34 Tex. Admin. Code § 5.12 - Processing Payments Through Electronic Funds Transfers
(a) Applicability.
These rules govern EFT payments by the comptroller on behalf of custodial and
paying state agencies as part of the electronic funds transfer system
authorized by Government Code, §
403.016.
(b) Definitions. The following words and
terms, when used in this subchapter, have the following meanings, unless the
context clearly indicates otherwise.
(1)
Automated clearing house (ACH)--A central distribution and settlement point for
the electronic clearing of debits and credits between financial institutions
subject to regulation under rules of an automated clearing house association
and applicable regulatory law.
(2)
ACH rules--The operating rules and guidelines governing the ACH network
published by NACHA, the Electronic Payments Association and applicable federal
regulatory law.
(3)
Comptroller--The Comptroller of Public Accounts for the State of
Texas.
(4) Credit entry--A type of
EFT entry that the comptroller initiates on behalf of a paying state agency to
credit a state payee's EFTS account at a domestic financial
institution.
(5) Custodial state
agency--A state agency that establishes and maintains the state payee's account
information. The custodial state agency may or may not be the paying state
agency.
(6) Direct deposit--A form
of EFT payment using ACH for the electronic transfer of funds directly into a
state payee EFTS account at a domestic financial institution.
(7) Electronic funds transfer (EFT)--A
transfer of funds which is initiated by the comptroller as originator to the
originating depository financial institution to order, instruct, or authorize a
receiving depository financial institution to perform a credit entry, reversal,
or reclamation in accordance with this subchapter. For purposes of these rules,
an EFT does not include a transaction originated by wire transfer, check,
draft, warrant, or other paper instrument.
(8) EFTS authorization--A state payee's
agreement to allow the comptroller to originate state-issued payments by EFT on
behalf of a paying state agency to a state payee EFTS account. A state payee
may provide EFTS authorization and notice under Government Code, §
403.016 by:
(A) submitting an EFTS authorization with a
state payee's agreement on a comptroller approved form; or
(B) providing an agreement to a custodial
state agency or a paying state agency in a manner deemed appropriate by that
agency and the comptroller, and as required by law and NACHA rules.
(9) EFTS form--An electronic or
paper form submitted by a state payee as part of the EFTS. An EFTS form used by
a custodial state agency or paying state agency is subject to comptroller
approval.
(10) Electronic funds
transfer system (EFTS)--A system authorized by Government Code, §
403.016, that is
administered by the comptroller in accordance with these rules to make EFT
payments to state payees on behalf of a paying state agency.
(11) Financial institution--A state or
national bank, a state or federal savings and loan association, a mutual
savings bank, or a state or federal credit union that complies with NACHA rules
and may be an originating depository financial institution or a receiving
depository financial institution.
(12) International ACH transaction (IAT)--An
ACH entry involving a financial agency (as defined by NACHA rules) that is not
located in the territorial jurisdiction of the United States. An international
ACH transaction may be referred to as an IAT entry or IAT.
(13) May not--A prohibition. The term does
not mean "might not" or its equivalents.
(14) NACHA--The National Automated Clearing
House Association is the electronic payments association that establishes
standards, rules and procedures that enable domestic financial institutions to
exchange payments electronically.
(15) Notification of change
(NOC)--Information sent by a financial institution through the ACH network to
notify the comptroller that previously valid information for a state payee has
become outdated or that information contained in a prenotification is
erroneous.
(16) Originating
depository financial institution--A financial institution that originates ACH
entries on behalf of the comptroller and transmits ACH entries through the ACH
network in accordance with NACHA rules.
(17) Originator--The comptroller acts as the
originator and authorizes an originating depository financial institution to
transmit, on behalf of the state, a credit entry, reclamation, reversal, or
prenotification entry to a state payee EFTS account at a domestic financial
institution.
(18) Pay card --A
payment card issued to a state employee or annuitant that provides access to
payroll, travel reimbursement, or retirement payments deposited to a designated
account at a domestic financial institution as part of the EFTS through the
comptroller's pay card contract.
(19) Paying state agency--A state agency for
which the comptroller initiates payment. The term includes the comptroller of
public accounts. A paying state agency may or may not be the custodial state
agency.
(20) Prenotification--A
non-dollar entry sent by the comptroller through the ACH network to alert a
receiving depository financial institution that a live dollar credit entry will
be forthcoming and to request verification of the state payee's EFTS account
information.
(21) Receiving
depository financial institution--A financial institution that receives ACH
entries to a state payee EFTS account.
