Section 5.47 - Deductions for Payments to Credit Unions(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) CAPPS--The centralized accounting and payroll/personnel system, or any successor system used to implement the enterprise resource planning component of the uniform statewide accounting project, developed under Government Code, § 2101.035 and § 2101.036.(2) Comptroller--The comptroller of public accounts for the State of Texas.(3) Credit union--A state credit union, an out-of-state credit union, a foreign credit union, or a federal credit union.(4) Electronic funds transfer--A payment made electronically instead of by warrant or check. The term includes a payment made through an automated clearinghouse, by bank wire, or by federal wire.(5) Employer--A state agency that employs a state employee who authorizes a deduction under this section.(6) Federal credit union--A credit union organized under 12 U.S.C. Chapter 14.(7) Foreign credit union--A credit union that is not organized under the laws of this state or the United States if the credit union is authorized under Finance Code, Title 3, Subtitle D, to do business in this state.(8) Holiday--A state or national holiday as specified by the General Appropriations Act or Government Code, §§ 662.001 - 662.010.(9) Include--A term of enlargement and not of limitation or exclusive enumeration. The use of the term does not create a presumption that components not expressed are excluded.(10) Institution of higher education--Has the meaning assigned by Education Code, § 61.003.(11) May not--A prohibition. The term does not mean "might not" or its equivalents.(12) Out-of-state credit union--A credit union organized under the laws of a state other than Texas if the credit union is authorized under Finance Code, Title 3, Subtitle D, to do business in this state.(13) Participating credit union--A credit union that the comptroller has certified according to this section.(14) Salary or wages--Base salary or wages, longevity pay, or hazardous duty pay.(15) State agency--A department, commission, board, office, or other agency of any branch of Texas state government, including an institution of higher education.(16) State credit union--A voluntary, cooperative, nonprofit financial institution that is authorized under Finance Code, Title 3, Subtitle D, to do business in this state for the purposes of: (A) encouraging thrift among its members;(B) creating a source of credit at fair and reasonable rates of interest;(C) providing an opportunity for its members to use and control their own money to improve their economic and social condition; and(D) conducting any other business, engaging in any other activity, and providing any other service that may be of benefit to its members subject to Finance Code, Title 3, Subtitle D, and rules adopted under that law.(17) State employee--An employee of a state agency. The term includes an elected or appointed official, a part-time employee, an hourly employee, a temporary employee, an employee who is not covered by Government Code, Chapter 654, and a combination of the preceding. The term excludes an independent contractor and an employee of an independent contractor.(18) Workday--A calendar day other than Saturday, Sunday, or a holiday.(b) Deductions or changes in deductions. (1) References in this section. A reference in this section to a deduction without further qualification or explanation is a reference only to a deduction from a state employee's salary or wages to make a payment to a participating credit union.(2) Authorization of a deduction or a change in the amount of a deduction.(A) A state employee may authorize a deduction or a change in the amount of a deduction only if the employee:(i) submits to the participating credit union to which the deducted amounts will be paid a properly completed authorization form establishing a deduction or changing the amount of a deduction; or(ii) submits through CAPPS a properly completed electronic authorization establishing a deduction or changing the amount of a deduction.(B) A state employee may not authorize more than three monthly deductions from the employee's salary or wages. However, a state employee may not authorize more than one monthly deduction to any particular participating credit union.(C) A state employee may authorize a change in the amount to be deducted from the employee's salary or wages at any time.(D) Neither the comptroller nor a state agency is liable or responsible for any damages or other consequences resulting from a state employee authorizing an incorrect amount of a deduction or a change in the amount of a deduction.(E) This subparagraph applies only if a state employee authorizes a deduction or changes the amount of a deduction by submitting a properly completed authorization form to the participating credit union to which the deducted amounts will be paid under subparagraph (A)(i) of this paragraph.(i) If the employee completing the authorization form is required to pay an administrative fee, the amount of the fee must be stated on the form before the employee signs it.(ii) The credit union shall submit in a secure manner the authorization form to the employer not later than the tenth workday after the day on which the form becomes effective.(F) This subparagraph applies only if a state employee authorizes a deduction or changes the amount of a deduction by submitting a properly completed electronic authorization through CAPPS under subparagraph (A)(ii) of this paragraph. The employer shall notify the participating credit union in writing of a deduction or change in the amount of a deduction when the employer submits the next monthly detail report to the credit union.