(a) Each political subdivision of the state is authorized to submit for approval by the state agency a plan for extending the benefits of Title II of the Social Security Act to employees of such political subdivision. The adjutant general, acting on behalf of the state, is authorized to submit and enter into a similar plan with the state agency for extending such benefits to the civilian employees of the National Guard units of this state, who are, for the purposes of this chapter, deemed to be a separate coverage group as provided for in the federal Social Security Act; provided, however, that nothing contained in this chapter shall be construed to deem or designate the civilian employees of the National Guard units of this state to be employees of this state. Each such plan and any amendments thereof shall be approved by the state agency if it finds that such plan, as amended, is in conformity with such requirements as are provided in regulations 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 Code Section 47-18-40;

(2) It provides that all services which constitute employment and are performed in the employ of a 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 sources from which the funds necessary to make the payments required by paragraph (1) of subsection (c) of this Code section and by subsection (d) of this Code section are expected to be derived and contains reasonable assurance that such sources will be adequate for such 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 will comply with such provisions as the state agency or the secretary of health and human services may from time to time find necessary in order to assure 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 with any provision contained in such plan, such termination to take effect at the expiration of such notice and on such conditions as may be provided by regulations of the state agency and which are consistent with the Social Security Act, provided that such conditions as may be provided by the regulations of the state agency for such termination shall assure that the state shall not incur any debt or loss in relation to any amounts due the state from other provisions of the Social Security Act, including grants in aid for public assistance and for maternal and child welfare.

(b) The state agency shall not finally refuse to approve a plan submitted by a political subdivision under subsection (a) of this Code section and shall not terminate an approved plan without reasonable notice and opportunity for hearings to the political subdivision affected thereby.

(c)(1) Each political subdivision as to which a plan has been approved under this Code section shall pay into the contribution fund, with respect to wages at such times as the state agency may by regulation prescribe, contributions in the amounts and at the rates specified in the applicable agreement entered into by the state agency under Code Section 47-18-40.

(2) Each political subdivision required to make payments under paragraph (1) of this subsection is authorized in consideration of the employee's retention in or entry upon employment after enactment of this chapter to impose upon each of its employees, as to services which are covered by an approved plan, a contribution with respect to his wages, which contribution shall not exceed the amount of the employees tax which 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 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 paragraph (1) of this subsection. Failure to deduct such contributions shall not relieve the employee or employer of liability therefor.

(3) Delinquent payments due under paragraph (1) of this subsection, including interest at the rate of 6 percent per annum, may be recovered by action in a court of competent jurisdiction against the political subdivision liable therefor or may, at the request of the state agency, be deducted from any other moneys payable to such subdivision by any department or agency of the state.

(d) If any county board of education, independent board of education, area board of education, or incorporated municipality which has entered into a plan of coverage for its employees under this Code section fails to make collection from its employees and to make reports and payments agreed to in its plan of coverage, it shall be the duty of the state agency to notify the State Board of Education of such failure; and thereupon it shall be the duty of the State Board of Education to withhold from such county board of education, independent board of education, area board of education, or incorporated municipality failing to make the reports and payments, all appropriations allotted to such board of education or municipality until such board of education or municipality has fully complied with the provisions agreed to in its plan of coverage. It shall be illegal for the State Board of Education or Department of Education to pay out or release such funds, unless the provisions of this Code section are complied with.

(e) If the governing authority of any county which has entered into a plan of coverage for its employees under this Code section fails to make collection from its employees and to make reports and payments agreed to in such plan of coverage, it shall be the duty of the state agency to notify the State Transportation Board and the director of the Office of Treasury and Fiscal Services of such failure; and thereupon, it shall be the duty of the State Transportation Board and the director of the Office of Treasury and Fiscal Services to withhold from such county governing authority all appropriations for highway and road purposes allotted to such county, until such county governing authority has fully complied with the provisions agreed to in its plan of coverage by making the required reports and remittances. It shall be illegal for the State Transportation Board or the director of the Office of Treasury and Fiscal Services to pay out or release such funds, unless this Code section has been complied with. The State Transportation Board and the director of the Office of Treasury and Fiscal Services are authorized and directed, upon authorization or certified request of the state agency, to remit to the state agency from such withheld funds the amount necessary to cover the remittances which such county governing authority has failed to pay to the state agency.

(f) If the governing authority of any municipal corporation which has entered into a plan of coverage for its employees under this Code section fails to make collection from its employees and to make reports and payments agreed to in such plan of coverage, it shall be the duty of the state agency to notify the director of the Office of Treasury and Fiscal Services of such failure; and thereupon it shall be the duty of the director of the Office of Treasury and Fiscal Services to withhold from such municipal governing authority any state appropriations allocated to such municipality until the director of the Office of Treasury and Fiscal Services receives authorization from the state agency to release such funds. The director of the Office of Treasury and Fiscal Services is authorized and directed, upon authorization and certified request of the state agency, to remit to the state agency from such withheld funds the amount necessary to cover the remittances which such municipal governing authority has failed to pay to the state agency under the provisions agreed to in its plan of coverage. It shall be illegal for the director of the Office of Treasury and Fiscal Services to pay out or release such funds, after notice from the state agency, unless this Code section is complied with.

(g) If any municipal corporation fails to make collections from its employees or fails to make reports and payments to the state agency as agreed to in its plan of coverage, such defaulting municipal corporation shall be subject to a penalty of 10 percent of the delinquent payments.

(h) The governing authority of each municipal corporation which has entered into a plan of coverage under this Code section shall enact an ordinance in which it agrees to abide by the rules and regulations of the state agency in regard to collections from its employees and in making reports and payments to the state agency. The municipal corporation shall pledge in such ordinance the amount which it would receive in state grant funds as security for assurance that it will make collections from its employees, submit required reports, and remit payments to the state agency as agreed to in its plan of coverage. If the amount of state grant funds which a municipal corporation is entitled to receive is less than its annual payment to the state agency, then the state agency may require such municipal corporation to deposit in escrow in accordance with rules and regulations of the state agency an amount which, when added to the state grant funds to which such municipality is entitled, would total an amount sufficient to meet the municipal corporation's obligations of reporting and remitting collections to the state agency.