Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 5 - FUNDS MANAGEMENT (FISCAL AFFAIRS) › Subchapter B - PAYMENT PROCESSING-ELECTRONIC FUNDS TRANSFERS › Section 5.12 - Processing Payments Through Electronic Funds Transfers

Current through Reg. 49, No. 28; July 12, 2024
(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.