(3) Sufficiency of salary or wages to support a deduction. (A) A state employee is solely responsible for ensuring that the employee's salary or wages are sufficient to support a deduction.(B) If a state employee's salary or wages are sufficient to support only part of a deduction, no part of the deduction may be made. If a state employee has authorized more than one deduction and the employee's salary or wages are insufficient to support all the deductions, none of the deductions may be made.(C) The amount that could not be deducted from a state employee's salary or wages because of subparagraph (B) of this paragraph may not be made up by deducting the amount from subsequent payments of salary or wages to the employee.(4) Timing of deductions. (A) Except as provided in subparagraph (B) of this paragraph, a deduction must be made from the salary or wages that are paid on the first workday of a month.(B) If a state employee does not receive a payment of salary or wages on the first workday of a month, the employer may designate the payment of salary or wages from which a deduction will be made. A deduction may be made only once each month.(5) Cancellation of deductions. (A) A state employee may cancel a deduction at any time. A cancellation is effective only if the employee: (i) submits to the participating credit union or employer a properly completed authorization form canceling a deduction; or(ii) submits through CAPPS a properly completed electronic authorization canceling a deduction.(B) This subparagraph applies only if a state employee cancels a deduction by submitting a properly completed authorization form to a participating credit union under subparagraph (A)(i) of this paragraph. The credit union shall submit in a secure manner the form to the employer not later than the tenth workday after the day on which the form becomes effective.(C) This subparagraph applies only if a state employee cancels a deduction by submitting a properly completed authorization form to an employer under subparagraph (A)(i) of this paragraph or by submitting a properly completed electronic authorization through CAPPS under subparagraph (A)(ii) of this paragraph. The employer shall notify the participating credit union in writing of the cancellation of a deduction when the employer submits the next monthly detail report to the credit union.(D) Neither the comptroller nor a state agency is liable or responsible for any damages or other consequences resulting from a state employee canceling a deduction.(6) Interagency transfers of state employees. A state employee who transfers from one state agency to a second state agency may be treated by the second state agency as if the employee has not yet authorized any deductions.(c) Effective dates of authorization forms and electronic authorizations. (1) Effective date of authorization forms or electronic authorizations that request new deductions, changes in deductions, or cancellation of deductions. This paragraph applies to a state employee's authorization form or electronic authorization that requests a new deduction, change in a deduction, or cancellation of a deduction. The employer may decide when the first deduction from the employee's salary or wages, or the change or cancellation of the deduction, will occur. However, the authorized deduction, change in a deduction, or cancellation of a deduction must begin not later than with the employee's salary or wages that are paid on the first workday of the second month following the month in which:(A) the employer receives the authorization form; or(B) the electronic authorization is submitted through CAPPS.(2) Copies of authorization forms.(A) A participating credit union is solely responsible for making a copy of an authorization form before the credit union submits the form to an employer .(B) A state employee is solely responsible for making a copy of an authorization form before the employee submits the form to a participating credit union or employer.(d) Return of authorization forms. (1) Mandatory return. An employer shall return an authorization form to the participating credit union or state employee that submitted the form if it: (A) is incomplete, contains erroneous data, or is otherwise insufficient and the insufficiency makes it impossible for the employer to cancel, establish, or change the deduction according to the form; or(B) is for an individual who is not employed by the employer.(2) Discretionary return. An employer may return an authorization form to the participating credit union or state employee that submitted the form if the form is a copy or facsimile.(e) Requirements for the content and format of authorization forms.(1) Prohibition against distributing or providing authorization forms. A participating credit union may not distribute or provide an authorization form to a state employee until the credit union has received the comptroller's written approval of the form.(2) Requirement to produce authorization forms. As a condition for retaining its certification, a participating credit union must produce an authorization form that complies with the comptroller's requirements and this section. The credit union must produce the form within a reasonable time after receiving its certification from the comptroller.(3) Using previously approved authorization forms. A participating credit union may use an authorization form that the comptroller has approved for use by another participating credit union if the form is modified so that the first credit union's name appears at the top of the form.