TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 3. TAX ADMINISTRATION

SUBCHAPTER O. STATE AND LOCAL SALES AND USE TAXES

The Comptroller of Public Accounts adopts amendments to §3.344, concerning telecommunications services, with changes to the proposed text as published in the June 27, 2025, issue of the Texas Register (50 TexReg 3724). The rule will be republished.

The comptroller received comments regarding adoption of the amendment from Helen Brantley of Texas Taxpayers and Research Association (TTARA) who requested the comptroller define "designated database provider" as referenced in Tax Code, §151.061 (Sourcing of Charges for Mobile Telecommunications Services). The comptroller agrees. In addition, Helen Brantley of TTARA requested the comptroller provide additional guidance and examples of what are reasonable controls as required under Tax Code, §151.061(j). The comptroller declines to provide additional guidance and examples in the rule because the current guidance is sufficient.

The comptroller amends subsection (a)(2) to define the term "designated database provider" in response to the comments received. The definition refers to 4 U.S.C. §124(3) (Definitions) under the federal Mobile Telecommunications Sourcing Act as provided in Tax Code, §151.061(c). The comptroller renumbers subsequent paragraphs accordingly.

The comptroller amends subsection (a)(4), previously paragraph (3), by removing the reference to §3.366 of this title (relating to Internet Access Services) which the comptroller is repealing. The repeal is based on Senate Bill 1405, 89th Legislature, 2025, effective July 1, 2025, which removed internet access service as a taxable service under Tax Code, §151.0101(a)(17) (Taxable Services).

The comptroller amends subsection (h)(4) related to how service providers determine local tax for mobile telecommunication services by adding language to conform to Tax Code, §151.061. The comptroller further amends subsection (h)(4) to memorialize policy outlined in STAR Accession No. 202410001M (October 2, 2024).

These amendments are adopted under Tax Code, §§111.002 (Comptroller's Rules; Compliance; Forfeiture), 321.306 (Comptroller's Rules), 322.203 (Comptroller's Rules), and 323.306 (Comptroller's Rules) which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of Tax Code, Title 2 (State Taxation), as well as taxes, fees, and other charges that the comptroller administers under other law.

The adoption implements Tax Code, §151.061 (Sourcing of Charges for Mobile Telecommunication Services).

§3.344. Telecommunications Services.

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Basic local exchange telephone service--The provision by a telephone company of each access line and each dial tone to a fixed location for sending and receiving telecommunications in the telephone company's local exchange network. Services are considered basic irrespective of whether the customer has access to a private or party line, or whether the customer has limited or unlimited access. The term does not include international, interstate, or intrastate long-distance telecommunications services or mobile telecommunications services.

(2) Designated database provider--An entity defined under 4 U.S.C. §124(3) (Definitions).

(3) Internet--Collectively the myriad of computer and telecommunications facilities, including equipment and operating software, that comprise the interconnected worldwide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to the protocol, to communicate information of all kinds by wire or radio.

(4) Internet access service--A service that enables users to access content, information, electronic mail, or other services offered over the Internet and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. The term does not include telecommunications services.

(5) Interstate long-distance telecommunication service--A telecommunication service that originates in one state, crosses state lines, and terminates in another state.

(6) Intrastate long-distance telecommunications service--A telecommunication service that originates and terminates within one state, but crosses the boundaries on subdivisions or jurisdictions within the state.

(7) Mobile telecommunications service--The provision of a commercial mobile radio service, as defined in 47 C.F.R. 20.3 of the Federal Communications Commission's (FCC) regulations in effect on June 1, 1999 under the Mobile Telecommunications Sourcing Act (4 U.S.C. §§116-126). The term includes cellular telecommunications services, personal communications services (PCS), specialized mobile radio services, wireless voice over Internet protocol services, and paging services. The term does not include telephone prepaid calling cards or air-ground radio telephone services as defined in 47 C.F.R. 22.99 of FCC regulations in effect on June 1, 1999.

(8) Pay telephone coin sent--Telecommunications service paid for by the insertion of coins into a coin-operated telephone.

(9) Place of primary use--The physical street address that is representative of where a customer primarily uses a mobile telecommunications service. That location must be either the customer's residential street address or the customer's primary business street address that is within the licensed service area of the service provider. The individual or entity that contracts with the service provider is the customer. If the individual or entity that contracts with the service provider is not the end user, then the physical street address where the end user primarily uses the service determines the customer's place of primary use. For example, a business owner who is located in Austin, Texas establishes mobile telecommunication service accounts for employees who are located in other cities. One employee does business from his home in Dallas, Texas. Two other employees work at an office that is located in Houston, Texas. Another employee works at an office that is located in New Orleans, Louisiana. The home street address of the employee in Dallas is the place of primary use for that cellular phone account. The place of primary use for the two Houston employees is the street address of the Houston office. The place of primary use for the employee in Louisiana is the street address of the New Orleans office.

