Payments to and by state agencies by electronic funds transfers; rules; penalty for failure to comply

(1) Upon consultation with the State Treasurer’s office, a state agency by rule may: (a) Require that payments to the agency above designated amounts be made by electronic funds transfer. All electronic funds transfer entries through an automated clearinghouse shall follow standards adopted by the State Treasurer that shall be substantially similar to those adopted by the National Automated Clearing House Association. (b) Notwithstanding any provision of law requiring payment by check or other means, establish a program under which electronic funds transfer is the primary method for payments made by the agency. (2)(a) In addition to any other penalty provided by law, a state agency may assess a penalty not to exceed five percent of the amount of the payment for failure to comply with the agency’s rules requiring payments to the agency by electronic funds transfer. (b) An agency that adopts rules under subsection (1)(b) of this section may not assess a penalty for failure to comply with the rules against any payee that is unable to receive payment by electronic funds transfer. Nothing in this paragraph authorizes a state agency to assess a penalty for failure to comply with rules adopted under subsection (1)(b) of this section. (c) An agency that adopts rules under subsection (1)(b) of this section may not require a payee to open a bank account as a condition of receipt of payment. (3) Notwithstanding subsection (1) of this section, the Department of Revenue may not require electronic funds transfer as the primary method for payment of: (a) Estimated tax, as defined in ORS 316.557; (b) Tax due to the department as shown on an individual income tax return filed under ORS chapter 316; or (c) Refunds of overpayments issued by the department under ORS 314.415. (4) As used in this section: (a) “Electronic funds transfer” is the movement of funds by nonpaper means, usually through a payment system including, but not limited to, an automated clearinghouse or the Federal Reserve’s Fedwire system. (b) “State agency” means an agency as defined by ORS 183.310 (1).