When used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) WAGES. All remuneration for employment, as defined in subdivision (2) of this section, 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 for @employment@ within the meaning of the federal Insurance Contributions Act, would not constitute @wages@ within the meaning of that act.

(2) EMPLOYMENT. Any service performed by an employee in the employ of the state, or any political subdivision thereof, or any instrumentality of either for such employer, except:

a. Service which, in the absence of an agreement entered into under this chapter, would constitute @employment@ as defined in Section 210 of the Social Security Act; or

b. Service which under applicable federal law may not be included in an agreement between the state and the federal agency entered into under this chapter.

(3) EMPLOYEE. An officer of a state, political subdivision or instrumentality whose compensation is paid from funds of the state, political subdivision, instrumentality or employing official. Such term includes all elected or appointed (salaried and fee basis) officers, deputies, assistants and clerks, substitute teachers or any other employees.

(4) FEDERAL AGENCY. Such federal officer, department or agency as is charged on behalf of the federal government by or under the applicable federal law with the particular federal function referred to in this chapter in connection with such term.

(5) POLITICAL SUBDIVISION. Any county, municipal corporation, school district or other equivalent governmental entity.

(6) INSTRUMENTALITY. Such term, when referring to an instrumentality of the state or political subdivision, includes only a legal entity which is separate and distinct from the state or such subdivision and whose employees are not by virtue of their relation to such entity employees of the state or such subdivision.

(7) APPLICABLE FEDERAL LAW. The provisions of the federal law, Public Law 734, 81st Congress, as such act may from time to time be amended, including federal regulations and requirements issued pursuant thereto, or any other federal laws which provide for extending the benefits of Title II of the Social Security Act to employees of states, political subdivisions and their instrumentalities.

(8) SOCIAL SECURITY ACT. The act of Congress approved August 14, 1935, Chapter 531, 49 Stat. 620, officially cited as the @Social Security Act@ as such act has been and may from time to time be amended.

(9) FEDERAL INSURANCE CONTRIBUTIONS ACT. Subchapter A of Chapter 9 of the federal Internal Revenue Code as such code has been and may from time to time be amended.

In order to extend to employees of the state, its political subdivisions and of the instrumentalities of either and to the dependents and survivors of such employees the basic protection accorded to others by the Old-Age and Survivors* Insurance System embodied in the Social Security Act, it is hereby declared to be the policy of the Legislature, subject to the limitations of this chapter, that such steps be taken as to provide such protection to employees of the state and local governments on as broad a basis as is permitted under applicable federal law.

There shall be a State Office for Social Security under the supervision of the state Comptroller. All employees of such office shall be subject to the provisions of the state Merit System.

(a) Federal-state agreement. The state Comptroller, with the approval of the Governor, 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 or of any instrumentality of any one or more of the foregoing with respect to services specified in such agreement, which constitute employment as defined in Section 36-28-1.

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 Comptroller 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 covered 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 promulgated thereunder, contributions with respect to wages, as defined in Section 36-28-1, equal to the sum of the taxes which would be imposed by Sections 3101 and 3111 of Title 26, U.S.C.A., 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 performed after a date specified therein but shall in no event be effective with respect to any service performed prior to January 1, 1951;

(4) All services which constitute employment as defined in Section 36-28-1 and are performed in the employ of the state by employees of the state shall be covered by the agreement; and

(5) All services which constitute employment as defined in Section 36-28-1 are performed in the employ of a political subdivision or in the employ of an instrumentality of either the state or a political subdivision and are covered by a plan which is in conformity with the terms of the agreement and has been approved by the state Comptroller under Section 36-28-5 shall be covered by the agreement.

(b) Powers of instrumentalities created jointly with other states. 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, to:

(1) Enter into an agreement with the Secretary of Health and Human Services whereby the benefits of the federal Old-Age and Survivors* Insurance System shall be extended to employees of such instrumentality;

(2) 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 subsection (a) of Section 36-28-7 if they were covered by an agreement made pursuant to subsection (a) of this section; and

(3) 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 agreement.

The agreement authorized by this subsection shall, to the extent practicable, be consistent with the terms and provisions of subsection (a) of this section and other provisions of this chapter.

(a) Each political subdivision of the state and each instrumentality of the state or of a political subdivision is hereby authorized to submit for approval by the state Comptroller 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 or instrumentality. Each such plan or any amendment thereof shall be approved by the state Comptroller 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 Comptroller; except, that no such plan shall be approved unless:

(1) It is in conformity with the requirements of the applicable federal law and with the agreement entered into under Section 36-28-4;

(2) It provides that all services which constitute employment, as defined in Section 36-28-1, and are performed in the employ of the political subdivision or instrumentality 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 (b) and by subsection (c) are expected to be derived and contains reasonable assurance that such sources will be adequate for such purposes from wages, fees and other compensation for services performed;

(4) It provides for such methods of administration of the plan by the political subdivision or instrumentality as are found by state Comptroller to be necessary for the proper and efficient administration of the plan;

(5) It provides that the political subdivision or instrumentality will make such reports, in such form and containing such information, as the state Comptroller may from time to time require, and will comply with such provisions as the state Comptroller or the federal agency may from time to time find necessary to assure the correctness and verifications of such reports.

(b)(1) Each political subdivision or instrumentality as to which a plan has been approved under subsection (a) of this section shall pay into the Contribution Fund, with respect to wages, as defined in Section 36-28-1, at such time or times as the state Comptroller may by regulation prescribe, contributions in the amounts and at the rates specified in the applicable agreement entered into by the state Comptroller under Section 36-28-4.