(10) Prepaid telecommunications service--A wireless or wire telecommunications service for which the provider requires a customer to prepay the full amount prior to provision of the service. The term does not include the sale or use of a telephone prepaid calling card as defined in paragraph (15) of this subsection. A card, pin number, access code or similar device that allows a user to access only a specific network, or that is intended for use with a specific user account or device (e.g., to add more minutes to an existing account) is a prepaid telecommunications service and is taxed as the sale of a telecommunications service. Local sales tax is collected as explained in subsection (h) of this section.

(11) Private communication service--A telecommunication service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of such channel or channels.

(A) As it relates to private communication service, the term "communications channel" means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points.

(B) As it relates to private communication service, the term "customer channel termination point" means the location where the customer either inputs or receives the communications.

(12) Seller--Any person who sells telecommunications services including a hotel, motel, owner or lessor of an office, residential building or development that contracts and pays for telecommunications services for resale to guests or tenants.

(13) Taxable service--A telecommunications service or other taxable service listed in Tax Code, §151.0101.

(14) Telecommunications services--The electronic or electrical transmission, conveyance, routing, or reception of sounds, signals, data, or information utilizing wires, cable, radio waves, microwaves, satellites, fiber optics, Voice over Internet Protocol (VoIP), or any other method now in existence or that may be devised, including but not limited to long-distance telephone service. The term includes mobile telecommunications services and prepaid telecommunications services. The term does not include:

(A) the storage of data or other information for subsequent retrieval or the processing, or reception and processing, of data or information intended to change its form or content;

(B) the sale or use of a telephone prepaid calling card;

(C) Internet access service; or

(D) pay telephone coin sent.

(15) Telephone company--A person who owns or operates a telephone line or telephone in this state and charges for its use.

(16) Telephone prepaid calling card--A card or other item, including an access code, that represents the right to access telecommunications services, other than prepaid telecommunications services as defined in paragraph (9) of this subsection, through multiple devices, regardless of the network providing direct service to the device used, for which payment is made in incremental amounts and before the call or transmission is initiated. For example, a calling card that allows a user to access a long distance telecommunications network for the purpose of making international calls through a pay phone is a telephone prepaid calling card. The sale of a telephone prepaid calling card is taxed as the sale of tangible personal property.

(17) Voice over Internet Protocol (VoIP)--A telecommunication service where a phone call is transmitted over a data network. The term "Internet Protocol" is a catchall phrase for the protocols and technologies of encoding a voice call that allow the voice call to be slotted in between data on a data network, including the Internet, a company's Intranet, or any other type of data network.

(b) Taxable telecommunications services. The total amount charged for a taxable telecommunications service is subject to sales tax. Sales tax is due on a charge for the following:

(1) basic local exchange telephone services;

(2) enhanced services such as metro service, extended area service, multiline hunting, and PBX trunk;

(3) auxiliary services such as call waiting and call forwarding;

(4) intrastate long-distance telecommunications services;

(5) interstate long-distance telecommunications services that are both originated from, and billed to, a telephone number or billing or service address within Texas such that if a call originates in Texas and is billed to a Texas service address, the charge is taxable even if the invoice, statement, or other demand for payment is sent to an address in another state;

(6) mobile telecommunications services for which the place of primary use is located in Texas;

(7) telegraph services that are both originated from, and billed to, a person within Texas;

(8) a telecommunications service paid for by the insertion of tokens, credit or debit card into a coin-operated telephone located in Texas;

(9) subject to subsection (e) of this section, the lease, rental, or other charges for telecommunication equipment including separately stated installation charges. Separately stated charges for labor to install wiring will not be taxable if the wiring is installed in new structures or residences in such manner as to become a part of the realty. Separately stated charges for labor to install wiring in existing nonresidential real property are taxable. See §3.291 and §3.357 of this title (relating to Contractors; Nonresidential Real Property Repair, Remodeling, and Restoration; Real Property Maintenance) for additional information. If charges for the installation of wiring and charges for the equipment are not separated, the total charge will be treated as a sale and installation of tangible personal property. Equipment sold by a telecommunications service provider is subject to sales or use tax and is not taxed as part of the telecommunications service if the service provider separately invoices the sale of the equipment. The sale of equipment is not separately invoiced if it is identified on the same bill, receipt or invoice as the sale of the telecommunications service, even if it is identified as a separate line item on the same bill, receipt, or invoice;

(10) installation of telecommunications services, including service connection fees;

(11) private communication services. Taxable receipts include the channel termination charge imposed at each channel termination point within this state, the total channel mileage charges imposed between channel termination points or relay points within this state, and an apportionment of the interoffice channel mileage charge that crosses the state border. An apportionment on the basis of the ratio of the miles between the last channel termination point in Texas and the state border to the total miles between that channel termination point and the next channel termination point in the route will be accepted. If there is a single charge for a private communication service in which the customer has channel termination points both inside and outside of Texas, the apportionment can also be determined by dividing the number of customer channel termination points in Texas by the total number of customer channel termination points to establish the percentage of the charge subject to state sales tax for Texas. Other apportionment methods may be used by the seller if first approved in writing by the comptroller;

(12) charges that are passed through to a purchaser for federal, state, or local taxes or fees that are imposed on the seller of the telecommunications service rather than on the purchaser. Such charges are a cost or expense of the seller and are included in the total price subject to sales tax; and

(13) prepaid wireless telecommunications services as defined by subsection (a)(9) of this section when the purchase is made in person at a Texas business or is made by telephone or the Internet and the purchaser's primary business address or residential address is in Texas.

