34 Tex. Admin. Code § 5.13 - Administration of Electronic Funds Transfers

(a) Role of the comptroller.

(1) General administration. As part of its general powers under Government Code, § 403.011, the comptroller shall supervise, as the sole accounting officer of the state, the state's fiscal concerns and manage those concerns as required by law, and keep and settle all accounts in which the state is interested. Under Government Code, § 403.056 and § 403.060 the comptroller has authority to prepare and deliver warrants, and to print and issue warrants. The comptroller has been granted further authority by Government Code, § 403.016 to establish and operate an EFTS to make state payments. As part of operating the EFTS, and in accordance with Government Code, § 403.016, the comptroller:

(A) may use the services of financial institutions, automated clearinghouses, and the federal government;

(B) shall approve the means of EFTS payments the state may use in accordance with Government Code, § 403.016;

(C) shall approve EFTS methods and forms, and post them online as appropriate, and provide them to paying and custodial state agencies and to state payees;

(D) may revise its policies and procedures from time to time as appropriate to operate the EFTS;

(E) is authorized to act as originator, to initiate an EFT;

(F) may act upon a request from a paying state agency to initiate a reversal to correct an erroneous entry or a reclamation for payments not due in accordance with these rules;

(G) shall use the EFTS to pay:

(i) state employee salary and travel expense reimbursements;

(ii) payments to annuitants;

(iii) recurring payments to municipalities, counties, political subdivisions, special districts, and other governmental entities of this state; and

(iv) payments to persons or vendors who choose to receive payment through the EFTS:

(H) is not required to make a payment by the EFTS even if a state payee or state agency requests payment by EFT;

(I) may, when a law requires the comptroller to make a payment by warrant, issue a payment by EFT under Government Code, § 403.016(g);

(J) shall issue a warrant to pay a person under the terms of Government Code, § 403.016(h); and

(K) may issue a payment to a state payee by warrant in lieu of EFT pursuant to Government Code, § 403.016(i).

(2) Specific procedures. As part of operating the EFTS, and in accordance with Government Code, § 403.016, the comptroller:

(A) may limit the number of state payee EFTS accounts that a state payee may designate for payment by EFT;

(B) shall rely on the EFTS authorization from a custodial state agency for the distribution of EFTS payments;

(C) may cancel a state payee's participation in the EFTS without prior notice to the state payee;

(D) shall rely on an NOC from receiving depository financial institution;

(E) may require state payees to disclose any information necessary to support an EFT payment;

(F) may require the custodial state agency, the paying state agency, the state payee, and the financial institution to provide contact information as appropriate; and

(G) shall, in the case of payments issued through the ACH network that are intended to be sent to a financial institution outside of the United States, or an IAT:

(i) require the paying state agency or the custodial state agency to obtain a written confirmation from state payees whether the intended final destination of a payment or payments is a country outside of the United States, in compliance with the law, NACHA rules, and in accordance with comptroller policy;

(ii) shall rely on the custodial state agency, the paying state agency, the state payee, and the financial institution to notify state agencies, including the comptroller, of payees who confirm the intended final destination of payment or payments is a country outside of the United States; and

(iii) shall not use the EFTS to transmit an IAT payment or payments.

(b) Role of the custodial state agency.

(1) The custodial state agency is responsible for establishing and maintaining EFTS state payee account information for EFT and shall:

(A) encourage state payees to participate in the EFTS;

(B) establish and maintain the state payee's EFTS account information for EFT in the comptroller's statewide systems in a manner prescribed by the comptroller;

(C) obtain comptroller approval for a EFTS form or EFTS authorization created by the custodial state agency before it uses the EFTS form or EFTS authorization;

(D) comply with a comptroller request to withdraw or change an EFTS form or EFTS authorization;

(E) post approved EFTS forms and EFTS authorizations online and direct state payees to online tools for EFTS forms and EFTS authorizations;

(F) obtain a state payee EFTS authorization or notice under Government Code, § 403.016, by submitting an EFTS authorization with a state payee's agreement on a comptroller approved form, or by obtaining an agreement between the custodial state agency and the state payee in a manner deemed appropriate by that agency and the comptroller, and as required by law and NACHA rules;

(G) obtain a written confirmation from state payees whether the intended final destination of a payment or payments is a country outside of the United States, in compliance with the law, NACHA rules, and in accordance with comptroller policy; and

(H) retain a record of the state payee's EFTS forms or EFTS authorizations in a manner deemed appropriate by that agency and the comptroller, and as required by law and NACHA rules.