(4) Restrictions on approval of authorization forms by the comptroller. The comptroller may not approve the authorization form of a participating credit union unless: (A) the form has a blank space for insertion of the amount of administrative fees the employee completing the form must pay under this section;(B) the name of the credit union appears at the top of the form; and(C) the form complies with the comptroller's other requirements for format and substance.(5) Revisions of authorization forms. A participating credit union shall revise an authorization form upon request from the comptroller. The credit union may not distribute or otherwise make available a revised form to a state employee until the credit union has received the comptroller's written approval of the form.(f) Requirements for certifying and decertifying credit unions.(1) Request for certification. The comptroller may not certify a credit union unless the comptroller receives a written request for certification from an individual who is authorized by the credit union to make the request.(2) Requirements for requests for certification. The comptroller may not certify a credit union unless its request for certification includes:(A) the credit union's complete name;(B) the street address of the credit union's main branch;(C) the mailing address of the credit union's main branch, if different from the street address;(D) the full name, title, telephone number, email address, and mailing address of the credit union's primary contact;(E) the credit union's Internal Revenue Service employer identification number; and(F) the other information that the comptroller deems necessary.(3) Electronic funds transfers. The comptroller may not certify a credit union unless the credit union: (A) submits to the comptroller a request for deducted amounts to be paid by the comptroller through electronic funds transfers under rules and procedures adopted by the comptroller;(B) submits to each institution of higher education that will be paying deducted amounts directly to the credit union a request for those amounts to be paid through electronic funds transfers; and(C) all those requests are approved.(4) Notifications.(A) The comptroller shall notify a credit union in writing about the comptroller's approval or disapproval of the credit union's request for certification not later than the 30th calendar day after the comptroller receives the request if the request is complete in all respects. If the 30th calendar day is not a workday, the first workday following the 30th calendar day is the deadline.(B) The comptroller shall maintain a list of participating credit unions. The comptroller shall periodically circulate the list to all state agencies and furnish a copy of the list to a state agency upon request.(5) Effective date of certification. The first deduction to a participating credit union may be made from salary or wages paid on the first workday of the second month following the month in which the comptroller certifies the credit union.(6) Termination of certification.(A) A participating credit union may terminate its participation in the deduction program authorized by this section only by terminating its certification.(B) A participating credit union may terminate its certification by providing written notice of termination to the comptroller. However, the credit union may not provide that notice before the credit union has provided written notice of termination to each state employee from whose salary or wages a deduction to the credit union is occurring.(C) A participating credit union's termination of its certification is effective beginning with the salary or wages paid on the first workday of the third month following the month in which the comptroller receives the credit union's proper notice of termination.(g) Payments of deducted amounts. (1) Payments by the comptroller through electronic funds transfers.(A) If feasible, the comptroller shall pay deducted amounts to a participating credit union by electronic funds transfer.(B) If the comptroller pays deducted amounts to a participating credit union by electronic funds transfer, the comptroller may: (i) make one transfer to the credit union and require it to distribute the transferred funds to state employees' accounts according to subsection (h) of this section; or(ii) make one transfer to the credit union account of each state employee.(2) Payments through warrants issued by the comptroller.(A) If it is infeasible for the comptroller to pay deducted amounts to a participating credit union by electronic funds transfer, the comptroller shall: (i) pay the amounts by warrant;(ii) make the warrant payable to the credit union;(iii) require the credit union to distribute the deducted amounts to state employees' accounts according to subsection (h) of this section; and(iv) make the warrant available for pick up by the employer whose employees' deducted amounts are being paid by the warrant.(B) An employer shall hand-deliver or use an overnight delivery service to deliver a warrant picked up under subparagraph (A) of this paragraph to the payee of the warrant. (i) If the warrant relates to salary or wages that are paid on the first workday of a month, the employer shall: (I) release the warrant to an overnight delivery service not later than the second workday of the month for delivery to the payee of the warrant; or(II) hand-deliver the warrant to the payee of the warrant not later than the third workday of the month.