By:  Bivins                                           S.R. No. 1255
                                  SENATE RESOLUTION
 1-1           BE IT RESOLVED by the Senate of the State of Texas, 77th
 1-2     Legislature, Regular Session, 2001, That Senate Rule 12.03 be
 1-3     suspended in part as provided by Senate Rule 12.08 to enable the
 1-4     conference committee appointed to resolve the differences on House
 1-5     Bill No. 3343, relating to the operation and funding of certain
 1-6     group coverage programs for certain school and educational
 1-7     employees and their dependents, to consider and take action on the
 1-8     following matters:
 1-9           (1)  Senate Rules 12.03(1) and (4) are suspended to permit
1-10     the committee to add text changing Section 2, Article 3.50-7,
1-11     Insurance Code, as added by SECTION 1.01, House Bill No. 3343, to
1-12     read as follows:
1-13           Sec. 2.  DEFINITIONS.  In this article:
1-14                 (1)  "Administering firm" means any entity designated
1-15     by the trustee to administer any coverages, services, benefits, or
1-16     requirements under this article and the trustee's rules adopted
1-17     under this article.
1-18                 (2)  "Charter school"  means an open-enrollment charter
1-19     school established under Subchapter D, Chapter 12, Education Code.
1-20                 (3)  "Dependent" means:
1-21                       (A)  a spouse of a full-time employee or
1-22     part-time employee;
1-23                       (B)  a full-time or part-time employee's
1-24     unmarried child who is younger than 25 years of age, including:
1-25                             (i)  an adopted child;
 2-1                             (ii)  a foster child, stepchild, or other
 2-2     child who is in a regular parent-child relationship; and
 2-3                             (iii)  a recognized natural child;
 2-4                       (C)  a full-time or part-time employee's
 2-5     recognized natural child, adopted child, foster child, stepchild,
 2-6     or other child who is in a regular parent-child relationship and
 2-7     who lives with or whose care is provided by the employee or the
 2-8     surviving spouse on a regular basis, regardless of the child's age,
 2-9     if the child is mentally retarded or physically incapacitated to
2-10     such an extent as to be dependent on the employee or surviving
2-11     spouse for care or support, as determined by the trustee; and
2-12                       (D)  notwithstanding any other provision of this
2-13     code, any other dependent of a full-time or part-time employee
2-14     specified by rules adopted by the trustee.
2-15                 (4)  "Employee" means a participating member of the
2-16     Teacher Retirement System of Texas who is employed by a
2-17     participating entity and who  is not receiving coverage from a
2-18     uniform group insurance program under the Texas Employees Uniform
2-19     Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
2-20     Insurance Code) or the Texas State College and University Employees
2-21     Uniform Insurance Benefits Act (Article 3.50-3, Vernon's Texas
2-22     Insurance Code) or from the Texas Public School Retired Employees
2-23     Group Insurance Program established under Article 3.50-4 of this
2-24     code.  The term does not include an individual performing personal
2-25     services as an independent contractor.
2-26                 (5)  "Health coverage plan" means any group policy or
 3-1     contract, hospital service agreement, health maintenance
 3-2     organization agreement, preferred provider arrangement, or any
 3-3     similar group arrangement or any combination of those policies,
 3-4     contracts, agreements, or arrangements that provides for, pays for,
 3-5     or reimburses expenses for health care services.
 3-6                 (6)  "Participating entity" means an entity
 3-7     participating in the uniform group coverage program established
 3-8     under this article.  The term includes:
 3-9                       (A)  a school district;
3-10                       (B)  another educational district whose employees
3-11     are members of the Teacher Retirement System of Texas;
3-12                       (C)  a regional education service center; and
3-13                       (D)  a charter school that meets the requirements
3-14     of Section 6 of this article.
3-15                 (7)  "Program" means the uniform group coverage program
3-16     established under this article.
3-17                 (8)  "Regional education service center" means a
3-18     regional education service center established under Chapter 8,
3-19     Education Code.
3-20                 (9)  "Trustee" means the Teacher Retirement System of
3-21     Texas.
3-22           Explanation:  This change is necessary to clarify who is a
3-23     dependent eligible for coverage under the new group coverage
3-24     program and to clarify that certain educational districts whose
3-25     employees are members of the Teacher Retirement System of Texas are
3-26     also  eligible to participate in the program.
 4-1           (2)  Senate Rule 12.03(4) is suspended to permit the
 4-2     committee to add text changing Sections 4(d) and (e), Article
 4-3     3.50-7, Insurance Code, as added by SECTION 1.01, House Bill
 4-4     No. 3343, to read as follows:
 4-5           (d)  During the initial period of eligibility, coverage
 4-6     provided under the program may not be made subject to a preexisting
 4-7     condition limitation.
 4-8           (e)  The trustee may offer optional coverages to employees
 4-9     participating in the program.  The trustee by rule may define the
4-10     types of optional coverages offered under this subsection.
4-11           Explanation:  These changes are necessary to clarify that
4-12     preexisting condition limitations may not be imposed during the
4-13     initial eligibility, and to authorize the provision of certain
4-14     optional coverages to participating employees.
4-15           (3)  Senate Rule 12.03(4) is suspended to permit the
4-16     committee to add text changing Section 5, Article 3.50-7, Insurance
4-17     Code, as added by SECTION 1.01, House Bill No. 3343, to read as
4-18     follows:
4-19           Sec. 5.  PARTICIPATION IN PROGRAM BY SCHOOL DISTRICTS, OTHER
4-20     EDUCATIONAL DISTRICTS, AND REGIONAL EDUCATION SERVICE CENTERS.
4-21     (a)  Effective September 1, 2002, each school district with 500 or
4-22     fewer employees and each regional education service center is
4-23     required to participate in the program.
4-24           (a-1)  Effective September 1, 2002, a school district that,
4-25     on January 1, 2001, had more than 500 employees but not more than
4-26     1,000 employees may elect to participate in the program.  A school
 5-1     district that elects to participate in the program under this
 5-2     subsection must notify the trustee of the election, in the manner
 5-3     prescribed by the trustee, not later than September 30, 2001.  This
 5-4     subsection expires January 1, 2002.
 5-5           (b)  Effective September 1, 2005, a school district with more
 5-6     than 500 employees may elect to participate in the program.  A
 5-7     school district that elects to participate under this subsection
 5-8     shall apply for participation in the manner prescribed by the
 5-9     trustee by rule.
5-10           (b-1)  Notwithstanding Subsection (b) of this section, a
5-11     school district with more than 500 employees may elect to
5-12     participate in the program before September 1, 2005, if the trustee
5-13     determines that participation by districts in that category would
5-14     be administratively feasible and cost-effective.  This subsection
5-15     expires September 1, 2005.
5-16           (c)  In determining the number of employees of a school
5-17     district for purposes of Subsections (a) and (b) of this section,
5-18     school districts that, on January 1, 2001, were members of a risk
5-19     pool established under the authority of Chapter 172, Local
5-20     Government Code, as provided by Section 22.004, Education Code, may
5-21     elect to be treated as a single unit.  A school district shall
5-22     elect whether to be considered as a member of  a risk pool under
5-23     this section by notifying the trustee not later than September 1,
5-24     2001.
5-25           (d)  A risk pool in existence on January 1, 2001, that, as of
5-26     that date, provided group health coverage to 500 or fewer school
 6-1     district employees may elect to participate in the program.
 6-2           (e)  A school district with 500 or fewer employees that is a
 6-3     member of a risk pool described by Subsection (c) of this section
 6-4     that provides  group health coverage to more than 500 school
 6-5     district employees must elect, not later than September 1, 2001,
 6-6     whether to be treated as a school district with 500 or fewer
 6-7     employees or as part of a unit with more than 500 employees.  The
 6-8     school district must notify the trustee of the election, in the
 6-9     manner prescribed by the trustee, not later than September 1, 2001.
6-10           (f)  For purposes of this section, participation in the
6-11     program by school districts covered by a risk pool is limited to
6-12     school districts covered by the risk pool as of January 1, 2001.
6-13           (g)  Notwithstanding Subsection (a) of this section, a school
6-14     district otherwise subject to Subsection (a) of this section that,
6-15     on January 1, 2001, was individually self-funded for the provision
6-16     of health coverage to its employees may elect to not participate in
6-17     the program.
