CHAPTER 561

An Act to amend and reenact §§ 51-111.2, 51-111.8, 51-111.8:1 and
51-111.5 of the Code of Virginta, relating to federal social security
for State and local employees, definition of terms, contents of agree-
ments, extension of coverage to certain employees, and plans for
coverage of local employees.

{H 42]

Approved March 31, 1956

Be it enacted by the General Assembly of Virginia:
1. That §§ 51-111.2, 51-111.8, 51-111.3:1 and 51-111.5 of the Code of
Virginia be amended and reenacted as follows:

§ 51-111.2. For the purposes of this chapter:
, (a) The term “wages” means all remuneration for employment as
defined herein, including the cash value of all remuneration paid in any
medium other than cash, except that such terms shall not include that part
of such remuneration which, even if it were paid for “employment
within the meaning of the Federal Insurance Contribution Act, would not
constitute “wages” within the meaning of that act.

(b) The term “employment” means any service performed by an
employee in the employ of the State, or any political subdivision thereof,
for such employer, whether it be regular or temporary, part-time or full-
time, employment, except service which in the absence of an agreement
entered into under this chapter would constitute “employment” as defined
in Title II of the Social Security Act, or service performed in the employ
of a school, college or university if such service is performed by a student
who is enrolled and is regularly attending classes at such school, college,
or university, or service of an emergency nature or service which under
the Social Security Act may not be included in an agreement by the State
and the federal agency entered into under this chapter.

_(c) The term “employee” includes an officer of the State, or of one
of its political subdivisions.

(d) The term “teacher” means any person who is regularly employed
on a salary basis as a professional or clerical employee of a county, city
or other local public school board.

(e) The term “State employee” means any person who is employed
in the service of, and whose compensation is payable, in whole or in part,
by the Commonwealth or any department, institution or agency thereof,
and shall include trial justices, the Auditor of Public Accounts, the Direc-
tor of the Division of Statutory Research and Drafting, the Clerk of the
House of Delegates, and the Clerk of the Senate, but not (1) any officer
elected by popular vote, and (2) a county or city treasurer, commissioner
of the revenue, Commonwealth's attorney, clerk of court, sheriff, sergeant
or constable, and a deputy or employee of any such officer.

(f) The term “local employee” means any employee of a political
subdivision, and shall include a “special employee” which means a county
or city treasurer, commissioner of the revenue, Commonwealth’s attorney,
clerk of court, sheriff, sergeant or constable and a deputy or employee of
any such officer. .

(g) The term “State agency” means the Board of Trustees of the
Virginia Retirement System.

The term “federal agency’ means in each case such federal
officer, department, or agency as is charged on behalf of the federal gov-
ernment, by or under the applicable federal law, with the particular
federal functions referred to in the chapter in connection with such term.

(i) The term “political subdivision” includes an instrumentality of
the State, or one or more of its political subdivisions, or of the State and
one or more of its political subdivisions, but only if such instrumentality
is a juristic entity which is legally separate and distinct from the State
or a political subdivision and only if its employees are not by virtue of
their relation to such juristic entity employees of the State or a political
subdivision.

(j) The term “applicable federal law” refers to such provisions of
federal law, including federal regulations and requirements issued pur-
suant thereto as provide for extending the benefits of Title II of the Social
Security Act to employees of states and their political subdivisions.

(k) The term “Social Security Act” means the act of Congress ap-
proved August fourteenth, one thousand nine hundred thirty-five, Chapter
five hundred thirty-one, forty-nine Statutes six hundred twenty, officially
CH. 561] ACTS OF ASSEMBLY 921

cited as the “Social Security Act”, as such act has been and may from
time to time be amended. ‘

(1) The term “Federal Insurance Contributions Act” means Sub-
chapter A of Chapter 9 of the Internal Revenue Code of 1939 and Sub-
chapters A and B of Chapter 21 of the federal Internal Revenue Code of
1954, as such * codes have been and may from time to time be amended;
and the term “employee tax” means the tax imposed by § 1400 of such
Code of 1939 and § 3101 of such Code of 1954.

