2015 Montana Legislature

HOUSE BILL NO. 564

INTRODUCED BY A. PERSON

AN ACT GENERALLY REVISING STATE LAW RELATED TO THE SOCIAL SECURITY ACT; REVISING DEFINITIONS; UPDATING REFERENCES TO FEDERAL LAW; UPDATING LANGUAGE CONCERNING EXCLUSIONS, REFERENDUMS, RULEMAKING, AGREEMENTS, AND CONTRIBUTIONS; AND AMENDING SECTIONS 19-1-102, 19-1-103, 19-1-104, 19-1-201, 19-1-202, 19-1-302, 19-1-303, 19-1-304, 19-1-401, 19-1-402, 19-1-501, 19-1-502, 19-1-503, 19-1-702, 19-1-704, 19-1-811, 19-1-815, 19-1-822, 19-1-823, 19-1-824, AND 19-1-826, MCA.

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

Section 1. Section 19-1-102, MCA, is amended to read:

"19-1-102. Definitions. For the purposes of this chapter, the following definitions apply:

(1) "Administrator" means the employee of the department who is designated as the state social security administrator and is delegated the authority to carry out the requirements of this chapter.

(2) "Department" means the department of administration provided for in 2-15-1001.

(1)(3) "Employee" means an elective or appointive officer or employee of the state or a political subdivision of the state.

(2)(4) "Employee tax" means the tax imposed by section 3101 of the Internal Revenue Code, 26 U.S.C. 3101, as amended.

(3)(5) (a) "Employment" means any service performed by an employee in the employ of the state or any political subdivision of the state for the employer, except:

(i) service that in the absence of an agreement entered into under this chapter would constitute employment as defined in the Social Security Act; or

(ii) service that under the Social Security Act may not be included in an agreement between the state and the secretary of health and human services entered into under this chapter.

(b) Service performed by civilian employees of national guard units is specifically included within the term employment.

(c) Service that 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 is included in the term employment if and when the governor issues, with respect to the service, a certificate to the secretary of health and human services pursuant to 19-1-304.

(4)(6) "Federal Insurance Contributions Act" means subchapters A and B of chapter 21 of the Internal Revenue Code.

(5)(7) "Political subdivision" means 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, including leagues or associations, but only if the instrumentality is a legally constituted entity that is legally separate and distinct from the state or subdivision and only if its employees are not by virtue of their relation to the entity employees of the state or subdivision. The term includes special districts or authorities created by the legislature or local governments, including but not limited to school districts and housing authorities.

(6)(8) "Secretary of health and human services" means the secretary of the United States department of health and human services. The term includes any individual to whom the secretary of health and human services has delegated any functions under the Social Security Act with respect to coverage under that act of employees of states and their political subdivisions and, with respect to any action taken prior to April 11, 1953, includes the federal security administrator and any individual to whom the administrator had delegated any function.

(7)(9) "Social Security Act" means the act of congress approved August 14, 1935, chapter 531, 49 Stat. 620, officially cited as the "Social Security Act", including regulations and requirements issued pursuant to the act, as the act has been and may be amended.

(8) "State agency" means the department of administration provided for in 2-15-1001.

(9)(10) "Wages" means all remuneration for employment, including the cash value of all remuneration paid in any medium other than cash, except that the term does not include that part of remuneration that, 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."

Section 2. Section 19-1-103, MCA, is amended to read:

"19-1-103. Exclusions. This chapter shall does not apply to and there shall be excluded from the operation thereof all employees of the state and of the political subdivisions thereof operating under the provisions of any retirement plan for firefighters."

Section 3. Section 19-1-104, MCA, is amended to read:

"19-1-104. Retirement systems to be considered separate. (1) Pursuant to section 218(d)(6) of the Social Security Act (42 U.S.C. 418(d)(6)), the public employees' retirement system of the state of Montana is, for the purposes of this chapter, considered a separate retirement system with respect to the state and a separate retirement system with respect to each political subdivision having positions covered by the system.

(2) Pursuant to section 218(l)(1)(c) of the Social Security Act (42 U.S.C. 418(l)(1)(c)), the Montana judges' retirement system, the sheriffs' retirement system, the Montana state game wardens' and peace officers' retirement system, the highway patrol officers' retirement system of the state of Montana, the public employees' retirement system of the state of Montana, and each municipal police retirement fund and each city participating in the municipal police officers' retirement system are, for the purposes of this chapter, considered separate retirement systems with respect to the state and separate retirement systems with respect to each political subdivision having positions covered by those systems."

