Amend CSHB 3540 as follows:                                                  

(1)  On page 1, line 15, strike "WAIVER OF AND SUPPLEMENTAL".
	(2)  In Article 2 of the bill, insert the following 
appropriately numbered SECTIONS and renumber SECTIONS of the 
article appropriately:
	SECTION ____.  Section 1551.101(a), Insurance Code, is 
amended to read as follows:
	(a)  An elected or appointed officer or employee who performs 
service, other than as an independent contractor, for this state, 
including an institution of higher education, and who is described 
by this section is eligible to participate in the group benefits 
program as an employee [on the date specified by Section 
1551.1055].
	SECTION ____.  Section 1551.102(a), Insurance Code, is 
amended to read as follows:
	(a)  An individual who has at least 10 years of service 
credit, as determined by the board of trustees, for which the 
individual was eligible to participate in the group benefits 
program under Section 1551.101 or who has at least five years of 
membership and five years of military service credited in the 
Employees Retirement System of Texas and who retires in a manner 
described by this section is eligible[, subject to Section 
1551.1055,] to participate as an annuitant in the group benefits 
program.
	SECTION ____.  Section 1551.111(b), Insurance Code, is 
amended to read as follows:
	(b)  Participation is limited to:                                              
		(1)  an officer or employee of either system who has 
been an officer or employee of either system [following completion 
of the waiting period described by Section 1551.1055];
		(2)  an eligible dependent of an officer or employee of 
either system described by Subdivision (1);
		(3)  an individual who:                                                       
			(A)  was an officer or employee of either system;                            
			(B)  has retired from either system[, subject to 
Section 1551.1055];
			(C)  receives or is eligible to receive an annuity 
from either system or under Chapter 803, Government Code, based on 
at least 10 years of service credit and is at least 65 years of age; 
and
			(D)  has at least 10 years of service credit with a 
state agency whose employees are authorized to participate in the 
group benefits program; and
		(4)  an eligible dependent of a retired officer or 
employee described by Subdivision (3).
	SECTION ____.  Section 1551.112(a), Insurance Code, is 
amended to read as follows:
	(a)  An individual may participate in the group benefits 
program as an annuitant[, subject to Section 1551.1055,] and may 
obtain coverage for the individual's dependents as any other 
participating annuitant if the individual:
		(1)  began employment with, or became an officer of, 
the Texas Turnpike Authority within the three-year period preceding 
August 31, 1997;
		(2)  was an officer or employee of the Texas Turnpike 
Authority on August 31, 1997;
		(3)  became an officer or employee of the North Texas 
Tollway Authority on September 1, 1997; and
		(4)  retires or is eligible to retire with at least 10 
years of service credit under the proportionate retirement program 
established by Chapter 803, Government Code, or under a public 
retirement system to which Chapter 803 applies and is at least 65 
years of age.
	SECTION ____.  Section 1551.1055, Insurance Code, is 
repealed.               
	SECTION ____.  A person who, immediately before the 
effective date of this Act, would be eligible to participate in the 
group benefits program established under Chapter 1551, Insurance 
Code, except that the person's eligibility has not begun under 
Section 1551.1055, Insurance Code, as that section existed 
immediately before repeal by this Act, becomes eligible on the 
effective date of this Act if the person is otherwise eligible to 
participate in the group benefits plan under Chapter 1551, 
Insurance Code, as that chapter exists on the effective date of this 
Act.