(ii) If the warrant relates to salary or wages that are paid on a day other than the first workday of a month, the employer shall:(I) release the warrant to an overnight delivery service not later than the second workday after the employer receives the warrant for delivery to the payee of the warrant; or(II) hand-deliver the warrant to the payee of the warrant not later than the third workday after the employer receives the warrant.(3) Payments by institutions of higher education.(A) This paragraph applies only to deductions from salaries or wages that the comptroller does not pay directly to state employees of institutions of higher education.(B) If feasible, an institution of higher education shall pay deducted amounts to a participating credit union by electronic funds transfer.(C) If an institution of higher education pays deducted amounts to a participating credit union by electronic funds transfer, the institution may: (i) make one transfer to the credit union and require it to distribute the transferred funds to state employees' accounts according to subsection (h) of this section; or(ii) make one transfer to the credit union account of each state employee.(D) If it is infeasible for an institution of higher education to pay deducted amounts to a participating credit union by electronic funds transfer, the institution shall: (i) pay the amounts by check;(ii) make the check payable to the credit union; and(iii) require the credit union to distribute the deducted amounts to state employees' accounts according to subsection (h) of this section.(E) An institution of higher education shall hand-deliver or use an overnight delivery service to deliver a check issued under subparagraph (D) of this paragraph to the payee of the check. (i) If the check relates to salary or wages that are paid on the first workday of a month, the institution shall: (I) release the check to an overnight delivery service not later than the second workday of the month for delivery to the payee of the check; or(II) hand-deliver the check to the payee of the check not later than the third workday of the month.(ii) If the check relates to salary or wages that are paid on a day other than the first workday of a month, the institution shall:(I) release the check to an overnight delivery service not later than the second workday after the date printed on the check for delivery to the payee of the check; or(II) hand-deliver the check to the payee of the check not later than the third workday after the date printed on the check.(h) Distributions of deducted amounts. (1) Applicability of this subsection. This subsection applies to deducted amounts only if they are paid to a participating credit union under subsection (g)(1)(B)(i), (g)(2), (g)(3)(C)(i), or (g)(3)(D) of this section.(2) Requirement. A participating credit union shall distribute the amount deducted from a state employee's salary or wages to the proper account of the employee at the credit union.(3) Deadline for distributions.(A) This subparagraph applies only if a participating credit union receives a payment of deducted amounts through an electronic funds transfer. The credit union shall distribute them according to paragraph (2) of this subsection not later than the first workday after the credit union receives the detail report for the deducted amounts.(B) This subparagraph applies only if a participating credit union receives a payment of deducted amounts through a warrant or check. The credit union shall distribute them according to paragraph (2) of this subsection not later than the first workday after the credit union receives the warrant or check.(4) Distribution of interest earned. This paragraph applies only to the interest that accrues while an employee's deducted amounts are in a credit union account awaiting distribution to the employee's account at the credit union. The interest shall be paid to the employee's account unless the credit union determines the payment would violate federal or state law or an agreement between the credit union and the employee.(i) Charging administrative fees to cover costs incurred to make deductions. (1) Requirement. (A) This subparagraph applies to a state employee whose salary or wages are paid through a warrant issued or an electronic funds transfer initiated by the comptroller. The comptroller may not charge the employee an administrative fee to cover the cost of making the deduction.(B) If a state employee's salary or wages are paid through a check issued or an electronic funds transfer initiated by an institution of higher education and the institution's payroll costs are reimbursed from the state treasury, the institution may determine whether the employee must pay an administrative fee to cover the cost of making the deduction. The fee, if charged, shall be paid through payroll deduction.(2) Determination by an institution of higher education of the amount of the fee.(A) An institution of higher education shall determine the amount of the administrative fee, if any, to be paid by a state employee covered by paragraph (1)(B) of this subsection.(B) The institution shall periodically recalculate the fee to ensure that the amount of the fee equals the cost of making the deduction. Except as otherwise provided in this subparagraph, the institution shall notify each participating credit union and employee of the institution in writing whenever the institution calculates or recalculates the fee. The institution is not required to notify an employee who has not authorized a deduction or a participating credit union to which no employee of the institution has authorized a currently-effective deduction.