PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 5. FUNDS MANAGEMENT (FISCAL AFFAIRS)

SUBCHAPTER D. CLAIMS PROCESSING--PAYROLL

34 TAC §5.46

The Comptroller of Public Accounts proposes amendments to §5.46 concerning deductions for paying membership fees to certain state employee organizations.

The amendments add a definition of CAPPS in new subsection (a)(1) and renumber the subsequent provisions accordingly.

The amendments to subsections (b)(1)(C) and (b)(2)(B) add a second method of establishing, changing or cancelling a payroll deduction for state employee organization membership fees. These provisions currently allow a state employee to establish, change or cancel a payroll deduction by submitting a written authorization form to the employer's human resource officer or payroll officer. The amendments to these provisions also allow a state employee to establish, change or cancel a payroll deduction by submitting an electronic authorization through CAPPS.

The amendments to subsection (b)(2)(D) make a conforming change to require state agencies to notify the affected eligible organization if a state employee submits an electronic authorization form through CAPPS cancelling a payroll deduction for state employee organization membership fees.

The amendments to subsection (b)(3)(C) make nonsubstantive changes to clarify and simplify the language in this provision.

The amendments to subsections (c) and (d) make conforming changes to apply the requirements regarding the effective date of authorizations and cancellations to electronic authorizations, in addition to written authorization forms.

The amendments to subsection (i)(3)(A), (B), and (D) update the references to renumbered provisions.

The amendments move subsection (k)(5) and (6) to new subsection (l)(2)(D) and (3), so that these provisions are placed in a subsection that is more closely related to the subject matter the provisions address. Specifically, since these provisions relate to the responsibilities of state agencies, they are being moved from subsection (k), which addresses the responsibilities of eligible organizations, to subsection (l), which addresses the responsibilities of state agencies. Subsequent provisions in subsections (k) and (l) are renumbered accordingly. The amendments also update the provisions regarding the acceptance of cancellation forms or cancellation notices to better address the responsibilities of state agencies.

The amendments to subsection (l)(2)(B) simplify the process for determining if a state employee organization identified on an authorization form is currently certified as an eligible organization. At this time, a state agency is required to check notification documents previously received from the comptroller to make this determination. These amendments will require a state agency to check the comptroller's website to confirm that the state employee organization is listed as an approved state employee organization for membership fee deduction.

Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed amended rule is in effect, the rule: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rule's applicability; and will not positively or adversely affect this state's economy.

Mr. Reynolds also has determined that the proposed amended rule would have no significant fiscal impact on the state government, units of local government, or individuals. The proposed amended rule would benefit the public by updating the rule to reflect current practices. There would be no significant anticipated economic cost to the public. The proposed amended rule would have no significant fiscal impact on small businesses or rural communities.

You may submit comments on the proposal to Rob Coleman, Director, Fiscal Management Division, at: rob.coleman@cpa.texas.gov or at: P.O. Box 13528 Austin, Texas 78711. The comptroller must receive your comments no later than 30 days from the date of publication of the proposal in the Texas Register.

The amendments are proposed under Government Code, §403.0165, which authorizes the comptroller to adopt rules to administer payroll deductions for certain state employee organizations, and Government Code, §659.110, which authorizes the comptroller to adopt rules to administer the eligible state employee organization membership fee deduction programs authorized by Government Code, Chapter 659, Subchapter G, concerning supplemental deductions.

The amendments implement Government Code, §403.0165 and §§659.1031 - 659.110.

§5.46.Deductions for Paying Membership Fees to Certain State Employee Organizations.

(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) [(1)] Comptroller--The Comptroller of Public Accounts for the State of Texas.

(3) [(2)] Eligible organization--A state employee organization that the comptroller has certified in accordance with this section and whose certification has not been terminated.

(4) [(3)] Employer--A state agency that employs a state employee who authorizes a deduction under this section.

(5) [(4)] Fiscal year--The accounting period for the state government which begins on September 1 and ends on August 31.

(6) [(5)] Holiday--A state or national holiday as specified by Government Code, §§662.001-662.010. The term does not include a holiday that the General Appropriations Act prohibits state agencies from observing.

(7) [(6)] Include--Is 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.

(8) [(7)] Institution of higher education--Has the meaning assigned by Education Code, §61.003.

(9) [(8)] May not--Is a prohibition. The term does not mean "might not" or its equivalents.

(10) [(9)] Membership fee--The dues or fee that a state employee organization requires a state employee to pay to maintain membership in the organization.

(11) [(10)] Salary or wage leveling agreement--A contract or other agreement between a state employee and the employer that requires the employer to pay the employee's total annual salary or wages over 12 months even though the employee is not scheduled to work each of those months.

