GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

S	2 

SENATE BILL 222
Finance Committee Substitute Adopted 5/20/99

Short Title:  Government Accept Electronic Payment.	(Public)

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Sponsors:

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Referred to:  

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March 4, 1999

A BILL TO BE ENTITLED
AN ACT TO PROVIDE FOR STATE AND LOCAL GOVERNMENTS TO ACCEPT CREDIT CARDS, CHARGE CARDS, DEBIT CARDS, AND ELECTRONIC FUNDS TRANSFERS FOR PAYMENT OF GOVERNMENT FEES, COSTS, AND DEBTS, AND TO ALLOW LOCAL GOVERNMENTS TO ACCEPT CREDIT CARDS, CHARGE CARDS, DEBIT CARDS, AND ELECTRONIC FUNDS TRANSFERS FOR PAYMENT OF PROPERTY TAXES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-228.90(b) is amended by adding a new subdivision to read:
"(3a)	Electronic payment. – Payment by charge card, credit card, debit card, or by electronic funds transfer as defined in this subsection."
Section 2.  G.S. 147-86.10 reads as rewritten:
"§ 147-86.10. Statement of policy.
It is the policy of the State of North Carolina that all agencies, institutions, departments, bureaus, boards, commissions, and officers of the State, whether or not subject to the Executive Budget Act, Chapter 143, Article 1 of the General Statutes, shall devise techniques and procedures for the receipt, deposit, and disbursement of moneys coming into their control and custody which are designed to maximize interest-bearing investment of cash, and to minimize idle and nonproductive cash balances. This policy shall apply to the General Court of Justice as defined in Article IV of the North Carolina Constitution, the public school administrative units, and the community colleges with respect to the receipt, deposit, and disbursement of moneys required by law to be deposited with the State Treasurer and with respect to moneys made available to them for expenditure by warrants drawn on the State Treasurer. This policy shall include the acceptance of electronic payments in accordance with G.S. 147-86.22 to the maximum extent possible consistent with sound business practices."
Section 3.  G.S. 147-86.22(b) reads as rewritten:
"(b)	Electronic Payment. – Notwithstanding the provisions of G.S. 147-86.20 and G.S. 147-86.21, this subsection applies to debts owed a community college, a local school administrative unit, an area mental health, developmental disabilities, and substance abuse authority, and the Administrative Office of the Courts, and to debts payable to or through the office of a clerk of superior court or a magistrate, as well as to debts owed to other State agencies as defined in G.S. 147-86.20.  The State Controller shall establish policies that allow accounts receivable to be payable under certain conditions by electronic payment as defined in G.S. 105-228.90(b).
These policies shall be established with the concurrence of the State Treasurer.  In addition, any policies that apply to debts payable to or through the office of a clerk of superior court or a magistrate shall be established with the concurrence of the Administrative Officer of the Courts.  The Administrative Officer of the Courts may also establish policies otherwise authorized by law that apply to these debts as long as those policies are not inconsistent with the Controller's policies.  
A condition of payment by electronic payment is receipt by the appropriate State agency of the full amount of the account receivable owed to the State agency. A debtor who pays by electronic payment may be required to pay any fee or charge associated with the use of electronic payment.
Subject to approval by the State Controller and State Treasurer, fees associated with processing electronic payments shall be paid out of the General Fund and Highway Fund when the process is economically beneficial to the State.  The State may impose a fee for the use of electronic payment when applicable.
The State Controller and State Treasurer shall consult with the Joint Legislative Commission on Governmental Operations before establishing policies that allow accounts receivable to be payable by electronic payment in accordance with this subsection and before authorizing fees associated with electronic payment to be paid out of the General Fund and Highway Fund in accordance with this subsection.  A State agency must also consult with the Joint Legislative Commission on Governmental Operations before implementing any program to accept payment under this subsection.  
A payment of an account receivable that is made by electronic payment and is not honored by the issuer of the card or the financial institution offering electronic funds transfer does not relieve the debtor of the obligation to pay the account receivable."
Section 4.  G.S. 147-86.11 reads as rewritten:
"§ 147-86.11.  Cash management for the State.
(a)	Uniform Plan. – The State Controller, with the advice and assistance of the State Treasurer, the State Budget Officer, and the State Auditor, shall develop, implement and amend as necessary a uniform statewide plan to carry out the cash management policy for all State agencies.  The State Auditor shall report annually to the Advisory Budget Commission and the General Assembly on the implementation of the plan as shown in the audits completed during the prior fiscal year.  The State Treasurer shall recommend periodically to the General Assembly any implementing legislation necessary or desirable in the furtherance of the State policy.  When used in this section, 'State agency' means any agency, institution, bureau, board, commission or officer of the State; however, except as provided in G.S. 147-86.12, 147-86.13, 147-86.14, and 147-86.22, this Article does not apply to the agencies, institutions, bureaus, boards, commissions and officers of the General Court of Justice as defined in Article IV of the North Carolina Constitution or to the local school administrative units and community colleges and their officers and employees.
