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Minutes for HB2070 - Committee on Taxation
Short Title
Allowing certain private not-for-profit postsecondary educational institutions to recoup credit card fees by permitting a surcharge for credit card transactions in the same manner as municipal universities, community colleges, technical colleges and vocational educational schools.
Minutes Content for Mon, Jan 25, 2021
Adam Siebers, Assistant Revisor provided an overview for HB2070 which would provide that certain not-for-profit private post secondary educational institutions accepting payment of fees, tuition or other charges in the form of a credit card the ability to charge a surcharge (Attachment 1).
Chairperson Smith directed Committee members to the fiscal note for HB2070 stating there is no fiscal impact on state revenues or expenditures.
Proponents: Matt Lindsey, President, Kansas Independent College Association, representing twenty independent colleges of Kansas testified for HB2070 noting under current law, vendors in Kansas who accept a credit card may not pass the fee that a credit or debit card requires to the customer. Kansas statute has an exemption for state or local government agencies including Regents, universities, community and technical colleges to pass on the surcharge to the customer. Instead, Kansas law requires non-profit colleges to absorb the credit card fee costs. He noted HB2070 would allow the credit card surcharge to include all Kansas-based educational entities, including the non-profit colleges (Attachment 2).
Ronald Olinger, Chief Financial Officer, Benedictine College, testified via Webex in fiscal year 2019-2020, 32% of tuition fees, room and board were paid with credit cards by students. The credit card surcharge was over a quarter of a million dollar cost, representing 10% of the annual fund donations for last year. The annual fund donations are used to cover student scholarships and other operating costs of the college and now must be used to cover the surcharge expense. He stated Benedictine College supports HB2070 that would grant permission to do what the Regent universities, Washburn, and the Kansas community colleges currently do (Attachment 3).
Shelley Kneuvean, Vice President, Finance and Administration, Baker University, testified for HB2070 stating this bill would modify the tax code and allow Baker University as well as other independent colleges to pass on the credit card fees to the consumer. Baker University incurs more than $200,000 in fees annually by the credit card companies and it is difficult financially for small liberal arts universities across the state. She stated the university has had declining enrollment and revenue due to COVID noting budget reductions are being made by eliminating some jobs. HB2070 would help the university with budget and financial limitations (Attachment 4).
The Committee discussed if a merchant passed the surcharge to the customer, would this interfere or change the statutes or contractual agreement the credit card companies have with users.
Meeting adjourned at 4:00 pm.