(12) [(11)] Salary or wages--Base salary or wages, longevity pay, or hazardous duty pay.

(13) [(12)] State agency--A department, commission, board, office, agency, or other entity of Texas state government, including an institution of higher education.

(14) [(13)] 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 (the Position Classification Act), and a combination of the preceding. The term excludes an independent contractor and an employee of an independent contractor.

(15) [(14)] State employee organization--An association, union, or other organization that advocates the interests of state employees concerning grievances, compensation, hours of work, or other conditions or benefits of employment.

(16) [(15)] Texas identification number--The 14-digit number that the comptroller assigns to each direct recipient of a payment made by the comptroller.

(17) [(16)] Workday--A calendar day other than Saturday, Sunday, or a holiday.

(b) Deductions.

(1) Authorization of deductions.

(A) A state employee may authorize one or more monthly deductions from the employee's salary or wages to pay membership fees to eligible organizations.

(B) Neither a state agency nor a state employee organization may state or imply that a state employee is required to authorize a deduction under this section.

(C) A state employee may provide an authorization only if the employee:

(i) submits to the employer's human resource officer or payroll officer a properly completed [completes an] authorization form establishing a deduction; or [and]

(ii) submits through CAPPS a properly completed electronic authorization establishing a deduction [the form to the employer's human resource officer or payroll officer].

(D) Neither the comptroller nor a state agency is liable or responsible for any damages or other consequences resulting from a state employee's authorization of an incorrect amount of a deduction under this section.

(E) Except as provided in subsection (i)(3) of this section, neither the comptroller nor a state agency is responsible for providing a state employee's membership information to an eligible organization.

(2) Change in the amount of a deduction or cancellation of a deduction.

(A) At any time, a state employee may authorize a change in the amount to be deducted under this section from the employee's salary or wages or cancel a deduction under this section.

(B) A state employee may authorize a change in the amount of a deduction or a cancellation of a deduction under this section only if the employee:

(i) submits to the employer's human resource officer or payroll officer a properly completed [completes an] authorization form, cancellation form, or cancellation notice, as appropriate, changing or cancelling a deduction; or [and]

(ii) submits through CAPPS a properly completed electronic authorization changing or canceling a deduction [the form or notice to the employer's human resource officer or payroll officer].

(C) Neither the comptroller nor a state agency is liable or responsible for any damages or other consequences resulting from a state employee's change of the amount of a deduction or cancellation of a deduction under this section.

(D) If a state employee submits a cancellation form or cancellation notice to the employer's human resource officer or payroll officer, or submits an electronic authorization through CAPPS cancelling a deduction, the state agency must notify the affected eligible organization.

(3) Automatic change in the amount of a deduction.

(A) An employer may change the amount of a deduction under this section from the employee's salary or wages without requiring the employee to submit a new authorization form only if:

(i) the employee's current authorization form authorizes the employer to change the amount of a deduction under this section from the employee's salary or wages without requiring the employee to submit a new authorization form; and

(ii) the change is needed because the eligible organization to which the employee authorized a deduction has changed the amount of membership fees it charges to state employees.

(B) Even if a state employee provides the authorization under subparagraph (A) of this paragraph, the employer may require the employee to submit a properly completed authorization form to the employer before the employer changes the amount of a deduction under this section from the employee's salary or wages.

(C) A state employee may provide the authorization under subparagraph (A) of this paragraph only if the employee[:]

[(i)] submits to the employer's human resource officer or payroll officer a properly completed [completes an] authorization form. [that enables state employees to provide the authorization; and]

[(ii) submits the form to the employer's human resource officer or payroll officer.]

(D) When an eligible organization wants to change the amount of membership fees it charges to state employees that are authorized under subparagraph (A) of this paragraph, the organization must provide prior written notification of the change to the comptroller. If the comptroller receives the notification on the first calendar day of a month, the change is effective for the salary or wages paid to state employees on the first workday of the second month following the month in which the comptroller receives the notification. If the comptroller receives the notification after the first calendar day of a month, the change is effective for the wages and salaries paid to state employees on the first workday of the third month following the month in which the comptroller received the notification.

(4) 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 authorized by this section.

(B) If a state employee's salary or wages are sufficient to support only part of a deduction authorized by this section, no part of the deduction may be made.

(C) The amount that could not be deducted from a state employee's salary or wages because they were insufficient to support the deduction may not be made up by deducting the amount from subsequent payments of salary or wages to the employee.

(5) Timing of deductions.

(A) Except as provided in subparagraph (B) of this paragraph, a deduction authorized by this section must be made from the salary or wages that are paid on the first working day of a month.