(3) Payment of the administrative fees. The total amount of administrative fees that an institution of higher education deducts from its state employees' salary and wages shall be paid to the institution.(j) Canceled payments of salary or wages; refunding deducted amounts to employers.(1) Canceled payments of salary or wages.(A) An employer shall notify a participating credit union in writing about the employer's cancellation of a payment of salary or wages to a state employee not later than the day the employer processes the cancellation. This subparagraph applies only if:(i) the payment is canceled after the employer has hand-delivered to the credit union or released to an overnight delivery service a monthly or an additional detail report; and(ii) the deductions covered by the report include deductions from the canceled payment of salary or wages.(B) If an employer notifies a credit union that the employer has canceled a payment of salary or wages to a state employee and if the credit union receives the notice before it distributes deducted amounts to the employee's account, the credit union may not make the distribution.(C) If a credit union's distribution of deducted amounts is prohibited by subparagraph (B) of this paragraph, the employer that paid them to the credit union shall obtain a refund of them according to paragraph (3)(A) or (B) of this subsection.(D) If an employer notifies a credit union that the employer has canceled a payment of salary or wages to a state employee and if the credit union receives the notice after it distributes deducted amounts to the employee's account, the credit union shall withdraw the amounts from the account unless: (i) the credit union determines the withdrawal would violate federal or state law; or(ii) the amount of funds in the account is insufficient for withdrawal of the full amount.(E) A credit union that receives notification under subparagraph (A) of this paragraph that an employer has canceled a payment of salary or wages to a state employee shall promptly notify the employer in writing about whether the employee's deducted amounts have been distributed to the employee's account. If the distribution has occurred, the credit union shall also notify the employer about whether the amounts have been withdrawn from the employee's account under subparagraph (D) of this paragraph. The credit union's notification to the employer must be made in writing .(2) Authorization of refunds. The payment of a state employee's deducted amounts to a participating credit union shall be refunded to the employer only if: (A) they exceed the amount that should have been paid to the credit union, and they have not been distributed to the employee's account at the credit union; or(B) they have been withdrawn from the employee's account at the credit union according to paragraph (1)(D) of this subsection.(3) Method for accomplishing refunds. If a refund from a participating credit union is required by paragraph (1)(C) or (2) of this subsection, the refund shall be accomplished by:(A) the employer of the state employee whose deducted amounts are being refunded subtracting the amount of the refund from a subsequent payment of deducted amounts to the credit union; or(B) the credit union issuing a check to the employer in the amount of the refund, if authorized by paragraph (4) of this subsection.(4) Paying refunds by check. A participating credit union may issue a check to an employer only if it submits to the credit union a written request for the refund to be made by check.(5) Deadline for paying refunds by check. If a participating credit union is authorized by paragraph (4) of this subsection to make a refund to an employer by check, the credit union shall ensure that the employer receives the check not later than the 30th calendar day after the date on which the credit union receives the employer's written request for the refund. If the 30th calendar day is not a workday, the first workday following the 30th calendar day is the deadline.(k) Responsibilities of participating credit unions.(1) Notification to the comptroller. A participating credit union shall notify the comptroller in writing immediately after a change occurs to:(A) the credit union's name;(B) the street address of the credit union's main branch;(C) the mailing address of the credit union's main branch, if different from the street address;(D) the full name, title, telephone number, email address, or mailing address of the credit union's primary contact; or(E) the credit union's routing number or bank account number.(2) Primary contact. The individual that a credit union designates as its primary contact must represent the credit union for the purposes of:(A) communicating with the comptroller, including receiving and responding to correspondence from the comptroller;(B) disseminating information, including information about the requirements of this section, to representatives of the credit union; and(C) communicating with employers about payment reconciliation and refunds.(3) Payment reconciliation and discrepancies. (A) A participating credit union shall reconcile the detail report provided by an employer under subsection (l) of this section with the deducted amounts paid to the credit union by the employer under subsection (g) of this section.