Part 1.
TEXAS DEPARTMENT OF TRANSPORTATION
Chapter 5.
FINANCE
Subchapter D. PAYMENT OF FEES FOR DEPARTMENT GOODS AND SERVICES
43 TAC §§5.41-5.44
The Texas Department of Transportation proposes new §§5.41-5.44,
concerning the payment of fees for department goods and services.
EXPLANATION OF PROPOSED NEW SECTIONS
House Bill 2247 and Senate Bill 1677, 76th Legislature, 1999, added §201.208
to the Transportation Code to authorize the commission to adopt rules regarding
the method of payment of a fee for any goods sold or services provided by
the department, or for the administration of any department program. Rules
adopted by the commission may authorize the use of electronic funds transfer
or a valid credit card issued by a financial institution chartered by a state
or the United States or by a nationally recognized credit organization approved
by the department. The rules may also require the payment of a discount or
service charge for a credit card payment in addition to the fee.
The department regularly sells goods or provides services to various persons
or entities, including the sale of travel promotional materials and department
publications, and the issuance of licenses, permits, and registrations. These
goods and services may be provided more efficiently by the department, and
with a greater level of customer satisfaction, if those customers could use
readily available means such as credit cards and electronic funds transfers
to pay fees associated with goods and services obtained from the department.
Section 5.41 describes the purpose of the new subchapter, which is to prescribe
acceptable payment methods that may be used by persons or entities to obtain
goods and services from the department, and to prescribe requirements for
payment by a particular method.
Section 5.42 defines words and terms used in the new subchapter.
Section 5.43 prescribes authorized methods of payment. Except as provided
in §5.44, all fees for department goods and services and any fee required
in the administration of any department program may be paid to the department
with certain valid credit cards, by electronic funds transfer, with personal,
business, or cashier's checks, by money order, or by cash in person at locations
made available for that purpose by the department. The new subchapter implements
the authority granted by §201.208 to accept payment by credit card or
electronic funds transfer, in addition to previously used methods of payment.
The department will be required to contract with one or more companies
to process credit card payments received by the department. These companies
will also charge the department a specified percentage of total funds received
from credit card sales each month in order to process the transactions (the
discount rate). In order to reduce the fiscal impact on the department resulting
from the acceptance of payments by credit card, §5.43 specifies that
fees may be paid by credit card only if the transaction involves a charge
of at least $5.00, except for certain transactions processed by the department's
Vehicle Titles and Registration (VTR) Division, and that a transaction may
not involve a charge of more than $2,000.
The minimum charge was set to reduce the impact of small transactions on
the fees paid by the department for credit card services. Based on the formula
used to calculate the discount rate, transactions of very small amounts would
cause the department's discount rate to increase, thus increasing the overall
cost to the department. Although transactions of very large amounts would
have the opposite effect on the discount rate, the increase in total funds
would also increase the overall cost. Based upon a review of goods and services
offered by the department for which a required fee could be paid by credit
card, the department determined that transaction amounts between $5.00 and
$2,000 would encompass most of the department's transactions without adversely
affecting the discount rate.
The department's VTR Division provides certain title and registration documents
in very large quantities, many of which have a fee as low as $1.00. While
the department would like to increase efficiency in this customer oriented
function, it would not be feasible to include a $5.00 minimum charge, given
the volume of low cost items provided by the VTR Division. Accordingly, transactions
involving VTR goods and services are not subject to the minimum transaction
amount. The department will request that the companies it contracts with to
process credit card transactions set up a separate account for VTR transactions
with its own discount rate. The separate discount rate will prevent those
transactions from affecting the rate charged for the remainder of the department's
transactions.
After the foregoing review of possible transactions, the department also
determined that the discount rate that would be charged for those transactions
would be approximately 2.25%. This rate is the equivalent of approximately
$1.25 per transaction. In order to act as proper stewards of public funds
while not charging its customers more than the cost to the department of processing
credit card transactions, §5.43 specifies that persons paying by credit
card will pay a service charge of $1.00 per transaction along with the applicable
fee. A service charge in this amount will ensure that the department recovers
as much of its costs as possible without overcharging a customer.
Section 5.44 specifies that the subchapter does not apply to the payment
of motor carrier registration fees under §18.15 of this title (relating
to Payment of Fees), motor transportation broker fees under §18.42 of
this title (relating to Fees), and oversize and overweight permit fees under §28.11
of this title (relating to General Oversize/Overweight Permit Requirements
and Procedures). Each of those sections prescribes payment methods similar
to the ones prescribed in the new subchapter.
