us-tx/regs
34 Tex. Admin. Code § 5.14 — Participation in the Electronic Funds Transfer System
(a)
State payee participation in electronic funds transfer system.
(1) Payee disclosure of state payee EFTS account information. The state payee must establish, change, or cancel state payee EFTS account information by providing EFTS authorization to a custodial state agency.
(2) EFTS forms. The state payee must obtain EFTS forms from the payee's paying state agency.
(3) State payee may elect to authorize payment by EFT. A state payee may choose to receive payment by EFT by providing EFTS authorization. A state payee's choice not to provide EFTS authorization constitutes notice to the comptroller to receive payment by warrant as provided in Government Code, §403.016(h)(1).
(4) Payment destination confirmation. At the time of electing to participate in the EFTS, a state payee must confirm whether payments they receive will be forwarded to a financial institution outside of the United States. A state payee must also notify the paying state agency of any change to the intended final destination of a payment or payments outside of the United States.
(5) Refusal to accept an EFT payment. A state payee may refuse to accept an EFTS payment in accordance with NACHA rules.
(6) Refusal of reversal. The state payee may not instruct their financial institution to reject a reversal made by the comptroller to correct an erroneous credit entry.
(7) Cancellation of state payee EFTS authorization. The cancellation of a state payee's EFTS authorization terminates the state payee's participation in the ETFS until the state payee provides a new EFTS authorization.
(8) Comptroller may issue warrant. The comptroller may issue a payment to a state payee by warrant in lieu of EFT pursuant to applicable law, including Government Code, §403.016(i).
(b)
Number of EFTS accounts. The comptroller may limit the number EFTS accounts that a state payee may designate for payment by EFTS, subject to the comptroller's policy and procedure.
(c)
EFTS authorization.
(1) The state payee must provide EFTS authorization to establish, change, or cancel instructions for EFT payments by providing account information by:
(A) submitting an EFT 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.
(2) Upon receipt of an EFTS authorization, the comptroller will issue a warrant to a state payee during the time when prenotification is used to verify the account information is correct.
(3) A state payee may request to bypass prenotification by certifying to the custodial state agency that:
(A) the state payee requests to bypass prenotification;
(B) the state payee has verified the account information with the financial institution; and
(C) the state payee is solely responsible for the consequences of providing erroneous account information that may result in rejection, delay, or loss of an EFTS payment.
(4) The custodial state agency must provide written notification to the comptroller that the state payee has requested to bypass prenotification for EFT payments under paragraph (3) of this subsection.
(5) If the state payee's financial institution rejects the state payee's account information, neither the comptroller, the custodial state agency, or the paying state agency is liable for the consequences of the rejection.
(6) If the comptroller receives an EFTS authorization or other notification to cancel a state payee's account information, the state payee's participation in the EFTS terminates until the custodial state agency or the comptroller receives a new EFTS authorization from the state payee.
(7) To facilitate proper EFT payments in accordance with NACHA rules or other regulations, the comptroller may change or cancel a state payee's account information without prior notice to the state payee.
(8) The comptroller or custodial state agency may cancel a state payee's account information without prior notice to the state payee.
(d)
Credit of EFTS payments.
(1) A payment is credited to a state payee EFTS account on the effective date of the credit entry regardless of when the receiving depository financial institution posts the credit.
(2) If payment is rejected or posted late by the receiving depository financial institution, the comptroller, a paying state agency, or a custodial state agency are not liable for any additional late payment interest, including under Government Code, Chapter 2251, or late fees or charges, including those that may be imposed by the state payee or receiving depository financial institution.
(e)
EFTS initiation of reversals and reclamations.
(1) Only a paying state agency may request that the comptroller initiate a reversal or reclamation.
(2) A paying state agency must request a reversal or reclamation through the comptroller in the comptroller's prescribed manner.
(3) A paying state agency shall not initiate a reversal for an EFTS payment initiated by the comptroller on behalf of the paying state agency.
(4) A paying state agency shall not initiate a reclamation entry for an EFTS payment initiated by the comptroller on behalf of the paying state agency.
(5) The comptroller may initiate a reversal for a state payroll or retirement payment or a reclamation for a retirement or benefit payment only in compliance with NACHA rules.
(6) Failure to make funds available by a state payee or state payee's beneficiary for a reversal or reclamation entry initiated by the comptroller results in a debt under Government Code, §403.055.
(f)
Reversal.
(1) Notice to comptroller. A paying state agency must submit to the comptroller a request for a reversal no later than five banking days after the effective date of the erroneous credit entry in accordance with comptroller procedures and NACHA rules.
(2) A receiving depository financial institution:
(A) may only accept a reversal entry from the comptroller for an erroneous credit entry initiated by the comptroller on behalf of a paying state agency; and
(B) in accordance with NACHA rules, shall not act upon instructions from the state payee to reject a reversal entry.
(3) Notice to state payee. A paying state agency must notify a state payee of a reversal entry no later than the effective date of the reversal in accordance with NACHA rules.
(4) Unsuccessful reversal entry.
(A) If the RFDI does not honor the comptroller's reversal entry, the state payee must reimburse the erroneous credit entry amount to the paying state agency.
(B) If the state payee fails to reimburse the paying state agency for the erroneous credit entry amount, the state payee will owe the amount of the erroneous credit entry as a debt to the state under Government Code, §403.055.
(C) A paying state agency shall report to the comptroller any state payee who fails to reimburse the paying state agency for any erroneous credit entry amounts, as required by Government Code, §403.055(f) and (g).
(g)
Reclamation.
(1) A paying state agency must submit EFTS reclamation requests to the comptroller for processing within five business days of notification of the death or legal incapacity of the state payee or beneficiary of the state payee.
(2) The comptroller may initiate a reclamation request on behalf of the paying state agency to reclaim any amounts transmitted to the state payee's account after the state payee's death or legal incapacity, or the death of a beneficiary of the state payee.
(3) The comptroller must provide prior approval to allow a paying state agency to initiate a reclamation entry for a credit entry which the comptroller initiated on behalf of a paying state agency.
(4) In accordance with NACHA rules, if the reclamation request is returned by the receiving depository financial institution, the comptroller may submit a written demand for payment of the reclamation request within fifteen days on behalf of the paying state agency.
(5) Unsuccessful reclamation entry.
(A) If the RFDI does not honor the comptroller's reclamation entry, the state payee or the state payee's beneficiary must reimburse the reclamation entry amount to the paying state agency.
(B) If the state payee or the state payee's beneficiary fails to reimburse the paying state agency for the reclamation entry amount, the state payee or the state payee's beneficiary will owe the reclamation entry amount as a debt to the state under Government Code, §403.055.
(C) A paying state agency shall report to the comptroller any state payee or state payee's beneficiary who fails to reimburse the paying state agency for any reclamation entry amounts, as required by Government Code, §403.055(f) and (g).
Source Note: The provisions of this §5.14 adopted to be effective February 23, 2015, 40 TexReg 825; amended to be effective July 31, 2018, 43 TexReg 4987.
Source: official text