(B) If a state employee does not receive a payment of salary or wages on the first working day of a month, the employer may designate the payment of salary or wages to the employee from which a deduction authorized by this section will be made. A deduction authorized by this section may be made only once each month.

(6) Regularity of deductions.

(A) This subparagraph applies to a state employee who is scheduled by the employer to work each month of a year. A deduction authorized by this section must be calculated so that the total membership fee paid by a state employee per year is spread evenly over 12 monthly deductions.

(B) This subparagraph applies to a state employee who is not scheduled by the employer to work each month of a year.

(i) If a state employee has entered into a salary or wage leveling agreement, a deduction authorized by this section must be calculated so that the total membership fee paid by the employee per year is spread evenly over the months the employee will be paid under the agreement.

(ii) If a state employee has not entered into a salary or wage leveling agreement, a deduction authorized by this section must be calculated so that the total membership fee paid by the employee per year is spread evenly over the months the employee will be paid.

(7) Retroactive deductions.

(A) In this paragraph, "retroactive deduction" means a deduction authorized by this section to the extent the purpose of the deduction is:

(i) to correct an error made in a previous month that resulted in the amount of money deducted being less than the amount authorized by a state employee; or

(ii) to catch up on the amount of membership fees owed by a state employee to an eligible organization because a deduction authorized by this section was not made in one or more previous months.

(B) A retroactive deduction is prohibited unless:

(i) an error described in subparagraph (A)(i) of this paragraph was committed by the employer; and

(ii) the eligible organization that received the erroneous deduction consents to the retroactive deduction.

(8) Interagency transfers of state employees. A state employee who transfers from one state agency to a second state agency must be treated by the second state agency as if the employee has not yet authorized any deductions under this section.

(c) Effectiveness of authorizations [authorization forms].

(1) Effective date of authorizations [authorization forms].

(A) This subparagraph applies if a state agency receives a state employee's properly completed authorization form or electronic authorization on the first calendar day of a month.

(i) The first deduction authorized by this section must be made from the employee's salary or wages that are paid on the first workday of the first month following the month in which the agency receives the authorization form or electronic authorization.

(ii) If an authorization form or electronic authorization is submitted to change the amount of a deduction authorized by this section, the change is effective with the deduction made on the first workday of the first month following the month in which the agency receives the authorization form or electronic authorization.

(B) This subparagraph applies if a state agency receives a state employee's properly completed authorization form or electronic authorization after the first calendar day of a month.

(i) The first deduction authorized by this section must be made from the employee's salary or wages that are paid on the first workday of the second month following the month in which the agency receives the authorization form or electronic authorization. However, the agency may consent for the first deduction to occur from the salary or wages that are paid on the first workday of the first month following the month in which the agency receives the authorization form or electronic authorization.

(ii) If an authorization form or electronic authorization is submitted to change the amount of a deduction authorized by this section, the change is effective with the deduction made on the first workday of the second month following the month in which the agency receives the authorization form or electronic authorization. However, the agency may consent for the change to be effective with the deduction made on the first workday of the first month following the month in which the agency receives the authorization form or electronic authorization.

(C) If the first calendar day of a month is not a workday, the first workday following the first calendar day is the deadline for the receipt of properly completed authorization forms or electronic authorizations.

(D) A state employee is solely responsible for ensuring that a properly completed authorization form or electronic authorization is received by the employer by the deadline.

(E) An eligible organization's receipt of the authorization form or electronic authorization is not a prerequisite to the authorization becoming effective.

(2) Return of authorization forms.

(A) A state agency shall return an authorization form to the state employee who submitted the form if:

(i) the form is incomplete, contains erroneous data, or is otherwise insufficient; and

(ii) a deficiency listed in clause (i) of this subparagraph makes it impossible for the agency to establish the deduction in accordance with the form.

(B) A state agency may either accept an authorization form from or return an authorization form to the state employee who submitted the form when the form postpones the first deduction authorized by this section beyond the effective date determined under paragraph (1) of this subsection. If the agency accepts the authorization form, the agency may not make the deduction effective before the effective date specified on the form.

(C) A state agency shall state in writing the reason for the return of an authorization form. The statement must be attached to the form being returned.

(d) Effectiveness of cancellation of deductions [forms and cancellation notices].

(1) Effective date of cancellation of deductions [forms and cancellation notices].

(A) This subparagraph applies if a state agency receives a state employee's properly completed cancellation form, [or] cancellation notice, or electronic authorization on the first calendar day of a month. A state employee's cancellation of a deduction authorized by this section is effective for the salary or wages paid to the employee on the first workday of the first month following the month in which the agency receives the cancellation form, [or] cancellation notice, or electronic authorization.