(b)	Duties of Auditor. – The State Auditor pursuant to authority under G.S. 147-64.6 shall monitor agency compliance with this Article, and make any comments, suggestions, and recommendations the Auditor deems advisable to the agencies.
(c)	Treasurer's Report. – The State Treasurer shall publish a quarterly report on all funds in the control or custody of the State Treasurer showing cash balances on hand, investments of cash balances and a comparative analysis of earnings and investment performances.
(d)	Earnings on Trust Funds. – The statewide cash management plan shall provide that any net earnings on invested funds, whose beneficial owner is not the State or a local governmental unit, shall be paid to the beneficial owners of the funds.  'Net earnings' are the amounts remaining after allowance for the cost of administration, management, and operation of the invested funds.
(e)	Elements of Plan. –  For moneys received or to be received, the statewide cash management plan shall provide at a minimum that:
(1)	Except as otherwise provided by law, moneys received by employees of State agencies in the normal course of their employment shall be deposited as follows:
a.	Moneys received in trust for specific beneficiaries for which the employee-custodian has a duty to invest shall be deposited with the State Treasurer under the provisions of G.S. 147-69.3.
b.	All other moneys received shall be deposited with the State Treasurer pursuant to G.S. 147-77 and G.S. 147-69.1.
(2)	Moneys received shall be deposited daily in the form and amounts received, except as otherwise provided by statute.
(3)	Moneys due to a State agency by another governmental agency or by private persons shall be promptly billed, collected and deposited.
(4)	Unpaid billings due to a State agency shall be turned over to the Attorney General for collection no more than 90 days after the due date of the billing, except that a State agency need not turn over to the Attorney General unpaid billings of less than five hundred dollars ($500.00), or (for institutions where applicable) amounts owed by all patients which are less than the federally established deductible applicable to Part A of the Medicare program, and instead may handle these unpaid bills pursuant to agency debt collection procedures.
(5)	Moneys received in the form of warrants drawn on the State Treasurer shall be deposited by the State agency directly with the State Treasurer and not through the banking system, unless otherwise approved by the State Treasurer. 
(6)	State agencies shall accept payment by electronic payment in accordance with G.S. 147-86.22 to the maximum extent possible consistent with sound business practices.
(f)	Disbursement Requirements. –  For the disbursement of money, the statewide cash management plan shall provide at a minimum that:
(1)	Moneys deposited with the State Treasurer remain on deposit with the State Treasurer until final disbursement to the ultimate payee.
(2)	The order in which appropriations and other available resources are expended shall be subject to the provisions of G.S. 143-27 regardless of whether the State agency disbursing or expending the moneys is subject to the Executive Budget Act.
(3)	Federal and other reimbursements of expenditures paid from State funds shall be paid immediately to the source of the State funds.
(4)	Billings to the State for goods received or services rendered shall be paid neither early nor late but on the discount date or the due date to the extent practicable.
(5)	Disbursement cycles for each agency shall be established to the extent practicable so that the overall efficiency of the warrant disbursement system is maximized while maintaining prompt payment of bills due.
(g)	Interest Maximized. –  The interest earnings of the General Fund and Highway Fund shall be maximized to the extent practicable.  To this end:
(1)	Interest earnings shall not be allocated to an account by the State Treasurer unless all of the moneys in the account are expressly eligible by law for receiving interest allocations.
(2)	State officers and employees who received moneys in trust or for investment shall be solely responsible for properly segregating such funds for investment in the manner prescribed by law.  The officer or employee charged with the responsibility for these moneys shall be under a duty to segregate the funds in a timely manner.  No investment income shall be allocated by the State Treasurer to trust or other investment accounts until properly segregated into investment accounts as provided by law and the rules of the State Treasurer.
(h)	New Technologies. –  The statewide cash management plan shall consider new technologies and procedures whenever the technologies and procedures are economically beneficial to the State as a whole.  Where the new technologies and procedures may be implemented without additional legislation, the technologies and procedures shall be implemented in the plan.
(i)	Penalty. –  A willful or continued failure of an employee paid from State funds or employed by a State agency to follow the statewide cash management plan is sufficient cause for immediate dismissal of the employee."
Section 5.  Article 3 of Chapter 159 of the General Statutes is amended by adding a new section to read:
"§ 159-32.1. Electronic payment.
