Vermont H 317: An act relating to the Statewide Unified Lending Study Committee

Bill Text

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VT LEG #379549 v.1
H.317 1
Introduced by Representatives Casey of Montpelier, Birong of Vergennes, 2
Cooper of Pownal, Duke of Burlington, Galfetti of Barre Town, 3
Greer of Bennington, Headrick of Burlington, Hooper of 4
Randolph, Hooper of Burlington, Maguire of Rutland City, 5
Masland of Thetford, Morris of Springfield, Ode of Burlington, 6
Pinsonault of Dorset, Sibilia of Dover, Squirrell of Underhill, 7
Toof of St. Albans Town, Waszazak of Barre City, and 8
Yacovone of Morristown 9
Referred to Committee on 10
Date: 11
Subject: Commerce and trade; credit card fees 12
Statement of purpose of bill as introduced: This bill proposes to prohibit credit 13
card fees on the amount of a transaction that is tax or gratuity. 14
An act relating to credit card fees on taxes and gratuities 15
It is hereby enacted by the General Assembly of the State of Vermont: 16
Sec. 1. 9 V.S.A. chapter 63, subchapter 4A is added to read: 17
Subchapter 4A. Credit Card Fees on Taxes and Gratuities 18
§ 2480s. PROHIBITION ON FEES 19
(a) As used in this subchapter: 20

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(1) “Acquirer bank” means a member of a payment card network that 1
contracts with a merchant either directly or indirectly through a processor for 2
the settlement of electronic payment transactions. 3
(2) “Electronic payment transaction” or “transaction” means a 4
transaction in which a person uses a debit card, credit card, or other payment 5
code or device issued or approved through a payment card network to debit a 6
deposit account or use a line of credit, whether authorization is based on a 7
signature, a personal identification number, or other means. 8
(3) “Gratuity” means: 9
(A) voluntary monetary contribution received by a merchant from a 10
guest, patron, or customer for services rendered; and 11
(B) an automatic service fee received by a merchant from a guest, 12
patron, or customer for services rendered that is intended to replace the need 13
for a voluntary monetary contribution pursuant to subdivision (A) of this 14
subdivision (3). 15
(4) “Interchange fee” means a fee established, charged, or received by a 16
payment card network for the purpose of compensating the issuer for its 17
involvement in an electronic payment transaction. 18
(5) “Issuer” means a person who issues a debit card or a credit card. 19
(6) “Merchant” means a person that collects and remits a tax. 20

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(7) “Payment card network” means an entity that directly or through 1
licensed members, processors, or agents provides the proprietary services, 2
infrastructure, and software that route information and data to facilitate 3
transaction authorization, clearance, and settlement, and that merchants are 4
required to access in order to accept a specific brand of general-purpose credit 5
cards, charge cards, debit cards, or stored-value cards as payment for goods 6
and services. 7
(8) “Processor” means an entity that facilitates, services, processes, or 8
manages a debit card or credit card authorization, billing, transfer, payment 9
procedures, or settlement with respect to an electronic payment transaction. 10
(b) Requirements. 11
(1) With respect to transactions involving a merchant and subject to the 12
restrictions set forth in subdivision (2) of this subsection, no issuer, payment 13
card network, acquirer bank, or processor shall charge or collect from a 14
merchant an interchange fee on the amount of the transaction that is a: 15
(A) tax; or 16
(B) gratuity. 17
(2)(A) A merchant shall transmit the amount of a transaction that is tax 18
and gratuity to the acquirer bank, payment card network, issuer, or any 19
designee of the foregoing as part of the transaction’s authorization or 20
settlement process. 21

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(B) An acquirer bank, payment card network, issuer, or any designee 1
of the foregoing that does not receive from a merchant the amount of a 2
transaction that is tax and gratuity as part of the transaction’s authorization or 3
settlement process pursuant to subdivision (A) of this subdivision (2) may 4
charge the merchant an interchange fee on the entire transaction. 5
(C) A merchant that does not transmit the amount of a transaction 6
that is tax and gratuity to the acquirer bank, payment card network, issuer, or 7
any designee of the foregoing as part of the transaction’s authorization or 8
settlement process pursuant to subdivision (A) of this subdivision (2) may 9
submit tax documentation showing the tax and gratuity amount of the 10
transaction to the acquirer bank or its designee not later than 180 days after the 11
transaction. 12
(D) An acquirer bank, payment card network, issuer, or any designee 13
of the foregoing that receives tax documentation from a merchant pursuant to 14
subdivision (C) of this subdivision (2) shall, not later than 30 days