HB 5265

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
(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
(2)  "Fund" means the health care professional
(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
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
(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;
(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
(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
(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
(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:
(A)  the number of bachelor of science or bachelor
of arts health care professional degrees awarded by the institution
(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
(2)  the total of all amounts calculated for eligible
institutions under Subdivision (1).
(b)  Before distributions are made under Subsection (a), the
(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
(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
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
(1)  increasing enrollment capacity;
(2)  providing faculty support and paying faculty
(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
(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
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
(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.