§ 575. Plans for coverage of employees of political subdivisions
(a) Each political subdivision of the State, acting through its legislative branch in
the case of a municipality, or through its governing body in the case of an instrumentality,
is authorized, and in the case of any political subdivision employing teachers is
required, to 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 provisions of
the Social Security Act, to employees of such political subdivision. Each plan and
any amendment to that plan shall be approved by the State agency if it finds that
the plan, or the plan as amended, is in conformity with the requirements as are provided
in rules of the State agency, except that no such plan shall be approved unless:
(1) it is in conformity with the requirements of the Social Security Act and with the
agreement entered into under section 573 of this title;
(2) it provides that all services that constitute employment as defined in section 572 of this title and are performed in the employ of the political subdivision by employees thereof,
shall be covered by the plan, except that it may exclude services performed by individuals
to whom Section 218(c)(3)(B) of the Social Security Act is applicable;
(3) it specifies the source or sources from which the funds necessary to make the payments
required by subdivision (c)(1) of this section and by subsection (d) of this section
are expected to be derived and contains reasonable assurance that such sources will
be adequate for such purposes;
(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 Secretary of Health and Human
Services may from time to time find necessary to ensure the correctness and verification
of such reports; and
(6) it authorizes the State agency to terminate the plan in its entirety, in the discretion
of the State agency, 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 rules of the
State agency and may be consistent with the provisions of the Social Security Act.
(b) The State agency shall not finally refuse to approve a plan submitted by a political
subdivision under subsection (a) of this section, and shall not terminate an approval
plan, without reasonable notice and opportunity for hearing to the political subdivision
affected thereby.
(c)(1) Each political subdivision as to which a plan has been approved under this section
is authorized to and shall pay into the Contribution Fund, with respect to wages,
at such time or times as the State agency may by rule prescribe, contributions in
the amounts and at the rates specified in the applicable agreement entered into by
the State agency under section 573 of this title.
(2) Each political subdivision required to make payments under subdivision (1) of this
subsection is authorized, in consideration of the employee’s retention in, or entry
upon, employment after April 26, 1951, to impose upon each of its employees, as to
services that are covered by an approved plan, a contribution with respect to his
or her wages as defined in section 572 of this title, not exceeding the amount of the employee tax that would be imposed by the federal
Insurance Contributions Act if such services constituted employment within the meaning
of that Act, and to deduct the amount of such contribution from his or her 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 or instrumentality
under subdivision (1) of this subsection. Failure to deduct such contribution shall
not relieve the employee or employer of liability therefor.
(d) Delinquent payments due under subdivision (c)(1) of this section may, with interest
at the rate of six percent per annum, be recovered by action in a court of competent
jurisdiction against the political subdivision liable therefor or may be deducted,
with interest, by, or at the request of, the State Treasurer from any other monies
payable to such subdivision by any department or agency of the State. (Amended 1981, No. 41, § 22; 2025, No. 18, § 12, eff. May 13, 2025.)