1 TAC §§114.1, 114.3, 114.5, 114.7, 114.9, 114.11
The General Services Commission proposes new Title 1, TAC,
Chapter 114, §§114.1, 114.3, 114.5, 114.7, 114.9, and 114.11, concerning
the Payment for Goods and Services in order to bring rules into compliance
with the Texas Government Code, Chapter 2251 and Acts of 75th Legislature,
Chapter 634, 1995 Tex. Gen. Laws 2179-2180. The new rules provide definitions
and invoicing standards for vendors doing business with the State of Texas,
to facilitate prompt payment. The new rules also establish a committee that
will provide ongoing policy guidance to state agencies and vendors. As a result
of Chapter 634 (1995) codified at Government Code, Section 403.016, the Office
of the Comptroller (Comptroller) is required to use the electronic fund transfer
system to make payments to vendors effective September 1, 1998. It further
amended Government Code, Section 2155.382, allowing for the Comptroller to
issue payments directly to vendors and to bundle payments for more than one
invoice, or payments from more than one agency, into a single payment. Effective,
September 1, 1999, Chapter 634 (1995) terminates the effect of Government
Code, Section 2251.041 which requires that a vendor petition a state agency
to claim interest due to late payment, therefore, allowing the Comptroller
to pay vendors and to automatically compute and pay any interest due if a
payment falls late. These rules provide for transition between the current
law and the law which will take effect September 1, 1999.
Mr. Gene Crump, Director of Fiscal Division, has determined for the first
five year period the rules are in effect there will be no adverse effect to
state or local government as a result of enforcing these rules.
Mr. Crump further determines that each year of the first five-year period
the new rules under Title 1, TAC, Chapter 114, are in effect, the public benefit
anticipated as a result of enforcing the proposed new rules are more efficient
processes that are compliant with the Government Code, Chapters 2155 and 2251,
and the Government Code, Section 403.016. As a result of these laws, the public
is already experiencing the benefit of reduced mail and paper costs by the
use of the electronic transfer fund system to pay vendors. The payment process
has also been accelerated. There will be no effect on small businesses. There
is no anticipated economic cost to persons who are required to comply with
the rule as proposed.
Comments on the proposals may be submitted to Judy Ponder, General Counsel,
General Services Commission, P.O. Box 13047, Austin, Texas, 78711-3047. Comments
must be received no later than 30 days from the date of publication of the
proposal in the
Texas Register
.
The new sections under Title 1, TAC, Chapter 114 are proposed
under the authority of the Texas Government Code, Title 10, Subtitle F, Chapter
2251, Section 2251.003.
The following codes are affected by these rules: Government Code, Title
10, Subtitle D, Chapter 2155, Sections 2155.041, 2155.324 and 2155.382; Government
Code, Chapter 2251; and Government Code, Section 403.016.
§114.1.Definitions.
The following words and terms, when used in this title, shall have
the following meanings, unless the context clearly indicates otherwise.
(1)
Bona-fide Dispute--a factually based difference of opinion
held in good faith by a vendor and a state agency.
(2)
Commission--General Services Commission.
(3)
Committee--Payment of Goods and Services Committee.
(4)
Disputed Payment--includes, but is not limited to
an invoice presented for payment
(A)
which is not in compliance with the invoicing standards
in this chapter;
(B)
which is for nonconforming goods and services under the
related purchase order or contract; or
(C)
which is not presented in the time frame allowed by the
related purchase order or contract.
(5)
Goods--includes supplies, materials, or equipment.
(6)
Payment--Money owed to a vendor for the sale or lease
of goods and/or services. Methods of payment include, but are not limited
to, credit card charges, warrants, electronic transfer, and petty cash.
(7)
Person--Includes a corporation, organization, government
or governmental subdivision or agency, business trust, estate, trust, partnership,
association and any other legal entity.
(8)
Services--The furnishing of skilled or unskilled labor
or professional work, including gas and water utility service. Services does
not include a:
(A)
professional service subject to Subchapter A, Chapter 2254,
Government Code;
(B)
service of a state agency employee;
(C)
Consulting service or service of a consultant as defined
by Subchapter B, Chapter 2254, Government Code; or
(D)
service of a public utility.
(9)
State agency--
(A)
a board, commission, department, office, or other agency
in the executive branch of state government that is created by the constitution
or a statute of this state, including a river authority and an institution
of higher education as defined by Section 61.003, Education Code;
(B)
the legislature or a legislative agency; or
(C)
the Supreme Court of Texas, Court of Criminal Appeals of
Texas, a court of appeals, a state judicial agency, or the State Bar of Texas.
(10)
Vendor--A person who supplies goods or services
to a state agency including all successor organizations, assignees and merged
entities.
§114.3.Exceptions to Prompt Pay Process.
(a)
This Chapter does not apply to a payment made by a governmental
entity, vendor, or subcontractor if:
(1)
there is a bona fide dispute between the political subdivision
and a vendor, contractor, subcontractor, or supplier about the goods delivered
or the services performed that causes the payment to be late;
(2)
there is a bona fide dispute between a vendor and
a subcontractor or between a subcontractor and its supplier about the goods
delivered or the services performed that causes the payment to be late;
(3)
the terms of a federal contract, grant, regulation,
or statute prevent the governmental entity from making a timely payment with
federal funds; or
(4)
the invoice is not mailed to the person to whom it
is addressed in strict accordance with any instruction on the purchase order
relating to the payment.
(b)
This Chapter does not affect Chapter 2253, Government Code,
Public Work Performance and Payment Bonds.
(c)
Notwithstanding subsection (a) of this section, Chapter
2251, Government Code, applies to a payment made by a state agency for gas
or water utility service regardless of any contractual provision.