(c) Nontaxable or exempt charges. Sales tax is not due on charges for:

(1) interstate long-distance telecommunications services that are not both originated from, and billed to, a telephone number or billing or service address within Texas. Records must clearly distinguish between taxable and exempt long-distance services;

(2) broadcasts by commercial radio or television stations licensed or regulated by the FCC. See §3.313 of this title (relating to Cable Television Service and Bundle Cable Service) for the tax status of cable television services;

(3) telecommunications services purchased for resale;

(4) telegraph services that are not both originated from and billed to a person within Texas;

(5) mobile telecommunications services for which the place of primary use is located outside of Texas;

(6) charges for federal, state, or local taxes or fees that are imposed on the purchaser rather than on the seller of the telecommunications service. For example, no sales tax is due on a separately stated charge for federal excise tax or for 9-1-1 Emergency Service Fee and 9-1-1 Equalization Surcharge because these taxes or fees are imposed on the purchaser and are not a cost of doing business of the seller; and

(7) telecommunications services exclusively provided or used for the navigation of machinery and equipment exclusively used or employed on a farm or ranch in the building or maintaining of roads or water facilities or in the production of:

(A) food for human consumption;

(B) grass;

(C) feed for animal life; or

(D) other agricultural products to be sold in the regular course of business.

(E) The purchaser must be an agricultural registrant and provide the seller with an agricultural exemption certificate.

(F) This paragraph is effective September 1, 2015, and applies to telecommunication services provided after this date.

(d) Billing and records requirements. If any nontaxable charges are combined with and not separately stated from taxable telecommunications service charges on the purchaser's bill or invoice from a provider of telecommunications services, the combined charge is subject to tax unless the service provider can identify the portion of the charges that are nontaxable through the provider's books and records kept in the regular course of business. If the nontaxable charges cannot reasonably be identified, the charges from the sale of both nontaxable services and taxable telecommunications services are attributable to taxable telecommunications services. The provider of telecommunications services has the burden of proving nontaxable charges.

(e) Resale of tangible personal property. See §3.285 of this title (relating to Resale Certificate; Sales for Resale).

(1) Transfer of tangible personal property to the care, custody and control of the purchaser. A telecommunications service provider may claim a resale exemption on the purchase of tangible personal property that is transferred by the telecommunications service provider to the care, custody, and control of the purchaser. A telecommunications service provider must collect sales tax on charges for such items.

(2) Wireless voice communication devices. A person may claim a resale exemption on the purchase of a cell phone or other wireless voice communication device as an integral part of a taxable service, regardless of whether there is a separate charge for the wireless voice communication device or whether the purchaser is the provider of the taxable telecommunications service, if payment for the service is a condition for receiving the wireless voice communication device. For example, if a person signs a contract for the purchase of telecommunications services at the location of a retailer and the retailer sells the person a cell phone as a condition of entering the contract for the telecommunications services that will be provided by someone other than the retailer, the retailer can purchase the cell phone tax free with a properly completed resale certificate.

(f) Resale of a telecommunications service. See §3.285 of this title.

(1) Sales tax is not due on the charge by one telephone company to another for providing access to a local exchange network. The telecommunications service provider must collect sales tax from the final purchaser on the total charge for the taxable service including the charge for access.

(2) A telecommunications service may be purchased tax free for resale if resold by the purchaser as an integral part of a taxable service. The purchaser must give the service provider a properly completed resale certificate to purchase the telecommunications service tax free for resale. A telecommunications service is an integral part of a taxable service if the telecommunications service is essential to the performance of the taxable service and without which the taxable service could not be rendered. For example, an Internet access service provider (ISP) may give a resale certificate when purchasing the dedicated dial-up line services to be used by the ISP's customers. However, the ISP must pay sales tax when purchasing its own personal or business use of telecommunications services such as charges for its office phone lines, mobile telecommunications services for its traveling salespersons, or for a customer service call-center.

(3) A mobile telecommunications service provider may purchase roaming services from another mobile telecommunications service provider tax free for resale to its customers that are using the roaming services. For example, an out-of-state mobile telecommunications service provider purchases roaming services in Texas for resale to its out-of-state customers (i.e., persons who have a place of primary use outside Texas). To be exempt from sales tax, the out-of-state mobile telecommunications service provider must give the seller of the roaming services a resale certificate showing either a Texas sales tax permit number or the sales tax permit number or registration number issued by its home state. Effective for billing periods that begin on or after August 1, 2002, these out-of-state customers do not owe Texas sales tax on roaming charges incurred while visiting or traveling through Texas.