6-18           (h)  Notwithstanding Subsection (a) of this section, a school
6-19     district otherwise subject to Subsection (a) of this section that
6-20     is a party to a contract for the provision of insurance coverage to
6-21     the employees of the district that is in effect on September 1,
6-22     2002, is not required to participate in the program until the
6-23     expiration of the contract period.  A school district subject to
6-24     this subsection shall notify the trustee in the manner prescribed
6-25     by the trustee.  This subsection expires March 1, 2004.
6-26           (i)  An educational district described by Section 2(6)(B) of
 7-1     this article that, on January 1, 2001, has 500 or fewer employees
 7-2     may elect not to participate in the program.
 7-3           Explanation:  This change is necessary to clarify the
 7-4     participation in the group coverage program of educational
 7-5     districts that are not school districts but whose employees are
 7-6     members of the Teacher Retirement System of Texas, to add a January
 7-7     1, 2001, date for determination of the size of a school district or
 7-8     risk pool, and to authorize larger districts to participate before
 7-9     September 1, 2005, if the Teacher Retirement System of Texas
7-10     authorizes that early participation.            
7-11           (4)  Senate Rule 12.03(4) is suspended to permit the
7-12     committee to add text changing Sections 7(c) and (e), Article
7-13     3.50-7, Insurance Code, as added by SECTION 1.01, House Bill
7-14     No. 3343, to read as follows:
7-15           (c)  A participating employee may select coverage in any
7-16     coverage plan offered by the trustee.  The employee is not required
7-17     to continue participation in the coverage plan initially selected
7-18     and may select a higher or lower tier coverage plan than the plan
7-19     initially selected by the employee in the manner provided by
7-20     trustee rule.  If the combined contributions received from the
7-21     state and the employing participating entity under Section 9 of
7-22     this article exceed the cost of a coverage plan selected by the
7-23     employee, the employee may use the excess amount of contributions
7-24     to obtain coverage under a higher tier coverage plan, or to pay all
7-25     or part of the cost of coverage for the employee's dependents.  A
7-26     married couple, both of whom are eligible for coverage under the
 8-1     program, may pool the amount of contributions to which the couple
 8-2     are entitled under the program to obtain coverage for themselves
 8-3     and dependent coverage.
 8-4           (e)  Notwithstanding Subsection (d) of this section, a
 8-5     participating entity may pay any portion of what otherwise would be
 8-6     the employee share of premiums and other costs associated with the
 8-7     coverage selected by the employee.
 8-8           Explanation:  These changes are necessary to specify that an
 8-9     employee participating in the group coverage program may elect
8-10     higher or lower coverage plans, clarifies the use of contributions
8-11     for dependent coverage, and expands the authority to pay for part
8-12     of an employee's premiums to all participating entities.
8-13           (5)  Senate Rules 12.03(1) and (4) are suspended to permit
8-14     the committee to add text changing Section 9, Article 3.50-7,
8-15     Insurance Code, as added by SECTION 1.01, House Bill No. 3343, to
8-16     read as follows:
8-17           Sec. 9.  PAYMENT OF CONTRIBUTIONS FOR PROGRAM.  (a)  The
8-18     state shall assist employees of participating school districts and
8-19     charter schools in the purchase of group health coverage under this
8-20     article by providing for each covered employee the amount of $900
8-21     each state fiscal year or a greater amount as provided by the
8-22     General Appropriations Act.  The state contribution shall be
8-23     distributed through the school finance formulas under Chapters 41
8-24     and 42, Education Code, and used by school districts and charter
8-25     schools as provided by Sections 42.2514 and 42.260, Education Code.
8-26           (b)  The state shall assist employees of participating
 9-1     regional education service centers and educational districts
 9-2     described by Section 2(6)(B) of this article in the purchase of
 9-3     group health coverage under this article by providing to the
 9-4     employing service center for each covered employee the amount of
 9-5     $900 each state fiscal year or a greater amount as provided by the
 9-6     General Appropriations Act.
 9-7           (c)  A participating entity shall make contributions for the
 9-8     program as provided by Article 3.50-9 of this code.
 9-9           (d)  An employee covered by the program shall pay that
9-10     portion of the cost of coverage selected by the employee that
9-11     exceeds the amount of the state contribution under Subsection (a)
9-12     or (b) of this section and the participating entity contribution
9-13     under Subsection (c) of this section.  The employee may pay the
9-14     employee's contribution under this subsection from the amount
9-15     distributed to the employee under Article 3.50-8 of this code.
9-16           (e)  Notwithstanding Subsection (d) of this section, a
9-17     participating entity may pay any portion of what otherwise would be
9-18     the employee share of premiums and other costs associated with the
9-19     coverage selected by the employee.
9-20           Explanation:  This change is necessary to clarify how the
9-21     state contributions for the group coverage program will be made,
9-22     and to specify that educational districts that are not school
9-23     districts but whose employees are members of the Teacher Retirement
9-24     System of Texas are eligible for state contributions.       
9-25           (6)  Senate Rule 12.03, Sections 9(a)(4), is suspended to
9-26     permit the committee to add text changing Section 1, Article
 10-1    3.50-8, Insurance Code, as added by SECTION 1.02, House Bill
 10-2    No. 3343, by adding a new definition of "cafeteria plan" to read as
 10-3    follows:
 10-4          (1)  "Cafeteria plan" means a plan as defined and authorized
 10-5    by Section 125, Internal Revenue Code of 1986, and its subsequent
 10-6    amendments.
 10-7          Explanation:  This change is necessary to clarify that the
 10-8    reference in the bill to the use of cafeteria plans means a plan as
 10-9    prescribed by federal law.
10-10          (7)  Senate Rule 12.03(4) is suspended to permit the
10-11    committee to add text changing Section 2, Article 3.50-8, Insurance
10-12    Code, as added by SECTION 1.02, House Bill No. 3343, to read as
10-13    follows:
10-14          Sec. 2.  ACTIVE EMPLOYEE HEALTH COVERAGE OR COMPENSATION
10-15    SUPPLEMENTATION.  (a)  Each year, the trustee shall deliver to each
10-16    school district, including a school district that is ineligible for
10-17    state aid under Chapter 42, Education Code, each other educational
10-18    district that is a member of the Teacher Retirement System of
10-19    Texas, each eligible charter school, and each regional education
10-20    service center state funds in an amount, as determined by the
10-21    trustee, equal to the product of the number of employees employed
10-22    by the district, school, or service center multiplied by $1,000 or
10-23    a greater amount as provided by the General Appropriations Act for
10-24    purposes of this article.
10-25          (b)  All funds received by a school district, other
10-26    educational district, eligible charter school, or regional
 11-1    education service center under this article are held in trust for
 11-2    the benefit of the employee on whose behalf the district, school,
 11-3    or service center received the funds.
 11-4          (c)  The trustee shall distribute funds under this article in
 11-5    equal monthly installments.  The trustee is entitled to recover
 11-6    from a school district, other educational district, eligible
 11-7    charter school, or regional education service center any amount
 11-8    distributed under this article to which the district, school, or
 11-9    service center was not entitled.
11-10          (d)  A determination by the trustee under this section is
11-11    final and may not be appealed.
11-12          Explanation:  This change is necessary to clarify how the
11-13    state  contributions for the group coverage program will be paid
11-14    and allocated, and to specify that educational districts that are
11-15    not school districts but whose employees are members of the Teacher
11-16    Retirement System of Texas are eligible for state contributions.
11-17          (8)  Senate Rule 12.03(4) is suspended to permit the
11-18    committee to add text changing Section 3, Article 3.50-8, Insurance
11-19    Code, as added by SECTION 1.02, House Bill No. 3343, to read as
11-20    follows:
11-21          Sec. 3.  EMPLOYEE ELECTION.  (a)  If an employee is covered
11-22    by a cafeteria plan of a school district, other educational
11-23    district, eligible charter school, or regional education service
11-24    center, the state contribution under this article shall be
11-25    deposited in the cafeteria plan, and the employee may elect among
11-26    the options provided by the cafeteria plan.  A cafeteria plan
 12-1    receiving state contributions under this article may include a
 12-2    medical savings account option and must include, at a minimum, the
 12-3    following options:
 12-4                (1)  a health care reimbursement account;
 12-5                (2)  a benefit or coverage other than that provided
 12-6    under Article 3.50-7 of this code, or any employee coverage or
 12-7    dependent coverage available under Article 3.50-7 of this code but
 12-8    not otherwise fully funded by the state or the employer
 12-9    contributions, any of which must be a "qualified benefit" under
12-10    Section 125, Internal Revenue Code of 1986, and its subsequent
12-11    amendments;
12-12                (3)  an option for the employee to receive the state
12-13    contribution as supplemental compensation; or
12-14                (4)  an option to divide the state contribution among
12-15    two or more of the other options provided under this subsection.
