BILL ANALYSIS


                                                         S.B. 661
                                                         By: Cain
                                             Economic Development
                                                         03-07-95
                                       Committee Report (Amended)
BACKGROUND

The electronic fund transfer terminals of financial institutions
are tied into shared networks or systems which exist on a regional
or national basis.  Agreements exist between the networks, terminal
owners, and financial institutions that issue access cards to
customers.  Financial institutions charge customers for the use of
terminals not owned by the institution in order to recoup its costs
associated with the transaction.  The owners of these terminals
have encountered limitations with regard to their ability to recoup
their costs by directly charging the party using the terminal.

Currently, there is no contractual or legal prohibition for a
terminal to charge a fee to a customer whose financial institution
is a member of a regional network.  Customers who use access cards
issued by Texas financial institutions on electronic terminals
located in this state may pay a transaction fee.  However, the
national shared networks prohibit owners of terminals from charging 
fees unless applicable state law specifically allows such charges.

PURPOSE

As proposed, C.S.S.B. 661 authorizes the owner of an electronic
terminal connected to a shared network to charge a fee for use of
the terminal.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 342-901 et seq., V.T.C.S., by adding
Article 3d, as follows:

   Art.  3d.  TRANSACTION FEES FOR SHARED ELECTRONIC TERMINALS

     Sec.  1.  Defines "electronic terminal," "electronic fund
     transfer," "financial institution," and "shared network."
     
     Sec.  2.  (a) Authorizes the owner of a point of sale terminal
     that is located in this state and connected to a shared
     network to impose a fee for the use of that terminal if
     imposition of the fee is disclosed at a time and in a manner
     that allows a user to avoid the transaction without incurring
     the transaction fee.  Authorizes the owner of an electronic
     terminal located in this state and connected to a shared
     network to impose a user fee for the terminal if imposition of
     the fee is disclosed at a time and in a manner that allows a
     user to terminate or cancel the transaction without incurring
     the transaction fee.
     
     (b) Prohibits an agreement to share electronic terminals
       from prohibiting, limiting, or restricting the owner of the
       electronic terminal to charge a fee; requiring the owner to
       limit or waive its rights under this article; or
       discriminating in any manner against the owner as a result
       of charging a fee under this article.
       
       SECTION 2.   Effective date: September 1, 1995.

SECTION 3. Emergency clause.