CHAPTER 2

An Act to provide for the coverage of officers and employees of the State,
and local governments, instrumentalities thereof, and other political
subdivisions under the old-age and survivors insurance provisions of
Title II of the federal Social Security Act; to provide for certain
repeals; and to repeal certain acts.

[S 4]

Approved January 31, 1952

Be it enacted by the General Assembly of Virginia:

1. § 1. Declaration of Policy.—It is hereby declared to be the policy
of the General Assembly, subject to the limitations of this act, that steps
be taken to provide Social Security protection to employees of the State
and local governments on the basis now permitted under applicable
federal law.

§ 2. Definitions.—For the purposes of this act:

(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 term shall not include that part
of such remuneration which, even if it were paid for “employment” within
the meaning of the Federal Insurance Contributions Act, would not con-
stitute “wages” within the meaning of that act.

(b) The term “employment” means any service performed by an em-
ployee 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 act would constitute “employment” as defined in Title II of
the Social Security Act, 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 act.

(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
Director 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, com-
missioner 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 sub-
division, 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.

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

(h) The term “federal agency” means in each case such federal
fficer, department, or agency as is charged on behalf of the federal
rovernment, by or under the applicable federal law, with the particular
ederal! functions referred to in this act in connection with such term.

(1) The term “political subdivision” includes an instrumentality of
he State, of one or more of its political subdivisions, or of the State and
ne or more of its political subdivisions, but only if such instrumentality
3; a juristic entity which is legally separate and distinct from the State
r a political subdivision and only if its employees are not by virtue of
1eir relation to such juristic entity employees of the State or a political
ibdivision.

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

(k) The term “Social Security Act’? means the act of Congress ap-
coved August fourteenth, one thousand nine hundred thirty-five, chapter
re hundred thirty-one, forty-nine Statutes six hundred twenty, officially
ted as the “Social Security Act’, as such act has been and may from time
time be amended.

(1) The term “Federal Insurance Contributions Act” means Sub-
apter A of Chap 9 of the Internal Revenue Code as such code has been
d may from time to time be amended.

s 3. Federal-State Agreement; Interstate Agreements.—(a) The
ate agency, with the approval of the Governor, is hereby authorized to
ter on behalf of the State into an agreement with the federal agency,
asistent with the terms and provisions of this act, for the purpose of
ending the benefits of the Federal Old-Age and Survivors Insurance Sys-
n to employees of the State or any political subdivision thereof, with
pect to services specified in such agreement, which constitute ‘‘em-
ployment” as defined in § 2 of this act. Such agreement may contain
such provisions relating to coverage, benefits, contributions, effective date,
modification and termination of the agreement, administration, 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 agreement 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 § 2
of this act, equal to the sum of the taxes which would be imposed by the
“Rate of Tax”’ sections of the Federal Insurance Contributions 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 § 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 § 2,
and (ii) are performed in the employ of a political subdivision, and (lii)
are covered by a plan which is in conformity with the terms of the agree-
ment and has been approved by the State agency under § 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 hun-
dred 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 employees; provided further
that such resolution may be rescinded subsequently by a recorded vote of
a majority of such governing body, whereupon the provisions of this act
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; such ap-
plication shall be made to the State agency accompanied by evidence of
the repeal of such local retirement system which repeal provides for
adequate safeguarding of vested rights acquired under such system.

(b) Interstate Instrumentalities. 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 Security Administrator whereby the bene-
fits of the Federal Old-Age and Survivors Insurance System shall be ex-
tended to employees of such instrumentality, (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 section 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 practicable, be consistent with the terms and pro-
visions of subsection (a) and other provisions of this act.

(c) Upon two years’ advance notice in writing to the Administrator
the State may terminate, effective at the end of a calendar quarter specified
in the notice, its agreement hereunder with the Administrator 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. :

§ 4. Contributions by State Employees.—(a) Every employee of
the State whose services are covered by an agreement entered into under
§ 3 shall be required to pay for the period of such coverage, into the
contribution fund established by § 7, contributions, with respect to wages,
as defined in § 2 of this act, equal to the amount of tax which would be im-
posed by the “Rate of Tax” section of Part I of the Federal Insurance
Contributions Act if such services constituted employment within the
meaning of that act. Such liability shall arise in consideration of the
employee’s retention in the service, or his entry upon such service, after
the enactment of this act.

(b) The contribution imposed by this section shall be collected by the
State by deducting the amount of the contribution from wages as and
when paid, but failure to make such deduction shall not relieve the em-
ployee from liability for such contribution.

(c) If more or less than the correct amount of the contribution im-
posed by this section is paid or deducted with respect to any remuneration,
proper adjustments, or refund if adjustment is impracticable, shall be
made, without interest, in such manner and at such times as the State
agency shall prescribe.