12-16          (b)  If an employee is not covered by a cafeteria plan of a
12-17    school district, other educational district, eligible charter
12-18    school, or regional education service center, the state
12-19    contribution under this article shall be paid to the employee as
12-20    supplemental compensation.
12-21          (c)  Supplemental compensation under this section must be in
12-22    addition to the rate of compensation that:
12-23                (1)  the school district, other educational district,
12-24    eligible charter school, or regional education service center paid
12-25    the employee in the preceding school year; or
12-26                (2)  the district, school, or service center would have
 13-1    paid the employee in the preceding school year if the employee had
 13-2    been employed by the district, school, or service center in the
 13-3    same capacity in the preceding school year.
 13-4          (d)  For each state fiscal year, an election under this
 13-5    section must be made before the later of:
 13-6                (1)  August 1 of the preceding state fiscal year; or
 13-7                (2)  the 31st day after the date the employee is hired.
 13-8          (e)  The trustee shall prescribe and distribute to each
 13-9    school district, other educational district, eligible charter
13-10    school, and regional education service center:
13-11                (1)  a model explanation written in English and Spanish
13-12    of the options employees may elect under this section and the
13-13    effect of electing each option; and
13-14                (2)  an election form to be completed by employees.
13-15          (f)  Each state fiscal year, a school district, other
13-16    educational district, eligible charter school, or regional
13-17    education service center shall prepare and distribute to each
13-18    employee a written explanation in English and Spanish, as
13-19    appropriate, of the options the employee may elect under this
13-20    section.  The explanation must be based on the model explanation
13-21    prepared by the trustee under Subsection (e) of this section and
13-22    must reflect all available health coverage options available to the
13-23    employee.  The explanation must be distributed to an employee
13-24    before the later of:
13-25                (1)  July 1 of the preceding state fiscal year; or
13-26                (2)  the fifth day after the date the employee is
 14-1    hired.
 14-2          (g)  The written explanation under Subsection (f) of this
 14-3    section must be accompanied by a copy of the election form
 14-4    prescribed under Subsection (e)(2) of this section.
 14-5          (h)  Any unencumbered funds that are returned to the school
 14-6    district from accounts established under Subsection (a) of this
 14-7    section may be used only to provide employee compensation,
 14-8    benefits, or both.
 14-9          Explanation:  This change is necessary to clarify the options
14-10    available to employees and to clarify the requirements for employee
14-11    elections.
14-12          (9)  Senate Rule 12.03(4) is suspended to permit the
14-13    committee to add text changing Section 4, Article 3.50-8, Insurance
14-14    Code, as added by SECTION 1.02, House Bill No. 3343, by adding a
14-15    new Subsection (b) to read as follows:
14-16          (b)  The trustee may enter into interagency contracts with
14-17    any agency of this state for the purpose of assistance in
14-18    implementing this article.
14-19          Explanation:  This change is necessary to clarify that the
14-20    contract authority of the Teacher Retirement System of Texas
14-21    applies to contracts under Article 3.50-8, Insurance Code, as added
14-22    by the bill.
14-23          (9)   Senate Rule 12.03(4) is suspended to permit the
14-24    committee to add text changing Sections 1 and 2, Article 3.50-10,
14-25    Insurance Code, as added by SECTION 1.04, House Bill No. 3343
14-26    (corresponding to Article 3.50-9, Insurance Code, in conference
 15-1    committee report), to read as follows:
 15-2          Sec. 1.  DEFINITIONS.  In this article:
 15-3                (1)  "Participating employee" means an employee of a
 15-4    school district, other educational district whose employees are
 15-5    members of the Teacher Retirement System of Texas, participating
 15-6    charter school, or regional education service center who
 15-7    participates in a group health coverage plan provided by or through
 15-8    the district, school, or service center.
 15-9                (2)  "Participating charter school" means an
15-10    open-enrollment charter school established under Subchapter D,
15-11    Chapter 12, Education Code, that participates in the uniform group
15-12    coverage program established under Article 3.50-7 of this code.
15-13                (3)  "Regional education service center" means a
15-14    regional education service center established under Chapter 8,
15-15    Education Code.
15-16          Sec. 2.  MAINTENANCE OF EFFORT FOR 2000-2001 SCHOOL YEAR.
15-17    (a)  Subject to Section 3 of this article, and except as provided
15-18    by Section 5 of this article, a school district, other educational
15-19    district whose employees are members of the Teacher Retirement
15-20    System of Texas, participating charter school, or regional
15-21    education service center that, for the 2000-2001 school year, paid
15-22    amounts to share with employees the cost of coverage under a group
15-23    health coverage plan shall, for each fiscal year, use to provide
15-24    health coverage an amount for each participating employee at least
15-25    equal to the amount computed as provided by this section.
15-26          (b)  The school district, other educational district,
 16-1    participating charter school, or regional education service center
 16-2    shall divide the amount that the district, school, or service
 16-3    center paid during the 2000-2001 school year for the prior group
 16-4    health coverage plan by the total number of full-time employees of
 16-5    the district, school, or service center in the 2000-2001 school
 16-6    year and multiply the result by the number of full-time employees
 16-7    of the district, school, or service center in the fiscal year for
 16-8    which the computation is made.  If, for the 2000-2001 school year,
 16-9    a school district, other educational district, participating
16-10    charter school, or regional education service center provided group
16-11    health coverage to its employees through a self-funded insurance
16-12    plan, the amount the district, school, or service center paid
16-13    during that school year for the plan includes only the amount of
16-14    regular contributions made by the district, school, or service
16-15    center to the plan.
16-16          (c)  Amounts used as required by this section shall be
16-17    deposited, as applicable, in:
16-18                (1)  the Texas school employees uniform group coverage
16-19    trust fund established under Section 8, Article 3.50-7, of this
16-20    code; or
16-21                (2)  another fund established for the payment of
16-22    employee health coverage that meets requirements for those funds
16-23    prescribed by the Texas Education Agency.
16-24          Explanation:  This change is necessary to clarify that
16-25    certain educational districts whose employees are members of the
16-26    Teacher Retirement System of Texas, open-enrollment charter schools
 17-1    that participate in the statewide group health coverage program,
 17-2    and regional education service centers are required to maintain
 17-3    current spending efforts for employee health coverage.
 17-4          (10)  Senate Rule 12.03(4) is suspended to permit the
 17-5    committee to add text changing Section 3, Article 3.50-10,
 17-6    Insurance Code, as added by SECTION 1.04, House Bill No. 3343
 17-7    (corresponding to Article 3.50-9, Insurance Code, in conference
 17-8    committee report), to read as follows:
 17-9          Sec. 3.  MINIMUM EFFORT.  (a)  A school district, other
17-10    educational district, participating charter school, or regional
17-11    education service center shall, for each fiscal year, use to
17-12    provide health coverage an amount equal to the number of
17-13    participating employees of the district, school, or service center
17-14    multiplied by $1,800.  Amounts used as required by this section
17-15    shall be deposited in a fund described by Section 2(c) of this
17-16    article.
17-17          (b)  To comply with this section, a school district or
17-18    participating charter school may use state funds received under
17-19    Chapter 42, Education Code, other than funds that may be used under
17-20    that chapter only for a specific purpose, except that amounts a
17-21    district or school is required to use to pay contributions under a
17-22    group health coverage plan for district or school employees under
17-23    Section 42.2514 or 42.260, Education Code, other than amounts
17-24    described by Section 42.260(c)(2)(B), are not used in computing
17-25    whether the district or school complies with this section.
