(b) An employer's application for participation in the system shall:

1. (1) Specify a proposed effective date for participation in the system; and

2. (2) Include the following information and materials:

   1. (A) A certified copy of the articles of incorporation, bylaws, and other organizational documents of employer;
   2. (B) A copy of the employer's:

(i) Most recent three (3) years' annual audited financial statements, including balance sheets, financial statements, and statements of cash flows; or

1. (ii) If the employer does not have audited financial statements, the year-end compilation reports or internal balance sheets and income statements for the employer;

   1. (C) A copy of the employer's most recent three (3) years' federal and state income tax returns;
   2. (D) A description of the employer's sources of funding, including the percentage of the funds that is provided by the federal or state government and the type of government funding provided;
   3. (E) A description of how the employer's board of directors or board of trustees is selected and whether any governmental agency has input in the selection of the board members;
   4. (F) A description of the types of services provided by the employer; and

   5. (G) A description of each government agency that would be responsible for providing the types of services provided by the employer if the employer did not provide the services.

      1. (c)

2. (1) After the system reviews the employer's application and accompanying information and materials, the system shall:

   1. (A) Determine whether an Internal Revenue Service ruling should be requested concerning whether or not the participation of the employees of the employer jeopardizes the system's status as a governmental plan; and
   2. (B) Request any necessary additional information and statements from the employer if the system determines that an Internal Revenue Service ruling should be requested.
3. (2) The employer shall provide the system with any additional information and statements requested by the system in relation to the Internal Revenue Service ruling.

4. (3) The employer shall pay the system three thousand dollars ($3,000) or the actual cost for fees and costs associated with obtaining the Internal Revenue Service ruling if the system determines that an Internal Revenue Service ruling should be requested.

   1. (d)
5. (1) The Board of Trustees of the Arkansas Teacher Retirement System shall consider and vote on an application for employer participation or continued participation.

6. (2) When considering an application for employer participation, the Board of Trustees of the Arkansas Teacher Retirement System:

   1. (A) Shall consider any relevant constitutional arguments brought to the attention of the executive director concerning the employer's application for employer participation;
   2. (B) Shall consider Rev. Rul. 89-49, 1989-1 C.B. 117; and
   3. (C) May consider any other relevant rulings issued by the Internal Revenue Service or the United States Department of Labor.