Two or more States may organize an interstate instrumentality to carry out one or more governmental functions for those States. An interstate instrumentality is an independent legal entity with power to hire, supervise, and discharge its own employees, and generally to sue and be sued in its own name, to contract, and to hold and convey real and personal property.

An interstate instrumentality is treated as a State for Section 218 coverage purposes.

Interstate instrumentalities may enter into and modify their own Section 218 Agreements, but only if given legal authority to do so by the laws of their participating States. A State may provide this authority either through general legislation applicable to all interstate instrumentalities in which the State participates, or through the State’s enabling legislation that creates the specific interstate instrumentality seeking coverage. If the laws of any single participating State would prevent the interstate instrumentality from entering into a Section 218 Agreement, then the entity lacks authority to enter into a Section 218 Agreement.

The Social Security Administration (SSA) views the question of whether State law permits an interstate instrumentality to enter into a Section 218 Agreement as a question of State law. If a State’s laws do not expressly authorize the interstate instrumentality to enter into a Section 218 Agreement, it may be necessary to obtain a State attorney general opinion clarifying the entity's authority. If the State attorney general is unable or unwilling to provide an opinion, SSA must independently assess the entity’s authority under that State’s laws. Likewise, if the interstate instrumentality involves many participating States and it is impractical to obtain State attorney general opinions from each State whose laws do not expressly authorize the interstate instrumentality to enter into a Section 218 Agreement, SSA may independently assess the entity’s authority under those States’ laws. SSA will consider whether the interstate instrumentality has general authority to enter into contracts and to hire and discharge employees.

Once an interstate instrumentality obtains Social Security coverage through a Section 218 Agreement, coverage under the Agreement continues even if additional States begin participating in the interstate instrumentality. A State’s revocation of an interstate instrumentality’s authority to enter into an Agreement does not terminate the interstate instrumentality’s existing and validly established Agreement for coverage.

An interstate instrumentality may extend coverage to absolute and retirement system coverage groups. All policies relating to coverage for States equally apply to interstate instrumentalities. A State retirement system that covers employees of an interstate instrumentality is considered a retirement system established by the interstate instrumentality.

As with any retirement system coverage group, coverage can be extended only after a referendum has been held for members of the retirement system, see SL 30001.323; SL 30001.331. Interstate instrumentalities may bring the retirement system positions under coverage through either

a majority-vote process (Section 218(d)(4); SL 30001.323; SL 30001.324) or

a divided-vote process (Section 218(d)(6); SL 30001.331; SL 30001.334).

The referendum provides an opportunity to vote for or against coverage to all eligible employees, see SL 30001.323C-D; SL 30001.331D-E) of the retirement system, SL 30001.321.

The interstate instrumentality must meet all required conditions for holding a referendum for its employees, and a designated official must certify the referendum (for the required referendum conditions, see SL 30001.323 and SL 30001.331).

The designated official(s) may be named in the enabling act, statutes, or other authorities (e.g., from the Board of Directors or the Chairperson). All interstate instrumentalities can provide coverage for police officers and firefighters in positions covered under a retirement system.

Since there is no specific State Administrator to educate the interstate instrumentality's employees on the referendum procedures, the regional office Section 218 specialist (RO specialist), upon the interstate instrumentality's request, may assist the interstate instrumentality's chief executive officer to ensure a proper referendum is held.

The interstate instrumentality should reach out to the RO specialist in which the interstate instrumentality's principal office is located when requesting such assistance and provide a point of contact. To contact the regional office, refer to the SSA Regional Office State and Local Coverage Specialists. The regional office retains the discretion to determine the level of assistance to provide on a case-by-case basis.

Where an interstate instrumentality legally dissolves and no longer exists, coverage under its Agreement effectively ends. The interstate instrumentality should notify the regional office of the dissolution as it occurs and provide SSA with documentary evidence of the dissolution. SSA will annotate its records to reflect the effective termination of the Agreement. For details on what evidence to provide for legal dissolution, please see SL 40001.485C.

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  SL 40001.410 Original Section 218 Agreement

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  SL 40001.420 Modifications to the Agreement