17-26          Explanation:  This change is necessary to clarify that
 18-1    certain educational districts whose employees are members of the
 18-2    Teacher Retirement System of Texas, open-enrollment charter schools
 18-3    that participate in the statewide group health coverage program,
 18-4    and regional education service centers are required to meet the
 18-5    same minimum spending effort applicable to school districts, and to
 18-6    clarify that certain state funds school districts and participating
 18-7    charter schools are required to use in meeting the minimum spending
 18-8    effort count against the minimum effort.
 18-9          (11)  Senate Rule 12.03(4) is suspended to permit the
18-10    committee to add text changing Sections 4(a)-(a-7), Article
18-11    3.50-10, Insurance Code (corresponding to Article 3.50-9, Insurance
18-12    Code, in conference committee report), as added by SECTION 1.04,
18-13    House Bill No. 3343, to read as follows:
18-14          (a)  For any state fiscal year beginning with the fiscal year
18-15    ending August 31, 2003, except as provided by Subsection (b) of
18-16    this section, a school district that imposes maintenance and
18-17    operations taxes at the maximum rate permitted under Section
18-18    45.003(d), Education Code, is entitled to state funds in an amount
18-19    equal to the difference, if any, between:
18-20                (1)  an amount equal to the number of participating
18-21    employees of the district multiplied by $1,800; and
18-22                (2)  if the following amount is less than the amount
18-23    specified by Subdivision (1) of this subsection, the sum of:
18-24                      (A)  the amount the district is required to use
18-25    to provide health coverage under Section 2 of this article for that
18-26    fiscal year; and
 19-1                      (B)  the difference, if any, between:
 19-2                            (i)  the amount determined under Section
 19-3    42.2514(b)(2), Education Code; and
 19-4                            (ii)  the amount determined under Section
 19-5    42.2514(b)(1), Education Code, if that amount is less than the
 19-6    amount specified by Subparagraph (i) of this paragraph.
 19-7          (a-1)  For the state fiscal year beginning September 1, 2002,
 19-8    a school district or participating entity is entitled to state
 19-9    funds in an amount equal to the difference, if any, between:
19-10                (1)  an amount equal to the number of participating
19-11    employees of the district or entity multiplied by $1,800; and
19-12                (2)  if the following amount is less than the amount
19-13    specified by Subdivision (1) of this subsection, the sum of:
19-14                      (A)  the amount the district or entity is
19-15    required to use to provide health coverage under Section 2 of this
19-16    article for that fiscal year; and
19-17                      (B)  the difference, if any, between:
19-18                            (i)  the amount determined under Section
19-19    42.2514(b)(2), Education Code; and
19-20                            (ii)  the amount determined under Section
19-21    42.2514(b)(1), Education Code, if that amount is less than the
19-22    amount specified by Subparagraph (i) of this paragraph.
19-23          (a-2)  For the state fiscal year beginning September 1, 2003,
19-24    a school district or participating entity is entitled to state
19-25    funds in an amount equal to the difference, if any, between:
19-26                (1)  an amount equal to the number of participating
 20-1    employees of the district or entity multiplied by $1,500; and
 20-2                (2)  if the following amount is less than the amount
 20-3    specified by Subdivision (1) of this subsection, the sum of:
 20-4                      (A)  the amount the district or entity is
 20-5    required to use to provide health coverage under Section 2 of this
 20-6    article for that fiscal year; and
 20-7                      (B)  the difference, if any, between:
 20-8                            (i)  the amount determined under Section
 20-9    42.2514(b)(2), Education Code; and
20-10                            (ii)  the amount determined under Section
20-11    42.2514(b)(1), Education Code, if that amount is less than the
20-12    amount specified by Subparagraph (i) of this paragraph.
20-13          (a-3)  For the state fiscal year beginning September 1, 2004,
20-14    a school district or participating entity is entitled to state
20-15    funds in an amount equal to the difference, if any, between:
20-16                (1)  an amount equal to the number of participating
20-17    employees of the district or entity multiplied by $1,200; and
20-18                (2)  if the following amount is less than the amount
20-19    specified by Subdivision (1) of this subsection, the sum of:
20-20                      (A)  the amount the district or entity is
20-21    required to use to provide health coverage under Section 2 of this
20-22    article for that fiscal year; and
20-23                      (B)  the difference, if any, between:
20-24                            (i)  the amount determined under Section
20-25    42.2514(b)(2), Education Code; and
20-26                            (ii)  the amount determined under Section
 21-1    42.2514(b)(1), Education Code, if that amount is less than the
 21-2    amount specified by Subparagraph (i) of this paragraph.
 21-3          (a-4)  For the state fiscal year beginning September 1, 2005,
 21-4    a school district or participating entity is entitled to state
 21-5    funds in an amount equal to the difference, if any, between:
 21-6                (1)  an amount equal to the number of participating
 21-7    employees of the district or entity multiplied by $900; and
 21-8                (2)  if the following amount is less than the amount
 21-9    specified by Subdivision (1) of this subsection, the sum of:
21-10                      (A)  the amount the district or entity is
21-11    required to use to provide health coverage under Section 2 of this
21-12    article for that fiscal year; and
21-13                      (B)  the difference, if any, between:
21-14                            (i)  the amount determined under Section
21-15    42.2514(b)(2), Education Code; and
21-16                            (ii)  the amount determined under Section
21-17    42.2514(b)(1), Education Code, if that amount is less than the
21-18    amount specified by Subparagraph (i) of this paragraph.
21-19          (a-5)  For the state fiscal year beginning September 1, 2006,
21-20    a school district or participating entity is entitled to state
21-21    funds in an amount equal to the difference, if any, between:
21-22                (1)  an amount equal to the number of participating
21-23    employees of the district or entity multiplied by $600; and
21-24                (2)  if the following amount is less than the amount
21-25    specified by Subdivision (1) of this subsection, the sum of:
21-26                      (A)  the amount the district or entity is
 22-1    required to use to provide health coverage under Section 2 of this
 22-2    article for that fiscal year; and
 22-3                      (B)  the difference, if any, between:
 22-4                            (i)  the amount determined under Section
 22-5    42.2514(b)(2), Education Code; and
 22-6                            (ii)  the amount determined under Section
 22-7    42.2514(b)(1), Education Code, if that amount is less than the
 22-8    amount specified by Subparagraph (i) of this paragraph.
 22-9          (a-6)  For the state fiscal year beginning September 1, 2007,
22-10    a school district or participating entity is entitled to state
22-11    funds in an amount equal to the difference, if any, between:
22-12                (1)  an amount equal to the number of participating
22-13    employees of the district or entity multiplied by $300; and
22-14                (2)  if the following amount is less than the amount
22-15    specified by Subdivision (1) of this subsection, the sum of:
22-16                      (A)  the amount the district or entity is
22-17    required to use to provide health coverage under Section 2 of this
22-18    article for that fiscal year; and
22-19                      (B)  the difference, if any, between:
22-20                            (i)  the amount determined under Section
22-21    42.2514(b)(2), Education Code; and
22-22                            (ii)  the amount determined under Section
22-23    42.2514(b)(1), Education Code, if that amount is less than the
22-24    amount specified by Subparagraph (i) of this paragraph.
22-25          (a-7)  A school district that receives state funds under
22-26    Subsection (a)  of this section for a state fiscal year is not
 23-1    entitled to state funds under Subsection (a-1), (a-2), (a-3),
 23-2    (a-4), (a-5), or (a-6) of this section.
 23-3          Explanation:  This change is necessary to require school
 23-4    districts and participating charter schools for whom 75 percent of
 23-5    the increased funding through the foundation school program funding
 23-6    elements exceeds the level of $900 per employee per year to use
 23-7    that excess towards meeting the minimum spending effort.
 23-8          (12)  Senate Rule 12.03(4) is suspended to permit the
 23-9    committee to add text changing Section 4(c), Article 3.50-10,
23-10    Insurance Code (corresponding to Article 3.50-9, Insurance Code, in
23-11    conference committee report), as added by SECTION 1.04, House Bill
23-12    No. 3343, to read as follows:
23-13          (c)  The Teacher Retirement System of Texas shall distribute
23-14    state funds to school districts and participating entities under
23-15    this section in equal monthly installments.  State funds received
23-16    under this section shall be deposited in a fund described by
23-17    Section 2(c) of this article.  The Texas Education Agency shall
23-18    provide to the retirement system information necessary for the
23-19    retirement system to determine a school district's or participating
23-20    entity's eligibility for state funds under this section.  The
23-21    trustee may enter into interagency contracts with any agency of
23-22    this state for the purpose of assistance in distributing funds
23-23    under this article.
