Amend HB 3125 by adding SECTIONS 2 and 3 and renumbering 
subsequent sections appropriately.
	"SECTION 2.  Section 830.107, Government Code, is amended by 
amending Subsection (a) and adding Subsections (c) and (d) to read 
as follows:
	(a)  A participant in the optional retirement program may 
authorize the payment of investment advisory fees from the amount 
in the participant's custodial account or annuity if:
		(1)  the investment advisory fees for each fiscal year 
do not exceed two percent of the annual value of the participant's 
custodial account or annuity as of the last day of that fiscal year;
		(2)  the fees are paid directly to a registered 
investment advisor that provides investment advice to the 
participant;
		(3)  the investment advisor to whom the fees are paid is 
registered with the Securities and Exchange Commission under the 
Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.), 
[and] is engaged full-time in the business of providing investment 
advice, and is registered with one or more of the optional 
retirement program vendors currently authorized by the 
participant's employing institution of higher education;
		(4)  the participant and the investment advisor enter 
into a contract, for a term of no more than one year, for services 
that provides for the payment of fees as provided by this section; 
and
		(5)  the attorney general has received an official 
determination from the Internal Revenue Service that payment of 
investment advisory fees as prescribed by this section is not a 
distribution of funds that is prohibited or subject to taxation and 
penalty under the Internal Revenue Code.
	(c)  Each institution:                                                  
		(1)  may require each currently authorized vendor to 
certify on at least an annual basis that each investment advisor to 
whom optional retirement program funds are remitted as payment for 
investment advisor services meets all requirements of this section;
		(2)  may:                                                              
			(A)  require that any investment advisor to whom a 
vendor remits optional retirement program funds be registered with 
the institution as a service provider; and
			(B)  subject the investment advisor to all 
policies and procedures adopted by the institution;
		(3)  may prohibit the payment of investment advisory 
fees to an investment advisor by deduction from a participant's 
optional retirement program account if the investment advisor fails 
to register or comply with the institution's policies and 
procedures; and
		(4)  shall prohibit a vendor from paying investment 
advisor fees to any investment advisor that does not or ceases to 
meet the requirements of this section.
	(d)  An investment advisor registered with an institution 
under this section must comply with all policies and procedures 
adopted by the institution and, at the discretion of the 
institution, may be prohibited from providing investment advisory 
services to the institution's participants for failure to comply.
	SECTION 3.  Section 830.107, Government Code, as amended by 
this Act applies only to a contract for investment advisory 
services entered into under the optional retirement program on or 
after September 1, 2005.  A contract entered into before September 
1, 2005, is governed by the law in effect on the date the contract 
was executed, and that law is continued in effect for that purpose."