1. (a) In this section the term "report" means the combination of all information and contributions required to be provided to and deposited with the system for each month of participation, in accordance with Subchapter E, Chapter 845, Government Code.
2. (b) The due date of a monthly report is the 15th day of the following month. A subdivision shall be assessed a penalty for each monthly report that is not received by the retirement system by the due date. The penalty for a past-due report consists of an administrative fee of $500 plus interest on the past-due amounts for each day past due computed at an annual rate of 12% .
3. (c) If a report is past due, the system shall mail an advice to the governing board and correspondent of the subdivision stating the due date of the report, that the report was not received by the due date, that the subdivision has incurred a penalty for late reporting in accordance with §845.407 of the Texas Government Code, and that the amount of the penalty will be computed and assessed on receipt of the report.
4. (d) After the system receives the past-due report, a notice shall be mailed to the governing board and correspondent of the subdivision stating that a penalty has been assessed for late reporting in accordance with §845.407, and indicating the date the report was received by the system, the number of days the report was past due, the amount of contributions on which interest was charged, the accumulated interest and the administrative fee. The notice shall inform the governing board and correspondent that if the penalty is not paid within three months from the date of the notice, the penalty shall be deducted from the subdivision's account in the Subdivision Accumulation Fund and credited to other funds of the system in accordance with §845.407.
5. (e) The amount of the penalty stated in the notice described by subsection (d) of this section becomes fixed and final on the tenth business day following the date of the notice and may not be modified thereafter for any reason.

Source Note:The provisions of this §107.6 adopted to be effective December 31, 1999, 24 TexReg 9302.