Amend CSSB 1246 as follows: (1) In Article 20C.14(a), Insurance Code, as added by SECTION 1 of the bill (page 9, line 17, House Committee Printing), strike "The state" and substitute "To the extent consistent with federal law, the state". (2) In Article 20C.14(b), Insurance Code, as added by SECTION 1 of the bill (page 9, line 26, House Committee Printing), strike "state fiscal biennium." and substitute "state fiscal biennium, except that the system shall receive a subcontract from the funding entity to provide services to those children if the system elects to receive a subcontract not later than November 1, 1997, the system provides the state share of matching funds for the entire population covered by the subcontract, and the subcontract does not cover an area that is included in the statutory territorial jurisdiction of a hospital district. If the system elects not to receive a subcontract or to provide the state share of matching funds, then any entity that is selected by the state Medicaid contracting entity to provide health care to those children shall use existing local health care providers and hospital providers in establishing its provider network." (3) In Article 20C.14, Insurance Code, as added by SECTION 1 of the bill (page 10, between lines 20 and 21, House Committee Printing), insert a new Subsection (f) to read as follows: "(f) The state retains the right to cancel a contract awarded under this article if the system is sold or dissolved."