(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)Comptroller approved EFTS form--An EFTS form approved
by the comptroller for use by a custodial or paying state agency in
the EFTS.
(5)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.
(6)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.
(7)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.
(8)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.
(9)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.
(10)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.
(11)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.
(12)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.
(13)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.
(14) May not--A prohibition. The
term does not mean "might not" or its equivalents.
(15)[(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.
(16)[(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.
(17)[(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.
(18)[(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.
(19)[(18)] Paycard--A payment
card issued to a state employee or annuitant that provides
access to payroll or retirement funds deposited to a designated
account at a domestic financial institution as part of the EFTS through
the comptroller's paycard contract.
(20)[(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.
(21)[(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.
(22)[(21)] Receiving depository
financial institution--A financial institution that receives ACH entries
to a state payee EFTS account.
(23)[(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.
(24)[(23)] Regulation E--The
regulations adopted by the Board of Governors of the Federal Reserve
System at 12 C.F.R. Part 205, as they may be amended, to implement
the Electronic Fund Transfer Act (15 U.S.C. §1693 et seq.).
(25)[(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 [certain limited circumstances,
including a state employee's termination, retirement, or death].
(26)[(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 and an institution of higher
education as defined by Education Code, §61.003 other than a
public junior college.
(27)[(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.
(28)[(27)] State payee EFTS
account--An account at a domestic financial institution designated
by a state payee for EFTS payments.
(29)[(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.
(30)[(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)paycard.
(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 [the] 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 911, 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 are 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.
The agency certifies that legal counsel has
reviewed the proposal and found it to be within the state agency's
legal authority to adopt.
Filed with the Office
of the Secretary of State on May 21, 2018
TRD-201802227 Victoria North
Chief
Counsel, Fiscal and Agency Affairs Legal Services Division
Comptroller of Public Accounts
Earliest possible date of adoption: July 1, 2018
For further information, please call: (512) 475-0387
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