                        July15,1987




Honorable John Vance                   Opinion No.    m-749
District Attorney
Services Building                      Re: Acceptance of credit cards
Dallas, Texas   75202                  in payment of fines, fees and
                                       other charges

Dear Mr. Vance:

     You ask several questions relating to a recently enacted statute
which enables county commissioners courts to authorize county
officials to accept credit cards for the payment of "a fee, fine,
court cost, or other charge. . . ." V.T.C.S. art. 3910a. Your
questions may be summarized as follows:

             1. Whether the acceptance of credit cards by a
          county constitutes a 'lending of credit' in viola-
          tion of the Texas Constitution;

             2. Whether article 3910a conflicts with provi-
          sions of the Texas Code of Criminal Procedure.
          which require that fines and costs be paid in
          money;

             3. Whether the assessment of processing fees
          and service charges under sections 3 and 5, re-
          spectively, of article 3910a is enforceable;

             4. Whether article 5069-1.12 prevents the
          collection of the processing fees authorized by
          section 3 of article 3910a;

             5. Whether   article   3910a   applies   to   bail
          bonds; and

             6. Whether the county may indemnify county
          officials responsible for collecting fines, fees,
          costs, and other charges by credit card.

Your questions will be addressed in this order. Your letter indicates
that a bank has agreed to make the acceptance of certain credit cards
by the county available at no charge to the county. Consequently,
this opinon does not address problems which could arise if the county



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actually received less from a defendant who paid by credit card than
from a defendant who paid cash.

     Article III, section 52. of the Texas Constitution prohibits the
legislature from authorizing "any county . . . to lend its credit or
to grant public money or [any] thing of value in aid of, or to any
individual, association or corporation whatsoever. . . .u See also
Tex. Coast. art. XI, $3. In Attorney General Opinion JId-522 (1986),
this office reiterated that article III, section 52, clearly prohibits
the legislature from authorizing county officers to deliver county
services ou credit. Accordingly, resolution of your first question
depends ou whether the acceptance of credit cards under article 3910a
actually constitutes a "lending of credit."

     Section 2(a)(l) of article 3910a authorizes county comnissioners
courts to authorize county or precinct officers to "accept payment
9 credit card of a fee, fine, court cost, or other charge. . . ."
(Emphasis added). Because this section does not grant authority to
issue credit cards, the transaction contemplated by article 3910a is a
tripartite arrangement. In the usual tripartite credit transaction, a
customer obtains loans from a creditor to purchase goods or services
from participating merchants; the creditor pays the participating
merchants and the customer is obligated to pay the creditor. See
V.T.C.S. art. 5069-15.01, 5(L); 1 J. Fonseca, Handling Consumer Credit   -
Cases, 910.2 (3rd ed. 1986). Thus, article 3910a contemplates that
thecounty   shall stand in the position of the merchant -- not the
creditor. No "lending of credit" by the county occurs. It has been
noted that some credit card "sales drafts" may .be dishonored and
returned to county officials. Although this fact may raise policy
concerns, it does not affect the legal question of whether the county
has extended its credit.

     Your second question suggests that article 3910s conflicts with
provisions of the Texas Code of Criminal Procedure which require that
fines and costs be paid in money. Article 43.02 of the Code of
Criminal Procedure provides:

          All recognizances, bail bonds, and undertakings of
          any kind, whereby a party becomes bound to pay
          money to the State. and all fines and forfeitures
          of a pecuniary character, shall be collected &
          the lawful money of the United States only.
          (Emphasis added).

     You also note that in Robinson v. State, 29 S.W. 788, 789 (Tex.
Crib. App. 1895). the court held that a county sheriff lacks statutory
authority to accept checks or promissory notes. The court stated that

          [s]uch officers are not clothed with the authority
                                                                         ?
          to thus bind the state by accepting checks,
          promissory notes, or property of any kind other



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Honorable John Vance - Page 3   (JM-749)




          than money, in payment of fines imposed upon
          parties convicted for violations of the law.
          (Emphasis added).

29 S.W. at 789. The case is iuappposite to the issue at hand.
Article 3910a provides express authority to accept credit cards.

