89R10097 KJE-F     By: Parker S.B. No. 1701       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.