Section 735.100  Establishment of Program

This Part governs the E-Pay Program created by Sections 7 and 17 of the State Treasurer Act.

Section 735.110  Purpose of Program

a)         The Act requires the Treasurer to receive the revenues and all other public moneys of the State, and all moneys authorized by law to be paid to the Treasurer, and safely keep the same.  The Act also provides that revenue received by the State in the form of coins, cash, checks, drafts, electronic fund transfers, electronic checks, credit card payments, debit card payments, or other similar payment instruments and the processing thereof shall be authorized for acceptance and collection by the State Treasurer.  [15 ILCS 505/7]  Pursuant to this authority, the Treasurer maintains contractual relationships with vendors in order to process financial transactions, such as credit card processing and electronic checks, on the State's behalf.

b)         The Act permits the Treasurer to establish an E-Pay program to supplement and enhance both the investment opportunities and the secure electronic payment options otherwise available to other custodians of public funds for public agencies in this State [15 ILCS 505/17].

c)         Pursuant to this authority, the Treasurer has established the E-Pay Program that provides a convenient, secure and affordable electronic payments processing option to facilitate the acceptance and processing of credit card, debit card and electronic check (E-check) payments to public agencies.  The management, administration, processing and settlement of electronic payments are provided by the Treasurer and its vendors, selected through a competitive bidding process.

(Source:  Amended at 46 Ill. Reg. 19013, effective November 10, 2022)

Section 735.200  Definitions

"Act" means the State Treasurer Act [15 ILCS 505] that establishes the E-Pay Program.

"Constituent" means a person or entity that utilizes the E-Pay Program to make payments or donations of public funds to a participant.

"Custodian" means a public agency or a recipient.

"Electronic Signature" means a signature in electronic form attached to or logically associated with an electronic record.  [5 ILCS 175/5-105]

"E-Pay Agreement" means the participant agreement that sets forth the Treasurer's terms and conditions for participation in the E-Pay Program.

"E-Pay Program" means the electronic payments processing program provided to public agencies to facilitate the acceptance and processing of credit card, debit card or E-check payments made to public agencies.

"Enrollment Form" means the form provided by the Treasurer to collect the required pertinent public agency information for enrollment into the E-Pay Program.

"Master Services Agreement" means the participant agreement that sets forth the E-Pay Program fees and the processor's terms and conditions for participation in the E-Pay Program.

"Participant" means a public agency that has been accepted by the Treasurer and enrolled into the E-Pay Program.

"PCI Data Security Standards" means the technical and operational requirements set forth by the Payment Card Industry (PCI) Security Standards Council for organizations accepting or processing payment transactions, and for software developers and manufacturers of applications and devices used in those transactions.

"Principal" means an individual who is authorized by the public agency or statute to execute contractual agreements on behalf of the public agency.

"Processor" means a vendor designated by the Treasurer, through a competitive bidding process, to provide electronic payment services via point-of-sale (POS), internet and telephone for the E-Pay Program.

"Public Agency" has the same meaning as in Section 17 of the Act.  Questions regarding whether an entity qualifies as a component unit of a public agency shall be resolved by the Treasurer, referring to Governmental Accounting Standards Board (GASB) pronouncements, including but not limited to GASB Statement 14: The Financial Reporting Entity. Component units need not be limited to those entities which may be designated as component units by the Illinois Office of the Comptroller and may include, but need not be limited to, area agencies on aging and other providers under the Illinois Act on the Aging [20 ILCS 105].

"Public Funds" means current operating funds, special funds, interest and sinking funds, and funds of any kind or character belonging to or in the custody of any public agency. [30 ILCS 235/1]

"Recipient" means a person or entity that receives public funds in the form of a fee or donation on behalf of a public agency.

"Settlement Account" means an account established by a participant to settle funds from E-Pay Program activity.

"Settlement Bank" means the institution designated by the participant that is responsible for the settlement of funds from E-Pay Program activity.

"State Agency" means the State of Illinois or any officer, agency, board, commission, authority or department thereof.  "State Agency" does not include the judicial or legislative branches of state government, and does not include colleges or universities.

"Treasurer" means the duly elected Treasurer of the State of Illinois or the Treasurer's designees.

"Treasurer's Website" means www.illinoistreasurer.gov or the successor to that website.