§ 5. Plans for Coverage of Employees of Political Subdivisions.—
(a) Each political subdivision of the State, except for those already having
a locally financed retirement system and those which do not desire coverage
and notify the State agency in accordance with § 3 (a) (5), shall submit
for approval by the State agency a plan for extending the benefits of
Title II of the Social Security 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 incon-
sistent with the provisions of this act applicable to such county, city or
other school board or other political subdivision. Each plan or any amend-
ment 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) Itis in conformity with the requirements of the applicable federal
law and with the agreement entered into under § 3.

(2) It provides that all services which constitute employment as
defined in § 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 assur-
ance 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 sueh 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 applicable federal
law.

(7) Any plan submitted by a political subdivision theretofore oper-
ating under a retirement system which it finances shall not be approved
unless the plan contains evidence of repeal of such retirement system with
adequate provision for safeguard of all vested rights which have arisen
under the system.

(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 ap-
proved under this section shall pay into the contribution fund, with respect
to wages, as defined in § 2 of this act, 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 § 3.

(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 act, to impose upon its employees, as to services which are covered
by an approved plan, a contribution with respect to wages, as defined in
§ 2 of this act, not exceeding the amount of tax which would be imposed
by the “Rate of Tax” section of Part I of the Federal Insurance Contribu-
tion 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 con-
tribution fund in partial discharge of the liability of such political sub-
division 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) may, with interest at the rate of six per centum per annum, be re-
covered by action in a court of competent jurisdiction against the political
subdivision liable therefor or may, at the request of the State agency and
after notice to the delinquent, be deducted from any non-earmarked
moneys distributable to such subdivision by any department or agency of
the State.

§ 6. Source of Contributions.—(a) In the case of State employees
the employer contributions by the State shall be wholly paid by the State
and shall begin as of January one, nineteen hundred fifty-one, or the be-
ginning date of current employment whichever is the latest. State em-
ployees who are covered as of such latest date shall pay the employee con-
tribution for coverage back to that date.

(b) In the case of local employees and teachers, contributions by the
employing political subdivision shall be paid as of the time the agreement
herein provided for specifies. Such agreement shall provide that the em-
ployee and teachers shall pay for back contributions; provided that the
2amployer may by recorded resolution pay the back contributions for its
2mployees and teachers or advance such sums as may be required to pro-
vide back contributions subject to repayment by the employees and teachers
concerned. In the case of teachers, the State shall reimburse the employing
political subdivision for the cost of the employer contribution.

(c) In the case of special employees the State shall reimburse the em-
ploying political subdivision for the cost of the employer contribution to
the extent the State participates in paying the salary of the employee who
is covered or to the extent it shares or would share in the excess receipts
from such office. The special employee shall pay the employee contribu-
tion for back coverage; provided that the employer may by recorded reso-
lution pay the back contributions for its employees and teachers or advance
such sums as may be required to provide back contributions subject to
repayment by the employees and teachers concerned.

§ 7. Contribution Fund.—(a) There is hereby established a special
fund to be known as the contribution fund. Such fund shall consist of
and there shall be deposited in such fund: (1) All contributions, inter-
est, and penalties collected hereunder. (2) All moneys appropriated
thereto. (3) All moneys paid to the State pursuant to any agreement
entered into under this act. (4) Any property or securities and earn-
ings thereof acquired through the use of moneys belonging to the fund.
(5) Interest earned upon any moneys in the fund. (6) All sums recovered
upon the bond of the custodian or otherwise for losses sustained by the
fund and all other moneys received for the fund from any other source.
All moneys in the fund shall be mingled and undivided. Subject to the
provisions of this act, the State agency is vested with full power, authority
and jurisdiction over the fund, including all moneys and property or
securities belonging thereto, and may perform any and all acts whether
or not specifically designated, which are necessary to the administration
thereof consistent with the provisions of this act.

(b) The contribution fund shall be established and held separate and
apart from any other funds or moneys of the State and shall be used and
administered exclusively for the purpose of this act. Withdrawals from
such fund shall only be made for (i) payment of amounts required to be
paid to the federal agency pursuant to an agreement entered into here-
under; and (ii) payment of refunds provided for herein.

(c) From the contribution fund the custodian of the fund shall pay
to the federal agency such amounts and at such time or times as may
be directed by the State agency in accordance with any agreement entered
into under § 3 and applicable federal law.

(d) The State Treasurer shall be ex officio treasurer and custodian
of the contribution fund and shall administer such fund in accordance
with the provisions of this act and the directions of the State agency and
shall pay all warrants drawn upon it in accordance with the provisions
of this section and with such regulations as the State agency may prescribe
pursuant thereto.

§ 8. Rules and Regulations.—The State agency shall make and pub-
lish such rules and regulations, not inconsistent with the provisions of
this act, as it finds necessary or appropriate to the efficient administra-
tion of the functions with which it is charged under this act.

§ 9. Separability.—If any provision of this act, or the application
thereof to any person or circumstance is held invalid, the remainder of
the act and the application of such provision to other persons or circum-
stances shall not be affected thereby.

2. Repeal.—All acts or parts of acts which are in conflict with the pro-
visions of this act are hereby repealed to the extent of such conflict.
3. An emergency exists and this act is in force on and after February
one, ninteen hundred fifty-two.