23-24          Explanation:  This change is necessary to permit the Teacher
23-25    Retirement System of Texas to enter into interagency contracts
23-26    relating to the distribution of state assistance towards meeting
 24-1    the minimum spending effort.
 24-2          (13)  Senate Rule 12.03(4) is suspended to permit the
 24-3    committee to add text changing Section 41.002(a), Education Code,
 24-4    as amended by SECTIONS 2.02 and 2.03, senate committee report,
 24-5    House Bill No. 3343, to read as follows:
 24-6          SECTION 2.02.  Effective September 1, 2001, Section
 24-7    41.002(a), Education Code, is amended to read as follows:
 24-8          (a)  A school district may not have a wealth per student that
 24-9    exceeds $300,000 [$295,000].
24-10          SECTION 2.03.  Effective September 1, 2002, Section
24-11    41.002(a), Education Code, is amended to read as follows:
24-12          (a)  A school district may not have a wealth per student that
24-13    exceeds $305,000 [$295,000].
24-14          Explanation:  This change is necessary to increase the
24-15    equalized wealth level under the school finance system.
24-16          (14)  Senate Rule 12.03(4) is suspended to permit the
24-17    committee to add text changing Section 42.2514, Education Code, as
24-18    added by SECTION 2.06, senate committee report, House Bill
24-19    No. 3343, to read as follows:
24-20          SECTION 2.05.  Effective September 1, 2002, Subchapter E,
24-21    Chapter 42, Education Code, is amended by adding Section 42.2514 to
24-22    read as follows:
24-23          Sec. 42.2514.  ADDITIONAL STATE AID FOR SCHOOL EMPLOYEE
24-24    BENEFITS.  (a)  In this section, "participating charter school"
24-25    means an open-enrollment charter school that participates in the
24-26    uniform group coverage program established under Article 3.50-7,
 25-1    Insurance Code.
 25-2          (b)  For each school year, a school district, including a
 25-3    school district that is otherwise ineligible for state aid under
 25-4    this chapter, or a participating charter school is entitled to
 25-5    state aid in an amount, as determined by the commissioner, equal to
 25-6    the difference, if any, between:
 25-7                (1)  the amount determined by multiplying the amount of
 25-8    $900 or the amount specified in the General Appropriations Act for
 25-9    that year for purposes of the state contribution under Section 9,
25-10    Article 3.50-7, Insurance Code, by the number of district or school
25-11    employees who participate in a group health coverage plan provided
25-12    by or through the district or school; and
25-13                (2)  an amount equal to 75 percent of the amount of:
25-14                      (A)  additional funds to which the district or
25-15    school is entitled due to the increase made by H.B. No. 3343, Acts
25-16    of the 77th Legislature, Regular Session, 2001, to:
25-17                            (i)  the equalized wealth level under
25-18    Section 41.002; and
25-19                            (ii)  the guaranteed level of state and
25-20    local funds per weighted student per cent of tax effort under
25-21    Section 42.302; or
25-22                      (B)  additional state aid to which the district
25-23    is entitled under Section 42.2513.
25-24          (c)  A school district or participating charter school may
25-25    use state aid received under this section only to pay contributions
25-26    under a group health coverage plan for district or school
 26-1    employees.
 26-2          (d)  A determination by the commissioner under this section
 26-3    is final and may not be appealed.
 26-4          (e)  The commissioner may adopt rules to implement this
 26-5    section.
 26-6          Explanation:  This change is necessary to permit
 26-7    open-enrollment charter schools that participate in the uniform
 26-8    group coverage plan to receive additional state funding if the
 26-9    increased funding the school receives through the foundation school
26-10    program funding elements does not reach the level of $900 per
26-11    employee per year.
26-12          (15)  Senate Rule 12.03(4) is suspended to permit the
26-13    committee to add text changing Section 42.260, Education Code, as
26-14    added by SECTION 2.10, senate committee report, House Bill
26-15    No. 3343, to read as follows:
26-16          SECTION 2.08.  Effective September 1, 2002, Subchapter E,
26-17    Chapter 42, Education Code, is amended by adding Section 42.260 to
26-18    read as follows:
26-19          Sec. 42.260.  USE OF CERTAIN FUNDS.  (a)  In this section,
26-20    "participating charter school" has the meaning assigned by Section
26-21    42.2514.
26-22          (b)  For each year, the commissioner shall certify to each
26-23    school district or participating charter school the amount of:
26-24                (1)  additional funds to which the district or school
26-25    is entitled due to the increase made by H.B. No. 3343, Acts of the
26-26    77th Legislature, Regular Session, 2001, to:
 27-1                      (A)  the equalized wealth level under Section
 27-2    41.002; or
 27-3                      (B)  the guaranteed level of state and local
 27-4    funds per weighted student per cent of tax effort under Section
 27-5    42.302; or
 27-6                (2)  additional state aid to which the district or
 27-7    school is entitled under Section 42.2513.
 27-8          (c)  Notwithstanding any other provision of this code, a
 27-9    school district or participating charter school may use the
27-10    following amount of funds only to pay contributions under a group
27-11    health coverage plan for district or school employees:
27-12                (1)  an amount equal to 75 percent of the amount
27-13    certified for the district or school under Subsection (b); or
27-14                (2)  if the following amount is less than the amount
27-15    specified by Subdivision (1), the sum of:
27-16                      (A)  the amount determined by multiplying the
27-17    amount of $900 or the amount specified in the General
27-18    Appropriations Act for that year for purposes of the state
27-19    contribution under Section 9, Article 3.50-7, Insurance Code, by
27-20    the number of district or school employees who participate in a
27-21    group health coverage plan provided by or through the district or
27-22    school; and
27-23                      (B)  the difference between the amount necessary
27-24    for the district or school to comply with Section 3, Article
27-25    3.50-9, Insurance Code, for the school year and the amount the
27-26    district or school is required to use to provide health coverage
 28-1    under Section 2 of that article for that year.
 28-2          (d)  A determination by the commissioner under this section
 28-3    is final and may not be appealed.
 28-4          (e)  The commissioner may adopt rules to implement this
 28-5    section.
 28-6          Explanation:  This change is necessary to require
 28-7    open-enrollment charter schools that participate in the uniform
 28-8    group coverage plan to use a portion of state funding received
 28-9    through the increases in the foundation school program funding
28-10    elements to provide employee health coverage.
28-11          (16)  Senate Rule 12.03(4) is suspended to permit the
28-12    committee to add text changing Section 42.302(a), Education Code,
28-13    as amended by SECTIONs 2.11 and 2.12, senate committee report,
28-14    House Bill No. 3343, to read as follows:
28-15          SECTION 2.09.  Effective September 1, 2001, Section
28-16    42.302(a), Education Code, is amended to read as follows:
28-17          (a)  Each school district is guaranteed a specified amount
28-18    per weighted student in state and local funds for each cent of tax
28-19    effort over that required for the district's local fund assignment
28-20    up to the maximum level specified in this subchapter.  The amount
28-21    of state support, subject only to the maximum amount under Section
28-22    42.303, is determined by the formula:
28-23                    GYA = (GL X WADA X DTR X 100) - LR
28-24    where:
28-25          "GYA" is the guaranteed yield amount of state funds to be
28-26    allocated to the district;
 29-1          "GL" is the dollar amount guaranteed level of state and local
 29-2    funds per weighted student per cent of tax effort, which is $25.81
 29-3    [$24.99] or a greater amount for any year provided by
 29-4    appropriation;
 29-5          "WADA" is the number of students in weighted average daily
 29-6    attendance, which is calculated by dividing the sum of the school
 29-7    district's allotments under Subchapters B and C, less any allotment
 29-8    to the district for transportation, any allotment under Section
 29-9    42.158, and 50 percent of the adjustment under Section 42.102, by
29-10    the basic allotment for the applicable year;
29-11          "DTR" is the district enrichment tax rate of the school
29-12    district, which is determined by subtracting the amounts specified
29-13    by Subsection (b) from the total amount of maintenance and
29-14    operations taxes collected by the school district for the
29-15    applicable school year and dividing the difference by the quotient
29-16    of the district's taxable value of property as determined under
29-17    Subchapter M, Chapter 403, Government Code, or, if applicable,
29-18    under Section 42.2521, divided by 100; and
29-19          "LR" is the local revenue, which is determined by multiplying
29-20    "DTR" by the quotient of the district's taxable value of property
29-21    as determined under Subchapter M, Chapter 403, Government Code, or,
29-22    if applicable, under Section 42.2521, divided by 100.
