HBA-ALS, DMD C.S.H.B. 1926 76(R) BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1926 By: Carter State Affairs 5/10/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Many state agencies provide services to the general public for which the agency charges a fee. Many of these services could be provided and fees collected online, however, there is no current method for collecting these fees. In addition, many credit and debit card companies charge a transaction fee, forcing an agency to choose between charging the fee to the buyer or paying the fee from its proceeds, both of which violate current statutory provisions. C.S.H.B. 1926 authorizes the comptroller of public accounts to adopt rules relating to the acceptance of debit and charge cards and electronic funds transfers, in addition to credit cards, for payment of fees, taxes, and charges to state agencies and for purchases by state agencies. This bill allows a state agency to use electronic means to provide a service to the public which involves the exchange of information and which may involve the exchange of money, such as the routine renewal of a license or providing copies of documents. This bill allows an agency engaging in electronic commerce to accept payment by a debit, credit, or charge card and by electronic funds transfer. This bill establishes that such exchanges of information and payments are confidential and are not public information. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that the rulemaking authority previously delegated to the comptroller of public accounts is modified in SECTION 1 (Section 403.023, Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 403.023, Government Code, as follows: Sec. 403.023. New Title: CREDIT, DEBIT, AND CHARGE CARDS; ELECTRONIC FUNDS TRANSFER. (a) Authorizes the comptroller of public accounts (comptroller) to adopt rules relating to the acceptance of debit cards, charge cards, and electronic funds transfer, in addition to credit cards, for payment of fees, taxes, and charges assessed by state agencies. Authorizes the rules to authorize a state agency to accept debit cards, charge cards, electronic funds transfer, or a combination of those methods, in addition to credit cards, if the comptroller determines the best interests of the state would be promoted. Deletes text authorizing the rules to authorize or require a credit card user to pay a processing fee to the state agency that accepts the credit cards. Makes conforming changes. (b) Deletes language authorizing the comptroller to adopt rules authorizing the General Services Commission (commission) to contract with one or more credit card issuers on behalf of state agencies. Makes conforming changes (c) Prohibits the comptroller from adopting rules about a particular state agency's acceptance of debit or charge cards that would affect a contract that the agency has entered into that is in effect on September 1, 1999. (d) Makes a conforming change. (e) Makes no change. SECTION 2. Amends Subchapter F, Chapter 2054, Government Code, by adding Section 2054.121, as follows: Sec. 2054.121. ELECTRONIC COMMERCE WITH LICENSEES AND MEMBERS OF PUBLIC. (a) Provides that this section applies to the use of electronic commerce by a state agency to provide to the general public or to persons who are regulated by the agency, services involving the exchange of information and receipt of payment. Provides examples of services to which this section applies. (b) Provides that Chapter 2177 (Electronic Commerce), Government Code, applying to the use of electronic commerce by a state agency to acquire goods and services is not affected by this section. Provides that this section does not apply to a state agency's use of the Internet or an electronic bulletin board to receive electronic mail, except to the extent that it is part of an electronic commerce transaction or to post generally accessible information that may be retrieved without charge. (c) Requires the Department of Information Resources (department) and the commission to cooperate to qualify for catalogue purchasing of automated information systems under Subchapter B (Catalogue Purchase Method), Chapter 2157 (Purchasing: Purchase of Automated Information Systems), Government Code, that are suitable for conducting electronic commerce transactions between a state agency and persons who are regulated by the agency or members of the general public. Requires the commission, before qualifying an electronic commerce system for the catalogue, to consult the department. Requires the department to determine whether the system meets acceptable standards applicable for performing the intended task. Requires the department and the commission to determine whether the security features of the system are sufficient to protect the integrity and privacy of exchanged information, particularly any information exchanged as part of making a payment. (d) Authorizes a state agency engaging in an electronic commerce transaction to accept payment by a debit, credit, or charge card or by electronic funds transfer and to designate payment by one or more of those means as the preferred method of payment. Authorizes the state agency, out of the amount that the state agency collects in accordance with statute, rule, or agency policy, to pay any transaction fee that the state incurs by accepting payment by one of those means. Specifies the type of information that is confidential and is not public information under Chapter 552 (Public Information), Government Code, if it is collected by or for a state agency, the agency owns or has a right of access to the information, and the information relates to a payment by debit, credit, or charge card or by electronic funds transfer under this section. (e) Provides that the department's rules regarding digital signatures apply to an electronic commerce transaction subject to this section. Provides that this section does not require the use of a digital signature for an electronic commerce transaction that can be accomplished without the use of a digital signature. (f) Provides that a state agency is not required to provide services through the use of electronic commerce to members of the general public or to persons who are regulated by the agency, but requires the agency to comply with this section if the agency does provide such services and if providing