FISCAL NOTE
James M. Bass, Director, Finance Division, has determined that for the
first five-year period the new sections are in effect, there will be fiscal
implications for state government as a result of enforcing or administering
the new sections. There will be increased costs to the state for professional
service fees paid to companies the department contracts with to process credit
card transactions. There will also be a one-time charge in the first year
for software necessary to process credit card payments. There will be decreased
costs to the state due to a reduction in administrative costs as a result
of increased efficiency in processing transactions. There will finally be
an increase in state revenue resulting from service charges imposed on credit
card users.
Although it is difficult to estimate the increased costs and revenue, as
the amount of the increase will generally depend on the number of transactions
and the amount of fees paid in each transaction, the department has estimated
the increase under an assumption of 20,000 transactions each month with a
10% increase yearly for the first five years, and a charge to the department
of $1.25 per transaction, based on the estimated discount rate. The department
also assumes that the new sections will only be in effect for one-half of
Fiscal Year 2000. Under those assumptions, in Fiscal Year 2000, the department
estimates the state would have increased costs of $160,000 ($150,000 in professional
service fees and $10,000 in software costs) and $120,000 in increased revenue.
In the following four fiscal years, costs are estimated to increase by $330,000
in Fiscal Year 2001, by $363,000 in Fiscal Year 2002, by $399,300 in Fiscal
Year 2003, and by $439,230 in Fiscal Year 2004. In the following four fiscal
years, revenue is estimated to increase by $264,000 in Fiscal Year 2001, by
$290,400 in Fiscal Year 2002, by $319,440 in Fiscal Year 2003, and by $351,384
in Fiscal Year 2004.
Mr. Bass has also determined that for the first five-year period the new
sections are in effect, there will be no fiscal implications for local governments
as a result of enforcing or administering the new sections. There are no anticipated
economic costs for persons required to comply with the new sections as proposed.
Mr. Bass has certified that there will be no significant impact on local
economies or overall employment as a result of enforcing or administering
the new sections.
PUBLIC BENEFIT
Mr. Bass has also determined that for each year of the first five years
the new sections are in effect, the public benefit anticipated as a result
of enforcing or administering the new sections will be to enable the department
to provide goods and services to customers more efficiently, with a corresponding
increase in customer satisfaction. There will be no effect on small businesses.
SUBMITTAL OF COMMENTS
Written comments on the proposed new sections may be submitted to James
M. Bass, Director, Finance Division, 125 East 11th Street, Austin, Texas 78701-2483.
The deadline for receipt of comments will be 5:00 p.m. on March 13, 2000.
STATUTORY AUTHORITY
The new sections are proposed under Transportation Code, §201.101,
which provides the Texas Transportation Commission with the authority to establish
rules for the conduct of the work of the Texas Department of Transportation
and, more specifically, Transportation Code, §201.208, which authorizes
the commission to adopt rules regarding the method of payment of a fee for
any goods sold or services provided by the department, or for the administration
of any department program.
No statutes, articles, or codes are affected by the proposed new sections.
§5.41.Purpose.
Transportation Code, §201.208 authorizes the commission to adopt
rules regarding the method of payment of a fee for any goods sold or services
provided by the department, or for the administration of any department program.
This subchapter prescribes acceptable payment methods and requirements for
payment by that method.
§5.42.Definitions.
The following words and terms, when used in this subchapter, shall
have the following meanings unless the context clearly indicates otherwise.
(1)
Commission - The Texas Transportation Commission.
(2)
Department - The Texas Department of Transportation.
(3)
Goods and services - Any goods sold or services provided
by the department, including the sale of travel promotional materials and
department publications, and the issuance of licenses, permits, and registrations.
(4)
VTR - The department's Vehicle Titles and Registration
Division.
§5.43.Methods of Payment.
(a)
Except as provided in §5.44 of this title (relating
to Exceptions), all fees for department goods and services and any fees required
in the administration of any department program may be paid to the department:
(1)
with a valid credit card issued by a financial institution
chartered by a state or the United States;
(2)
by electronic funds transfer;
(3)
with a personal check, business check, cashier's check,
or money order, payable to the Texas Department of Transportation; or
(4)
by cash in person at locations made available for
that purpose by the department.
(b)
Fees may be paid by credit card only if the transaction
involves a charge of at least five dollars, except for transactions involving
VTR goods and services. Payments by credit card may not be made if a transaction
involves a charge of more than $2,000.
(c)
Persons paying by credit card will pay a service charge
of one dollar per transaction along with the applicable fee.
§5.44.Exceptions.
This subchapter does not apply to the payment of motor carrier registration
fees under §18.15 of this title (relating to Payment of Fees), motor
transportation broker fees under §18.42 of this title (relating to Fees),
and oversize and overweight permit fees under §28.11 of this title (relating
to Permit Issuance Requirements and Procedures).
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on January 31, 2000.
TRD-200000666
Richard Monroe
General Counsel
Texas Department of Transportation
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 463-8630
Subchapter D. REGIONAL TOLLWAY AUTHORITIES
Chapter 27.
TOLL PROJECTS