(g) Taxable purchases. Subject to the provisions of subsections (e) and (f) of this section, a telecommunications service provider owes sales or use tax on all tangible personal property and services that are used to provide the service. See §3.346 of this title (relating to Use Tax), §3.281 of this title (relating to Records Required; Information Required), and §3.282 of this title (relating to Auditing Taxpayer Records).

(h) Local tax.

(1) Subject to the provisions of paragraph (2) of this subsection, jurisdictions that impose local sales and use taxes may repeal the local sales tax exemption on telecommunications services. See Publication 96-339 (Jurisdictions That Impose Local Sales Tax on Telecommunications Services) for a list of jurisdictions that impose local taxes on telecommunications services.

(2) Taxable interstate long-distance telecommunications are only subject to state sales tax. Local taxing jurisdictions may not repeal the local sales tax exemption on interstate long-distance telecommunications services.

(3) A seller of taxable telecommunications services, with the exception of mobile telecommunications services as explained in paragraph (4) of this subsection and prepaid wireless telecommunications services as explained in paragraph (6) of this subsection, must collect local sales taxes based on the location from which the telecommunications service originates. If the point of origin cannot be determined, the telecommunications service provider must collect local taxes based on the address to which the telecommunications service is billed.

(4) A seller of mobile telecommunications services must collect local sales taxes based on the place of primary use as defined in subsection (a)(8) of this section and per Tax Code, §151.061. The location from which a mobile telecommunications service originates does not determine whether the service is exempt or is subject to state or local sales tax.

(A) Local sales and use tax may be determined by using an electronic database as described in Tax Code, §151.061(a)(3). If neither the state nor a designated database provider provides an electronic database as described in Tax Code, §151.061(a)(3), then the seller of a mobile telecommunications service shall be held harmless from any tax, charge, or fee liability that is due only as a result of an assignment of a street address to an incorrect taxing jurisdiction.

(B) To be held harmless, the seller of a mobile telecommunications service must have exercised due diligence which includes demonstrating it has:

(i) expended reasonable resources to implement and maintain an appropriately detailed electronic database of street address assignments to taxing jurisdictions;

(ii) implemented and maintained reasonable internal controls to promptly correct misassignments of street addresses to taxing jurisdictions; and

(iii) used all reasonable obtainable and usable data pertaining to municipal annexations, incorporations, reorganizations, and any other changes in jurisdictional boundaries, including the comptroller's online Sales Tax Rate Locator and Publication 96-339, Jurisdictions that Impose Local Sales Tax on Telecommunications Services, or any subsequent or revised versions of the Locator or Publication.

(5) A seller of telephone prepaid calling cards is not selling a telecommunications service and must collect state and local sales or use tax on the sale of the cards in the same manner as sales of other tangible personal property.

(6) A seller of prepaid wireless telecommunications services as defined in subsection (a)(9) of this section must collect local tax based on the business address of the seller when the sale occurs in Texas in person. However, if the sale occurs over the telephone or Internet, tax is due if the primary business address of the purchaser or residential address of the purchaser is in Texas.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 16, 2025.

TRD-202504655

Jenny Burleson

Director, Tax Policy

Comptroller of Public Accounts

Effective date: January 5, 2026

Proposal publication date: June 27, 2025

For further information, please call: (512) 475-2220

SUBCHAPTER V. FRANCHISE TAX

The Comptroller of Public Accounts adopts an amendment to §3.586, concerning margin: nexus, without changes to the proposed text as published in the November 14, 2025, issue of the Texas Register (50 TexReg 7408). The rule will not be republished. The amendment provides guidance on determining economic nexus for certain entities.

The comptroller adds paragraph (3) to the economic nexus provision in subsection (f) to provide that a foreign taxable entity that apportions its margin using a method other than gross receipts must use gross receipts as sourced to Texas under §3.591(e) and (f) of this title (relating to Margin: Apportionment) to determine economic nexus.

The comptroller did not receive any comments regarding adoption of the amendment.

This amendment is adopted under Tax Code, §111.002 (Comptroller's Rules; Compliance; Forfeiture), which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of Tax Code, Title 2.

The amendment implements Tax Code, §171.001 (Tax Imposed).

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 18, 2025.

TRD-202504726

Jenny Burleson

Director, Tax Policy

Comptroller of Public Accounts

Effective date: January 7, 2026

Proposal publication date: November 14, 2025

For further information, please call: (512) 475-2220

PART 5. TEXAS COUNTY AND DISTRICT RETIREMENT SYSTEM

CHAPTER 101. PRACTICE AND PROCEDURE REGARDING CLAIMS

The Board of Trustees ("Board") of the Texas County and District Retirement System ("TCDRS" or the "System") adopts the repeal of current 34 TAC Chapter 101 ("Chapter 101"), relating to general rules and procedure regarding claims before TCDRS, and adopts new Chapter 101, also relating to general rules and procedures regarding claims before TCDRS in conjunction with the administrative rule review conducted by TCDRS in compliance with Government Code §2001.039. The rules are adopted without changes to the proposed text as published in the August 29, 2025, issue of the Texas Register (50 TexReg 5636). The rules will not be republished.

