Public Act 90-0518 of the 90th General Assembly
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.