COMPLIANCE ECONOMIC REVIEW
Pursuant to section 120.745(5), Florida Statutes
RULE 69C-4.40045, FLORIDA ADMINISTRATIVE CODE
Convenience Fees
DEPARTMENT OF FINANCIAL SERVICES
DIVISION OF TREASURY
April 2013
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JUSTIFICATION FOR THE RULE
Section 215, Florida Statutes, was amended in 1983 to authorize acceptance of credit cards by
state agencies for goods and services, under certain circumstances. Currently, section 215.322,
Florida Statutes, allows for the acceptance of credit cards by state agencies, units of local
government, and the judicial branch and requires the State Treasurer to adopt rules to
administer the section. Charge cards, debit cards, and electronic funds transfer are also
included as acceptable payment types under this section. The intent of the Legislature is to
encourage state agencies, the judicial branch and units of local government to make their
goods, services, and information more convenient to the public through the acceptance of
payments by credit cards, charge cards, debit cards, or other means of electronic funds
transfers to the maximum extent practicable when the benefits to the participating agency and
the public substantiate the cost of accepting these types of payments. Under certain conditions,
a convenience fee may be imposed on the customer making payment.
Currently, section 215.322(3)(b), Florida Statutes, mandates that the Chief Financial Officer
adopt rules governing the imposition of convenience fees upon the person making the
payment. Department rules associated with convenience fees, Rule 69C-4.0045(1-3), F.A.C.,
describe when and under what conditions a convenience fee may be imposed. Section
215.322(3)(b), Florida Statutes, provides that “the total amount of such convenience fees may
not exceed the total cost to the state agency. A convenience fee is not refundable to the payer.
However, this section does not permit the imposition of surcharges on any other credit card
purchase in violation of s. 501.0117.”
Since convenience fees are paid by the customer, state agencies and local governments save on
statewide contract and transaction processing costs in the amount of the convenience fees
imposed.
Over the last five fiscal years, $15.58 million in convenience fees have been imposed on
payments made to state agencies, while $11.70 million have been imposed on payments made
to local governments.
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STATEMENT OF ESTIMATED REGULATORY COSTS
1.
Direct or indirect economic impact:
Likelihood of the regulatory cost, including transactional costs, of more than $1
million cumulatively over five years.
It is expected that costs will continue to exceed $1 million over the next five
fiscal years.
The convenience fees imposed pursuant to this rule averaged $2.73 million on an
annual basis based on the fees due under the current contract with the state’s
ePayments provider. It is expected the total convenience fee amounts will
continue to rise as more customers pay electronically for goods and services.
For the past five fiscal years, the convenience fees imposed on customers
making payment to state agencies were as follows:
2008
2009
2010
2011
2012
$2.23 million
$2.33 million
$2.45 million
$2.14 million
$6.43 million
For the past five years, the estimated convenience fees imposed on customers
making payment to local governments were as follows:
2008
2009
2010
2011
2012
2.
$1.94 million
$2.28 million
$2.68 million
$3.15 million
$3.63 million
Types and numbers of individuals or entities likely to be required to comply
with this rule:
A convenience fee may be imposed upon any individual or entity making a
payment using a payment card or electronic check. The number of transactions
to which convenience fees were applied for payment to state agencies totaled
3
45.88 million in 2012; the number of transactions to which convenience fees
were applied for payment to local governments was an estimated 207.26 million
in 2012.
3.
Cost to the Division and other state or local governments to implement the
rule and enforce the rule:
This rule is implemented and enforced by two positions within the Division of
Treasury at an annual cost totaling approximately $6,000.
4.
Effect on state or local revenues:
Convenience fees are paid by the customer; therefore, the state agencies and
local governments save on contract and transaction processing costs in the
amount of the convenience fees imposed by the ePayments provider, which
includes pass through transaction costs imposed by the credit card industry. The
convenience fees imposed pursuant to this rule averaged $2.73 million on an
annual basis.
The convenience fees imposed on customers making payment to state agencies
over the past five fiscal years, identified in section 1 above average $3.116 per
year. However, as section 1 above reveals, there was a sharp increase in 2012
with the implementation of Chapter 2010-151, Laws of Florida and implementing
rules for a state agency to require electronic payment, when those using the new
required method of payment were subject to the fee. This resulted in an
increase in the fees imposed from 2011 of $2.14 million to $6.43 million in 2012.
The increase is anticipated to gradually increase from the higher 2012 amount.
The estimated convenience fees imposed on customers making payment to local
governments over the past five fiscal years, identified in section 1 above, average
$2.736 million. The increase is anticipated to gradually increase at a rate similar
to the increase from 2011 of $3.15 million to 2012 of $3.63 million.
5.
Transactional costs:
There are no other costs other than those mentioned in 3 and 4 above.
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6.
Impact on small business:
Small businesses may be required to comply with this rule when paying by
payment card or electronic check.
7.
Impact on small counties and small cities:
Convenience fees are paid by the customer; therefore, the local governments
including small counties and small cities participating in the ePayments provider
contract services save on contract and transaction processing costs in the amount
of the convenience fees imposed by the ePayments provider, which includes pass
through transaction costs imposed by the credit card industry.
METHODOLOGY
The number of and impact on individuals and entities affected by this rule was determined by
identifying the state agencies collecting a convenience fee for payment card collections only
and totaling the transaction volumes based on data from the ePayments provider. For local
governments, the amount was determined using an estimate of the previous year’s transaction
volume based on data from the ePayments provider.
The cost for the personnel was determined by estimating the approximate time spent per year,
5%, of two positions:
 Government Analyst II – 5% @ $54,600 annual salary
$2,730
 Financial Administrator – 5% @ $64,546 annual salary
$3,227
Total
$5,957
Rounded to $6,000
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