SECTION 1. Section 15-26-2 of the General Laws in Chapter 15-26 entitled "State Disbursement Unit for the Collection and Distribution of Child Support" is hereby amended to read as follows:

15-26-2. Operation. -- (a) The centralized state collection and disbursement unit shall be operated directly by the department of administration, division of taxation or its designee and in coordination with the automated system.

(b) The centralized state collection and disbursement unit shall use the automated procedures, electronic processes, including the electronic funds transfer (EFT) provisions as authorized by the tax administrator under section 44-1-31 of the Rhode Island general laws, and computer driven technology to the maximum extent feasible, efficient and economical, for the collection and disbursement of support payments including procedures for receipt from parents, employers, and other states, and for disbursement to custodial parents and other obligees, the state agency, and the agencies of other states; for accurate identification of payments; to ensure prompt disbursement of the custodial parent's share of any payment and to furnish to any parent, upon request, timely information on the current status of support payments.

SECTION 2. Section 44-1-31 of the General Laws in Chapter 44-1 entitled "State Tax Officials" is hereby amended to read as follows:

44-1-31. Taxes to be paid by electronic funds transfer. - Taxes and child support to be paid by electronic funds transfer. -- (a) The tax administrator is authorized to provide by rule for the payment of any tax, including employer taxes, by electronic funds transfer where the tax required to be paid in connection with the filing of any return, report or other document with the division of taxation exceeds ten thousand dollars ($10,000). Provided, however, in all instances where a taxpayer is required to pay employment taxes to the internal revenue service by electronic funds transfer, the taxpayer shall pay Rhode Island income tax withheld by electronic funds transfer.

(b) The tax administrator is authorized to provide by rule for the payment of child support and/or medical support received from any in-state, or interstate employers, making income withholdings, and from collections received from other state collection and disbursement units and foreign jurisdictions, by electronic funds transfer (EFT) when the child support and/or medical support is required to be paid in connection with a court or administrative order for support to the state's central collection and disbursement.

(b) (c) The tax administrator shall adopt rules and regulations necessary to implement this section including, but not limited to, rules and regulations:

(1) Coordinating the filing of tax returns with the payment of taxes by electronic funds transfer and the payment of child support;

(2) Specifying the form, frequency, and content of electronic funds transfer messages and electronic date information in order to insure the proper receipt and crediting of the tax or child support payment.

(c) (d) Payment of personal income taxes by individuals is not subject to the provisions of subsection (a), provided, that employers' withholding of taxes is subject to the provisions of subsection (a).

SECTION 3. This act shall take effect upon passage.