A. Any political subdivision of the Commonwealth which desires coverage for its employees, shall submit a plan of agreement for extending the benefits of the Social Security Act to its employees to the state social security administrator for approval. The state social security administrator shall approve plans of agreement or amendments to plans of agreement that conform to the state social security administrator's rules and policies, except that no plan of agreement or amendment shall be approved or adopted unless it:

1. Conforms with the requirements of the applicable federal law and with the agreement entered into under § 51.1-702.

2. Provides that all services which constitute employment and are performed in the employ of the political subdivision by any employees thereof shall be covered by the plan of agreement.

3. Specifies the source from which the funds necessary to make the payments required by subsection C of this section are expected to be derived and contains reasonable assurance that the source will be adequate for such purpose.

4. Provides for the proper and efficient administration of the plan of agreement.

5. Provides that the political subdivision shall make such reports, in such form and containing such information, as the state social security administrator may require and comply with such provisions as the state social security administrator or the federal agency may find necessary to ensure the correctness and verification of such reports.

B. The state social security administrator shall not finally refuse to approve a plan of agreement submitted under subsection A without reasonable notice and opportunity for hearing to each political subdivision affected.

C. Each political subdivision which has a plan of agreement approved under this section shall pay to the Internal Revenue Service, at such time or times as may be required by applicable federal law, contributions with respect to wages, equal to the applicable 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.

D. Every political subdivision required to make payments under subsection C is authorized to impose upon its employees, as to services which are covered by an approved plan of agreement, a contribution with respect to wages, not exceeding the amount of tax which would be imposed by the "Rate of Tax" sections of 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 wages. Failure to make such deduction shall not relieve the employee from liability for such contribution.

1952, c. 2, § 51-111.5; 1956, c. 561; 1977, c. 620; 1981, c. 479; 1982, c. 579; 1984, c. 430; 1990, c. 832; 2005, c. 902.