(B) This subparagraph applies if a state agency receives a state employee's properly completed cancellation form, [or] cancellation notice, or electronic authorization after the first calendar day of a month. A state employee's cancellation of a deduction authorized by this section is effective for the salary or wages paid to the employee on the first workday of the:

(i) second month following the month in which the agency receives the cancellation form, [or] cancellation notice, or electronic authorization; or

(ii) first month following the month in which the agency receives the cancellation form, [or] cancellation notice, or electronic authorization if the agency consents to this effective date.

(C) If the first calendar day of a month is not a workday, the first workday following the first calendar day is the deadline for the receipt of properly completed cancellation forms, [or] cancellation notices, or electronic authorization.

(D) A state employee is solely responsible for ensuring that properly completed cancellation forms, [and] cancellation notices, and electronic authorization are received by the deadline.

(E) An eligible organization's receipt of the cancellation form, [or] cancellation notice, or electronic authorization is not a prerequisite to the cancellation becoming effective.

(2) Return of cancellation forms and cancellation notices.

(A) A state agency shall return a cancellation form or cancellation notice to the state employee who submitted the form or notice if:

(i) the form or notice is incomplete, contains erroneous data, or is otherwise insufficient; and

(ii) a deficiency listed in clause (i) of this subparagraph makes it impossible for the agency to cancel the deduction in accordance with the form or notice.

(B) A state agency shall state in writing the reason for the return of a cancellation form or cancellation notice. The statement must be attached to the form being returned.

(e) Authorization and cancellation forms.

(1) The comptroller's approval of authorization and cancellation forms.

(A) An eligible organization may not distribute or provide an authorization or cancellation form to a state employee until the organization has received the comptroller's written approval of the form.

(B) As a condition for retaining its eligibility, an eligible organization must produce an authorization form and a cancellation form that comply with the comptroller's requirements and this section. The organization must produce the forms within a reasonable time after the organization receives its certification from the comptroller.

(C) The comptroller may approve an eligible organization's authorization form if the form:

(i) clearly informs state employees that a properly completed authorization form must be submitted to the employer's human resource officer or payroll officer to authorize a deduction;

(ii) clearly informs state employees that a copy of the properly completed authorization form should be provided to the organization to notify the organization that the employee has authorized a deduction;

(iii) contains the following statement: "I understand that I cannot be compelled to be a member of a state employee organization or to pay dues to a state employee organization as a condition of employment with the state. While I am free to join a state employee organization, I understand that I may change or cancel this authorization at any time by providing written notice to my employer. I voluntarily authorize a monthly payroll deduction in the amount shown above from my salary or wages for membership fees to the state employee organization listed above and agree to comply with the comptroller's rules concerning this deduction. I agree that my name, social security number, personal contact information, and the amount of my payroll deduction for membership fees may be provided to the state employee organization listed above only for the purpose of informing the state employee organization about the payroll deduction."; and

(iv) complies with this section and the comptroller's other requirements for format and substance.

(D) The comptroller may approve the cancellation form of an eligible organization if the form:

(i) clearly informs state employees that a properly completed cancellation form must be submitted to the employer's human resource officer or payroll officer to cancel the deduction;

(ii) clearly informs state employees that a copy of the properly completed cancellation form should be provided to the organization to notify the organization that the employee has cancelled the deduction;

(iii) clearly informs state employees that they are not required to state a reason for a cancellation; and

(iv) complies with the comptroller's other requirements for format and substance.

(E) An eligible organization must revise an authorization or cancellation form upon request from the comptroller. The organization may not distribute or otherwise make available to state employees a revised form until the organization has received the comptroller's written approval of the form.

(2) Distribution of authorization or cancellation forms.

(A) An eligible organization must provide an authorization or cancellation form to a state employee or state agency promptly after receiving:

(i) an oral or written request for the form from the employee or agency; or

(ii) an oral or written request to provide the form to the employee from the comptroller or the employer.

(B) A state agency may maintain a supply of cancellation forms and distribute the forms to its state employees upon request. An eligible organization shall promptly provide the forms to the agency upon request.

(f) Procedural requirements for certifying state employee organizations.

(1) Request for certification.

(A) The comptroller may not certify a state employee organization under this section unless the comptroller receives a written request for certification from an individual who is authorized by the organization to make the request.

(B) The comptroller may not certify a state employee organization under this section if the comptroller receives the organization's request for certification after June 2nd of a fiscal year.

(2) Requirements for requests for certification. A request for certification submitted to the comptroller by a state employee organization must contain:

(A) the organization's complete name;

(B) the street address of the headquarters of the organization;

(C) the mailing address of the headquarters of the organization, if different from the street address;

(D) the full name, title, telephone number, and mailing address of the organization's primary contact;

(E) a specific request for certification as an eligible organization, specifying whether the organization is requesting certification under Government Code, §403.0165 or §659.1031;

(F) a specific acceptance of the requirements of this section as they exist at the time the request is made or as adopted or amended thereafter;

(G) the organization's Internal Revenue Service employer identification number; and

(H) any other information that the comptroller deems necessary.

