(a) As used in this Code section, the term:

(1) "Independent school system" means the independent school system of a municipality.

(2) "Local retirement fund" means a local retirement fund covering teachers employed by an independent school system.

(3) "Municipality" means any municipality of this state having a population of 300,000 or more according to the United States decennial census of 1970 or any future such census.

(4) "Teacher" means any teacher as defined by Code Section 47-3-1 who is employed by an independent school system.

(b) Any teacher who is employed by an independent school system after July 1, 1979, shall become a member of the retirement system as a condition of employment, and such teacher shall not be eligible for membership in a local retirement fund.

(c) Teachers who are actively employed on July 1, 1979, by an employer operating under a local retirement fund may elect to transfer from membership in the local retirement fund to membership in the Teachers Retirement System of Georgia, effective July 1, 1979. Such election must be made before July 1, 1979, in a manner prescribed by the board of trustees. All such teachers who transfer their membership to the retirement system under this Code section shall receive creditable service under the retirement system, equivalent to the creditable service such teachers had under the local retirement fund as of the date all payments are made as provided in subsections (d) and (e) of this Code section, provided that no creditable service shall be granted for service which would not otherwise be allowable under the retirement system. The board of trustees shall cause the records of such transferred teachers, after verification in the manner prescribed by the board of trustees, to reflect such creditable service.

(d) For each teacher becoming a member of the retirement system pursuant to subsection (c) of this Code section, the fiscal authority or other governing body, by whatever name designated, of the local retirement fund shall be empowered and shall have the duty to pay to the board of trustees the amount of contributions paid by such teacher to the local retirement fund and credited to each such teacher under it, together with applicable accrued regular interest, as determined by the board of trustees, to the date of payment. The fiscal authority or other governing body shall have the duty to notify the board of trustees as to the amount paid on behalf of each such teacher. Such payment shall be made to the board of trustees by not later than October 1, 1979, or by the date of retirement of any teachers who retire prior to October 1, 1979, whichever is earlier.

(e) Each teacher who becomes a member of the retirement system pursuant to subsection (c) of this Code section shall pay to the board of trustees the amount of contributions which would have been paid by the teacher to the retirement system had the teacher been a member of the retirement system during the period of creditable service established pursuant to subsection (c) of this Code section, plus interest, as provided in this subsection, which would have accumulated on such contributions, less the amount paid on behalf of each such teacher pursuant to subsection (d) of this Code section. Interest which would have accumulated on such contributions shall be computed on the basis of regular accrued interest until January 1, 1982, and on the basis of 16 percent per annum from January 1, 1982, until the payment required by this subsection is made. The board of trustees shall determine the amount to be paid as interest. Such payment shall and must be made to the board of trustees in the manner prescribed by the board of trustees by not later than December 31, 1983, or by the date of retirement for any teacher who retires prior to December 31, 1983, whichever is earlier.

(f) The fiscal authority or other governing body, by whatever name designated, of the local retirement fund or the independent school system, or both, or their successors in interest, shall be empowered and shall have the duty to pay to the board of trustees an amount of employer contributions (not less than zero) actuarially determined by the board of trustees under the following formula:

A = B - ((C / D) x E)

A = Amount of employer contributions payable to the board of trustees under this subsection.

B = Unfunded accrued liability, determined as of June 30, 1979, of those teachers who transfer to the retirement system pursuant to subsection (c) of this Code section and determined on the basis of the same methods and assumptions used in preparing the regular annual actuarial evaluation, as if those teachers who transfer had been members of the retirement system on June 30, 1979, less the payments made pursuant to subsections (d) and (e) of this Code section.

C = Unfunded accrued liability, determined as of June 30, 1979, of the retirement system, determined without regard to any teacher in the employ of an independent school system as defined in subsection (a) of this Code section.

