1. (a) In accordance with Government Code, §2257.106, the comptroller shall impose an annual assessment each state fiscal year on each participating depository institution in an amount sufficient to pay the costs of administering the pooled collateral program. The comptroller will publish instructions on the required assessment procedure, formula, deadlines, and requirements on its website. The comptroller may, in its discretion and when appropriate, allocate program costs over a period of years.

2. (b) The formula for determining the amount of the assessment will be based on the following factors:

   1. (1) the number of collateral transactions a participating depository institution conducts;
   2. (2) the number of public entity accounts a participating depository institution maintains in the program; and,
   3. (3) the depository institution's average weekly deposits of public funds collateralized during that state fiscal year.

3. (c) The annual assessment formula is the sum of the: depository institution's collateral transaction fee, public entity account maintenance fee, and depository institution's average weekly deposits fee based on its share of the total average weekly deposits of public funds collateralized in the program. The cost to administer the program each state fiscal year will be the sum of these three fees for all participating depository institutions. The annual assessment formula includes the following:

   1. (1) a collateral transaction fee of $5.00 per collateral pledge or withdrawal transaction;
   2. (2) a public entity account maintenance fee of $50.00 per public entity per month, or any part of a month, for the months of participation during the state fiscal year; and

   3. (3) an average weekly deposits fee based on each depository institution's percentage of the total average weekly deposits of public funds collateralized in the program. The average weekly deposits fee is determined as follows:

      1. (A) calculate each depository institution's average weekly deposit of public funds collateralized in the program;
      2. (B) exclude those depository institutions with less than a $1 million in average weekly deposits, as they will not be subject to this fee;
      3. (C) calculate the percentage share for each depository institution (with average weekly collateralized deposits of at least $1 million or more) of the total average weekly deposits of public funds (for all depository institutions with average weekly deposits of at least $1 million or more);
      4. (D) determine the remaining annual program costs by subtracting all collateral transaction fees and public entity account maintenance fees from the total annual program costs; and
      5. (E) apply each depository institution's percentage share obtained in subparagraph (C) of this paragraph to the remaining annual program costs in subparagraph (D) of this paragraph to obtain each depository institution's fee based on its percentage share of the average weekly deposits of public funds collateralized in the program.
4. (d) The comptroller shall calculate the annual assessment based on the formula in subsection (c) of this section and send a notification to each participating depository institution after the close of the state fiscal year.
5. (e) The participating depository institution will remit payment to the comptroller by Automated Clearing House (ACH) credit according to the instructions provided by the comptroller within 45 calendar days after the date it receives the notice.
6. (f) The comptroller may impose an administrative penalty against a participating depository institution if it does not timely pay the assessment.

Source Note:The provisions of this §4.120 adopted to be effective October 19, 2010, 35 TexReg 9345.