(g) Substantive requirements for certifying state employee organizations. The comptroller shall certify a state employee organization under this section if the organization satisfies the requirements of paragraph (1) or (2) of this subsection.

(1) Certification of a state employee organization under Government Code, §403.0165.

(A) The comptroller shall certify a state employee organization if the organization:

(i) submits persuasive evidence to the comptroller that the organization had a membership of at least 4,000 state employees throughout the 18 months preceding the month in which the comptroller receives the organization's request for certification (an example of the evidence that the comptroller may review is a membership roster containing the name of each state employee who is a member of the organization, the date each employee joined the organization, and the date through which each employee's membership fees are paid);

(ii) demonstrates to the comptroller that the organization conducts activities on a statewide basis (an organization may satisfy this requirement by submitting any relevant evidence, including newsletters, news articles, correspondence, and membership rosters containing the names and addresses of the organization's members);

(iii) demonstrates to the comptroller that the organization had a membership fee structure for state employees throughout the 18 months preceding the month in which the comptroller receives the organization's request for certification (an organization may satisfy this requirement by submitting relevant evidence, including dated enrollment forms from state employees, documentation about the fees structure, and financial records);

(iv) demonstrates to the comptroller that the membership fees collected from state employees will be equal to an average of at least one-half of the membership fees received by the organization nationwide (an organization may satisfy this requirement by submitting financial records that compare the membership fees to be received from state employees with the membership fees received from other individuals throughout the nation); and

(v) has submitted to the comptroller a completed direct deposit form for the organization.

(B) The comptroller shall certify a state employee organization under this paragraph that demonstrates to the satisfaction of the comptroller that the organization had a membership of at least 4,000 state employees on April 1, 1991. The organization is not required to satisfy any of the other substantive requirements of this paragraph except for subparagraph (A)(v) of this paragraph. A state employee organization may demonstrate that the organization had a membership of at least 4,000 state employees on April 1, 1991, only by submitting to the comptroller:

(i) a membership roster containing the name of each state employee who was a member of the organization on April 1, 1991;

(ii) the date each employee joined the organization; and

(iii) the date through which each employee's membership fees were paid as of April 1, 1991.

(2) Certification of a state employee organization under Government Code, §659.1031. The comptroller shall certify a state employee organization if the organization:

(A) submits persuasive evidence to the comptroller that the organization had a membership of at least 2,000 active or retired state employees who hold or have held certification from the Texas Commission on Law Enforcement under Occupations Code, Chapter 1701, Subchapter G; and

(B) has submitted a completed direct deposit form for the organization to the comptroller.

(3) Notifications.

(A) The comptroller shall notify a state employee organization about the comptroller's approval or disapproval of the organization's request for certification by no later than the 30th day after the comptroller receives the request if the request is complete in all respects.

(B) The comptroller shall notify each state agency of the comptroller's certification of a state employee organization by no later than the 30th day after the comptroller makes the certification.

(h) Effective date of certification. The first deduction to pay a membership fee to an eligible organization 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 organization.

(i) Payments of deducted membership fees.

(1) Payments by the comptroller through electronic funds transfers. The comptroller shall pay deducted membership fees to an eligible organization by electronic funds transfer.

(2) Payments by institutions of higher education.

(A) This paragraph applies only to membership fees in eligible organizations that have been deducted from salaries or wages that the comptroller does not pay directly to state employees of institutions of higher education.

(B) An institution of higher education shall pay deducted membership fees to an eligible organization by electronic funds transfer unless it is infeasible to do so.

(C) If it is infeasible for an institution of higher education to pay deducted membership fees to an eligible organization by electronic funds transfer, then the institution shall pay the fees by check. The check must be mailed or delivered to the organization by no later than the 20th calendar day of the month following the month when the salary or wages from which the deductions were made were earned. If the 20th calendar day of a month is not a workday, then the first workday following the 20th calendar day is the deadline for the mailing or delivery of checks.

(3) Reconciliation.

(A) An eligible organization shall reconcile the detail report provided by a state agency under subsection (1)(4) [(l)(3)] of this section with:

(i) the amount of membership fees paid to the organization under this subsection; and

(ii) the organization's membership information.

(B) An eligible organization must submit to the agency, in a secure manner, a reconciling items report, which identifies:

(i) any discrepancies between the detail report provided by a state agency under subsection (l)(4) [(l)(3)] of this section and the actual amount of membership fees received under this subsection; and

(ii) the name of any employee listed in the detail report provided by a state agency under subsection (l)(4) [(l)(3)] of this section for whom the organization does not already have personal contact information.