those services involves the exchange of information and may involve the receipt of payment. (g) Requires a state agency that acquires an automated information system for the purpose of engaging in electronic commerce to acquire a system approved by the department and the commission and acquire the system by using the specified catalogue purchase method and obtain a waiver of the requirements from the department after demonstrating to the department that the agency will more effectively or efficiently engage in electronic commerce by using another system. SECTION 3. Amends, Section 2155.385(a), Government Code, as follows: Sec. 2155.385. New Title: CREDIT, DEBIT, AND CHARGE CARDS; ELECTRONIC FUNDS TRANSFER. Deletes the condition that the commission is authorized to contract with one or more credit card issuers for state agencies to use credit cards to pay for purchases only if authorized by rule adopted by the comptroller. Authorizes the commission to contract with one ore more credit, debit, or charge card issuers or electronic funds transfer services for state agencies to use credit, debit, or charge cards or electronic funds transfer to pay for purchases. Prohibits the commission from entering into a contract under this subsection that conflicts with the comptroller's rules under Section 403.023, Government Code. SECTION 4. Amends Chapter 2172, Government Code, by adding Section 2172.007, as follows: Sec. 2172.007. CONTRACTS RELATED TO RECEIVING PAYMENT BY CREDIT, DEBIT, OR CHARGE CARD OR ELECTRONIC FUNDS TRANSFER. (a) Authorizes the commission to contract with one or more credit, debit, or charge card issuers or electronic funds transfer services for state governmental entities that accept the use of credit, debit, or charge cards or electronic funds transfer to receive payment of taxes, regulatory fees, or fees or charges for goods or services provided by a state governmental entity. (b) Authorizes a contract under this section to provide for displaying an issuer's logo on a state governmental entity's Internet site, electronic bulletin board, or analogous electronic presence. (c) Prohibits the commission from entering into a contract under this section that conflicts with the comptroller's rules under Section 403.023. SECTION 5.Effective date: September 1, 1999. SECTION 6.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE This substitute modifies the original to conform to Legislative Council format. This substitute modifies the caption by adding the provision that this bill relates to making or receiving payment by a state governmental entity. This substitute further amends Section 403.023, Government Code, in SECTION 1, by changing the title from "Credit and Debit Cards" in the original to "Credit, Debit, and Charge Cards; Electronic Funds Transfer" in the substitute. This substitute deletes text authorizing the rules adopted by the comptroller of public accounts (comptroller) to authorize or require a credit card user to pay a processing fee to the state agency that accepts the credit cards. This substitute also makes changes to conform to the change in the title of the section. This substitute makes a nonsubstantive change. This substitute modifies proposed Section 2054.121, Government Code, in SECTION 2, to include the sale of products as an example of services to which this section applies. This substitute makes further modifications to this proposed section, as follows: In proposed Subsection (c), this substitute requires the Department of Information Resources (department) to determine whether the system meets acceptable standards applicable for performing the intended task, rather than to determine whether the system is generally suitable for the intended task. This substitute requires the department, in addition to the General Services Commission (commission), to determine whether the security features of the system are sufficient to protect the integrity and privacy of exchanged information, particularly any information exchanged as part of making a payment. In proposed Subsection (d), this substitute authorizes the state agency, out of the amount that the state agency collects in accordance with statute, rule, or agency policy, to pay any transaction fee that the state incurs by accepting payment by one of those means. This substitute deletes text from the original which authorized the state agency to waive any transaction fee for use of electronic means and accept the amount set by statute or rule for the good or service. This substitute includes an account number as information that is confidential and not subject to disclosure, if collected by or for a state agency and if the agency owns or has a right of access to the information. This substitute makes conforming changes. In proposed Subsection (e), this substitute includes a provision to provide that this section does not require the use of a digital signature for an electronic commerce transaction that can be accomplished without the use of a digital signature. This substitute appropriately reletters proposed Subsection (h) from the original as proposed Subsection (g) of the substitute. This substitute redesignates SECTIONS 3 (effective date) and 4 (emergency clause) from the original bill to SECTIONS 5 and 6 of the substitute. This substitute appropriately renumbers SECTION 2 (Section 2155.385, Government Code) of the original to SECTION 3 of the substitute. This substitute further amends Section 2155.385, Government Code, in SECTION 3, to include the section title in the text and to change the title of the section from "Credit Cards" to "Credit, Debit, and Charge Cards; Electronic Funds Transfer." This substitute deletes text from the original bill which authorized the commission to contract with one or more credit card issuers to enable state agencies to use credit cards to handle electronic payments received by the agency for fees, taxes, and sales of goods or services produced by the agency. This substitute also deletes text from the original bill which authorized the display of the issuers' logos on agency web sites or other electronic presence as part of the contract. This substitute makes conforming and nonsubstantive changes. This substitute adds new SECTION 4 (proposed Section 2172.007, Government Code). For further explanation, please refer to the Section-by-Section Analysis in this document.