USE OF ELECTRONIC FUND TRANSFER SYSTEM FOR COLLECTION OF CERTAIN TAXES.

SEC. 523. USE OF ELECTRONIC FUND TRANSFER SYSTEM FOR COLLECTION OF CERTAIN TAXES. (a) General Rule.— Section 6302 of the Internal Revenue Code of 1986 (relating to mode or time of collection) is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection: “(h) Use of Electronic Fund Transfer System for Collection of Certain Taxes.— “(1) Establishment of system.— “(A) In general.— The Secretary shall prescribe such regulations as may be necessary for the development and 107 STAT. 2162implementation of an electronic fund transfer system which is required to be used for the collection of depository taxes. Such system shall be designed in such manner as may be necessary to ensure that such taxes are credited to the general account of the Treasury on the date on which such taxes would otherwise have been required to be deposited under the Federal tax deposit system. “(B) Exemptions.— The regulations prescribed under subparagraph (A) may contain such exemptions as the Secretary may deem appropriate. “(2) Phase-in requirements.— “(A) In general.— Except as provided in subparagraph (B), the regulations referred to in paragraph (1)— “(i) shall contain appropriate procedures to assure that an orderly conversion from the Federal tax deposit system to the electronic fund transfer system is accomplished, and “(ii) may provide for a phase-in of such electronic fund transfer system by classes of taxpayers based on the aggregate undeposited taxes of such taxpayers at the close of specified periods and any other factors the Secretary may deem appropriate. “(B) Phase-in requirements.— The phase-in of the electronic fund transfer system shall be designed in such manner as may be necessary to ensure that— “(i) during each fiscal year beginning after September 30, 1993, at least the applicable required percentage of the total depository taxes imposed by chapters 21, 22, and 24 shall be collected by means of electronic fund transfer, and “(ii) during each fiscal year beginning after September 30, 1993, at least the applicable required percentage of the total other depository taxes shall be collected by means of electronic fund transfer. “(C) Applicable required percentage.— “(i) In the case of the depository taxes imposed by chapters 21, 22, and 24, the applicable required percentage is— “(I) 3 percent for fiscal year 1994, “(II) 16.9 percent for fiscal year 1995, “(III) 20.1 percent for fiscal year 1996, “(IV) 58.3 percent for fiscal years 1997 and 1998, and “(V) 94 percent for fiscal year 1999 and all fiscal years thereafter. “(ii) In the case of other depository taxes, the applicable required percentage is— “(I) 3 percent for fiscal year 1994, “(II) 20 percent for fiscal year 1995, “(III) 30 percent for fiscal year 1996, “(IV) 60 percent for fiscal years 1997 and 1998, and “(V) 94 percent for fiscal year 1999 and all fiscal years thereafter. “(3) Definitions.— For purposes of this subsection— 107 STAT. 2163 “(A) Depository tax.— The term ‘depository tax’ means any tax if the Secretary is authorized to require deposits of such tax. “(B) Electronic fund transfer.— The term ‘electronic fund transfer’ means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution or other financial intermediary to debit or credit an account. “(4) Coordination with other electronic fund transfer requirements.— “(A) Coordination with certain excise taxes.— In determining whether the requirements of subparagraph (B) of paragraph (2) are met, taxes required to be paid by electronic fund transfer under sections 6061(e) and 5703(b) shall be disregarded. “(B) Additional requirement.— Under regulations, any tax required to be paid by electronic fund transfer under section 5061(e) or 5703(b) shall be paid in such a manner as to ensure that the requirements of the second sentence of paragraph (1)(A) of this subsection are satisfied.”. (b) Effective Date.— (1) In general.— The amendments made by this section shall take effect on the date the Agreement enters into force with respect to the United States. (2) Regulations.— Not later than 210 days after the date of enactment of this Act, the Secretary of the Treasury or his delegate shall prescribe temporary regulations under section 6302(h) of the Internal Revenue Code of 1986 (as added by this section).