# COMAR Title 25 — Office of the State Treasurer

## Subtitle 03 — Treasury Management

### Chapter 02 — Alternative Methods of Funds Transfer

**Authority:** State Finance and Procurement Article, §7-227.1; State Personnel and Pensions Article, §2-405; Annotated Code of Maryland

**Administrative History:** Effective date: October 30, 1989 (16:21 Md. R. 2263)

**Administrative History:** Regulations .02B amended and .03—.05 adopted as an emergency provision effective January 1, 2001 (28:4 Md. R. 415); amended permanently effective May 28, 2001 (28:10 Md. R. 950)

#### Regulation .01 General.

*COMAR 25.03.02.01*

A. Findings. Pursuant to the requirements of the State Finance and Procurement Article, §7-227.1, Annotated Code of Maryland, the Treasurer has determined that the following alternative methods of funds transfer are means generally recognized and accepted by the banking industry for disbursing funds:

  (1) The transfer of funds by use of the Automated Clearing House (ACH) payments system; and

  (2) The transfer of funds by the wire transfer payments system.

B. Authorizations. In accordance with the determination set forth in §A of this regulation, the Treasurer authorizes the use of the alternative methods of funds transfer as follows:

  (1) Use of either the ACH payments system or the wire transfer payments system to transfer funds generally between State accounts;

  (2) Use of the ACH payments system to make repetitive, routine payments as identified in Regulation .02 of this chapter; and

  (3) Use of the wire transfer payments system to make specific payments when payment is due on an absolute date and time or when time of payment is otherwise of the essence.

#### Regulation .02 Allowable Transfers and Disbursements.

*COMAR 25.03.02.02*

A. Transfers. Funds may be transferred between the various State bank accounts by means of an alternative method of funds transfer authorized by Regulation .01 of this chapter.

B. Disbursements. Upon warrant of the Comptroller, State funds may be disbursed by means of an alternative method of funds transfer authorized by Regulation .01 of this chapter for the payment of:

  (1) Principal, interest, or both, on State debt or the debt of a unit of State government;

  (2) Major routine State grants and shared-revenue disbursements to the political subdivisions of the State and to the units of those subdivisions;

  (3) State payroll-related disbursements, including, but not limited to:

    (a) Retirement, pension, and FICA contributions,

    (b) Taxes,

    (c) Insurance premiums,

    (d) Voluntary deductions, and

    (e) Net pay;

  (4) Disbursements to the federal government or to a state government;

  (5) Disbursements for the acquisition of investments by the Treasurer; and

  (6) Other disbursements that, in the judgment of the Comptroller and the Treasurer, or the authorized representative of either, are, in the interest of the State, best made by an alternative method of funds transfer.

#### Regulation .03 Payment of Net Pay.

*COMAR 25.03.02.03*

A. Scope. This regulation applies to an employee hired on or after January 1, 2001.

B. Except as provided in Regulation .05 of this chapter, the Central Payroll Bureau shall pay an employee's net pay by electronic funds transfer to the institution designated by the employee as provided in this regulation.

C. When an employee becomes eligible to receive net pay, the employing agency personnel director shall provide to the employee an electronic funds transfer authorization form. If an employee has not requested payment by check under Regulation .05 of this chapter, the employee shall complete the form and submit it to the Central Payroll Bureau.

D. The Central Payroll Bureau shall accept an electronic funds transfer authorization form filed by an employee if:

  (1) The employee has completed the form; and

  (2) The institution named by the employee on the form participates in the Automatic Clearing House Network.

E. An employee may change an institution designated on an electronic funds transfer authorization form by completing and filing a new form with the Central Payroll Bureau.

F. The last electronic funds transfer authorization form filed by an employee and accepted by the Central Payroll Bureau shall control the electronic funds transfer of the employee's net pay.

#### Regulation .04 Payment Procedure.

*COMAR 25.03.02.04*

A. The Central Payroll Bureau shall transmit an employee's biweekly net pay to the institution designated by the employee as set forth in Regulation .03B of this chapter.

B. The Central Payroll Bureau shall give an employee who receives net pay through electronic funds transfer a biweekly advice statement that reflects the following:

  (1) Total amount of biweekly pay;

  (2) Amounts deducted from the biweekly pay; and

  (3) The portion of the biweekly pay electronically transferred.

#### Regulation .05 Payment by Check.

*COMAR 25.03.02.05*

A. At the time of hiring, an employee shall be notified of the employee's right to request an exemption from receiving net pay by electronic funds transfer.

B. An employee may submit a written request to the State Treasurer for payment of the employee's biweekly net pay by check instead of by an electronic funds transfer. The request shall be granted by the State Treasurer.