BACKGROUND INFORMATION AND JUSTIFICATION

Repeal of Current Chapter 101

TCDRS adopts the repeal of current 34 TAC Chapter 101, which includes the following sections: 34 TAC §101.1, Definitions; 34 TAC §101.2. Scope and Application; 34 TAC §101.3. Filing of Documents; 34 TAC §101.4. Computation of Time; 34 TAC §101.5. Applications for Benefits or Asserting Other Claims; 34 TAC §101.6. Time for Filing of Retirement Applications and First Annuity Payments; 34 TAC §101.7. Supporting Documents To Be Submitted; 34 TAC §101.8. Service Retirement Benefits Approved by Director; 34 TAC §101.9. Disability Retirement Applications Referred to Medical Board; 34 TAC §101.10. Disability Retirement Benefits Approved by Director; 34 TAC §101.11. Summary Disposition of Other Approved Applications; 34 TAC §101.12. Contest of Application: Form and Content; 34 TAC §101.13. Notice of Prehearing Disposition; 34 TAC §101.14. Procedure for Obtaining Hearing of Claim Denied in Whole or in Part by Director as Contested Case; 34 TAC §101.15. Hearing of Conflicting and Contested Claims; 34 TAC §101.16. Conduct of Contested Case Hearings; 34 TAC §101.17. Proposals for Decision; 34 TAC §101.18. Filing of Exceptions, Briefs, and Replies; 34 TAC §101.19. Board Consideration and Action; 34 TAC §101.20. Final Decisions and Orders; 34 TAC §101.21. When Decisions Become Final; 34 TAC §101.22. Motions for Rehearing; 34 TAC §101.23. Rendering of Final Decision or Order; 34 TAC §101.24. The Record; 34 TAC §101.25. Proceedings for Review, Suspension, or Revocation of Disability Benefits; 34 TAC §101.26. Applicability to Pending Proceedings.

Adoption of New Chapter 101

TCDRS adopts rules §§101.1 - 101.14 (34 TAC §101.1. Definitions; 34 TAC §101.2. Scope and Application; 34 TAC §101.3. Filing of Documents; 34 TAC §101.4. Computation of Time; 34 TAC §101.5. Time for Filing of Retirement Applications and First Annuity Payments; 34 TAC §101.6. Supporting Documents To Be Submitted; 34 TAC §101.7. Service Retirement Benefits Approved by Director; 34 TAC §101.8. Disability Retirement Applications Referred to Medical Board; 34 TAC §101.9. Disability Retirement Benefits Approved by Director; 34 TAC §101.10. Summary Disposition by the Director; 34 TAC §101.11. Appeal of Administrative Decision 34 TAC §101.12. Board Consideration and Action; 34 TAC §101.13. Proceedings for Review, Suspension, or Revocation of Disability Benefits, and 34 TAC §101.14. Exclusive Purpose).

As a result of its rule review, TCDRS repeals current Chapter 101 and adopts new Chapter 101 to update definitions, which will be used consistently throughout all TCDRS administrative rules, and to update procedures for benefit claims and contests.

COMMENTS

TCDRS received no comments related to the repeal of Chapter 101, and received no comments related to the adoption of a new Chapter 101.

STATUTORY AUTHORITY

The repeal of existing Chapter 101 is adopted and implements the authority granted under the following provisions of the TCDRS Act: (i) Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration TCDRS; (ii) Government Code §844.403, which allows the Board to adopt rules necessary or desirable to implement Chapter 844, Subchapter D, which relates to disability retirement benefits; (iii) Government Code §845.116, which allows the Board to adopt rules and procedures relating to the electronic filings and transfers. In addition, the rule changes are adopted as a result of TCDRS' rule review, which was conducted pursuant to Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted repeal of Chapter 101 implements §§844.403, 845.116 and 845.102 of the Government Code. No other statute, code or article is affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504745

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

STATUTORY AUTHORITY

The adoption of new Chapter 101 implements the authority granted under the following provisions of the TCDRS Act: (i) Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of the System; (ii) Government Code §844.403, which allows the Board to adopt rules necessary or desirable to implement Chapter 844, Subchapter D, which relates to disability retirement benefits; (iii) Government Code §845.116, which allows the Board to adopt rules and procedures relating to the electronic filings and transfers. In addition, the rule changes are adopted as a result of TCDRS' rule review, which was conducted pursuant to Texas Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted new rules implement §§844.403, 845.116 and 845.102 of the Government Code. No other statute, code or article is affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504746

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

CHAPTER 103. CALCULATIONS OR TYPES OF BENEFITS

The Board of Trustees ("Board") of the Texas County and District Retirement System ("TCDRS" or the "System") adopts amendments to Chapter 103 concerning Calculations or Types of Benefits in conjunction with the administrative rule review conducted by TCDRS in compliance with the Government Code §2001.039. These amendments are adopted without changes to the proposed text as published in the August 29, 2025, issue of the Texas Register (50 TexReg 5641). The rules will not be republished.