(C) The organization must ensure that the agency receives the organization's reconciling items report by no later than the 60th calendar day after the day on which the agency submitted the detail report to the organization. If the 60th calendar day is not a workday, the first workday following the 60th calendar day is the deadline.

(D) A state agency that receives a reconciling items report from an eligible organization shall investigate the reconciling items described in the organization's reconciling items report, and notify the organization of the action to be taken to eliminate the reconciling items. A reconciling item may be eliminated by:

(i) making a retroactive deduction if it is authorized by subsection (b)(7) of this section;

(ii) recovering an excessive payment to an eligible organization of amounts deducted under this section from a subsequent payment to the organization;

(iii) recovering an excessive payment to an eligible organization of amounts deducted under this section by obtaining a refund from the organization in accordance with subsection (k)(5) [(k)(7)] of this section;

(iv) the agency making corrections to the detail report if the report is incorrect; or

(v) providing the organization, in a secure manner, with personal contact information for each employee identified in the reconciling items report for whom the organization does not already have personal contact information.

(E) If a state agency timely receives a reconciling items report that identifies the information described in paragraph (3)(B)(ii) of this subsection, the agency shall provide the information described in paragraph (3)(D)(v) of this subsection to the organization no later than the 10th calendar day after the day on which the agency received the organization's reconciling items report. If the 10th calendar day is not a workday, the first workday following the 10th calendar day is the deadline for providing the information.

(4) Subordinate units of eligible organizations.

(A) A chapter or other subordinate unit of an eligible organization may receive directly from the comptroller or an institution of higher education a payment of deducted membership fees if the fees were deducted under authorization forms that authorized the payment of the fees to the chapter or other subordinate unit of the organization.

(B) A request to pay deducted membership fees to a chapter or subordinate unit instead of the parent eligible organization must be submitted to the comptroller by the organization.

(C) The comptroller may grant a request under subparagraph (B) of this paragraph only if the membership fee structure of the chapter or subordinate unit is the same as the membership fee structure of the parent eligible organization.

(D) The comptroller's granting of a request under subparagraph (B) of this paragraph is not a certification of the chapter or subordinate unit as an eligible organization.

(E) The comptroller may require an eligible organization to submit proof that an entity is a chapter or other subordinate unit of the organization before a payment of deducted membership fees is paid directly to the entity. The comptroller may periodically require the organization to submit proof that the entity is still a chapter or other subordinate unit of the organization as a condition for continuing to pay deducted membership fees directly to the entity.

(j) Solicitation. This section does not prohibit the chief administrator of a state agency from permitting or prohibiting solicitation by eligible organizations on the premises of the agency.

(k) Responsibilities of eligible organizations.

(1) Disseminating information.

(A) An eligible organization is solely responsible for the dissemination of relevant information to its representatives and employees.

(B) An eligible organization must ensure that its representatives and employees comply with the requirements of this section.

(2) Notification to the comptroller. An eligible organization must notify the comptroller in writing immediately after a change occurs to:

(A) the organization's name;

(B) the street address of the headquarters of the organization;

(C) the mailing address of the headquarters of the organization, if different from the street address;

(D) the full name, title, telephone number, or mailing address of the organization's primary contact; or

(E) the organization's electronic funds transfer information.

(3) Primary contact. The individual that a state employee organization designates as its primary contact must represent the organization for the purposes of:

(A) communicating with the comptroller, including receiving and responding to correspondence from the comptroller; and

(B) disseminating information, including information about the requirements of this section, to representatives of the organization.

(4) Texas identification number. The Texas identification number of an eligible organization must appear on all correspondence from the organization to the comptroller or a state agency.

[(5) Acceptance of authorization forms. A state agency must accept an authorization form from a state employee if a refusal to accept the form would violate a law of the United States or the State of Texas.]

[(6) Acceptance of cancellation forms and cancellation notices. A state agency must accept a cancellation form or cancellation notice from a state employee unless:]

[(A) the employee is not a member of the organization; or]

[(B) the employee did not properly complete the cancellation form.]

(5) [(7)] Refunding excessive payments of amounts deducted under this section.

(A) An eligible organization shall refund a payment of amounts deducted under this section to the extent the amount exceeds the amount that should have been paid to the organization if:

(i) the organization receives a written request for the refund from a state agency;

(ii) the agency provides reasonable evidence of the overpayment to the organization; and

(iii) no subsequent payments of amounts deducted under this section are anticipated to be made to the organization.