(2) The custodial state agency may cancel a state payee's EFTS authorization without prior notice to the state payee.

(3) The custodial state agency shall provide reasonable advance written notice to the comptroller of a regulatory requirement related to the custodial state agency's EFTS processing.

(4) The custodial state agency shall not act as an originator, as defined in these rules, unless specifically authorized to do so by the comptroller or under law.

(c) Role of the paying state agency. The paying state agency is the state agency for which the comptroller initiates payment. The paying state agency:

(1) shall encourage state payees to participate in the EFTS;

(2) shall act in accordance with any applicable laws and requirements;

(3) may provide notice to the comptroller under Government Code, § 403.016(h)(2) to request payment by warrant rather than by EFT;

(4) shall obtain a written confirmation from state payees whether the intended final destination of a payment or payments is a country outside of the United States, in compliance with federal law, NACHA rules, and in accordance with comptroller policy;

(5) shall not act as an originator as defined in these rules unless specifically authorized to do so by the comptroller or under law;

(6) shall obtain comptroller approval for an EFTS form or an EFTS authorization created by the paying state agency before it uses the EFTS form or EFTS authorization;

(7) shall comply with a comptroller request to withdraw or change an EFTS form or EFTS authorization;

(8) shall post online its comptroller-approved EFTS forms and EFTS authorization, and payment information;

(9) shall provide payment reconciliation assistance to state payees upon request;

(10) shall provide payment information to the comptroller's statewide accounting system to facilitate the state payee's payment reconciliation, in accordance with comptroller policy;

(11) shall provide reasonable advance written notice to the comptroller of a regulatory requirement related to the paying state agency's EFT processing;

(12) shall obtain a written confirmation from state payees whether the intended final destination of a payment or payments is a country outside of the United States, in compliance with the law, NACHA rules, and in accordance with comptroller policy; and

(13) shall report to the comptroller any state payee or state payee's beneficiary who fails to reimburse the paying state agency for any payment amount of an unsuccessful EFTS reversal, in accordance with Government Code, § 403.055(f) and (g).

(d) Limitation of liability.

(1) Notwithstanding any provision to the contrary, the comptroller is not liable for any harm, damages, attorney's fees, or costs in connection with the EFTS, including but not limited to liability arising:

(A) when a paying state agency is in noncompliance of that agency's statutes requiring mandatory EFT payment of certain payments, or fails to comply with existing law and NACHA rules;

(B) from any act or omission of a paying state agency or a custodial state agency; and

(C) when a paying state agency and/or a custodial state agency fail to notify the comptroller of a regulatory requirement.

(2) Notwithstanding any provision to the contrary, the comptroller, the paying state agency, and custodial state agency are not liable for any harm, damages, attorney's fees, or costs in connection with the EFTS, including but not limited to the following matters:

(A) arising from any act or omission of any automated clearing house, financial institution, or other person or entity;

(B) arising from the consequences of a rejection of the EFT account information by the receiving depository financial institution; and

(C) arising when an EFT payment is rejected or posted late, including any additional late payment interest, additional late fees or charges.

Notes

34 Tex. Admin. Code § 5.13

The provisions of this §5.13 adopted to be effective June 10, 1992, 17 TexReg 3909; amended to be effective December 6, 1996, 21 TexReg 11520; Adopted by Texas Register, Volume 40, Number 08, February 20, 2015, TexReg 825, eff. 2/23/2015