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.
The consent of Congress is required for the creation of some interstate instrumentalities.