BACKGROUND INFORMATION AND JUSTIFICATION

As a result of its rule review, TCDRS adopts amendments to §§103.1 - 103.11 (34 TAC §103.1. Actuarial Tables; 34 TAC §103.2. Additional Optional Retirement Annuities; 34 TAC §103.3. Beneficiary Designations and Payment Elections Requiring Spousal Consent; 34 TAC §103.4. Certification of Prior Service and Average Prior Service Compensation; 34 TAC §103.5. Required Distribution; 34 TAC §103.6. Recalculation of Retirement Annuities to Include Post Retirement Deposits; 34 TAC §103.7. Determination of Reestablished Credit; 34 TAC §103.8. Limit on Payments During the Limitation Year; 34 TAC §103.9. Partial Lump-Sum Distribution on Service Retirement; 34 TAC §103.10. Survivor Annuity; 34 TAC §103.11. Group Term Life Benefit Based on Extended Coverage). The amendments are mostly non-substantive and include changes to terminology consistent with changes being simultaneously adopted in §101.1 concerning definitions, and updates to reflect federal law and current processes.

COMMENTS

TCDRS received no comments related to the amendments to §§103.1 - 103.11.

STATUTORY AUTHORITY

The amendments are adopted and implement the authority granted under Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of the System. In addition, the rule changes are adopted because of TCDRS' rule review, which was conducted pursuant to Texas Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted rules implement §845.102 of the Government Code. No other statute, code, or articles are affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504747

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

CHAPTER 105. CREDITABLE SERVICE

The Board of Trustees ("Board") of the Texas County and District Retirement System ("TCDRS" or the "System") adopts amendments to Chapter 105 concerning Creditable Service in conjunction with the administrative rule review by TCDRS in compliance with the Government Code §2001.039. These amendments are adopted without changes to the proposed text as published in the August 29, 2025, issue of the Texas Register (50 TexReg 5648). The rules will not be republished.

BACKGROUND INFORMATION AND JUSTIFICATION

As a result of the review, TCDRS adopts amendments to §§105.1 - 105.9 (34 TAC §105.1. Person Employed by Multiple Employers; 34 TAC §105.2. Combining Credited Service with Multiple Employers; 34 TAC §105.3. Credited Service for Active Duty Qualified Military Service; 34 TAC §105.4. Credited Service Under the Uniformed Services Employment and Reemployment Rights Act; 34 TAC §105.5. Correction of Errors by Employers: Record Adjustments; 34 TAC §105.6. Calculation of Current Service Credit; 34 TAC §105.7. Service Credit for Certain Public Employment; 34 TAC §105.8. Employee Termination Date; 34 TAC 105.9. Notice By Employer of Certain Felony Convictions of Elected or Appointed Officers). 34 TAC §105.41. Credited Service and Survivor Benefits Under the Heroes Earning Assistance and Relief Tax Act of 2008. The amendments are non-substantive changes to clarify language and to update terminology consistent with changes simultaneously adopted to §101.1 concerning definitions.

COMMENTS

TCDRS received no comments related to the amendments to §§105.1 - 105.9.

STATUTORY AUTHORITY

The amendments are adopted and implement the authority granted under Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of the System. In addition, the rule changes are adopted because of TCDRS' rule review, which was conducted pursuant to Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted rules implement §845.102 of the Government Code. No other statute, code or article is affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504748

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

CHAPTER 107. MISCELLANEOUS RULES

The Board of Trustees ("Board") of the Texas County and District Retirement System ("TCDRS" or the "System") adopts the repeal of current 34 TAC Chapter 107 ("Chapter 107"), relating to miscellaneous rules, and adopts new Chapter 107, also relating to miscellaneous rules in conjunction with the administrative rule review conducted by TCDRS in compliance with the Government Code §2001.039. The rules are adopted without changes to the proposed text as published in the August 29, 2025, issue of the Texas Register (50 TexReg 5652). The rules will not be republished.

