AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

S.B. 1596 allows private schools in Texas to pass along the fee in connection with a payment for tuition, other fees, or charges being paid. Certain stipulations would be put on the amount of the fee as well as alerting the credit card or debit card holder as to the amount before they are to be charged.

 

Currently, only private schools are not allowed to charge these fees as a way to offset some of their expenses and their counterparts—public schools, public and private colleges and universities—are allowed to pass along the fee.

 

As proposed, S.B. 1596 amends current law relating to authorizing certain private schools to charge fees for processing or handling certain payments or payment transactions.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1.  Amends Subtitle C, Title 5, Business & Commerce Code, by adding Chapter 111, as follows:

 

CHAPTER 111.  PRIVATE SCHOOLS

 

Sec. 111.001.  DEFINITIONS.  Defines “cardholder,” “credit card,” “debit card,” and “private school” for the purposes of this chapter.

 

Sec. 111.002.  CHARGES AND FEES FOR CERTAIN PAYMENTS AT PRIVATE SCHOOLS.  (a)  Provides that this section applies to a payment of tuition, a fee, or another charge to a private school that is made or authorized in person, by mail, by telephone call, or through the Internet by means of:

 

(1)  a credit card;

 

(2)  a debit card; or

 

(3)  an electronic funds transfer.

 

(b)  Authorizes a private school to charge a fee or other amount in connection with a payment to which this section applies, in addition to the amount of the tuition, fee, or other charge being paid, including:

 

(1)  a discount, convenience, or service charge for the transaction;  or

 

(2)  a service charge in connection with a payment transaction that is dishonored or refused for lack of funds or insufficient funds.

 

(c)  Requires a fee or other charge under this section to be in an amount reasonable and necessary to reimburse the school for the expense incurred by the school in processing and handling the payment or payment transaction.

 

(d)  Requires the school, before accepting a payment by credit card, debit card, or electronic funds transfer, to notify the cardholder or other person making the payment of any fee to be charged under this section.

 

SECTION 2.  Amends Section 59.402(b), Finance Code, as follows:

 

(b) Provides that this section (Imposition of Surcharge for Use of Debit or Stored Value Card) does not apply to:

 

(1) Creates this subdivision from existing text; or

 

(2) a private  school that accepts a debit card for the payment of fees or other charges, as provided by Section 111.002, Business & Commerce Code.

 

SECTION 3.  Amends Section 339.001(b), Finance Code, as follows:

 

(b)  Provides that this section (Imposition of Surcharge for Use of Credit Card) does not apply to:

 

(1) Creates this subdivision from existing text; or

 

(2) a private school that accepts a credit card for the payment of fees or other charges, as provided by Section 111.002, Business & Commerce Code.

 

SECTION 4.  Effective date: upon passage or September 1, 2015.