PRINTER'S NO. 535
No. 476 Session of 1991
INTRODUCED BY LAWLESS, SAURMAN, NAHILL, TRELLO, BELFANTI AND
CAPPABIANCA, MARCH 11, 1991
REFERRED TO COMMITTEE ON FINANCE, MARCH 11, 1991
AN ACT
1 Authorizing the Department of Revenue to negotiate with
2 financial institutions to allow the State to be the
3 sponsoring entity for a financial institution credit card;
4 providing that the fee negotiated by the department in
5 exchange for being a sponsoring entity be deposited in the
6 General Fund and the Mental Health Services Fund.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Department." The Department of Revenue of the Commonwealth.
14 "Financial institution." A bank, a bank and trust company, a
15 trust company, a savings and loan association, a building and
16 loan association, a credit union, a savings bank and a national
17 bank.
18 "Financial institution credit card." A credit card that
19 entitles the holder to make open-account purchases up to an
1 approved amount and is issued through the agency of a financial
2 institution.
3 "Sponsoring entity." An entity that solicits the use of a
4 particular financial institution credit card bearing the
5 entity's name in exchange for fee from the credit card insurer.
6 Section 2. Credit card program.
7 The department is authorized to participate in a financial
8 institution credit card program for the benefit of the
9 Commonwealth. Within 180 days of the effective date of this act,
10 the department shall contact each financial institution to
11 determine if:
12 (1) the financial institution or its holding company or
13 affiliate currently administers a credit card program;
14 (2) the credit card program provides a fee or commission
15 on retail sales to the sponsoring entity for the issuance and
16 use of the credit card; and
17 (3) the credit card program would accept the
18 Commonwealth as a sponsoring entity.
19 Section 3. Distribution of proceeds.
20 If the department determines that the Commonwealth may be a
21 sponsoring entity for a financial institution credit card, the
22 department shall negotiate the most favorable rate for the
23 Commonwealth's fee. The Commonwealth may not offer a more
24 favorable rate to any credit card issuer. The rate must be
25 expressed as a percentage of the gross sales from the use of the
26 credit card. The proceeds of the fee must be deposited one-half
27 in the General Fund and one-half in the Mental Health Services
28 Fund.
29 Section 4. Creation of fund.
30 There is hereby established in the State Treasury a separate
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1 account to be known as the Mental Health Services Fund. The
2 moneys from this fund shall be appropriated to State and local
3 health services, as may be needed, by the General Assembly.
4 Section 5. Contracts.
5 In participating in a credit card program, the department may
6 contract with a number of financial institutions to establish
7 the Commonwealth as a sponsoring entity. The department may not
8 contract to assume any liability for lost or stolen credit
9 cards.
10 Section 6. Regulations.
11 The department shall promulgate regulations to carry out the
12 provisions of this act.
13 Section 7. Effective date.
14 This act shall take effect in 60 days.
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