: P.A. 86-345; 88-455.)

    Section 99.  Effective date.  This Act takes effect  upon
becoming law.

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