29-23          SECTION 2.10.  Effective September 1, 2002, Section
29-24    42.302(a), Education Code, is amended to read as follows:
29-25          (a)  Each school district is guaranteed a specified amount
29-26    per weighted student in state and local funds for each cent of tax
 30-1    effort over that required for the district's local fund assignment
 30-2    up to the maximum level specified in this subchapter.  The amount
 30-3    of state support, subject only to the maximum amount under Section
 30-4    42.303, is determined by the formula:
 30-5                    GYA = (GL X WADA X DTR X 100) - LR
 30-6    where:
 30-7          "GYA" is the guaranteed yield amount of state funds to be
 30-8    allocated to the district;
 30-9          "GL" is the dollar amount guaranteed level of state and local
30-10    funds per weighted student per cent of tax effort, which is $27.14
30-11    [$24.99] or a greater amount for any year provided by
30-12    appropriation;
30-13          "WADA" is the number of students in weighted average daily
30-14    attendance, which is calculated by dividing the sum of the school
30-15    district's allotments under Subchapters B and C, less any allotment
30-16    to the district for transportation, any allotment under Section
30-17    42.158, and 50 percent of the adjustment under Section 42.102, by
30-18    the basic allotment for the applicable year;
30-19          "DTR" is the district enrichment tax rate of the school
30-20    district, which is determined by subtracting the amounts specified
30-21    by Subsection (b) from the total amount of maintenance and
30-22    operations taxes collected by the school district for the
30-23    applicable school year and dividing the difference by the quotient
30-24    of the district's taxable value of property as determined under
30-25    Subchapter M, Chapter 403, Government Code, or, if applicable,
30-26    under Section 42.2521, divided by 100; and
 31-1          "LR" is the local revenue, which is determined by multiplying
 31-2    "DTR" by the quotient of the district's taxable value of property
 31-3    as determined under Subchapter M, Chapter 403, Government Code, or,
 31-4    if applicable, under Section 42.2521, divided by 100.
 31-5          Explanation:  This change is necessary to increase the
 31-6    guaranteed level of state and local funding per weighted student
 31-7    per penny of tax effort.
 31-8          (17)  Senate Rule 12.03(4) is suspended to permit the
 31-9    committee to add text adding Subsection (l) to Section 26.08, Tax
31-10    Code, as amended by SECTION 1.06, House Bill No. 3343, to read as
31-11    follows:
31-12          (l)  For purposes of Subsection (k), the amount of state
31-13    funds that would have been available to a school district in the
31-14    preceding year is computed using the maximum tax rate for the
31-15    current year under Section 42.253(e), Education Code.
31-16          Explanation:  This change is necessary to clarify that school
31-17    district rollback tax rates that are adjusted for tax increases in
31-18    connection with the minimum spending effort are computed in the
31-19    same manner as other school district rollback tax rates.
31-20          (18)  Senate Rule 12.03(4) is suspended to permit the
31-21    committee to add text changing Section 62.1015, Health and Safety
31-22    Code, as added by SECTION 1.07, House Bill No. 3343, to read as
31-23    follows:
31-24          SECTION 1.04.  Subchapter C, Chapter 62, Health and Safety
31-25    Code, is amended by adding Section 62.1015 to read as follows:
31-26          Sec. 62.1015.  ELIGIBILITY OF CERTAIN CHILDREN; DISALLOWANCE
 32-1    OF MATCHING FUNDS.  (a)  In this section, "charter school,"
 32-2    "employee," and "regional education service center" have the
 32-3    meanings assigned by Section 2, Article 3.50-7, Insurance Code.
 32-4          (b)  A child of an employee of a charter school, school
 32-5    district, other educational district whose employees are members of
 32-6    the Teacher Retirement System of Texas, or regional education
 32-7    service center may be enrolled in health benefits coverage under
 32-8    the child health plan.  A child enrolled in the child health plan
 32-9    under this section participates in the same manner as any other
32-10    child enrolled in the child health plan.
32-11          (c)  The cost of health benefits coverage for children
32-12    enrolled in the child health plan under this section shall be paid
32-13    as provided in the General Appropriations Act.  Expenditures made
32-14    to provide health benefits coverage under this section may not be
32-15    included for the purpose of determining the state children's health
32-16    insurance expenditures, as that term is defined by 42 U.S.C.
32-17    Section 1397ee(d)(2)(B), as amended, unless the Health and Human
32-18    Services Commission, after consultation with the appropriate
32-19    federal agencies, determines that the expenditures may be included
32-20    without adversely affecting federal matching funding for the child
32-21    health plan provided under this chapter.
32-22          Explanation:  This change is necessary to provide for
32-23    coverage under the child health program for children of employees
32-24    of all entities eligible to participate in the new group coverage
32-25    plan and to clarify the Health and Human Services Commission's
32-26    authority to determine whether resulting expenditures affect
 33-1    federal matching funds for the child health program.
 33-2          (19)  Senate Rule 12.03(4) is suspended to permit the
 33-3    committee to add text changing Section 3, Article 3.51, Insurance
 33-4    Code, as amended by SECTION 3.16, House Bill No. 3343, by adding a
 33-5    new Subsection (b) to read as follows:
 33-6          (b)  This section does not preclude an entity described by
 33-7    Subsection (a) of this section from procuring contracts under this
 33-8    article for the provision of optional insurance coverages to the
 33-9    employees of the entity.
33-10          Explanation:  This change is necessary to clarify that a
33-11    participating entity retains the authority to purchase optional
33-12    coverages for its employees.
33-13          (20)  Senate Rule 12.03(4) is suspended to permit the
33-14    committee to add text changing Article 26.036(c), Insurance Code,
33-15    as added by SECTION 3.17, House Bill No. 3343, to read as follows:
33-16          (c)  An independent school district that is participating in
33-17    the uniform group coverage program established under Article 3.50-7
33-18    of this code may not participate in the small employer market under
33-19    this article for health insurance coverage and may not renew a
33-20    health insurance contract obtained in accordance with this article
33-21    after the date on which the program of coverages provided under
33-22    Article 3.50-7 of this code is implemented.  This subsection does
33-23    not affect a contract for the provision of optional coverages not
33-24    included in a health benefits plan under this chapter.
33-25          Explanation:  This change is necessary to clarify that an
33-26    independent school district retains the authority to purchase
 34-1    optional coverages for its employees through the small employer
 34-2    program under Chapter 26, Insurance Code.
 34-3          (21)  Senate Rule 12.03(4) is suspended to permit the
 34-4    committee to add text changing Section 22.004, Education Code, as
 34-5    amended by SECTION 3.18, House Bill No. 3343, to read as follows:
 34-6          Sec. 22.004.  GROUP HEALTH BENEFITS FOR SCHOOL EMPLOYEES.
 34-7    (a)  A [Each] district shall participate in the uniform group
 34-8    coverage program established under Article 3.50-7, Insurance Code,
 34-9    as provided by Section 5 of that article.