§114.5.Invoicing Standards.
(a)
To receive payment, vendors must submit an invoice to the
state agency receiving the goods or services. The invoice must at a minimum
include:
(1)
the vendor's mailing and e-mail (if applicable) address;
(2)
the vendor's telephone number;
(3)
the name and telephone number of a person designated
by the vendor to answer questions regarding the invoice;
(4)
the state agency requisition number;
(5)
the state agency's full name, agency number, and delivery
address;
(6)
the commission's purchase order number, if applicable;
(7)
the contract number or other reference number, if
applicable;
(8)
a valid Texas identification number (TIN) issued by
the Comptroller of Public Accounts;
(9)
a description of the goods or services, in sufficient
detail to identify the order which relates to the invoice;
(10)
unit numbers corresponding to the original order;
and
(11)
other relevant information supporting and explaining
the payment requested or identifying a successor organization to an original
vendor, if necessary.
(b)
When a correct and complete invoice is received, the agency
shall date stamp the document and submit it for payment as prescribed by that
state comptroller's office and in accordance with the Uniform Statewide Accounting
System (USAS) User Manual, certifying that the goods or services were received
in accordance with the purchase order and that the invoice is correct and
properly payable. Incorrect or incomplete invoices should be immediately returned
to the vendor.
(c)
When satisfied that the payment is correct, the commission
will approve for payment those vouchers for which pre-auditing is required
on the USAS system. Partial payments may be made for partial shipments.
(d)
Invoices, vouchers, and payments will be processed according
to the following schedule:
(1)
the originating agency must transmit electronically the
voucher to the comptroller no later than 11 calendar days after the later
of:
(A)
the date the agency received the invoice from the vendor;
(B)
the date the agency received the supplies, material, or
equipment; or
(C)
the date on which the performance of services was completed.
(2)
In accordance with the Government Code, Section
2155.324, the commission must electronically approve the voucher on pre-audit
purchases categories exceeding $25,000 for service contracts, emergency purchases,
research purchases and all lease payments on the USAS system no later than
the eight calendar day after receipt of the invoice and purchase information
from the originating agency.
(3)
The state comptroller must submit the payment to the
originating agency or mail the payment to the vendor (or electronically transmit
the payment to the vendor's financial institution) no more than eight calendar
days after receipt of the voucher from the commission pursuant to the Government
Code, Section 2155.382.
§114.7.Payments.
(a)
A payment is considered completed on the date it is postmarked
mailed or on the date it is electronically transmitted to the vendor's financial
institution. This date is used to determine a timely payment.
(b)
Any payment owed by an agency must be mailed or transmitted
electronically to the vendor no later than 30 days after the later of:
(1)
the day on which the agency received the goods;
(2)
the date the performance of the service under the
contract is completed; or
(3)
the day on which the agency received the invoice for
goods or services.
(c)
Payments will accrue interest at the rate of 1.0% per month
if not timely made, beginning on the day after payment is due and ending on
the date the payment is mailed or electronically transmitted to the vendor.
If partial payment is timely made, the unpaid balance of a partial payment
will accrue interest as provided by this subsection.
(d)
Pursuant to the Government Code, Section 2251.041, effective
until August 31, 1999, a vendor must submit its claim for payment of accrued
interest to the originating agency no later than six months after the vendor's
receipt of payment. Claims submitted to the originating agency after that
time will not be honored.
(e)
Until August 31, 1999, the originating agency shall process
claims for accrued interest by submitting the claim and a properly executed
voucher directly to the state comptroller in accordance with rules and procedures
adopted by the state comptroller.
(f)
Effective September 1, 1999, and pursuant to the Government
Code, Section 2251.026, an agency is liable for the interest on overdue payments.
The comptroller shall
(1)
compute interest imposed on the agency ;
(2)
pay the interest at the time payment is made on the
principal;
(3)
and submit the interest payment with the net amount
due for goods and services.
(g)
After September 1, 1999, a vendor shall not be required
to petition, bill or wait an additional day to receive the interest due.
(h)
The unpaid balance of a partial payment made within the
period provided by this section accrues interest as provided by subsection
(c) of this section unless the balance is in dispute.
§114.9.Disputed Payments.
(a)
An agency shall notify a vendor of an error in an invoice
submitted for payment by the vendor not later than the 21st day after the
date the agency receives the invoice.
(b)
If a dispute is resolved in favor of the vendor, the vendor
is entitled to receive interest on the unpaid balance of the invoice submitted
by the vendor beginning on the date that the payment for the invoice is overdue.
(c)
If a dispute is resolved in favor of the agency, the vendor
shall submit a corrected invoice that must be paid in accordance with §114.7(b)
and (c) of this title (relating to Payments). The unpaid balance accrues interest
as provided by §114.7(h) of this title if the corrected invoice is not
paid by the appropriate date.
§114.11.Delegated Authority.
(a)
The Payment of Goods and Services Committee is hereby established
by the commission to provide ongoing prompt payment policy guidance to state
agencies and to vendors. The committee will answer questions posed by state
agencies and vendors through a web site selected by the committee and by such
other means as convenient for the state agencies and vendors.
(b)
The committee will be composed of two employees from the
General Services Commission and two employees from the Office of the Comptroller
selected by the executive of the respective agency. The initial committee
members shall be designated within 30 days of the effective date of these
rules and serve for two years.
(c)
The committee will meet at least quarterly and post notice
of and hold its meetings in accordance with the Open Meetings Act, Chapter
551, Government Code.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
May 5, 1999.
TRD-9902640
Judy Ponder
General Counsel
General Services Commission
Earliest possible date of adoption: June 20, 1999
For further information, please call: (512) 463-3960