Report Title:

Federal Social Security for Public Employees; Coverage

Description:

Authorizes the governor, on behalf of the State, to enter into an agreement with the Secretary of Health and Human Services for the extension of benefits of the hospital insurance system to employees of the State and its political subdivisions. Extends the benefits of Title XVIII of the Social Security Act to employees of the political subdivisions of State. Requires the EWC to fund costs associated with the purposes of this Act as it applies to EWC employees. (SD2)

THE SENATE

S.B. NO.

3175

TWENTY-SECOND LEGISLATURE, 2004

S.D. 2

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to federal social security for public employees.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 88-211, Hawaii Revised Statutes, is amended to read as follows:

"88-211 Definitions. For the purposes of this part:

(1) 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 the term shall not include that part of the 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) The term "employment" means any service performed by an employee in the employ of the State, or any political subdivision thereof, for such employer except

(A) Service which in the absence of an agreement entered into under this part would constitute "employment" as defined in the Social Security Act; or

(B) Service which under the Social Security Act may not be included in an agreement between the State and the Department of Health[, Education,] and [Welfare] Human Services entered into under this part. Service which under the Social Security Act may be included in an agreement only upon certification by the governor in accordance with section 218(d)(3) of that Act shall be included in the term "employment" if and when the governor issues, with respect to such service, a certificate to the Secretary of Health[, Education,] and [Welfare] Human Services pursuant to section 88-219;

(3) The term "employee" includes an officer of the State or political subdivision thereof;

(4) The term "state agency" means the administrator of the state employees' retirement system;

(5) The term "Secretary of Health[, Education,] and Welfare"] Human Services" includes an individual to whom the Secretary of Health[, Education,] and [Welfare] Human Services has delegated any of the Secretary's functions under the Social Security Act with respect to coverage under the Act of employees of the states and territories and their political subdivisions;

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

(7) The term "Social Security Act" means the Act of Congress approved August 14, 1935, chapter 531, 49 Statutes At Large 620, officially cited as the "Social Security Act," (including regulations and requirements issued pursuant thereto), as such Act has been and may from time to time be amended;

(8) The term "Federal Insurance Contributions Act" means subchapter A of chapter 9 of the federal Internal Revenue Code of 1939 and subchapters 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 section 1400 of the Code of 1939 and section 3101 of the Code of 1954."

SECTION 2. Section 88-212, Hawaii Revised Statutes, is amended to read as follows:

"88-212 Federal-state agreement. The state agency, with the approval of the governor, may enter on behalf of the State into an agreement with the Secretary of Health[, Education,] and [Welfare,] Human Services consistent with the terms and provisions of this part, for the purpose of extending the benefits of the federal old age [and], survivors, and hospital insurance system to employees of the State or any political subdivision thereof with respect to services specified in the agreement which constitute "employment" as defined in section 88-211. The 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 Secretary of Health[, Education,] and [Welfare,] Human Services shall agree upon, but, except as may be otherwise required by or under the Social Security Act as to the services to be covered, the 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 the services constituted employment within the meaning of Title II of the Social Security Act;

(2) The State will pay to the Secretary of the Treasury, at such time or times as may be prescribed under the Social Security Act, contributions with respect to wages (as defined in section 88-211), equal to the sum of the taxes which would be imposed by 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 in employment covered by the agreement performed after a date specified therein but in no event may it be effective with respect to any such services performed prior to the first day of January 1951;

(4) All services which constitute employment as defined in section 88-211 and are performed in the employ of the State by employees of the State, shall be covered by the agreement; provided that except for purposes of paragraph (6) of [[]this[]] section, services of state employees may be covered under the agreement at such times, as members of the coverage group or groups (as defined in section 218(b)(5) of the Social Security Act), and with such optional exclusions (as permitted by section 218(c) of the Social Security Act, including section 218(c)(3)(C) thereof) as may be decided upon by the state agency with the approval of the governor, as evidenced by the governor's approval of the pertinent agreement or modification thereto;

(5) All services which (A) constitute employment as defined in section 88-211, (B) are performed in the employ of a political subdivision of the State, and (C) are covered by a plan which is in conformity with the terms of the agreement and has been approved by the state agency under section 88-218, shall be covered by the agreement;

(6) As modified the agreement shall include all service described in paragraph (4) and may include all service described in paragraph (5) of this section and performed by individuals in positions covered by a retirement system with respect to which the governor has issued a certificate to the Secretary of Health[, Education] and [Welfare] Human Services pursuant to section 88-219."

SECTION 3. Section 88-218, Hawaii Revised Statutes, is amended to read as follows:

"88-218 Plans for coverage of employees of political subdivision. Each political subdivision of the State may submit for approval by the state agency a plan for extending the benefits of [Title] Titles II and XVIII of the Social Security Act, in conformity with applicable provisions of the Act, to employees of the political subdivision. Each plan and any amendment thereof shall be approved by the state agency if it finds that the plan, or the plan as amended, conforms with such requirements provided in regulations of the state agency, except that no plan shall be approved unless:

(1) It conforms with the requirements of the Social Security Act and with the agreement entered into under section 88-212;

(2) It provides that all services which constitute employment as defined in section 88-211 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)(C) 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 section 88-221 and by section 88-223 are expected to be derived and contains reasonable assurance that the sources will be adequate for the 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 Secretary of Health[, Education,] and [Welfare] Human Services may from time to time find necessary to assure the correctness and verification of the reports;

(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 provision contained in the plan, the termination to take effect at the expiration of the notice and on such conditions as may be provided by regulations of the state agency and may be consistent with the provisions of the Social Security Act."

SECTION 4. The Center for Cultural and Technical Interchange Between East and West, Inc., a Hawaii educational nonprofit public corporation, shall fund all costs incurred as a result of the extension of the benefits of Title XVIII of the Social Security Act to its employees.

SECTION 5. This Act shall take effect upon its approval; provided that section 3 shall take effect on July 1, 2004.