34-10          (b)  A district that does not participate in the program
34-11    described by Subsection (a) shall make available to its employees
34-12    group health coverage provided by a risk pool established by one or
34-13    more school districts under Chapter 172, Local Government Code, or
34-14    under a policy of insurance or group contract issued by an insurer,
34-15    a company subject to Chapter 20, Insurance Code, or a health
34-16    maintenance organization under the Texas Health Maintenance
34-17    Organization Act (Chapter 20A, Vernon's Texas Insurance Code).  The
34-18    coverage must meet the substantive coverage requirements of Article
34-19    3.51-6, Insurance Code, and any other law applicable to group
34-20    health insurance policies or contracts issued in this state.  The
34-21    coverage must include major medical treatment but may exclude
34-22    experimental procedures.  In this subsection, "major medical
34-23    treatment" means a medical, surgical, or diagnostic procedure for
34-24    illness or injury.  The coverage may include managed care or
34-25    preventive care and must be comparable to the basic health coverage
34-26    provided under the Texas Employees Uniform Group Insurance Benefits
 35-1    Act (Article 3.50-2, Vernon's Texas Insurance Code).  The board of
 35-2    trustees of the Teacher Retirement System of Texas shall adopt
 35-3    rules to determine whether a school district's group health
 35-4    coverage is comparable to the basic health coverage specified by
 35-5    this subsection.  The rules must provide for consideration of the
 35-6    following factors concerning the district's coverage in determining
 35-7    whether the district's coverage is comparable to the basic health
 35-8    coverage specified by this subsection:
 35-9                (1)  the deductible amount for service provided inside
35-10    and outside of the network;
35-11                (2)  the coinsurance percentages for service provided
35-12    inside and outside of the network;
35-13                (3)  the maximum amount of coinsurance payments a
35-14    covered person is required to pay;
35-15                (4)  the amount of the copayment for an office visit;
35-16                (5)  the schedule of benefits and the scope of
35-17    coverage;
35-18                (6)  the lifetime maximum benefit amount; and
35-19                (7)  verification that the coverage is issued by a
35-20    provider licensed to do business in this state by the Texas
35-21    Department of Insurance or is provided by a risk pool authorized
35-22    under Chapter 172, Local Government Code, or that a district is
35-23    capable of covering the assumed liabilities in the case of coverage
35-24    provided through district self-insurance.
35-25          (c) [(b)]  The cost of the coverage provided under the
35-26    program described by Subsection (a)  shall be paid by the state,
 36-1    the district, and the employees in the manner provided by Article
 36-2    3.50-7, Insurance Code.  The cost of coverage provided under a plan
 36-3    adopted under Subsection (b) shall [may] be shared by the employees
 36-4    and the district using the contributions by the state described by
 36-5    Section 9, Article 3.50-7, Insurance Code, and Article 3.50-8,
 36-6    Insurance Code.
 36-7          (d) [(c)]  Each district shall report the district's
 36-8    compliance with this section [subsection] to the executive director
 36-9    of the Teacher Retirement System of Texas not later than March 1 of
36-10    each even-numbered year in the manner required by the board of
36-11    trustees of the Teacher Retirement System of Texas.  For a district
36-12    that does not participate in the program described by Subsection
36-13    (a), the [The] report must be based on the district group health
36-14    coverage plan in effect during the current plan year and must
36-15    include:
36-16                (1)  appropriate documentation of:
36-17                      (A)  the district's contract for group health
36-18    coverage with a provider licensed to do business in this state by
36-19    the Texas Department of Insurance or a risk pool authorized under
36-20    Chapter 172, Local Government Code; or
36-21                      (B)  a resolution of the board of trustees of the
36-22    district authorizing a self-insurance plan for district employees
36-23    and of the district's review of district ability to cover the
36-24    liability assumed;
36-25                (2)  the schedule of benefits;
36-26                (3)  the premium rate sheet, including the amount paid
 37-1    by the district and employee;
 37-2                (4)  the number of employees covered by the [each]
 37-3    health coverage plan offered by the district; and
 37-4                (5)  any other information considered appropriate by
 37-5    the executive director of the Teacher Retirement System of Texas.
 37-6          (e) [(d)]  Based on the criteria prescribed by Subsection (b)
 37-7    [(a)], the executive director of the Teacher Retirement System of
 37-8    Texas shall, for each district that does not participate in the
 37-9    program described by Subsection (a), certify whether a district's
37-10    coverage is comparable to the basic health coverage provided under
37-11    the Texas Employees Uniform Group Insurance Benefits Act (Article
37-12    3.50-2, Vernon's Texas Insurance Code).  If the executive director
37-13    of the Teacher Retirement System of Texas determines that the group
37-14    health coverage offered by a district is not comparable, the
37-15    executive director shall report that information to the district
37-16    and to the Legislative Budget Board.  The executive director shall
37-17    submit a report to the legislature not later than September 1 of
37-18    each even-numbered year describing the status of each district's
37-19    group health coverage program based on the information contained in
37-20    the report required by Subsection (d) [(c)] and the certification
37-21    required by this subsection.
37-22          (f) [(e)]  A school district that does not participate in the
37-23    program described by Subsection (a) may not contract with an
37-24    insurer, a company subject to Chapter 20, Insurance Code, or a
37-25    health maintenance organization to issue a policy or contract under
37-26    this section, or with any person to assist the school district in
 38-1    obtaining or managing the policy or contract unless, before the
 38-2    contract is entered into, the insurer, company, organization, or
 38-3    person provides the district with an audited financial statement
 38-4    showing the financial condition of the insurer, company,
 38-5    organization, or person.
 38-6          (g) [(f)]  An insurer, a company subject to Chapter 20,
 38-7    Insurance Code, or a health maintenance organization that issues a
 38-8    policy or contract under this section and any person that assists
 38-9    the school district in obtaining or managing the policy or contract
38-10    for compensation shall provide an annual audited financial
38-11    statement to the school district showing the financial condition of
38-12    the insurer, company, organization, or person.
38-13          (h) [(g)]  An audited financial statement provided under this
38-14    section must be made in accordance with rules adopted by the
38-15    commissioner of insurance or state auditor, as applicable.
38-16          (i)  Notwithstanding any other provision of this section, a
38-17    district participating in the uniform group coverage program
38-18    established under Article 3.50-7, Insurance Code, may not make
38-19    group health coverage  available to its employees under this
38-20    section after the date on which the program of coverages provided
38-21    under Article 3.50-7, Insurance Code, is implemented.
38-22          (j)  This section does not preclude a district that is
38-23    participating in the uniform group coverage program established
38-24    under Article 3.50-7, Insurance Code, from entering into contracts
38-25    to provide optional insurance coverages for the employees of the
38-26    district.
 39-1          Explanation:  This change is necessary to clarify that a
 39-2    school district that does not participate in the group coverage
 39-3    program retains the responsibility to offer coverage comparable to
 39-4    the plan provided to state employees through the Employees
 39-5    Retirement System of Texas, and also retains the authority to
 39-6    purchase optional coverages for its employees.
 39-7          (22)  Senate Rule 12.03(4) is suspended to permit the
 39-8    committee to add SECTION 4.01 to read as follows:
 39-9          SECTION 4.01.  On September 1, 2002, the comptroller shall
39-10    transfer the amount of $42 million from the retired school
39-11    employees group insurance fund created under Section 15, Article
39-12    3.50-4, Insurance Code, as amended by this Act, to the Texas school
39-13    employees uniform group coverage trust fund created under Section
39-14    8, Article 3.50-7, Insurance Code, as added by this Act.  The
39-15    Teacher Retirement System of Texas shall use the amount transferred
39-16    under this section to establish and implement the uniform group
39-17    coverage program for school employees established under Article
39-18    3.50-7, Insurance Code, as added by this Act.
39-19          Explanation:  This change is necessary to use a portion of
39-20    the current balance in the fund for the TRS-Care program to
39-21    implement the group coverage program for active school employees.
