(a) An applicant to become a direct report shall submit the following documentation with the following content:
(1) If contributions required to be paid by a member are picked up for the sole purpose of deferring taxes as authorized by Section 414(h)(2) of the Internal Revenue Code of 1986 (26 U.S.C.A Sec 414(h)(2)) and Section 17501 of the Revenue and Taxation Code, a resolution adopted by the district's governing board certifying its intent to pick up member contributions in compliance with those provisions and the Teachers' Retirement Law.
(2) A resolution adopted by the district's governing board resolving to become a direct report to the system and certifying each of the following.
(A) “[District] hereby elects to become a direct report to the California State Teachers' Retirement System, effective on July 1, [effective year].”
(B) “[District] has a payroll system independent of the county.”
(C) The district is fiscally accountable, fiscally independent, or both, as demonstrated by including the relevant statements from either of the following subdivisions:
(i) For a school district: “[District] is [fiscally accountable as defined in Section 42647/ fiscally independent as defined in Section 42650/ both fiscally accountable and fiscally independent as defined in Sections 42647 and 42650] of the Education Code.”
(ii) For a community college district: “[District] is [fiscally accountable as defined in Section 85266/ fiscally independent as defined in Section 85266.5/ both fiscally accountable and fiscally independent as defined in Sections 85266 and 85266.5] of the Education Code.”
(D) “[District] has the ability to be in full compliance with the file layouts specified in Division 3 of Title 5 of the California Code of Regulations.”
(E) “[District] is responsible for submitting contribution data and remitting contributions in accordance with the Teachers' Retirement Law.”
(F) “[District] is responsible for submitting contribution data and remitting contributions for all adjustments to contributions that relate to service performed prior to the effective date of the direct reporting relationship as requested by the system or as identified by the district.”
(G) “[District] is responsible for payment of any penalty assessments for contributions and data submitted as a direct report on or after the effective date of the direct reporting relationship.”
(H) “[District] is responsible for submitting all contribution data and remitting all contributions on and after the effective date of becoming a direct report.”
(I) “For the last five fiscal years, [District] has been issued an unqualified opinion on its annual financial audit pursuant to Section 41020 or 84040 of the Education Code.”
(J) The district has maintained a status of acceptable standing with the most current accrediting body by affirming the relevant statement from either of the following subdivisions:
(i) For a school district: “[District] has not been on probationary accreditation status nor had its accreditation status withheld by the most current accreditation body sanctioned by the California Department of Education in the last five fiscal years.”
(ii) For a community college district: “[District] has not been ordered to show cause or been subject to the equivalent strictest sanctions applied from the most current accreditation body sanctioned by the Board of Governors of the California Community Colleges in the last five fiscal years.”
(K) “[District] shall notify the system within three business days if its payroll operations are no longer independent of the county or if its fiscally accountable status or fiscal independence is revoked. If any of these occur, the district shall cease submitting contribution data and remitting contributions to the system directly and shall resume submitting contribution data and remitting contributions through [County] effective on the date following revocation.”
(L) The relevant statement from either of the following subdivisions:
(i) For a school district: “[District] shall notify the system within three business days if it is placed on one-year probationary accreditation status or has its accreditation status withheld or an equivalent status by the accrediting body.”
(ii) For a community college district, “[District] shall notify the system within three business days if it is ordered to show cause or is placed on an equivalent status or sanction by the accrediting body.”
(M) “If [district] is terminated as a direct report, [County] shall be responsible for submitting or remitting any missed reports, adjustments, contributions, penalties, and interest associated with the time period that the district was a direct report.”
(N) “[District] may terminate the direct reporting relationship only when the system, the district, and [County] have agreed to the employer terminating the relationship.”
(3) A resolution adopted by the county governing authority authorizing the district to become a direct report to the system and certifying each of the following:
(A) “On [date district's governing board approved resolution], [District] elected to become a direct report to the system effective on July 1, [effective year].”
(B) “[District] meets the eligibility requirements of the system, as specified on a resolution adopted by the district's governing board to become a direct report pursuant to paragraph (2) of subdivision (a) of Section 27703 of the California Code of Regulations.”
(C) “[County] is not responsible for submitting contribution data and remitting contributions, including adjustments to contribution data and contributions made prior to the effective date of [District] becoming a direct report.”
(D) “[County] is not responsible for any penalty or interest assessments for contributions and data submitted by [District] as a direct report on or after the effective date of becoming a direct report for the duration of the direct reporting relationship.”
(E) “If [District] is terminated as a direct report, [County] is responsible for submitting and remitting any and all reports, adjustments, contributions, penalties and interest to the system.”
(F) “[County] shall notify the system within three business days of revocation should the district's fiscally accountable status or fiscal independence be revoked, and shall resume submitting contribution data and remittance on behalf of the district on the revocation effective date.”