§ 51-111.8. (a) The State agency, with the approval of the Gover-
nor, is hereby authorized to enter on behalf of the State into an agreement
with the federal agency, consistent with the terms and provisions of this
chapter, for the purpose of extending the benefits of the Federal Old-Age
and Survivors Insurance System to employees of the State or any political
subdivision thereof, with respect to services specified in such agreement,
which constitute “employment” as defined in § 51-111.2. Such agreement
may contain such provisions relating to coverage, benefits, contributions,
effective date, modification and termination of the agreement, administra-
tion, and other appropriate provisions as the State agency and federal
agency shall agree upon, but except as may be otherwise required by or
under applicable federal law as to the services to be covered, such agree-
ment shall provide in effect that:

(1) Benefits will be provided for employees whose services are cov-
ered by the agreement, and their dependents and survivors, on the same
basis as though such services constituted employment within the meaning
of Title II of the Social Security Act.

(2) The State will pay to the federal agency, at such time or times
as may be prescribed by the applicable federal law or by regulation of the
federal agency, contributions with respect to wages, as defined in §
51-111.2, equal to the sum of the taxes which would be imposed by the
‘Rate of Tax” sections of the Federal Insurance Contribution Act if the
services covered by the agreement constituted employment within the
meaning of that act. .

(3) Such agreement shall be effective with respect to services per-
formed after a date specified therein but shall in no event cover any such
services performed prior to January one, nineteen hundred fifty-one.

(4) All services which constitute employment as defined in § 51-111.2
and are performed in the employ of the State by State employees shall
be covered by the agreement.

(5) All services which (i) constitute employment as defined in §
51-111.2, and (ii) are performed in the employ of a political subdivision,
and (iii) are covered by a plan which is in conformity with the terms of
the agreement and has been approved by the State agency under § 51-111.5,
shall be covered by the agreement; provided that services rendered in the
employ of a county, city or other school board shall be covered by the
agreement on the effective date specified therein not prior to January one,
nineteen hundred fifty-one; provided further that such services in the
employ of a political subdivision, except such services in the employ of a
county, city or other school board, shall not be covered if the governing
body of the political subdivision by recorded vote of a majority of the
members adopts by April one, nineteen hundred fifty-two, a resolution
notifying the State agency that it does not desire coverage for its em-
ployees; provided further that such resolution may be rescinded subse-
quently by a recorded vote of a majority of such governing body, where-
upon the provisions of this chapter shall apply to services performed in
the employ of the political subdivision.

(6) A political subdivision which is operating under a retirement
system which it finances may, as provided in (5) above, continue the same
or may apply for coverage of its employees under the agreement, * or both.

(b) Any instrumentality jointly created by this State and any other
state or states is hereby authorized, upon the granting of like authority
by such other state or states, (1) to enter into an agreement with the
federal * agency whereby the benefits of the Federal Old-Age and Sur-
vivors Insurance System shall be extended to employees of such instru-
mentality, (2) to require its employees to pay (and for that purpose to
deduct from their wages) contributions equal to the amounts which they
would be required to pay under § 51-111.4 (a) if they were covered by
an agreement made pursuant to subsection (a) of this section, and (8) to
make payments to the secretary of the treasury in accordance with such
agreement, including payments from its own funds, and otherwise to
comply with such agreements. Such agreement shall, to the extent prac-
ticable, be consistent with the terms and provisions of subsection (a) and
other provisions of this chapter.

‘((¢) Upon two years’ advance notice in writing to the * federalagency
the State may terminate, effective at the end of a calendar quarter speci-
fied in the notice, its agreement hereunder with the * federal agency either
(1) in its entirety, but only if the agreement has been in effect from its

.effective date for not less than five years prior to the receipt of such
notice; or (2) with respect to any coverage group as defined in the Social
Security Act, but only if the agreement has been in effect with respect to
such coverage group for not less than five years prior to the receipt of
such notice.

