A bill that would have preventedthe State of California from charging “convenience”fees for credit card transactions was brought to a grinding haltthis month in the state senate.

“The billis dead for the year,” said Jenny Bretschneider, aspokeswoman for Democratic Sen. Debra Bowen. Bowen had originallyproposed and drafted SB1801.

The defeat ofthis bill may affect Sacramento State students because of thepossibility that the university may soon charge a similar fee forcredit card transactions.

Many governmentorganizations charge a credit card fee of about 2-3 percent of theentire transaction completed. The Department of Motor Vehicles andthe Franchise Tax Board are an example of two agencies that chargethis fee. For example, if a customer was paying for $1,000 worth oftaxes and paid with a credit card over the phone or via theInternet, the cost would be $25.

Under currentlaw, private businesses are not allowed to pass on the credit cardtransaction fees to customers, however, government organizationsare not covered by these rules.

State agenciessay they charge these fees to cover the cost of vendors who providecredit card transaction services. Vendors like Official PaymentCorporation are hired by state agencies like the Franchise TaxBoard. These vendors charge a fee for their services and that feeis passed on to the customer through a surcharge. According to theOfficial Payment Corporation’s Web site, the fee covers thecost associated with providing the service.

“Theconvenience fee covers the cost of processing the paymenttransaction,” said a statement on the OPC Website.

Bowen believesthat the state can save money by encouraging individuals to usetheir credit cards to complete transactions rather than paying bychecks or cash.

The senatorpointed to findings from a 2001 survey conducted by the AmericaAssociation of Motor Vehicle Administrators. The report showed thatthe personnel cost associated with an over-the-counter transactionis higher compared to Internet credit cardpayments.

Over-the-countertransactions “actually cost the state more” money,Bretschneider said.

He argued thatcredit card customers are being forced to pay a fee, while thosethat pay by check are not. Bowen feels that consumers willavoid paying by credit card in order to safe themselves from thecost of surcharges.

Groups likeCalifornia State Association of Counties are opposed to limitingthe state’s ability to charge a credit cardfee.

“Countiessimply cannot afford to recoup those costs, and current statuteallows us to pass those cost along to the customer,” saidJean Hurst, legislative representative for the Association ofCounties. “If a county were required to pick up those costson their own, we believe that the counties would no longer be ableto afford to provide the convenience to the customer of offering acredit card payment.”

Bowen said thatshe would continue to pursue the issue. She plans to submit arecommendation to the Governor’s California PerformanceReview Commission. In the meantime, if Sac State decides to extenda surcharge fee no legislation will be available to protectstudents.