     The acceptance of credit cards does, however, create some
questions about the enforcement of a defendant's obligation to pay
costs and fines under article 43.01 of the Code of Criminal Procedure.
The credit card transaction authorized by article 3910a is similar in
some respects to the situation presented when a check to the county is
dishonored.   In Attorney General Opinion JM-522, this office
determined that a justice of the peace may accept a check as condi-
tional payment of fines, costs, and judgments. Although a check does
not constitute money, once it is honored by a bank, it results in the
receipt of money. Attorney General Opinion JM-522. If a check is
dishonored, it is just as if no payment has been made; the defendant
is not discharged from his obligation to pay costs and fines. See
Code Grim. Proc. art. 43.01; Attorney General Opinion JM-522. Siral=
considerations apply to the acceptance of payments made by credit
cards under article 3910a. If a defendant refused or failed to pay
the obligation to the lending institution and the lending institution
refused to pay the county, the defendant's obligation under article
43.01 would not be discharged. In the usual case, however, the
lending institution would pay the county, and the lending institution
would bear the risk of non-collection. In the unlikely situation that
the county is required to collect a credit card obligation from a
defendant who refuses or fails to pay the obligation, it follows that
certain consumer credit laws could apply to the county's collection
efforts. Similarly, in the unusual case where the defendant actually
paid the lending institution but the lending institution failed or
refused to credit the county with the payment, it could raise serious
due process questions and concerns under the consumer credit laws if
the county refused to consider the defendant discharged from his
obligation to pay costs and fines under article 43.01 of the Code of
Criminal Procedure. A discussion of all of the implications of the
consumer credit laws on individual cases of nonpayment that
conceivably could arise depends on the terms of the particular
agreement with a lending institution and is beyond the scope of your
opinion request. Consequently, articles 43.01 and 43.03 of the Code
of Criminal Procedure are not satisfied until either the defendant
pays or the county actually receives money. Article 3910a does not
"repeal" these provisions. Article 39108 does, however, create an
exception to article 43.02's mandate that all such obligations be
collected in money.

     You also ask whether the county has any legal recourse for a
defendant's failure to pay either the processing fee authorized by
section 3 of article 3910a or the service charge authorized by section
5 of article 3910a for dishonored drafts. As a practical matter, it



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Honorable John Vance - Page 4   (JM-749)




should be noted that part of a charge draft cannot be dishonored.
Consequently, your concern Is relevant primarily t.7the collection of
a service charge for dishonored charge drafts. You suggest that such
fees and charges must be parr of the sentence before an arrest for
failure to pay the fee or charge may be effected. The Code of
Criminal Procedure provides for the collection of fines and costs.
See art. 43.07; see also Attorney General Opinion MU-322 (1981); cf.
Gunstanson v. State, 666 S.W.2d 183 (Tex. App. - Dallas 1983. pet.
ref'd) (incarceration of a proven indigent for failure to pay
immediately a fine or court cost is constitutionally impermissible).
In contrast, the county's remedy for a failure to pay a processing fee
or a service charge for a dishonored charge draft is a civil matter.
See Attorney General Opinion JM-472 (1986).
-
     Another objection raised in your request letter involves article
5069-1.12, V.T.C.S. This statute provides that:

          [i]n a sales transaction for goods or services
          involving the use of a credit card for an exten-
          sion of credit, the seller may not impose a sur-
          charge on the buyer because the buyer uses a
          credit card instead of cash, a check, or similar
          means of payment.

See also 15 U.S.C. 51666f(a)(2) ("[alo seller in any sales transaction
may impose a surcharge on a cardholder who elects to use a credit card
in lieu of payment by cash, check, or similar means.") Article
5069-1.12 appears to be in conflict with sections 2(a)(2) and 3(a) of
article 3910a. Section 2(a)(2) enables a commissioners court to
authorlee the collection of a fee for processing payments made by
credit card. Section 3(a) limits the amount of the processing fee.

     The Sixty-ninth Legislature enacted both article 3910a and
article 5069-1.12. See Acts 1985, 69th Leg., ch. 363, at 1433
(codified as V.T.C.S.Z.    3910a); Acts 1985, 69th Leg., ch. 443, §l,
at 1578 (codified as V.T.C.S. art. 5069-1.12). The Texas Supreme
Court stated the rule of construction applicable to statutes enacted
during the same legislative session:

             The rule is, that in the construction of acts
          of the same session, the whole must be taken and
          construed as one act, and to make a latter provi-
          sion repeal a former, there must be an express
          repeal, or an irreconcilable repugnancy between
          them; and then the latter will control. . . .
          [Nlothing short of expressions so plain and
          positive as to force upon the mind an irresistible
          conviction, or absolute necessity, will justify a
          court in presuming, that it was the intention of
          the legislature that their acts passed at the same
          session, should abrogate and annul one another.


