Sec. 845.407. PENALTY FOR LATE CONTRIBUTIONS. (a) Except as provided by Subsections (c), (d), and (e), a participating subdivision that fails to provide the information required by Section 845.403 or to pay all contributions required by this subchapter to be made and remitted to the retirement system not later than the 15th day of the month in which they become due shall pay a penalty under this section. The penalty for a past-due monthly remission is equal to interest on the past-due amounts for each day past due at a nominal interest rate of 12 percent, plus a $500 administrative fee. If the penalty is not paid within three months after the date notice of the penalty has been sent to the subdivision, the retirement system shall deduct the penalty from the subdivision's account in the subdivision accumulation fund. The interest portion of the penalty shall be deposited by the retirement system in the distributable income account of the income fund. The administrative fee portion of the penalty shall be deposited by the retirement system in the expense fund.

(b) Payments and required reports are considered to be made when received by the retirement system.

(c) A penalty will not be assessed under this section for a late payment or report made in a document sent to the correct address:

(1) by certified mail, return receipt requested, not later than the 10th day of the month in which the payment or report becomes due; or

(2) using a same-day or overnight delivery method, approved by the board of trustees, not later than the 14th day of the month in which the payment or report becomes due.

(d) If the retirement system does not receive a payment or report, a penalty will not be assessed under this section if the subdivision provides proof satisfactory to the system that the document containing the payment or report was sent in accordance with Subsection (c).

(e) The retirement system may extend the due date provided by this section if a subdivision applies for an extension before the due date and the director determines that good cause exists for the extension and that the need for the extension is not caused by neglect, indifference, or lack of diligence.

Added by Acts 1999, 76th Leg., ch. 427, Sec. 60, eff. Dec. 31, 1999. Amended by Acts 2001, 77th Leg., ch. 122, Sec. 52, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 621, Sec. 34, eff. Jan. 1, 2004.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 300 (H.B. 407), Sec. 35, eff. January 1, 2010.