§ 61-111.8:1. Effective on the day that the Social Security Act is
amended so as to permit coverage of State employees who were in posi-
tions covered by a retirement system on the date that the agreement with
the federal agency was made applicable, the State agency, with the
approval of the Governor, is authorized to enter, on behalf of the State,
into a modification of the original agreement with the federal agency for
the purpose of extending the benefits of the Federal Old-Age and Sur-
vivors Insurance System to members of the State Police Officers Retire-
ment System and to * members of the Virginia Supplemental Retirement
System and other State employees as were excluded from such coverage
under the original agreement. Such coverage may be made retroactive to
the earliest effective date permitted by such amendment to the Social
Security Act, but in no event shall it cover any services performed prior
to January one, nineteen hundred fifty-one. .

§ 51-111.5. (a) Each political subdivision of the State, except for
those * which do not desire coverage and notify the State agency in
accordance with § 51-111.3 (a) (5), shall submit for approval by the
State agency a plan for extending the benefits of Title II of the Social
Gecurity Act, in conformity with applicable federal law, to employees of
any such political subdivision. In the event any county, city or other
school board or any other political subdivision fails to submit such plan
to the State agency on or before April one, nineteen hundred fifty-two, the
State agency shall make and adopt a plan not inconsistent with the pro-
visions of this chapter applicable to such county, city or other school
board or other political subdivision. Each plan or any amendment thereof
submitted to the State agency shall be approved by the State agency if it
finds that such plan, or such plan as amended, is in conformity with such
requirements as are provided in regulations of the State agency, except
that no plan or amendment shall be approved or adopted unless:

(1) It is in conformity with the requirements of the applicable fed-
eral law and with the agreement entered into under § 51-111.8.
CH. 561] ACTS OF ASSEMBLY 923

(2) It provides that all services which constitute employment as
defined in § 51-111.2 and are performed in the employ of the political
subdivision by any employees thereof, shall be covered by the plan.

(3) It specifies the source or sources from which the funds necessary
to make the payments required by paragraph (1) of subsection (c) and
by subsection (d) are expected to be derived and contains reasonable
assurance that such sources will be adequate for such purpose.

(4) It provides for such methods of administration of the plan by

the political subdivision as are found by the State agency to be necessary
for the proper and efficient administration of the plan.
. (5) It provides that the political subdivision will make such reports,
in such form and containing such information, as the State agency may
from time to time require, and comply with such provisions as the State
agency or the federal agency may from time to time find necessary to
assure the correctness and verification of such reports.

(6) It authorizes the State agency to terminate the plan in its
entirety if it finds that there has been a failure to comply substantially
with any provisions contained in such plan, such termination to take
effect at the expiration of such notice and on such conditions as may be
provided by regulations of the State agency and be consistent with ap-
plicable federal law.

*s

(b) The State agency shall not finally refuse to approve a plan sub-
mitted under subsection (a), and shall not terminate an approved plan,
without reasonable notice and opportunity for hearing to each political
subdivision affected thereby.

(c) (1) Each political subdivision as to which a plan has been
approved under this section shall pay into the contribution fund, with
respect to wages, as defined in § 51-111.2, at such time or times as the
State agency may by regulation prescribe, contributions in the amounts
and at the rates specified in the applicable agreement entered into by the
State agency under § 51-111.8.

(2) Every political subdivision required to make payments under
paragraph (1) of this subsection is authorized, in consideration of the
employee’s retention in, or entry upon, employment after enactment of
this chapter, to impose upon its employees, as to services which are cov-
ered by an approved plan, a contribution with respect to wages, as defined
in § 51-111.2, not exceeding the amount of tax which would be imposed
by the “Rate of Tax’ section of * subchapter A of the Federal Insurance
Contribution Act if such services constituted employment within the
meaning of that act, and to deduct the amount of such contribution from
the wages as and when paid. Contributions so collected shall be paid into
the contribution fund in partial discharge of the liability of such political
subdivision under paragraph (1) of this subsection. Failure to deduct
such contribution shall not relieve the employee or employer of liability
therefor.

(d) Delinquent payments due under paragraph (1) of subsection (c)
nay, with interest at the rate of six per centum per annum, be recovered
yy action in a court of competent jurisdiction against the political sub-
livision liable therefor or may, at the request of the State agency and
ifter notice to the delinquent, be deducted from any nonearmarked
noneys distributable to such subdivision by any department or agency of
he State.