Section 4. Section 19-1-201, MCA, is amended to read:

"19-1-201. State agency to make Department may adopt rules. The state agency shall make and publish such department may adopt rules, not inconsistent with the provisions of this chapter, as it finds necessary or appropriate to the efficient administration of the functions with which it is charged under to implement the provisions of this chapter."

Section 5. Section 19-1-202, MCA, is amended to read:

"19-1-202. Costs of administration. All costs allocable to for the administration of this chapter must be charged to the state agency department."

Section 6. Section 19-1-302, MCA, is amended to read:

"19-1-302. Conduct of referendum. In either case, the The governor shall designate the department director, who shall direct the administrator to conduct and supervise a referendum. The referendum shall must be conducted and the governor shall designate an agency or individual to supervise its conduct, in accordance with the requirements of section 218(d)(3) of the Social Security Act (42 U.S.C. 418(d)(3)), on the question of whether service in positions covered by a retirement system established by the state or by a political subdivision thereof should be excluded from or included under this chapter."

Section 7. Section 19-1-303, MCA, is amended to read:

"19-1-303. Notice of referendum. The notice of referendum required by section 218(d)(3)(C) of the Social Security Act (42 U.S.C. 418(d)(3)(C)) to be given to employees shall must contain or shall be accompanied by a statement, in such the form and such detail as that the agency or individual designated to supervise the referendum department director, acting through the administrator, considers necessary and sufficient, informing the employees of the rights which that will accrue to them and their dependents and survivors and the liabilities to which they will be subject if their services are included under an agreement under this chapter."

Section 8. Section 19-1-304, MCA, is amended to read:

"19-1-304. Certification of referendum by governor. Upon receiving When the department receives satisfactory evidence that with respect to a referendum the conditions specified in section 218(d)(3) of the Social Security Act (42 U.S.C. 418(d)(3)) have been met, the governor shall certify the results of the referendum to the secretary of health and human services."

Section 9. Section 19-1-401, MCA, is amended to read:

"19-1-401. Authority for federal-state agreement. The state agency department director, with the approval of the governor, may enter, on behalf of the state, into an agreement on behalf of the state with the secretary of health and human services, 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 of the state with respect to services specified in the agreement that constitute "employment", as defined in 19-1-102."

Section 10. Section 19-1-402, MCA, is amended to read:

"19-1-402. Contents of federal-state agreement. The agreement authorized by 19-1-401 may contain provisions relating to coverage, benefits, effective date, and modification of the agreement, administration, and other appropriate provisions as the state agency department director and secretary of health and human services agree upon. Except as otherwise required or permitted by the Social Security Act regarding the services to be covered, the agreement must provide that:

(1) benefits will be provided for employees whose services are covered by the agreement and for 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 agreement must be effective with respect to services in employment covered by the agreement performed after a date specified in the agreement, but may not be effective with respect to services performed prior to the first day of the calendar year in which the agreement is entered into or in which the modification of the agreement making it applicable to services is entered into, except that the effective date may be made retroactive to the extent permitted by section 218(e) of the Social Security Act, 42 U.S.C. 418(e);

(3) all services that constitute employment and are performed by employees of the state must be covered by the agreement; and

(4) all services that constitute employment, are performed by employees of a political subdivision of the state, and are covered by a plan that is in conformity with the terms of the agreement and that has been approved by the state agency department under Title 19, chapter 1, part 5, must be covered by the agreement."

Section 11. Section 19-1-501, MCA, is amended to read:

"19-1-501. Submission of plan and agreement. Each political subdivision of the state shall submit for approval by the state agency department a plan and agreement between the state and the political subdivision for extending the benefits of Title II of the Social Security Act, in conformity with applicable provisions of such the act, to employees of such political subdivision."

Section 12. Section 19-1-502, MCA, is amended to read:

"19-1-502. Approval of plan and agreement by state agency department. (1) A plan and agreement and any amendment thereof of the plan and agreement shall must be approved by the state agency department if it the administrator finds that the plan or the plan as amended and agreement, or an amendment to the plan and agreement, is are in conformity with such the department's requirements as are provided in regulations of the state agency.

(2) The state agency department may not finally refuse to approve a plan and agreement submitted by a political subdivision under 19-1-501 and may not terminate an approved plan and agreement without reasonable notice and opportunity for hearing to the affected political subdivision affected thereby."

Section 13. Section 19-1-503, MCA, is amended to read:

"19-1-503. Required provisions of plan and agreement. A plan and agreement may not be approved by the department unless:

(1) it is they are in conformity with the requirements of the Social Security Act and with the agreement entered into under 19-1-401 and 19-1-402;

(2) it provides they provide that all services that constitute employment and that are performed by employees of the political subdivisions will be covered by the plan and agreement, except that it the plan and agreement may exclude services performed by individuals to whom section 218(c)(3)(B) of the Social Security Act, 42 U.S.C. 418(c)(3)(B), is applicable."