(Source:  Amended at 46 Ill. Reg. 19013, effective November 10, 2022)

Section 735.210  Incorporation by Reference

a)         The following materials are incorporated by reference in this Part:

PCI Security Standards Council, LLC, 401 Edgewater Place, Suite 600, Wakefield MA 01880

Payment Card Industry (PCI) Data Security Standard v.3.2.1 (May 2018); https://www.pcisecuritystandards.org/documents/PCI_DSS_v3-2-1.pdf

Payment Card Industry (PCI) Data Security Standard v.4.0 (March 2022); https://www.pcisecuritystandards.org/documents/PCI-DSS-v4_0.pdf

b)         The materials incorporated by reference in this Section are incorporated as of the date specified and do not include any later amendments or editions.

(Source:  Amended at 46 Ill. Reg. 19013, effective November 10, 2022)

Section 735.300  Treasurer Responsibilities

a)         The Treasurer will procure and designate a credit/debit card and electronic check payment processing vendor to provide electronic payment services via point-of-sale, internet and telephone for the E-Pay Program. This shall include the acceptance of major credit/debit card providers and E-checks for all participants.

b)         Pursuant to PCI Data Security Standards, the E-Pay Program will comply with operational and technical requirements for accepting or processing payment transactions, and for software developers and manufacturers of applications and devices used in those transactions.

c)         The Treasurer is responsible for the administration of the E-Pay Program and will perform the following:

1)         Review the eligibility of public agencies prior to enrollment;

2)         Establish enrollment, quality control, and maintenance requirements and processes;

3)         Establish terms and conditions;

4)         Establish customer service processes;

5)         Procure any necessary services administered through the E-Pay Program;

6)         Retain documents in compliance with the State Records Act [5 ILCS 160] and the State Records Commission administrative rules (44 Ill. Adm. Code 4400);

7)         Respond to waiver requests for a State agency’s required participation in the E-Pay Program in accordance with Section 735.420; and

8)         Other tasks necessary to administer the E-Pay Program.

(Source:  Amended at 46 Ill. Reg. 19013, effective November 10, 2022)

Section 735.310  Processor Responsibilities

The Processor is responsible for the day-to-day management of the E-Pay Program and will perform the following:

a)         Enroll public agencies into the E-Pay Program as determined by the Treasurer;

b)         Provide for electronic credit card and check payment services via multiple payment formats in accordance with PCI data security standards and industry best practices;

c)         Provide customer service as determined by the Treasurer;

d)         Distribute funds from E-Pay Program activity into the participant's settlement account or to third-party service providers as described in Section 735.500;

e)         Retain copies of participant documents, including the enrollment form;

f)         Charge participants for the applicable services in accordance with the cost schedule;

g)         Provide the Treasurer and participants with sufficient reports and/or the ability to run reports; and

h)         File the participant's accurate 1099K with the Internal Revenue Service by the due date.

(Source:  Amended at 46 Ill. Reg. 19013, effective November 10, 2022)

Section 735.320  Fees

To the extent permitted by law, the Treasurer shall permit participants to absorb the processing fees associated with electronic payment services or pass the processing fees to constituents. Processing fees shall be publicly available and disclosed to public agencies prior to enrollment. Processing fees will be established through the competitive procurement of the processor.  Processing fees may include, but are not limited to:

a)         Cost of interchange rates, dues, assessments, and any other pass through fees from the issuing credit card bank and the card networks;

b)         Fees collected by the processor for the authorization, clearing, and settlement of credit card transactions and electronic check payments; and

c)         Fees paid to the Treasurer by the processor for the program administration, pursuant to Section 735.300. Administrative fees paid to the Treasurer shall not exceed the product of 25 basis points multiplied by the monthly processing volume, excluding transaction fees.

Section 735.330  Termination (Repealed)

(Source:  Repealed at 46 Ill. Reg. 19013, effective November 10, 2022)

Section 735.400  Participation

a)         The E-Pay Program is offered to public agencies to facilitate the acceptance and processing of credit card, debit card or E-check payments. The E-Pay Program is offered to local governments to facilitate the acceptance and processing of credit card payments as authorized by the Local Government Acceptance of Credit Cards Act [50 ILCS 345].

b)         In order to participate in the E-Pay Program, a public agency shall submit an enrollment form and agree to the terms and conditions established by the Treasurer and its vendors. 

c)         State agencies, when accepting or processing credit card, debit card or E-check payments to be held within the State Treasury, must either participate in the E-Pay Program or receive a waiver in accordance with Section 735.420 in order to comply with Section 7 of the Act.

d)         Participation in the Public Treasurers' Investment Pool shall not be a prerequisite for participation in the Treasurer's E-Pay Program. [15 ILCS 505/17]