39-22          (23)  Senate Rule 12.03(4) is suspended to permit the
39-23    committee to add SECTION 4.02 to read as follows:
39-24          SECTION 4.02.  A portion of the amounts appropriated in
39-25    Article III, S.B. No. 1, Acts of the 77th Legislature, Regular
39-26    Session, 2001, to the Texas Education Agency is allocated as
 40-1    provided by this section:
 40-2                (1)  for the fiscal year ending August 31, 2002, the
 40-3    amount appropriated under Strategy A.2.1.:  FSP-Equalized
 40-4    Operations is reduced by the sum of $3 million and the amount
 40-5    appropriated to the Teacher Retirement System of Texas is increased
 40-6    by that amount for the establishment and implementation of the
 40-7    uniform group coverage program for school employees established
 40-8    under Article 3.50-7, Insurance Code, as added by this Act;
 40-9                (2)  for the fiscal year ending August 31, 2003, the
40-10    amount appropriated under Strategy A.2.1.:  FSP-Equalized
40-11    Operations is reduced by the sum of $691,100,000 and the amount
40-12    appropriated to the Teacher Retirement System of Texas is increased
40-13    by that amount for payment of:
40-14                      (A)  school employee health coverage or
40-15    compensation supplementation under Article 3.50-8, Insurance Code,
40-16    as added by this Act; and
40-17                      (B)  state assistance in meeting the minimum
40-18    effort regarding school employee health coverage under Article
40-19    3.50-9, Insurance Code, as added by this Act;
40-20                (3)  for the fiscal year ending August 31, 2003, the
40-21    amount appropriated under Strategy A.2.1.:  FSP-Equalized
40-22    Operations is reduced by the sum of $1,361,000 and the amount
40-23    appropriated to the Teacher Retirement System of Texas is increased
40-24    by that amount for assistance to school districts in paying social
40-25    security taxes on amounts of supplemental compensation received by
40-26    district employees under Article 3.50-8, Insurance Code, as added
 41-1    by this Act, as provided by Section 6, Article 3.50-9, Insurance
 41-2    Code, as added by this Act; and
 41-3                (4)  for the fiscal year ending August 31, 2003, the
 41-4    amount appropriated under Strategy A.2.1.:  FSP-Equalized
 41-5    Operations is reduced by the sum of $4.2 million and the amount
 41-6    appropriated to the Health and Human Services Commission is
 41-7    increased by that amount for payment of the costs of health
 41-8    benefits coverage for children enrolled in the child health plan
 41-9    under Section 62.1015, Health and Safety Code, as added by this
41-10    Act.
41-11          Explanation:  This change is necessary to reallocate money
41-12    previously appropriated in Senate Bill No. 1 for the foundation
41-13    school program to the Teacher Retirement System of Texas for
41-14    establishing and implementing the group coverage program for active
41-15    school employees, for paying school employee health coverage or
41-16    compensation supplementation, state assistance in meeting the
41-17    minimum effort requirement, and  assistance to certain school
41-18    districts for paying additional social security taxes, and to the
41-19    Health and Human Services Commission for paying costs of health
41-20    benefits coverage for children of school employees enrolled in the
41-21    child health plan.      
41-22          (24)  Senate Rule 12.03(4) is suspended to permit the
41-23    committee to add SECTION 4.03 to read as follows:
41-24          SECTION 4.03.  The Legislative Budget Board shall increase
41-25    the number of full-time-equivalent positions authorized for the
41-26    Teacher Retirement System of Texas by S.B. No. 1, Acts of the 77th
 42-1    Legislature, Regular Session, 2001, by 25 for each fiscal year of
 42-2    the biennium ending August 31, 2003.
 42-3          Explanation:  This change is necessary to allow the Teacher
 42-4    Retirement System of Texas to employ additional employees to
 42-5    establish and implement the group coverage program for active
 42-6    school employees.
 42-7          (25)  Senate Rule 12.03(4) is suspended to permit the
 42-8    committee to add SECTION 4.04 to read as follows:
 42-9          SECTION 4.04.  The Legislative Budget Board shall increase
42-10    the number of full-time-equivalent positions authorized for the
42-11    Texas Education Agency by S.B. No. 1, Acts of the 77th Legislature,
42-12    Regular Session, 2001, by three for each fiscal year of the
42-13    biennium ending August 31, 2003.
42-14          Explanation:  This change is necessary to allow the Texas
42-15    Education Agency to employ additional employees to implement the
42-16    group coverage program for active school employees and the system
42-17    for making associated payments to school districts.
42-18          (26)  Senate Rule 12.03(4) is suspended to permit the
42-19    committee to add text to the transitional material in the bill, as
42-20    added by SECTIONs 5.02 through 5.06, House Bill No. 3343, to read
42-21    as follows:
42-22          SECTION 5.02.  The Teacher Retirement System of Texas shall
42-23    transfer to the fund established under Section 8, Article 3.50-7,
42-24    Insurance Code, as added by this Act, any outstanding balance held
42-25    by the Teacher Retirement System of Texas as of December 31, 2001,
42-26    in the school employees group insurance fund established under
 43-1    Section 15, Article 3.50-4, Insurance Code, that was designated for
 43-2    use in programs relating to active school district employees.
 43-3          SECTION 5.03.  Not later than July 31, 2001, the Teacher
 43-4    Retirement System of Texas shall provide written information to
 43-5    school districts subject to Section 5(a-1), Article 3.50-7,
 43-6    Insurance Code, as added by this Act, that provides a general
 43-7    description of the uniform group coverage program established under
 43-8    Article 3.50-7, Insurance Code, as added by this Act.
 43-9          SECTION 5.04.  A school district that becomes eligible to
43-10    participate in the uniform group coverage program established under
43-11    Article 3.50-7, Insurance Code, as added by this Act, as provided
43-12    by Section 5(b) of that article and that elects to participate in
43-13    the program beginning September 1, 2005, must notify the Teacher
43-14    Retirement System of Texas of the election not later than January
43-15    1, 2005.
43-16          SECTION 5.05.  During the initial implementation of Article
43-17    3.50-7, Insurance Code, as added by this Act, and notwithstanding
43-18    any bidding requirements or other requirements set forth in Article
43-19    3.50-4, Insurance Code, or Article 3.50-7, Insurance Code, as added
43-20    by this Act, the Teacher Retirement System of Texas may amend any
43-21    agreement in effect on September 1, 2001, that it has entered into
43-22    under Article 3.50-4, Insurance Code, for benefits or
43-23    administration to extend application of that agreement to include
43-24    participants and programs under Article 3.50-7, Insurance Code, as
43-25    added by this Act, and may, as necessary, extend the periods of
43-26    contracts for benefits or administration in effect on September 1,
 44-1    2001, under Article 3.50-4, Insurance Code.
 44-2          SECTION 5.06.  As soon as practicable after September 1,
 44-3    2001, the Health and Human Services Commission shall consult with
 44-4    the appropriate federal agencies and make the determination
 44-5    required by Section 62.1015, Health and Safety Code, as added by
 44-6    this Act.
 44-7          Explanation:  These changes are necessary to modify the
 44-8    transitional material to accurately reflect the changes made to the
 44-9    bill.
44-10          (27)  Senate Rule 12.03(4) is suspended to permit the
44-11    committee to add text to the transitional material in the bill, as
44-12    added by SECTION 5.07, House Bill No. 3343, to read as follows:
44-13          SECTION 5.07.  Notwithstanding any applicable state law
44-14    relating to competitive bidding requirements for school districts,
44-15    a school district that is required as of September 1, 2002, to
44-16    participate in the uniform group coverage program established under
44-17    Article 3.50-7, Insurance Code, as added by this Act, is exempt
44-18    from any requirement that the district request bids for health
44-19    insurance coverage before the renewal date of the district's
44-20    contract for health insurance coverage for the 2001-2002 school
44-21    year.
44-22          Explanation:  This change is necessary to grant school
44-23    districts that will be required to participate in the uniform group
44-24    coverage plan additional flexibility in negotiating health
44-25    insurance coverage contracts for the 2001-2002 school year.
44-26          (28)  Senate Rule 12.03(4) is suspended to permit the
 45-1    committee to add text to the transitional material in the bill, as
 45-2    added by SECTION 5.08, House Bill No. 3343, to read as follows:
 45-3          SECTION 5.08.  (a)  Except as otherwise provided by this Act,
 45-4    this Act takes effect September 1, 2001.
 45-5          (b)  Sections 5.03 and 5.07 of this Act take effect
 45-6    immediately if this Act receives a vote of two-thirds of all the
 45-7    members elected to each house, as provided by Section 39, Article
 45-8    III, Texas Constitution.  If this Act does not receive the vote
 45-9    necessary for immediate effect, Sections 5.03 and 5.07 of this Act
45-10    take effect September 1, 2001.
45-11          Explanation:  This change is necessary to allow certain
45-12    transitional provisions to have immediate effect.
45-13                                 ______________________________________
45-14                                         President of the Senate
45-15                                      I hereby certify that the above
45-16                                 Resolution was adopted by the Senate
45-17                                 on May 27, 2001, by the following
45-18                                 vote:  Yeas 30, Nays 0, one present
45-19                                 not voting.
45-20                                 ______________________________________
45-21                                         Secretary of the Senate