(B) If a refund is required by subparagraph (A) of this paragraph, the organization must ensure that the appropriate state agency receives the refund by no later than the 30th calendar day after the later of:

(i) the date on which the organization receives the agency's written request for the refund; and

(ii) the date on which the organization receives the agency's reasonable evidence of the overpayment.

(l) Responsibilities of state agencies.

(1) Reports of violations. A state agency may report to the comptroller a violation of this section that the agency believes an eligible organization or its representatives or employees might have committed. A report must be made in writing, and a copy of the report must be mailed to the organization at the same time that the original of the report is mailed to the comptroller.

(2) Authorization forms. A state agency:

(A) may accept authorization forms only if they comply with this section;

(B) must ensure that the state employee [identifying information for an eligible] organization identified on an authorization form is listed [the same as the identifying information] on the comptroller's website as an approved state employee organization for membership fee deduction [notification document received from the comptroller under subsection (g)(3)(B) of this section]; [and]

(C) may not accept an authorization form that contains an obvious alteration without the state employee's written consent to the alteration; and [.]

(D) must accept an authorization form from a state employee if a refusal to accept the form would violate a law of the United States or the State of Texas.

(3) Acceptance of cancellation forms and cancellation notices. A state agency must accept a cancellation form or cancellation notice from a state employee unless:

(A) the employee has not previously authorized a monthly deduction from the employee's salary or wages to pay membership fees to the eligible organization listed on the cancellation form or cancellation notice; or

(B) the employee did not properly complete the cancellation form or failed to provide sufficient information in the cancellation notice.

(4) [(3)] Detail reports to eligible organizations.

(A) An employer must submit, in a secure manner, a detail report each month to each eligible organization that receives the deductions.

(B) A detail report to an eligible organization for a month must contain:

(i) the name, in alphabetical order, and social security number of each state employee from whose salary or wages a deduction was authorized by this section for the month, regardless of whether the deduction was actually made; and

(ii) the amount of the deduction made for each employee.

(C) An employer must submit the detail report for the payment to the organization by no later than the 15th calendar day of the month in which the payment was made. If the 15th calendar day is not a workday, then the first workday following the 15th calendar day is the deadline for submitting the report.

(m) Termination of certification.

(1) Termination by the comptroller.

(A) The comptroller may terminate the certification of an eligible organization only if the organization violates subsection (e)(1) of this section.

(B) The comptroller may determine the effective date of a termination under this paragraph. No deduction authorized by this section may be made to an eligible organization on or after the effective date of a termination under this paragraph.

(C) When the comptroller terminates the certification of an eligible organization, the comptroller shall send written notice of the termination to the organization via certified mail, return receipt requested.

(2) Termination by eligible organizations.

(A) An eligible organization may terminate its participation in the deduction program authorized by this section only by terminating its certification.

(B) An eligible organization may terminate its certification by providing written notice of termination to the comptroller. However, an organization may not provide written notice of termination to the comptroller until the organization has provided written notice of termination to each state employee from whose salary or wages a membership fee to the organization is being deducted.

(C) An eligible organization's termination of its certification is effective beginning with the salary or wages that are paid on the first workday of the third month following the month in which the comptroller receives the organization's proper notice of termination.

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 April 16, 2024.

TRD-202401614

Victoria North

General Counsel for Fiscal and Agency Affairs

Comptroller of Public Accounts

Earliest possible date of adoption: June 2, 2024

For further information, please call: (512) 475-2220

SUBCHAPTER B. TEXAS BROADBAND DEVELOPMENT OFFICE

DIVISION 2. BROADBAND DEVELOPMENT PROGRAM

34 TAC §16.30

The Comptroller of Public Accounts proposes amendments to §16.30, concerning definitions.

The amendments to §16.30 increase the threshold speeds for internet service to qualify as broadband service to match the standards adopted by the Federal Communications Commission for advanced telecommunications capability under 47 U.S.C., §1302 as contemplated under Senate Bill 1238, §1, 88th Legislature, R.S., 2023 (amending Government Code, §490I.0101(b)).

Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed amended rule is in effect, the rule: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rule's applicability; and will not positively or adversely affect this state's economy.

Mr. Reynolds also has determined that the proposed amended rule would have no significant fiscal impact on the state government, units of local government, or individuals. The proposed amended rule would benefit the public by conforming the rule to current federal standards. There would be no anticipated significant economic cost to the public. The proposed amended rule would have no fiscal impact on small businesses or rural communities.

You may submit comments on the proposal to Greg Conte, Director, Broadband Development Office, at broadband@cpa.texas.gov or at P.O. Box 13528, Austin, Texas 78711-3528. The comptroller must receive your comments no later than 30 days from the date of publication of the proposal in the Texas Register.