(Source:  Amended at 46 Ill. Reg. 19013, effective November 10, 2022)

Section 735.410  Enrollment

A public agency may enroll in the E-Pay Program on documents prescribed by the Treasurer and its vendors.  Electronic signatures are permitted when electronically submitting any documents, E-Pay agreements, or master services agreements. 

a)         The enrollment form shall require public agencies to provide the following information for the public agency and may require this information for any custodians that are not the public agency itself:

1)         names;

2)         tax identification numbers;

3)         mailing and physical street addresses;

4)         email addresses;

5)         phone numbers;

6)         name and title of the person who will be the principal;

7)         processing and technical requirements to be used;

8)         settlement banks; and

9)         any additional information needed to assist in clarifying when the enrollment form is unclear or insufficient.

b)         Public agencies shall sign a master services agreement in which they agree to the fees and the terms and conditions of the processor.

c)         Public agencies shall sign an E-Pay agreement in which they agree to the terms and conditions of the Treasurer.

Section 735.420  Waiver

The Treasurer may waive a State agency’s required participation in the E-Pay Program for a specified duration of time when the Treasurer determines a waiver is in the best interest of the State.

a)         A State agency seeking a waiver may submit a waiver application to the Treasurer.  The Treasurer will prescribe the information required from a State agency in applying for a waiver, which may include the following information:

1)         the name of the State agency seeking the waiver;

2)         a contact person at the State agency who is responsible for the application and any further contact information the Treasurer requests from the State agency;

3)         the basis for the requested waiver, which must include any applicable considerations listed in subsection (b);

4)         information regarding any procurement utilized by the State agency to procure existing payment processing or other related services;

5)         the requested duration of the waiver; and

6)         any additional information requested by the Treasurer in evaluating the waiver request.

b)         The Treasurer will not unreasonably withhold a waiver, and will consider the following factors prior to granting, in whole or in part, or denying a waiver:

1)         the sufficiency of information provided by the State agency seeking a waiver;

2)         any current payment processing or related services used by or available to the State agency, the benefits or drawbacks of those services, and prior efforts, if any, to participate in the E-Pay Program;

3)         potential technical impacts;

4)         potential operational impacts;

5)         potential financial impacts; and

6)         any additional information the Treasurer determines necessary or important in its evaluation of the waiver request.

(Source:  Added at 46 Ill. Reg. 19013, effective November 10, 2022)

Section 735.430  Termination

a)         In the event that a participant’s E-Pay Program services fail to comply with the terms and conditions of the process as set forth in the master services agreement under Section 735.410(b), or the Treasurer as set forth in the E-Pay agreement under Section 735.410(c), the Treasurer may freeze and/or terminate any or all of the participant’s E-Pay Program services.

b)         Prior to freezing or terminating any services, the Treasurer will provide a minimum of 24 hours’ notice of the intent to freeze or terminate that identifies the grounds for that action. If satisfactory remedial action is not taken by the participant and/or its recipient within the notice period, the Treasurer will freeze or terminate the services depending upon the notice given.

c)         The Treasurer may freeze any or all of the participant’s E-Pay Program services without notice in any of the following circumstances:

1)         if there is illegal, or suspected illegal, use of the E-Pay Program services;

2)         use of the E-Pay Program services that is unauthorized by the participant, or suspected to be so unauthorized; or

3)         any reason that E-Pay Program services cannot be provided through no fault of the Treasurer’s (e.g., problems with the settlement bank).

(Source:  Added at 46 Ill. Reg. 19013, effective November 10, 2022)

Section 735.500  Settlement Account

Funding from the E-Pay Program activity will be distributed by the processor into settlement accounts at the participant's settlement banks, except that where a participant incurs charges for services provided by a third party and ancillary to the E-Pay Program, the participant may direct the processor to distribute relevant fees for services to the third-party service provider. The Treasurer may give public agencies the option of using their own settlement banks, a settlement bank selected by the Treasurer via a competitive procurement process, or the processor's settlement bank.  The participant's settlement bank must, at minimum, be authorized to do business in Illinois as an Illinois bank or a national bank with a presence in Illinois.  In addition, the participant's settlement bank must be insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, be a member of the Automated Clearing House network, and qualify as a depository for public funds pursuant to either the Public Funds Investment Act [30 ILCS 235] or the Deposit of State Moneys Act [15 ILCS 520].

(Source:  Amended at 46 Ill. Reg. 19013, effective November 10, 2022)