1.    The child support agency shall establish a state disbursement unit for the collection and disbursement of payments of child support. The state disbursement unit is responsible for the collection and disbursement of all payments under child support orders.

2.    The child support agency may contract with any public or private entity for any service provided by the state disbursement unit. The state disbursement unit may employ technology and agents to allow receipt of child support payments at locations and times when state disbursement unit staff are not available.

3.    The state disbursement unit shall use automated procedures, electronic processes, and computer-driven technology, including the statewide automated data processing system established under section 50-09-02.1, to the maximum extent feasible, efficient, and economical, for the collection and distribution of child support payments.

4.    The state disbursement unit shall account for and disburse all support payments received by it, maintain necessary records, and develop procedures for providing information to the parties, including the obligor and obligee, regarding actions taken and, at least annually, regarding child support payments collected and distributed. The state disbursement unit shall adopt procedures for the maintenance and retention of records of child support payments and for the storage and destruction of records when the support obligation is satisfied or is terminated.

5.    The state disbursement unit shall deposit all child support payments received in the state treasury. All payments so deposited, except those payments assigned to the state, are appropriated to the child support agency as a standing and continuing appropriation for the purpose of making disbursements to obligees entitled to the child support payments collected.

6.    Notwithstanding section 28-20-36, the state disbursement unit shall disburse collected child support payments in conformity with title IV-D of the Social Security Act [Pub. L.

93-647; 88 Stat. 2351; 42 U.S.C. § 651 et seq.]. Any disbursement made in error is not a gift and must be repaid. The child support agency may take any action not inconsistent with law to secure repayment of any disbursement made in error. Interest accrued on an unpaid child support obligation is child support. To the extent consistent with the requirements of title IV-D, a payment received with respect to a child support arrearage must first be applied to accrued interest on the earliest arrearage, and then to the principal of that arrearage. The child support agency may calculate judgment interest accrued on child support obligations that first became arrearages after July 1, 2002. The child support agency shall enter in its records judgment interest on child support obligations that first became arrearages on or before July 1, 2002, for periods before January 1, 2004, only if a court has ordered the interest amount calculated by some individual or entity other than the child support agency and approved the calculated amount. For child support obligations that first became arrearages on or before July 1, 2002, the child support agency may calculate judgment interest accrued only for periods on or after January 1, 2004. For purposes of this subsection, arrearage means an unpaid child support obligation that was due in a month prior to the current month.

7.    Unless notice has otherwise been provided, the state disbursement unit shall provide notice to the obligor, the obligee, and any income payer that payment must be made to the state disbursement unit.

    8.    The child support agency may suspend or waive judgment interest on an arrearage as part of an amnesty program, as an incentive for satisfying a child support obligation or complying with a payment plan, or if the child support agency determines that the judgment interest is not collectible through commercially reasonable efforts. This subsection applies to judgment interest accruing before July 1, 2005, only if the arrearage is assigned to the child support agency under section 50-09-06.1 or 50-24.1-02.1 or if the obligee provides written consent. Any judgment interest that is suspended or waived under this subsection may be reinstated by the child support agency if the obligor has failed to comply with a payment plan.

9.    If an obligee is deceased, any past-due child support that is received must be disbursed in the following order:

a.    As specifically provided in a court order in the event of the obligee’s death; b.    To the obligee’s estate or as provided in the obligee’s will; c.    To the child or children on whose behalf the payments were made if the child or children are all eighteen years of age or older; d.    As directed by the court if one or more of the children to whom the child support is owed is under eighteen years old; or

e.    Refunded to the obligor if the court determines that the past-due child support cannot be disbursed under this section.

10.    Unless any party to a child support order objects within ten days of the date of a notice sent by first-class mail to the party’s last-known address, the child support agency may change the payee of a child support obligation for the current month or a future month upon request of a guardian or other person who has legal custody of the child or children for whom the child support is being paid.