BACKGROUND INFORMATION AND JUSTIFICATION

Repeal of Current Chapter 107

TCDRS adopts the repeal of current 34 TAC Chapter 107, which includes the following sections: 34 TAC §107.1. Confidentiality of Board Records; 34 TAC §107.2. Payments by Members to Purchase Forfeited Benefits; 34 TAC §107.3. Direct Rollovers and Trustee-to-Trustee Transfers; 34 TAC §107.4. Bona Fide Termination of Employment; 34 TAC §107.5. Termination of Membership on Withdrawal; Cancellation of Valid Withdrawal Application; 34 TAC §107.6. Penalty for Late Reporting; Waiver of Penalty; 34 TAC §107.7. Extension of Due Date; 34 TAC §107.8. Electronic Transfer of Funds; 34 TAC §107.9. Electronic Filing of Documents; 34 TAC §107.10. Treatment of Ineligible Benefit Payments; 34 TAC §107.12. Payments Due or Suspended on Death of Annuitant; 34 TAC §107.13. Membership of Leased Employees; 34 TAC §107.14. Acceptance of Rollovers and Transfers; 34 TAC §107.15. Resumption of Enrollment; 34 TAC §107.16. Exclusive Purpose; 34 TAC §107.17. Annual Allocation of Net Investment Income or Loss; and 34 TAC §107.18. Special Prior Service Contribution Rates.

Adoption of New Chapter 107

TCDRS adopts rules §§107.1- 101.9 (34 TAC §107.1. Payments by Members to Purchase Forfeited Benefits; 34 TAC §107.2. Direct Rollovers from TCDRS and Trustee-to-Trustee Transfers; 34 TAC §107.3. Bona Fide Termination of Employment; 34 TAC §107.4. No Cancellation of Valid Withdrawal Application; 34 TAC §107.5. Electronic Transfer of Funds Relating to Employers; 34 TAC §107.6. Treatment of Ineligible Benefit Payments; 34 TAC §107.7. Payments Due or Suspended on Death of Person Entitled to Benefit; 34 TAC §107.8. Acceptance of Rollovers and Transfers; and 34 §107.9. Annual Allocation of Net Investment Income or Loss).

As a result of its rule review, TCDRS repeals current Chapter 107 and adopts new Chapter 107 to eliminate unnecessary rules, and update rules to reflect current procedures.

COMMENTS

TCDRS received no comments related to the repeal of Chapter 107, and received no comments related to the adoption of a new Chapter 107.

STATUTORY AUTHORITY

The repeal of existing Chapter 107 is adopted and implements the authority granted under the following provisions of the TCDRS Act: Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of TCDRS. In addition, the rule changes are adopted as a result of TCDRS' rule review, which was conducted pursuant to Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted repeal of Chapter 107 implements § 845.102 of the Government Code. No other statute, code or article is affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504749

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

STATUTORY AUTHORITY

The adoption of new Chapter 107 implements the authority granted under the following provisions of the TCDRS Act: Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of TCDRS. In addition, the rule changes are adopted as a result of TCDRS' rule review, which was conducted pursuant to Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted rules implement § 845.102 of the Government Code. No other statute, code or article is affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504750

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

CHAPTER 109. DOMESTIC RELATIONS ORDERS

The Board of Trustees ("Board") of the Texas County and District Retirement System ("TCDRS" or the "System") adopts the repeal of current 34 TAC Chapter 109 ("Chapter 109"), relating to domestic relations orders, and adopts new Chapter 109, also relating to domestic relations orders in conjunction with the administrative rule review conducted by TCDRS in compliance with the Government Code §2001.039. The rules are adopted without changes to the proposed text as published in the August 29, 2025, issue of the Texas Register (50 TexReg 5657). The rules will not be republished.

BACKGROUND INFORMATION AND JUSTIFICATION

Repeal of Current Chapter 109

TCDRS adopts the repeal of current 34 TAC Chapter 109, which includes the following sections: 34 TAC §109.1. Purpose; 34 TAC §109.2. Definitions; 34 TAC §109.3. Notice Regarding Receipt of Order; 34 TAC §109.4. Requirements for Qualified Domestic Relations Orders; 34 TAC §109.5. Contents of Domestic Relations Order; 34 TAC §109.7. Approval of Order; 34 TAC §109.9. Order Appearing Not To Qualify; 34 TAC §109.12. Payments to Alternate Payees; 34 TAC §109.13. Form of Qualified Domestic Relations Order; and 34 TAC §109.14. Provisions Incorporated by Reference.

Adoption of New Chapter 109

TCDRS adopts, rules §§109.1 - 109.9 (34 TAC §109.1. Definitions; 34 TAC §109.2. Notice Regarding Receipt of Order; 34 TAC §109.3. Requirements for Qualified Domestic Relations Orders; 34 TAC §109.4. Contents of Domestic Relations Orders; 34 TAC §109.5. Approval of Order; 34 TAC §109.6. Order Appearing Not To Qualify; 34 TAC §109.7. Payments to Alternate Payees; 34 TAC §109.8. Form of Qualified Domestic Relations Order; and 34 TAC §109.9. Provisions Incorporated by Reference).

As a result of its rule review, TCDRS repeals current Chapter 109 and adopts new Chapter 109 to update definitions consistent with the definitions in the new Chapter 101, eliminate unnecessary rules, and update rules to reflect current procedures.

COMMENTS

TCDRS received no comments related to the repeal of Chapter 109, and received no comments related to the adoption of a new Chapter 109.

