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

(1) "Employee" means full-time officers and employees of a new state agency; provided, however, that such term shall not mean an individual classified by an employer as an independent contractor or a leased employee within the meaning of Section 414(n) of the Internal Revenue Code, even if such individual is later reclassified by the Internal Revenue Service as a common law employee.

(2) "Employer" means a new state agency paying the compensation of an employee.

(3) "New state agency" means any department, division, board, bureau, commission, institution, or other agency of the state or any state public authority which first becomes established or active on or after July 1, 1992.

(4) "State public authority" means any public authority or public corporation created by general law to carry out state purposes or functions, and the term does not include public authorities created by general law to carry out purposes or functions within or on behalf of counties, municipalities, or other political subdivisions and which are activated by action of individual political subdivisions.

(b) Except as otherwise provided by subsection (c) of this Code section, the employees of a new state agency shall be members of the retirement system as a condition of employment without the necessity of any further amendment to this chapter to include specifically such employees as members of the retirement system. The employers of such employees shall have the same duties and obligations that are applicable to other employers under the retirement system. The employees of new state agencies shall be subject to the provisions of Code Section 47-2-334, except that if a member of the retirement system becomes an employee of a new state agency without any break in service, the member shall retain the same status which the member possessed at the time of becoming an employee of the new state agency.

(c) If the law which establishes or activates a new state agency prohibits officers or employees of the new state agency from being members of the retirement system or limits membership to specified officers or employees of the new state agency, then the provisions of such law shall control over the provisions of subsection (b) of this Code section.

(d) (1) As used in this subsection, the term:

(A) "Corporation" means the Georgia Lottery Corporation created by Code Section 50-27-4.

(B) "Section 401(k) plan" means the deferred compensation plan offered by the state for public employees pursuant to Section 401(k) of the federal Internal Revenue Code on July 1, 1998, as now or subsequently amended.

(C) "Termination date" means the earlier of:

(i) The date on which the corporation receives a favorable ruling from the federal Internal Revenue Service as to the corporation's participation in the Section 401(k) plan; or

(ii) The date on which the corporation establishes a tax qualified retirement plan for its officers and employees.

(2) Notwithstanding the provisions of subsection (c) of this Code section, no person employed as an officer or employee of the corporation on or after the termination date shall be a member of this retirement system. Any member who on the termination date is a member of this retirement system may make an irrevocable election to retain membership in this retirement system by notifying the board of trustees in writing not later than 60 days following the termination date. Any person who so elects to remain a member of this retirement system shall not be eligible to participate in any tax qualified retirement plan offered by such corporation.

(3) If the corporation participates in the Section 401(k) plan, it shall not be authorized to maintain for its officers and employees any tax qualified retirement plan other than the plan qualified under Section 457 of the federal Internal Revenue Code on July 1, 1998.

(4) The corporation's participation in either the Section 401(k) plan or any tax qualified retirement plan maintained by the corporation shall be subject to the following conditions:

(A) The maximum percentage of a participant's annual salary which the corporation may pay into the plan for or on behalf of the participant shall not exceed 7 1/2 percent; and

(B) Each participant shall have a vested interest in employer contributions in accordance with the schedule in the subaccount of the Section 401(k) plan providing for employer contributions which is in existence on July 1, 1998, as now or hereafter amended.