(2) Every political subdivision or instrumentality 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 November 1, 1950, to impose upon its employees as to services which are covered by an approved plan, a contribution with respect to wages, as defined in Section 36-28-1, not exceeding the amount of tax which would be imposed by Section 3101 of Title 26, U.S.C.A., 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 or instrumentality under subdivision (1) of this subsection. Failure to deduct such contribution shall not relieve the employee or employer of liability therefor.

(c) Delinquent accounts due under subdivision (1) of subsection (b) of this section shall be assessed a penalty of $10.00 and shall pay late interest based on the 91 day U.S. Treasury bill rate in effect on the date of delinquency and continuing through date of payment. However, in no event shall the rate of interest be less than six percent per annum. Delinquent accounts may be recovered by civil action in a court of competent jurisdiction against the political subdivision or instrumentality liable therefor or shall, at the request of the state Comptroller, be deducted from any other moneys payable to such subdivision or instrumentality by any department or agency of the state. Any entity failing to provide end-of-the-year reconciliations on or before the deadline set by the state Social Security administrator shall be assessed a five-dollar per day unmitigable penalty for each such day of delay.

(a) Upon request of the State of Alabama or any political subdivision or instrumentality thereof, the state Comptroller for Social Security is hereby authorized to obtain Social Security coverage of services rendered by student employees whose positions fall within any coverage group to which Social Security has been heretofore extended prior to September 15, 1961. The coverage of such additional student services shall be optional with respect to the State of Alabama or any political subdivision or instrumentality thereof and may be made retroactive to the extent permitted under applicable federal law.

(b) After September 15, 1961, the state Comptroller for Social Security shall include the services of student employees when Social Security coverage is extended to any new or additional coverage group, unless the request of such additional coverage group for extension of Social Security coverage expressly excludes services of student employees.

(a) Every employee of the state whose services are covered by an agreement entered into under Section 36-28-4 shall be required to pay for the period of such coverage into the Contribution Fund established by Section 36-28-8 contributions with respect to wages, as defined in Section 36-28-1, equal to the amount of tax which would be imposed by Section 3101 of Title 26, U.S.C.A., 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 November 1, 1950.

(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 employee from liability for such contribution. The persons or department preparing the payrolls through which employees covered by the agreement are paid shall make such reports to the state Comptroller as are deemed necessary upon forms supplied by the Comptroller.

(c) If more or less than the correct amount of the contribution imposed 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 Comptroller shall prescribe.

(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, interest and penalties collected under Sections 36-28-5 and 36-28-7;

(2) All moneys appropriated thereto under this chapter;

(3) Any property or securities and earnings thereof acquired through the use of moneys belonging to the fund;

(4) Interest earned upon any moneys in the fund; and

(5) 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.

(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 chapter. Withdrawals from such fund shall be made for and solely for:

(1) Payment of amounts required to be paid to the federal agency pursuant to an agreement entered into under Section 36-28-4;

(2) Payment of refunds provided for in subsection (c) of Section 36-28-7; and

(3) Refunds of overpayments, not otherwise adjustable, made by a political subdivision or instrumentality.

(4) To transfer such funds, not otherwise required in subdivisions (1), (2) and (3) of this subsection, into the Social Security Special Allocation Account, for administration. Such sum is hereby appropriated for this purpose.

(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 Comptroller in accordance with any agreement entered into under Section 36-28-4 and applicable federal law.

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

(e)(1) There is appropriated annually to the Contribution Fund, in addition to the contributions collected and paid into the Contribution Fund under Sections 36-28-5 and 36-28-7, to be available for the purposes of subsections (b) and (c) of this section, until expended, such additional sums as are found to be necessary in order to make the payments to the federal agency which the state is obligated to make pursuant to an agreement entered into under Section 36-28-4; provided, that the sums necessary to match Social Security contributions by employees covered under the Teachers* Retirement System are hereby appropriated annually from the Education Trust Fund; provided further, that the sums necessary to match Social Security contributions by state employees other than those covered by the Teachers* Retirement System are hereby appropriated annually from the fund from which the salaries of such employees of each employer are paid.

In the case of those departments supported wholly by transfers from other state funds, there is hereby appropriated from the supporting funds such additional amounts as may be necessary to pay the sums necessary to match Social Security contributions by employees of each department so supported in the same proportion as the other state funds contribute to the support and maintenance of such department.

(2) The state Comptroller shall submit to each regular session of the state Legislature, at least 90 days in advance of the beginning of such session, an estimate of the amounts appropriated to the Contribution Fund by subdivision (1) of this subsection for the next appropriation period.

(f) Where Social Security contributions are made from salaries paid from federal funds, the employer shall pay from such federal funds to the state Comptroller for Social Security the amount calculated as a percentage of the salaries of those teachers to be contributed by the state as employer in accordance with Sections 36-28-5 and 36-28-7. Such amounts shall be paid by separate check payable to the state Comptroller for Social Security representing the employer tax at the same time as employee Social Security contributions are paid to the state Comptroller; provided, that the provisions of this subsection shall not apply to funds received under the provisions of the Hatch Act of 1887, as amended in 1955, and the McIntyre-Stennis Act (Cooperative Forestry Research Act of 1962) of the Congress of the United States for the support of agriculturally related research.

The state Comptroller shall make and publish such rules and regulations, not inconsistent with the provisions of this chapter, as he finds necessary or appropriate to the efficient administration of the functions with which he is charged under this chapter.