HOUSE BILL REPORT

HB 532

BYRepresentatives H. Sommers,  Hankins, Belcher and L. Smith; by request of  Department of General Administration

Revising provisions on the administration of the use of credit cards for state institutions.

House Committe on State Government

Majority Report:     Do pass.  (8)

     Signed by Representatives H. Sommers, Chair; Peery, Vice Chair; Baugher, Chandler, Hankins, O'Brien, Sayan and Walk.

House Staff:Pam Madson (786-7135)

AS REPORTED BY COMMITTEE ON STATE GOVERNMENT FEBRUARY 24, 1987

BACKGROUND:

The director of the Department of General Administration (GA) is required to develop a program enabling state agencies and departments to use credit cards to make purchases.  The director shall adopt rules concerning distribution and use of credit cards, available credit limits, payment of bills, and any other rule necessary to administer or implement the credit card program. The director is also authorized to contract with one or more financial institutions located within the state to administer the program.

The latter provision effectively bars out-of-state financial institutions from providing the state with credit card administrative services, which no in-state financial institution currently offers.  Credit card administrative services include automated management reporting systems.  Such reporting systems could be used to identify those airline routes used most by state agency personnel, who spent approximately $9.8 million on air travel last year alone.  With this information, the state would be able to obtain discounts from airlines for high volume air routes.

SUMMARY:

The director of General Administration is no longer restricted to contracting with in-state financial institutions to administer the state credit card program.

Fiscal Note:    Attached.

House Committee ‑ Testified For:     Meredith Jennings, Department of General Administration; and Collum Liska, Office of Financial Management.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     Current state law precludes out-of-state credit card vendors from providing the state with administrative services along with the cards.  Administrative services such as automated card use monitoring are not now provided by in-state vendors.  By allowing out-of-state vendors to provide these services, the state would benefit in several ways.  Automated card use monitoring would enable the state to obtain airline volume discounts by identifying airline routes most heavily used by state employees.  Greater state credit card use would reduce agency travel advance costs, improve agency cash flow, and hasten employee travel voucher submittals.

House Committee - Testimony Against: None Presented.