The amendments are proposed under Government Code, §490I.0101(b), which permits the comptroller by rule to adopt standards for internet service that match the standards adopted by the Federal Communications Commission for advanced telecommunications capability under 47 U.S.C., §1302 and under Government Code, §490I.0109, which permits the comptroller to adopt rules as necessary to implement Chapter 490I regarding the Texas Broadband Development Office.

The amendments implement Government Code, Chapter 490I.

§16.30.Definitions.

As used in this subchapter and in these rules, the following words and terms shall have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person that has submitted an application for an award under this subchapter.

(2) Application protest period--A period of at least thirty days beginning on the first day after an application is posted under §16.36(d) of this subchapter.

(3) Broadband development map--The map adopted or created under Government Code, §490I.0105.

(4) Broadband service--Internet service that delivers transmission speeds capable of providing:

(A) a download speed of not less than 100 [25] Mbps; or

(B) an upload speed of not less than 20 [three ] Mbps; and

(C) network round-trip latency of less than or equal to 100 milliseconds based on the 95th percentile of speed measurements.

(5) Broadband serviceable location--A business or residential location in this state at which broadband service is, or can be, installed, including a community anchor institution.

(6) Census block--The smallest geographic area for which the U.S. Bureau of the Census collects and tabulates decennial census data as shown on the most recent on Census Bureau maps.

(7) Commercial broadband service provider--A broadband service provider engaged in business intended for profit, a telephone cooperative, an electric cooperative, or an electric utility that offers broadband service or middle-mile broadband service for a fare, fee, rate, charge, or other consideration.

(8) Community anchor institution--An entity such as a school, library, health clinic, health center, hospital or other medical provider, public safety entity, institution of higher education, public housing organization, or community support organization that facilitates greater use of broadband service by vulnerable populations, including, but not limited to, low-income individuals, unemployed individuals, children, the incarcerated, and aged individuals.

(9) Designated area--A census block or other area as determined under §16.21 of this subchapter.

(10) Grant funds--Grants, low-interest loans, and other financial incentives awarded to applicants under this subchapter for the purpose of expanding access to and adoption of broadband service.

(11) Grant recipient--An applicant who has been awarded grant funds under this subchapter.

(12) Mbps--Megabits per second.

(13) Middle mile infrastructure--Any broadband infrastructure that does not connect directly to an end-user location, including a community anchor institution. The term includes:

(A) leased dark fiber, interoffice transport, backhaul, carrier-neutral internet exchange facilities, carrier-neutral submarine cable landing stations, undersea cables, transport connectivity to data centers, special access transport, and other similar services; and

(B) wired or private wireless broadband infrastructure, including microwave capacity, radio tower access, and other services or infrastructure for a private wireless broadband network, such as towers, fiber, and microwave links.

(C) The term does not include provision of Internet service to end-use customers on a retail basis.

(14) Non-commercial broadband service provider--A broadband service provider that is not a commercial broadband service provider.

(15) Office--The Broadband Development Office created under Government Code, §490I.0102.

(16) Project area--The area, consisting of one or more broadband serviceable locations, identified by an applicant in which the applicant proposes to deploy broadband service or middle mile infrastructure.

(17) Public school--A school that offers a course of instruction for students in one or more grades from prekindergarten through grade 12 and is operated by a governmental entity.

(18) Qualifying broadband service--Broadband service that meets the minimum speed, latency and reliability thresholds prescribed by the office in each applicable notice of funds availability.

(19) Reliable broadband service--Broadband service that is accessible to a location via:

(A) fiber-optic technology;

(B) Cable Modem/ Hybrid fiber-coaxial technology;

(C) digital subscriber line (DSL) technology; or

(D) terrestrial fixed wireless technology utilizing entirely licensed spectrum or using a hybrid of licensed and unlicensed spectrum.

(20) Served location--A broadband serviceable location that has access to reliable broadband service that exceeds the minimum threshold for an underserved location or a location that is subject to an existing federal commitment to deploy qualifying broadband service.

(21) Underserved location--A broadband serviceable location that has access to reliable broadband service but does not have access to reliable broadband service with the capability of providing:

(A) a download speed of not less than 100 Mbps;

(B) an upload speed of not less than 20 Mbps; and

(C) a network round-trip latency of less than or equal to 100 milliseconds based on the 95th percentile of speed measurements as established under Government Code, §490I.0101.

(22) Unserved location--A broadband serviceable location that does not have access to reliable broadband service.

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 April 16, 2024.

TRD-202401615

Victoria North

General Counsel for Fiscal and Agency Affairs

Comptroller of Public Accounts

Earliest possible date of adoption: June 2, 2024

For further information, please call: (512) 475-2220