Section 14. Section 19-1-702, MCA, is amended to read:

"19-1-702. Contributions by state employees. (1) Every employee of the state whose services are covered by an agreement entered into under 19-1-401 and 19-1-402 must be required to pay, for the period of coverage, contributions with respect to wages equal to the amount of employee tax that would be imposed by the Federal Insurance Contributions Act if the services constituted employment within the meaning of that act. The liability arises in consideration of the employee's retention in the service of the state or entry into service.

(2) The contribution imposed by this section must be collected by deducting the amount of the contribution from wages paid, but failure to make the deduction does not relieve the employee from liability for the contribution.

(3) 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 a refund if adjustment is impracticable must be made, without interest, in the manner and at times that the state agency department prescribes."

Section 15. Section 19-1-704, MCA, is amended to read:

"19-1-704. Contribution by political subdivision. Each political subdivision as to which with a plan has been and agreement approved under part 5 of this chapter shall pay, at such the time or times as the state agency may prescribe by regulation prescribed by the department, contributions with respect to wages (, as defined in 19-1-102), in the amounts and at the rates specified in the applicable agreement entered into by the state agency department director on behalf of the state under 19-1-401 and 19-1-402."

Section 16. Section 19-1-811, MCA, is amended to read:

"19-1-811. Referendum by school district. A On approval by the board of trustees, a school district of the state may, upon the approval thereof being voted by the board of trustees, conduct and supervise a referendum, or may request that the department conduct and supervise a referendum. The referendum must be conducted pursuant to section 218 of the federal Social Security Act (42 U.S.C. 418), among the members of the staff and teachers of the school or schools under the jurisdiction of the board of trustees. If the majority of votes cast in the referendum indicates indicate that the staff and teachers approve social security coverage, then the board of trustees shall certify to the department of administration that the conditions for coverage by social security coverage, required by section 218 of the Social Security Act, have been complied with."

Section 17. Section 19-1-815, MCA, is amended to read:

"19-1-815. Merger of reporting entities. If the approval of referenda at different times results in the establishment of two separate social security reporting entities for a high school district and an elementary school district and the high school building is located in the elementary school district, the state agency department shall, upon request of the boards of trustees in both districts, merge the two reporting entities to form a single reporting entity if the elementary school district and high school district:

(1) have boards of trustees of which a majority of each board is composed of the same persons;

(2) are administered by the same executive officer; and

(3) have payroll calculations made in the same payroll application."

Section 18. Section 19-1-822, MCA, is amended to read:

"19-1-822. Referendum -- institution of higher education. On request of the president of an institution, the governor shall designate an agency or individual direct the department to give notice of and supervise a referendum in the retirement system for that institution in compliance with the requirements prescribed by section 218 of the Social Security Act (42 U.S.C. 418)."

Section 19. Section 19-1-823, MCA, is amended to read:

"19-1-823. Certification by governor. If the On the department's notification that a majority of votes cast in the referendum indicates that the majority of voters desire it were cast in favor of participation in social security, the governor, through the department, shall certify to the secretary of health and human services that the conditions set forth in section 218 of the Social Security Act (42 U.S.C. 418) have been complied with in respect to the retirement system voting in the referendum."

Section 20. Section 19-1-824, MCA, is amended to read:

"19-1-824. Federal-state agreement. Upon On certification, the governor shall designate an official direct the department director to enter into an agreement or a modification or supplement to an the existing agreement or both a modification and a supplement with the appropriate officers of the federal government, pursuant to section 218 of the Social Security Act (42 U.S.C. 418), to secure coverage thereunder for the retirement system with respect to which certification has been made. An agreement may be made retroactive to the extent permissible under the Social Security Act."

Section 21. Section 19-1-826, MCA, is amended to read:

"19-1-826. Changes in federal law. In the event that any relevant provisions of federal law are amended or superseded, then the provisions hereof of this part which that relate to such the law shall must be applied to the amended law or the superseding law."

- END -

Latest Version of HB 564 (HB0564.ENR)
Processed for the Web on April 1, 2015 (11:42am)

New language in a bill appears underlined, deleted material appears stricken.

Sponsor names are handwritten on introduced bills, hence do not appear on the bill until it is reprinted.

See the status of this bill for the bill's primary sponsor.

Status of this Bill | 2015 Legislature | Leg. Branch Home
All versions of this bill (PDF format)
Authorized print version of this bill (PDF format)
[ NEW SEARCH ]

Prepared by Montana Legislative Services
(406) 444-3064