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Wright v. Broeter, 196 S.W.2d 82, 85 (Tex. 1946). The legislature
approved articles 3910a and 5069-1.12 on May 20 md May 27, 1985,
respectively. Thus, if an irreconcilable difference exists between
articles 3910a and 5069-1.12, article 5069-1.12 must prevail as the
latter enactment.

     Articles 3910a and 5069-1.12 are not necessarily irreconcilable.
Section 3(a) of article 3910a authorizes a commissioners court to

          set the processing fee in an amount that is
          reasonably related to the expense incurred by the
          county or precinct officer in processing the
          payment by credit card. Bowever, the court may
          not set the processing fee in an amount that
          exceeds five percent of the amount of the fee,
          court cost, or other charge being paid.

Thus, section 3 focuses on assuring that counties incur no additional
costs as a consequence of accepting payment by credit cards. Article
5069-1.12 focuses on preventing discrimination by sellers against
buyers who use credit cards instead of cash. Such 'discrimination' is
often simply an attempt by merchants to pass on to consumers the
merchants' cost of accepting credit cards. Thus, section 3(a) of
article 3910a and article 5069-1.12 address the same basic practice.
But article 5069-1.12 applies to sellers in a commercial setting. See
also 15 U.S.C. $1666f(a)(2) (applies to sales transactions). Although
thecounty   may stand in the position of a seller while accepting
credit cards, the cou.ntyis not in the business of "selling" goods or
services.   Governing entities cannot logically be compared to
businesses -- their function and purpose are different. Article
5069-1.12 was not intended to apply to counties. Article 5069-1.12
therefore does not prevent counties from charging processing fees
under sections 2(a)(2) and 3(a) of article 3910a.

     You indicate that the Dallas County Commissioners Court contends
that bail bonds fall within the meaning of fees, fines, court costs,
or other charges in article 3910a. Article 17.01 of the Code of
Criminal Procedure defines "bail" as

          the security given by the accused that he will
          appear and answer before the proper court the
          accusation brought against him, and includes a
          bail bond or a personal bond.

Bail constitutes pre-trial security. See Attorney General Opinion
JM-363 (1985). In contrast, the "fe=        fines, and court costs"
covered by article 3910a relate to amcunts which are usually imposed
only after trial and conviction. Moreover, the area of bail bonds is
of significant interest to the public and to bail bondsmen. Con-
sequently, if the legislature had intended article 3910a to include
bail, it would have done so expressly.



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Honorable John Vance - Page 6      (34-749)




     Finally, you ask whether the county may indemnify county
officials responsible for collecting payments by credit card under
article 3910a or whether such indemnification is "necessary." Article
3910a does not alter the law applicable to county officials' liability
for the collection of fees and fines. See Tex. Const. art. XVI, 161;
Code Grim. Proc. art. 103.003; V.T.C.S.?%s.    1622; 3912e. §5; 3912k.
$5; Attorney General Opinion MW-18% (1980); see also V.T.C.S. art.
3896; Attorney General Opinion JM-517 (1986). Nor does article 3910a
change the law with regard to indemnification. See generally Attorney
General Opinion MW-156 (1980); see also Attorney General Opinion Nos.
JM-153 (1984); H-1318 (197%) (gave-ntal     entities may not purchase
liability insurance without specific statutory authority).          As
indicated, if a charge draft is dishonored, it     would be as if no
payment had been made; the county official must use all legal means to
collect the fees, fines, court costs and other charges which may be
due.   See Attorney General Opinions JM-522; V-201 (1947). The
officia=ould     not incur a different degree of liability simply
because the official accepted payment by credit card. Because of the
processing fees and service charges, the amount he must collect may
differ. Liability for the collection, however, would not change.

                                SUMMARY

               Article 3910a, V.T.C.S., which authorizes
          county commissioners court to authorize county
          officials to accept payment for fees, fines, court
          costs, and other charges is a valid and enforce-
          able statute.




                                           JIM     MATTOX
                                           Attorney General of Texas

MARYKELLER
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Jennifer Riggs
Assistant Attorney General




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