A unit of local government or public authority may, in lieu of payment by cash or check, accept payment by electronic payment as defined in G.S. 105-228.90(b)	for any tax, assessment, rate, fee, charge, rent, interest, penalty, or other receivable owed to it.  A unit of local government or public authority may pay any negotiated discount, processing fee, transaction fee, or other charge imposed by a credit card, charge card, or debit card company, or by a third-party merchant bank, as a condition of contracting for the unit's or the authority's acceptance of electronic payment.  A unit or authority may impose the fee or charge as a surcharge on the amount paid by the person using electronic payment."
Section 6.  G.S. 105-357(b) reads as rewritten:
"(b)	Acceptance of Checks and Electronic Payment. – The tax collector may accept checks and electronic payments, as defined in G.S. 105-228.90(b), in payment of taxes, as authorized by G.S. 159-32.1.  Acceptance of a check or electronic payment is at the tax collector's own risk.  A tax collector who accepts electronic payment of taxes may add a fee to each electronic payment transaction to offset the service charge the taxing unit pays for electronic payment service.  A tax collector who accepts electronic payment or check in payment of taxes may issue the tax receipt immediately or withhold the receipt until the check has been collected or the electronic payment invoice has been honored by the issuer.
If a tax collector accepts a check or an electronic payment and issues a tax receipt and the check is returned unpaid (without negligence on the part of the tax collector in presenting the check for payment) or the electronic payment invoice is not honored by the issuer, the taxes for which the check or electronic payment was given shall be deemed unpaid; the tax collector shall immediately correct the copy of the tax receipt and other appropriate records to show the fact of nonpayment, and shall give written notice by certified or registered mail to the person to whom the tax receipt was issued to return it to the tax collector.  After correcting the records to show the fact of nonpayment, the tax collector shall proceed to collect the taxes by the use of any remedies allowed for the collection of taxes or by bringing a civil action on the check or electronic payment.
A financial institution with which a taxing unit has contracted for receipt of payment of taxes may accept a check in payment of taxes.  If the check is honored, the financial institution shall so notify the tax collector, who shall, upon request of the taxpayer, issue a receipt for payment of the taxes.  If the check is returned unpaid, the financial institution shall so notify the tax collector, who shall proceed to collect the taxes by use of any remedy allowed for collection of taxes or by bringing a civil action on the check.
(1)	Effect on Tax Lien. – If the tax collector accepts a check or electronic payment in payment of taxes on real property and issues the receipt, and the check is later returned unpaid or the electronic payment invoice is not honored by the issuer, the taxing unit's lien for taxes on the real property shall be inferior to the rights of purchasers for value and of persons acquiring liens of record for value if the purchasers or lienholders acquire their rights in good faith and without actual knowledge that the check has not been collected or the electronic payment invoice has not been honored, after examination of the copy of the tax receipt in the tax collector's office during the time that record showed the taxes as paid or after examination of the official receipt issued to the taxpayer prior to the date on which the tax collector notified the taxpayer to return the receipt.
(2)	Penalty. – In addition to interest for nonpayment of taxes provided by G.S. 105-360 and in addition to any criminal penalties provided by law for the giving of worthless checks, the penalty for giving in payment of taxes a check that is returned because of insufficient funds or nonexistence of an account of the drawer is ten percent (10%) of the amount of the check, subject to a minimum of one dollar ($1.00) and a maximum of one thousand dollars ($1,000).  This penalty does not apply if the tax collector finds that, when the check was presented for payment, the drawer of the check had sufficient funds in an account at a financial institution in this State to pay the check and, by inadvertance, the drawer of the check failed to draw the check on the account that had sufficient funds.  This penalty shall be added to and collected in the same manner as the taxes for which the check was given."
Section 7.  G.S. 132-1.2 reads as rewritten:
"§ 132-1.2.  Confidential information.
(a)	Nothing in this Chapter shall be construed to require or authorize a public agency or its subdivision to disclose any information that:
  (1)	Meets all of the following conditions:
a.	Constitutes a "trade secret"as defined in G.S. 66-152(3).
b.	Is the property of a private "person"as defined in G.S. 66-152(2).
c.	Is disclosed or furnished to the public agency in connection with the owner's performance of a public contract or in connection with a bid, application, proposal, industrial development project, or in compliance with laws, regulations, rules, or ordinances of the United States, the State, or political subdivisions of the State.
d.	Is designated or indicated as "confidential"or as a "trade secret"at the time of its initial disclosure to the public agency.
  (2)	Reveals an account number for electronic payment as defined in G.S. 105-228.90(b) and obtained pursuant to Articles 6A or 6B of Chapter 147 of the General Statutes or G.S. 159-32.1."
Section 8.  This act is effective when it becomes law.