ORDINANCE _________________

AN ORDINANCE relating to the City's acceptance of credit cards, debit cards, and other electronic commerce methods for payment of taxes, license fees, fines, other fees, and City services; authorizing acceptance by City departments of these forms of payments for these purposes; authorizing the Director of Executive Administration to determine when City departments may accept, and set and impose service and other fees for, credit cards, debit cards, and electronic commerce payments; providing for the adoption of City-wide policies and procedures for the acceptance of credit cards, debit cards, and electronic commerce; and amending Chapter 5.22 of the Seattle Municipal Code.

WHEREAS, use of credit and debit cards has become prevalent in everyday financial transactions, and citizen demand has risen dramatically for the availability to pay for City taxes, licenses, fees, and services by credit cards, debit cards, and electronic commerce methods; and

WHEREAS, Ordinance 117375, as amended by Ordinance 117524, requires all City departments to obtain the approval of the Director of Executive Administration prior to accepting credit and debit cards for certain types of City payments; and Ordinance 119283 authorizes the Director of Executive Administration to establish and collect fees for various electronic payment transactions; and

WHEREAS, the State Auditor has approved of first-class cities accepting credit cards for payments of City-imposed fees and taxes, and absorbing related bank fees; and

WHEREAS, it is in the City's and the public's interests to continue to have central oversight by the Director of Executive Administration to ensure that the electronic commerce practices by the various City departments are cost-effective and appropriate to the service, managed with proper financial controls and proper security for both the City and the customer, and integrated with the City's other financial operations; and

WHEREAS, each City department will be responsible for any costs incurred through its acceptance of credit cards, debit cards, and other electronic commerce methods;

NOW, THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. The title of Chapter 5.22 of the Seattle Municipal Code is hereby amended as follows: CONVENIENCE FEE FOR ELECTRONIC PAYMENTS VIA CREDIT AND DEBIT CARDS AND ELECTRONIC COMMERCE

Section 2. Seattle Municipal Code Section 5.22.010 is hereby amended as follows:

SMC 5.22.010 Fee authorized Authorization for Acceptance of Credit Cards, Debit Cards, and Electronic Commerce.

All City departments are authorized to accept credit cards, debit cards, and electronic commerce for payment of City taxes, licenses, fees, and other services, but only if and to the extent approved by the Director of Executive Administration or the Director's designee ("Director"). Before approving a City department's policies and procedures for the acceptance of credit cards, debit cards, or electronic commerce payments for City taxes, licenses, fees, or services, the Director shall consider whether sufficient provision has been made for internal financial controls and security. The Director is further authorized to establish Citywide policies and procedures for the acceptance of credit cards, debit cards, and electronic commerce for payment of City taxes, licenses, fees, and other services. The Director of Executive Administration or the Director's designee ("Director") is authorized to establish and collect a convenience fee ("fee") that shall apply to the total payment charged to each credit or debit card transaction made via electronic commerce technology. The fee shall only be imposed one (1) time on each credit or debit card used in a transaction. The fee shall be in addition to the total amount of the original fee, fine, or bill owed to the City, plus any applicable interest, penalty, or late charge. The fee shall also be in addition to any transaction charges or fees set by a financial institution that the City decides to collect as a means of recovering the City's cost of having the financial institution process the credit or debit card payments.

Section 3. Seattle Municipal Code Section 5.22.020 is hereby amended as follows:

SMC 5.22.020 Fees for Credit, Debit, and Electronic Payments Amount of Fee.

With approval by the Director as to the type and amount of any convenience fee ("fee"), a City department may apply a fee and add it to each credit or debit card transaction, or to payments made electronically. The Director shall set a specific fee by rule. The fees, which need not be the same for all departments or for all transactions, shall be negotiated with and approved by established by the Director after consultation with the Head of each City Department that accepts payment through credit or debit cards, or through electronic commerce technology, shall be designed to recover no more than the City's overall costs in accepting and processing payments, and shall not exceed any applicable provision of federal, state, or local law. Upon approval by the Director, City departments may be authorized to absorb part or all of any charges imposed by a bank or other commercial provider in connection with the acceptance of credit and debit cards or payments made electronically.

Section 4. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the ____ day of _________, 2003, and signed by me in open session in authentication of its passage this _____ day of __________, 2003.

_________________________________

President __________of the City Council

Approved by me this ____ day of _________, 2003.

_________________________________

Gregory J. Nickels, Mayor

Filed by me this ____ day of _________, 2003.

____________________________________

City Clerk

(Seal)

Kenneth J. Nakatsu/GJ

Credit Card Policy Ordinance

September 22, 2003

version #5