STATUTORY AUTHORITY

The repeal of existing Chapter 109 is adopted and implements the authority granted under the following provisions of the TCDRS Act: (i) Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of TCDRS. In addition, the rule changes are adopted as a result of TCDRS' rule review, which was conducted pursuant to Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted repeal of Chapter 109 implements §845.102 of the Government Code. No other statute, code or article is affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504751

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

STATUTORY AUTHORITY

The adoption of new Chapter 109 implements the authority granted under the following provisions of the TCDRS Act: (i) Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of TCDRS. In addition, the rule changes are adopted as a result of TCDRS' rule review, which was conducted pursuant to Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted new rules implement §845.102 of the Government Code. No other statute, code or article is affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504752

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

CHAPTER 111. TERMINATION OF PARTICIPATION: SUBDIVISIONS

The Board of Trustees ("Board") of the Texas County and District Retirement System ("TCDRS" or the "System") adopts the repeal of current 34 TAC Chapter 111 ("Chapter 111"), relating to termination of participating subdivisions (employers), and adopts new Chapter 111, also relating to termination of participating subdivisions (employers) in conjunction with the administrative rule review conducted by TCDRS in compliance with the Government Code §2001.039. These amendments and repeals are adopted without changes to the proposed text as published in the August 29, 2025, issue of the Texas Register (50 TexReg 5648). The rules will not be republished.

BACKGROUND INFORMATION AND JUSTIFICATION

Repeal of Current Chapter 111

TCDRS adopts the repeal of current 34 TAC Chapter 111, which includes the following sections: 34 TAC §111.1. Purpose; 34 TAC §111.2. Definitions; 34 TAC §111.3. Notices Voluntary Termination; and 34 TAC §111.4. Notices Involuntary Termination.

Adoption of New Chapter 111

TCDRS adopts rules §111.1 and §111.2 (34 TAC §111.1. Notice of an Employer's Intent to Terminate Participation and 34 TAC §111.2. Notice by TCDRS to Members of Terminated Plans).

As a result of its rule review, TCDRS repeals current Chapter 111 and adopts new Chapter 111 to update definitions consistent with the definitions in the new Chapter 101, eliminate unnecessary rules, and update rules to reflect current procedures.

COMMENTS

TCDRS received no comments related to the repeal of Chapter 111, and received no comments related to the adoption of a new Chapter 111.

STATUTORY AUTHORITY

The repeal of existing Chapter 111 is adopted and implements the authority granted under the following provisions of the TCDRS Act: Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of TCDRS. In addition, the rule changes are adopted as a result of TCDRS' rule review, which was conducted pursuant to Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted repeal of Chapter implements §845.102 of the Government Code. No other statute, code or article is affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504753

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

STATUTORY AUTHORITY

The adoption of new Chapter 111 implements the authority granted under the following provisions of the TCDRS Act: Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of TCDRS. In addition, the rule changes are adopted as a result of TCDRS' rule review, which was conducted pursuant to Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted new rules implement §845.102 of the Government Code. No other statute, code or article is affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504754

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889

CHAPTER 113. TEXAS COUNTY AND DISTRICT RETIREMENT SYSTEM QUALIFIED REPLACEMENT BENEFIT ARRANGEMENT

The Board of Trustees ("Board") of the Texas County and District Retirement System ("TCDRS") adopts amendments to Chapter 113 concerning the Texas County and District Retirement System Qualified Replacement Benefit Arrangement. This proposal is part of the administrative rule review conducted by TCDRS in compliance with the Government Code §2001.039. The amendments are non-substantive and include changes to terminology consistent with changes simultaneously adopted to §101.1 concerning definitions. The amendments are adopted without changes to the proposed text as published in the August 29, 2025, issue of the Texas Register (50 TexReg 5663). The rules will not be republished.

BACKGROUND INFORMATION AND JUSTIFICATION

As a result of the review, TCDRS adopts amendments to §§113.1 - 113.6 (34 TAC §113.1. Purpose; 34 TAC §113.2. Definitions; 34 TAC §113.3. Eligibility and Payments; 34 TAC §113.4. Administration; 34 TAC §113.5. Amendment and Termination; 34 TAC §113.6. General Provisions).

COMMENTS

TCDRS received no comments related to the amendments to §§113.1 - 113.6.

STATUTORY AUTHORITY

The amendments are adopted and implement the authority granted under (i) Government Code §845.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of TCDRS, and (ii) Government Code §845.504, which allows the Board to adopt rules to administer the excess benefit program in a manner consistent with federal law. In addition, the rule changes are adopted because of TCDRS' rule review, which was conducted pursuant to Government Code §2001.039.

CROSS REFERENCE TO STATUTE

The adopted rules implement §§ 845.102 and 845.504 of the Government Code. No other statute, code or article are affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 19, 2025.

TRD-202504755

Ann McGeehan

General Counsel

Texas County and District Retirement System

Effective date: January 8, 2026

Proposal publication date: August 29, 2025

For further information, please call: (512) 328-8889