D = The total annual earnable compensation for the fiscal year ending June 30, 1979, of members of the retirement system, plus the annual state compensation for the fiscal year ending June 30, 1979, of members of local retirement funds other than a local retirement fund as defined in subsection (a) of this Code section.

E = The total earnable compensation for the fiscal year ending June 30, 1979, of those teachers who transfer to the retirement system pursuant to subsection (c) of this Code section.

(g) Payment of the amount determined under subsection (f) of this Code section shall be made to the board of trustees in 39 equal annual installments to be paid by June 30 of each year beginning on June 30, 1980, and in the manner prescribed by the board of trustees. In addition to payment of the installments of the amount determined under subsection (f) of this Code section, annual interest shall be added to each payment computed on the unpaid balance of such amount at a rate equal to the average rate of return on fixed income investments made by the retirement system during the preceding calendar year. By May 1 of each year, the board of trustees shall notify the fiscal authority or other governing body, by whatever name designated, of the local retirement fund or the independent school system, or both, or their successors in interest, as to the amount due by the following June 30. The amount in the notification will include the interest as computed pursuant to this subsection and shall and must be paid by the following June 30. The fiscal authority or other governing body, by whatever name designated, of the local retirement fund or the independent school system, or both, or their successors in interest, shall be empowered and shall have the duty to pay this interest.

(h) The employer of any teachers who become members of this retirement system under this Code section and any such teachers shall have all the rights, obligations, and duties under this Code section and as provided by any other provisions of this chapter.

(i) If the fiscal authority or other governing body, by whatever name designated, of the local retirement fund or the independent school system, or both, or their successors in interest, refuse or fail to make any payment required by this Code section, it shall be the duty of the board of trustees to notify the Office of Treasury and Fiscal Services and the State Board of Education of such refusal or failure; and thereupon it shall be the duty of the Office of Treasury and Fiscal Services and the State Board of Education to withhold from such fiscal authority or other governing body any state appropriations or any other funds which would be allocated or allocable for educational purposes to such fiscal authority or other governing body until the Office of Treasury and Fiscal Services and the State Board of Education receives authorization from the board of trustees to release such funds. The Office of Treasury and Fiscal Services and the State Board of Education are authorized and directed, upon certified request of the board of trustees, to remit to the board of trustees from such withheld funds the amount necessary to cover the amount which the fiscal authority or other governing body has refused or failed to pay to the board of trustees under this Code section. It shall be illegal for the Office of Treasury and Fiscal Services and the State Board of Education to pay out or release such funds, after notice from the board of trustees, until and unless compliance with this Code section is achieved. The Office of Treasury and Fiscal Services and the State Board of Education are authorized to release the remainder of all such withheld funds upon authorization from the board of trustees.

(j) Notwithstanding any of the provisions of this Code section to the contrary, if the fiscal authority or other governing body, by whatever name designated, of the local retirement fund or the independent school system, or both, or their successors in interest, refuses or fails to make the payments specified in subsections (d), (f), and (g) of this Code section and if subsection (i) of this Code section fails sufficiently and completely to cover the amount of such nonpayment or payment failure, the teachers transferring to the retirement system pursuant to subsection (c) of this Code section shall incur a pro rata reduction in creditable service or retirement allowances, or both, to be determined by the board of trustees, sufficient to compensate financially and actuarially for the failure or refusal of payment or the inability or nonavailability of funds from which to cover the payment failure or refusal of payment.

(k) The fiscal authority or other governing body, by whatever name designated, of the local retirement fund or the independent school system, or both, or their successors in interest, shall make such certifications as are requested by the board of trustees to implement and effectuate this Code section.

(l) No provision of this Code section shall be construed to result in any increase in the rate of employer contributions paid by employers based on the part of the earnable compensation of members not payable from state teachers' salary funds or from other funds of the state.

(m) No provision of this Code section shall be construed to result in any increase in the rate of employee contributions paid by employees other than those employees who become members of this retirement system pursuant to this Code section.