(B) A participating credit union shall report all discrepancies between a detail report provided by an employer and the actual amount of deductions received from the employer. The credit union shall provide in a secure manner its report to the employer that submitted the detail report. The credit union must ensure that its report is received not later than the 60th calendar day after the day on which the detail report was mailed, hand-delivered, or released, whichever applies. If the 60th calendar day is not a workday, the first workday following the 60th calendar day is the deadline.(4) Submission of detail reports. A participating credit union that wants a monthly or additional detail report to be submitted to an entity other than the credit union must notify the comptroller in writing. An employer is not required to submit the report to the entity before the employer has received notification from the comptroller that the report must be submitted to the entity.(l) Responsibilities of employers .(1) Authorization forms. An employer : (A) may accept an authorization form only if it complies with this section; and(B) is not required to accept an authorization form that contains an obvious alteration without the state employee's written consent to the alteration.(2) Monthly detail reports to participating credit unions.(A) An employer shall submit in a secure manner a monthly detail report to each participating credit union that received or should have received a payment of amounts deducted from the salary or wages of at least one of the employer's state employees. If the participating credit union has notified the comptroller in writing that the monthly detail reports should be submitted to an entity other than the credit union, the reports shall be submitted to that entity.(B) A monthly detail report may cover only the deductions from salary or wages that are paid on the first workday of the month. Deducted amounts that were paid by electronic funds transfer directly to the credit union accounts of state employees may not be included in the report.(C) An employer shall ensure that a monthly detail report is received by the participating credit union or other entity under subparagraph (A) of this paragraph not later than the third workday of the month.(D) A monthly detail report to a participating credit union for a particular month must include: (i) the name and social security number of each state employee from whose salary or wages deducted amounts were paid to the credit union for the month; and(ii) the amount of deductions from each state employee's salary or wages that were paid to the credit union for the month.(E) An employer shall submit its monthly detail reports in the format required by the comptroller.(3) Additional detail reports to participating credit unions. (A) An employer shall submit in a secure manner an additional detail report to each participating credit union that received or should have received a payment of amounts deducted from the salary or wages of at least one of the employer's state employees. If the participating credit union has notified the comptroller in writing that the additional detail reports should be submitted to an entity other than the credit union, the reports shall be submitted to that entity.(B) An additional detail report may cover only the deductions from salary or wages that are paid on a day other than the first workday of the month. Deducted amounts that were paid by electronic funds transfer directly to the credit union accounts of state employees may not be included in the report.(C) This subparagraph applies only to an additional detail report that covers deducted amounts which are paid by electronic funds transfer to a participating credit union. An employer shall ensure that an additional detail report is received by the participating credit union or other entity under subparagraph (A) of this paragraph not later than the third workday of the month after the deducted amounts are paid to the credit union.(D) This subparagraph applies only to an additional detail report that covers deducted amounts which are paid by warrant or check to a participating credit union. The report shall accompany the warrant or check when it is mailed or otherwise delivered to the credit union.(E) An additional detail report to a participating credit union for a particular month must include: (i) the name and social security number of each state employee from whose salary or wages deducted amounts were paid to the credit union for the month; and(ii) the amount of deductions from each state employee's salary or wages that were paid to the credit union for the month.(F) An employer shall submit its additional detail reports in the format required by the comptroller.(4) Payment discrepancies. An employer that receives a report of discrepancies from a participating credit union shall investigate them and notify the credit union in writing of the action to be taken to eliminate them. The employer shall provide the notification not later than the 30th calendar day after the employer receives the report. If the 30th calendar day is not a workday, the first workday following the 30th calendar day is the deadline.(m) Responsibilities of the comptroller. The comptroller shall notify all state agencies in writing whenever the comptroller receives written notification from a participating credit union that monthly or additional detail reports should be submitted to an entity other than the credit union.34 Tex. Admin. Code § 5.47
The provisions of this §5.47 adopted to be effective May 22, 1995, 20 TexReg 3468; amended to be effective November 19, 1996, 21 TexReg 10989; Amended by Texas Register, Volume 47, Number 15, April 15, 2022, TexReg 2032, eff. 4/18/2022