89R10097 KJE-F

By: Wilson H.B. No. 5265

A BILL TO BE ENTITLED

AN ACT

relating to the health care professional education fund.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 62.003(1), Education Code, is amended to read as follows:

(1) Except as otherwise provided by Subchapters C, D, E, F, G, [and] I, and J, "eligible institution" means the eligible agencies and institutions of higher education listed in Article VII, Section 17(b), of the Constitution of Texas, and any institution or agency of higher education that is later made eligible to participate in the disbursement of funds pursuant to Article VII, Section 17(c), of the Constitution of Texas.

SECTION 2. Chapter 62, Education Code, is amended by adding Subchapter J to read as follows:

SUBCHAPTER J. HEALTH CARE PROFESSIONAL EDUCATION FUND

Sec. 62.201. PURPOSE. The purpose of this subchapter is to allocate appropriations from the health care professional education fund to provide a dedicated, independent, and equitable source of funding to enable general academic teaching institutions to increase the production of health care professional degrees to meet workforce needs in this state.

Sec. 62.202. DEFINITIONS. In this subchapter:

(1) "Eligible institution" means a general academic teaching institution that is eligible to receive distributions of money under this subchapter.

(2) "Fund" means the health care professional education fund.

(3) "General academic teaching institution" and "university system" have the meanings assigned by Section 61.003.

(4) "Health care professional degree" means a baccalaureate degree, a master's degree, a doctoral of professional practice degree, or a research doctorate degree listed under Code 51 as a health profession or related clinical science in the Classification of Instructional Programs adopted by the United States Department of Education.

(5) "Trust company" means the Texas Treasury Safekeeping Trust Company.

Sec. 62.203. ADMINISTRATION AND INVESTMENT OF FUND. (a) The health care professional education fund is a fund outside the state treasury held by the comptroller and administered by the trust company.

(b) The trust company shall administer and invest the fund in accordance with Section 21, Article VII, Texas Constitution.

(c) The trust company shall determine the amount available for distribution from the fund in accordance with a distribution policy adopted by the comptroller that is designed to:

(1) preserve the purchasing power of the fund's assets over an economic cycle, subject to the liquidity needs of the fund; and

(2) provide as nearly as practicable a stable and predictable stream of annual distributions.

Sec. 62.204. GIFTS, GRANTS, AND DONATIONS. The comptroller may solicit and accept gifts, grants, or donations from any public or private source for the fund.

Sec. 62.205. ELIGIBILITY TO RECEIVE DISTRIBUTIONS FROM FUND. A general academic teaching institution is eligible to receive distributions under this subchapter for a state fiscal year if the institution:

(1) is designated as a comprehensive university, doctoral university, or master's university under the coordinating board's accountability system; and

(2) awarded health care professional degrees during the preceding state fiscal year.

Sec. 62.206. DISTRIBUTION OF APPROPRIATION FUNDS TO ELIGIBLE INSTITUTIONS. (a) Each state fiscal year, the comptroller shall distribute to eligible institutions in accordance with this subchapter money appropriated from the fund for that fiscal year.

(b) The total amount appropriated from the fund for any state fiscal year may not exceed an amount equal to 7.0 percent of the average net market value of the investment assets of the fund, as determined by the comptroller, for a period set by comptroller policy.

(c) The amount appropriated from the fund for distribution in a state fiscal year must be allocated as follows:

(1) 95 percent to the permanent endowment for health care professional education under Section 62.207; and

(2) five percent to the health care professional education startup fund under Section 62.208.

Sec. 62.207. PERMANENT ENDOWMENT FOR HEALTH CARE PROFESSIONAL EDUCATION. (a) For each state fiscal year, an eligible institution is entitled to a distribution of a portion of the total amount allocated for the permanent endowment for health care professional education under Section 62.206(c)(1) for that fiscal year. Subject to Subsection (b), the portion of the total amount allocated to which an eligible institution is entitled is a fraction of that total amount equal to the quotient of:

(1) the sum of:

(A) the number of bachelor of science or bachelor of arts health care professional degrees awarded by the institution in the preceding three years;

(B) three multiplied by the number of master of arts or master of science health care professional degrees awarded by the institution in the preceding three years; and

(C) six multiplied by the number of doctor of professional practice or research doctorate health care professional degrees awarded by the institution in the preceding three years; and

(2) the total of all amounts calculated for eligible institutions under Subdivision (1).

(b) Before distributions are made under Subsection (a), the comptroller shall:

(1) reduce the amount to which eligible institutions are entitled under that subsection as necessary to ensure that no single eligible institution or university system receives more than 25 percent of the annual distribution from the fund for that state fiscal year; and

(2) reallocate any amounts by which one or more eligible institutions' distributions are reduced under Subdivision (1) to each other eligible institution whose distribution was not reduced under Subdivision (1) based on the institution's pro rata share under Subsection (a), subject to the limit described by Subdivision (1).

Sec. 62.208. HEALTH CARE PROFESSIONAL EDUCATION STARTUP FUND. (a) Each state fiscal year, the coordinating board shall distribute money allocated under Section 62.206(c)(2) to award grants to eligible institutions to start new or expand existing health care professional degree programs.

(b) An eligible institution that has reached the limit under Section 62.207(b)(1) may not receive a grant under this section.

Sec. 62.209. USE OF ALLOCATED AMOUNTS. (a) An eligible institution may use money received under this subchapter only for the support and maintenance of educational and general activities that promote increased capacity to award health care professional degrees in a manner that aligns with the goals of the state's master plan for higher education developed under Section 61.051.

(b) For purposes of Subsection (a), the use of money is limited to the following permitted activities in health care professional degree programs:

(1) increasing enrollment capacity;

(2) providing faculty support and paying faculty salaries;

(3) purchasing equipment or library materials;

(4) awarding loan repayment guarantees to students enrolled in graduate health care professional degree programs who commit to teaching at general academic teaching institutions in this state for at least four years after graduation;

(5) investing in clinical facilities or administration for clinical placement programs that expand enrollment capacity of undergraduate health care professional degree programs; and

(6) increasing the number of graduates from health care professional degree programs.

(c) Money received in a state fiscal year by an eligible institution under this subchapter that is not used in that fiscal year by the institution may be held and used by the institution in subsequent state fiscal years for the purposes prescribed by this section.

Sec. 62.210. DETERMINATION AND REPORT OF AMOUNT OF DISTRIBUTIONS. For each state fiscal biennium, the Legislative Budget Board, in consultation with the coordinating board, shall:

(1) determine the amount of each distribution from the fund to which each eligible institution is entitled as provided by this subchapter; and

(2) report the determinations made under Subdivision (1) to the legislature and the comptroller.

Sec. 62.211. RULES. The coordinating board may adopt rules as necessary to implement this subchapter.

SECTION 3. This Act takes effect September 1, 2026, but only if the constitutional amendment proposed by the 89th Legislature, Regular Session, 2025, establishing the Texas Health Care Workforce Education Fund to provide funding to eligible institutions of higher education to address Texas' health care workforce needs and drive the state economy is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.