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A BILL to amend the Code of Virginia by adding in Article 3 of Chapter 4 of Title 6.2 a section numbered
6.2-432.1
, relating to financial institutions; processing fee on taxes prohibited; civil penalty.
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding in Article 3 of Chapter 4 of Title 6.2 a section numbered
6.2-432.1
as follows:
§
6.2-
43
2
.1
.
Processing fee on taxes prohibited
; civil penalty
.
A.
For purposes of this section
:
"Authorization" means the process through which a merchant requests approval for an electronic payment transaction from
an
issuer.
"Clearance" means the process of transmitting final transaction data from a merchant to an issuer for posting to the cardholder's account and t
he calculation of fees and charges, including
processing
fees, that apply to the issuer and the merchant.
"Debit card" means a card
or other payment code or device issued or approved for use through a payment card network to debit an asset account, regardless of the purpose for which the account is established, whether authorization is based on a signature, a personal identification number, or other means. "Debit card" includes a
general
-
use prepaid card, as defined in 15 U.S.C.
§
1693
l
-1. "Debit card" does not include paper checks.
"Electronic payment transaction" means a transaction in which a person uses a debit card, credit card, or other payment code or device issued or approved th
rough a payment card network to debit a deposit account or
access
a line of credit, whether authorization is based on a signature, personal identification number, or other means.
"Issuer"
means a
n entity
issuing a debit card or
c
redit
c
ard or the issuer's agent.
"Payment card network" means an entity that (i) directly
,
or through li
censed members, processors, or agents, provides the proprietary services, infrastructure, and software
that
route
s
information and data
to
conduct electronic payment transaction authorization, clearance, and settlement and (ii) a merchant uses to accept a brand of debit card
or
credit card to carry out electronic payment transactions.
"Processing fee" means a fee established, charged, or received by a payment card network for the purpose of compensating the issuer for its involvement in an electronic payment transaction.
"Processor" means an entity that facilitates, services, processes, or manages the debit or credit authorization, billing, transfer, payment procedures, or settlement with respec
t to any electronic payment transaction.
"Settlement" means the process of transmitting sales information to the issu
er
for collection and reimbursement of funds to the merchant and calculating and reporting the net transaction amount to the issuer and merchant for an electronic payment transaction that is cleared.
B.
No
payment card network shall
impose
or receive
any processing fee
on the portion of any transaction comprising
the amount of taxes imposed by Chapter
6
(§
58.1-600
et seq.)
of Title 58.1 on any
electronic payment
transaction
.
C
.
Any person, other than a merchant, that
imposes
or receives
a
processing fee in
violat
ion of
this
section
is subject to a civil penalty of $1,000 per electronic payment transaction and
shall
refund the merchan
t
the
portion
of any processing fee
improperly imposed or received
.
2. That the provisions of this act shall become effective on July 1, 2028.