§ 404.1020 Work for States and their political subdivisions and instrumentalities. ( a ) *General.* If you work as an employee of a State, a political subdivision of a State, or any wholly owned instrumentality of one or more of these, your work is excluded from employment unless— ( 1 ) The work is covered under an agreement under section 218 of the Act (see subpart M of this part); or
( 2 ) The work is *covered transportation service* as defined in section 210(k) of the Act (see paragraph (c) of this section).
( 3 ) You perform services after July 1, 1991, as an employee of a State (other than the District of Columbia, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa), a political subdivision of a State, or any wholly owned instrumentality of one or more of the foregoing and you are not a member of a retirement system of such State, political subdivision, or instrumentality. Retirement system has the meaning given that term in section 218(b)(4) of the Act, except as provided in regulations prescribed by the Secretary of the Treasury. This paragraph does not apply to services performed— ( i ) As an employee employed to relieve you from unemployment;
( ii ) In a hospital, home, or other institution where you are a patient or inmate thereof;
( iii ) As an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or other similar emergency;
( iv ) As an election official or election worker if the remuneration paid in a calendar year for such service prior to 1995 is less than $100, or less than $1000 for service performed in any calendar year after 1994 and before 2000, or, for service performed in any calendar year after 1999, less than the $1000 base amount, as adjusted pursuant to section 218(c)(8)(B) of the Social Security Act to reflect changes in wages in the economy. We will publish this adjustment of the $1000 base amount in the Federal Register on or before November 1 preceding the year for which the adjustment is made.
( v ) As an employee in a position compensated solely on a fee basis which is treated, pursuant to section 211(c)(2)(E) of the Act, as a trade or business for purposes of inclusion of the fees in net earnings from self-employment; or
( 4 ) The work is covered under § 404.1021 or § 404.1022.
( b ) *Medicare qualified government employment.* Notwithstanding the provisions of paragraph (a) of this section, your work may be covered as Medicare qualified government employment (see § 404.1018b(c) of this subpart).
( c ) *Covered transportation service* — ( 1 ) *Work for a public transportation system.* If you work for a public transportation system of a State or political subdivision of a State, your work may be covered transportation service if all or part of the system was acquired from private ownership. You must work as an employee of the State or political subdivision in connection with its operation of a public transportation system for your work to be covered transportation service. This paragraph sets out additional conditions that must be met for your work to be covered transportation service. If you work for a public transportation system but your work is not covered transportation service, your work may be covered for social security purposes under an agreement under section 218 of the Act (see subpart M of this part).
( 2 ) *Transportation system acquired in whole or in part after 1936 and before 1951.* All work after 1950 for a public transportation system is covered transportation service if— ( i ) Any part of the transportation system was acquired from private ownership after 1936 and before 1951; and
( ii ) No general retirement system covering substantially all work in connection with the operation of the transportation system and guaranteed by the State constitution was in effect on December 31, 1950.
( 3 ) *Transportation system operated on December 31, 1950, no part of which was acquired after 1936 and before 1951.* If no part of a transportation system operated by a State or political subdivision on December 31, 1950, was acquired from private ownership after 1936 and before 1951, work for that public transportation system is not covered transportation service unless performed under conditions described in paragraph (b)(4) of this section.
( 4 ) *Addition after 1950 to existing transportation system.* Work for a public transportation system part of which was acquired from private ownership after 1950 as an addition to an existing transportation system is covered transportation service beginning with the first day of the third calendar quarter following the calendar quarter in which the addition was acquired if— ( i ) The work is performed by an employee who— ( A ) Worked in employment in connection with the operation of the addition before the addition was acquired by the State or political subdivision; and
( B ) Became an employee of the State or political subdivision in connection with and at the time of its acquisition of the addition;
( ii ) On that first day, work performed by that employee is— ( A ) Not covered by a general retirement system; or
( B ) Covered by a general retirement system which contains special provisions that apply only to employees described in paragraph (c)(4)(i)(B) of this section;
( iii ) The existing transportation system was operated by the State or political subdivision on December 31, 1950; and
( iv ) Work for the existing transportation system was not covered transportation service because— ( A ) No part of the system was acquired from private ownership after 1936 and before 1951; or
( B ) The general retirement system described in paragraph (c)(2)(ii) of this section was in effect on December 31, 1950.
( 5 ) *Transportation system acquired after 1950.* All work for a public transportation system is covered transportation service if— ( i ) The transportation system was not operated by the State or political subdivision before 1951;
( ii ) All or part of the transportation system was first acquired from private ownership after 1950; and
( iii ) At the time the State or political subdivision first acquired any part of its transportation system from private ownership, it did not have a general retirement system covering substantially all work performed in connection with the operation of the transportation system.
( 6 ) *Definitions.* ( i ) The term *general retirement system* means any pension, annuity, retirement, or similar fund or system established by a State or by a political subdivision of a State for employees of the State, the political subdivision, or both. The term does not include a fund or system which covers only work performed in positions connected with the operation of the public transportation system.
( ii ) A transportation system (or part of a system) is considered to have been acquired from private ownership by a State or political subdivision if— ( A ) Before the acquisition, work performed by employees in connection with the operation of the system (or an acquired part) constituted employment under the Act; and
( B ) Some of these employees became employees of the State or political subdivision in connection with and at the time of the acquisition.
( iii ) The term *political subdivision* includes an instrumentality of a State, of one or more political subdivisions of a State, or of a State and one or more of its political subdivisions.
[45 FR 20075, Mar. 27, 1980, as amended at 57 FR 59910, 59914, Dec. 17, 1992; 61 FR 38366, July 24, 1996; 69 FR 51556, Aug. 20, 2004]