Amend CSHB 2664 by striking all below the enacting clause and 
substituting the following:
	SECTION 1.  Subchapter B, Chapter 802, Government Code, is 
amended by adding Section 802.1012 to read as follows:
	Sec. 802.1012.  AUDITS OF ACTUARIAL VALUATIONS, STUDIES, AND 
REPORTS.  (a)  In this section, "governmental entity" means a unit 
of government that is the employer of active members of a public 
retirement system.
	(b)  Except as provided by Subsection (k), this section 
applies only to a public retirement system with total assets the 
book value of which, as of the last day of the preceding fiscal 
year, is at least $100 million.
	(c)  Every five years, the actuarial valuations, studies, 
and reports of a public retirement system most recently prepared 
for the retirement system as required by Section 802.101 or other 
law under this title or under Title 109, Revised Statutes, must be 
audited by an independent actuary who:
		(1)  is engaged for the purpose of the audit by the 
governmental entity; and
		(2)  has the credentials required for an actuary under 
Section 802.101(d).
	(d)  Before beginning an audit under this section, the 
governmental entity and the independent actuary must agree in 
writing to maintain the confidentiality of any nonpublic 
information provided by the public retirement system for the audit.
	(e)  Before beginning an audit under this section, the 
independent actuary must meet with the manager of the pension fund 
for the public retirement system to discuss the appropriate 
assumptions to use in conducting the audit.
	(f)  Not later than the 30th day after completing the audit 
under Subsection (c), the independent actuary shall submit to the 
public retirement system for purposes of discussion and 
clarification a preliminary draft of the audit report that is 
substantially complete.
	(g)  The independent actuary shall:                                     
		(1)  discuss the preliminary draft of the audit report 
with the governing body of the public retirement system; and
		(2)  request in writing that the retirement system, on 
or before the 30th day after the date of receiving the preliminary 
draft, submit to the independent actuary any response that the 
retirement system wants to accompany the final audit report.
	(h)  The independent actuary shall submit to the 
governmental entity the final audit report that includes the audit 
results and any response received from the public retirement 
system:
		(1)  not earlier than the 31st day after the date on 
which the preliminary draft is submitted to the retirement system; 
and
		(2)  not later than the 60th day after the date on which 
the preliminary draft is submitted to the retirement system.
	(i)  At the first regularly scheduled open meeting after 
receiving the final audit report, the governing body of the 
governmental entity shall:
		(1)  include on the posted agenda for the meeting the 
presentation of the audit results;
		(2)  present the final audit report and any response 
from the public retirement system; and
		(3)  provide printed copies of the final audit report 
and the response from the public retirement system for individuals 
attending the meeting.
	(j)  The governmental entity shall:                                     
		(1)  maintain a copy of the final audit report at its 
main office for public inspection;
		(2)  submit a copy of the final audit report to the 
public retirement system and the State Pension Review Board not 
later than the 30th day after the date the final audit report is 
received by the governmental entity; and
		(3)  pay all costs associated with conducting the audit 
and preparing and distributing the report under this section.
	(k)  This section does not apply to the Employees Retirement 
System of Texas, the Teacher Retirement System of Texas, the Texas 
County and District Retirement System, the Texas Municipal 
Retirement System, or the Judicial Retirement System of Texas Plan 
Two.
	SECTION 2.  The first audit required under Section 802.1012, 
Government Code, as added by this Act:
		(1)  shall be conducted not later than September 1, 
2008; and               
		(2)  must include an audit of each actuarial valuation, 
study, and report of the public retirement system that was prepared 
for that retirement system in the preceding five years.
	SECTION 3.  This Act takes effect September 1, 2007.