(22) Reclamation--A request made by the
comptroller in compliance with NACHA rules, to an originating depository
financial institution to reclaim from a receiving depository financial
institution any amounts received by a state payee after the state payee's death
or legal incapacity, or the death of a beneficiary of a state payee.
(23) Regulation E--The regulations adopted by
the Bureau of Consumer Financial Protection at 12 C.F.R. Part 1005, as they may
be amended, to implement the Electronic Fund Transfer Act (15 U.S.C. §
1693
et seq.).
(24) Reversal--An EFT entry initiated by the
comptroller at the request of a paying state agency to correct an erroneous
credit entry previously transmitted to a state payee EFTS account. The
comptroller may initiate a reversal of an EFT payment of state employee payroll
or retirement in compliance with NACHA rules.
(25) State agency--
(A) a department, commission, board, office,
or other agency in the executive or legislative branch of state government that
is created by the constitution or a statute of this state, including the
comptroller of public accounts;
(B)
the supreme court of Texas, the court of criminal appeals, a court of appeals,
or a state judicial agency; or
(C)
a university system or an institution of higher education as defined by
Education Code, §
61.003 other than a
public junior college.
(26) State payee--A person to whom a state
payment is issued, including an individual, state employee, annuitant,
business, vendor, governmental entity, or other legal recipient paid by the
State of Texas.
(27) State payee
EFTS account--An account at a domestic financial institution designated by a
state payee for EFTS payments.
(28)
Warrant--A state payment in the form of a paper instrument which is subject to
applicable state law, is drawn on the State of Texas treasury funds, and is
payable to a state payee on behalf of a paying state agency by the comptroller
or by a state agency with delegated authority to issue warrants under
Government Code, §
403.060. A warrant is
not an approved means of electronic funds transfer as set out in subsection (c)
of this section.
(29) Wire
transfer--An unconditional order to a financial institution to pay a fixed or
determinable amount of money to a state payee upon receipt or on a day stated
in the order that is transmitted by electronic or other means. Wire transfer is
not an approved means of electronic fund transfer, as set out in subsection (c)
of this section.
(c)
Approved types of EFTS payments.
(1) The
comptroller will approve the types of EFTS payments the state may use by rule
and amend the approval based upon the comptroller's procedures and current
technology.
(2) EFTS payment types
approved by the comptroller to a state payee EFTS account include:
(A) direct deposit, except an IAT;
and
(B) pay card.
(3) Any other type of payment
which is not an approved type of EFTS payment under paragraph (2) of this
subsection is not considered to be an approved type of EFTS payment under these
rules. Warrants, wire transfers, and IAT are not approved types of EFTS
payments.
(d) Compliance
with applicable NACHA rules and regulation. Each participant in the EFTS,
including the comptroller, the paying state agency, the custodial state agency,
and the state payee, shall comply with applicable law and NACHA regulations in
EFTS transactions.
(e)
Confidentiality. Each participant in the EFTS, including the comptroller, the
paying state agency, the custodial state agency, and the state payee, shall
comply with applicable confidentiality requirements under the law, including
maintaining the confidentiality of financial institution account numbers and
state payee social security numbers.
(f) Audit. The comptroller is subject to
audit by NACHA for compliance with NACHA rules concerning EFT transactions
under this chapter. The comptroller may audit a paying or custodial state
agency for compliance with applicable regulatory or NACHA rules concerning EFT
transactions under this chapter. A paying or custodial state agency shall
comply with an audit under this chapter.
(g) Notification.
(1) Any questions, comments, or complaints
concerning the comptroller's electronic funds transfer system as it relates to
Government Code, §
403.016 and these
rules may be sent to the comptroller by mail to: Texas Comptroller of Public
Accounts, Fiscal Management, 111 E. 17th Street, Room 1010.9, Austin, Texas,
78711, or by email to tins.mail@cpa.texas.gov, or at such other email address
as the comptroller may designate.
(2) The comptroller may provide additional
information and updates on its website regarding notification.
(3) The comptroller may require the custodial
state agency, the paying state agency, the state payee, and the financial
institution to provide contact information as appropriate.
(h) Conflict of law. If there is a conflict
in law between any of these rules and applicable law, the applicable law shall
apply. If any provision of these rules is held to be invalid, illegal, or
unenforceable due to a conflict of law, it will not affect any other provisions
of these rules, and the rules will be construed as if such invalid or illegal
or unenforceable provision had never been contained herein.
Notes
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