Overall Vote Recommendation

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

HB 5265 creates the Texas Health Care Workforce Education Fund, a new funding mechanism designed to expand the number of health care professional degrees awarded by general academic teaching institutions in Texas. Administered by the Texas Treasury Safekeeping Trust Company, the fund is intended to provide a stable, independent source of revenue to address statewide health care workforce shortages. The fund will be operated outside the state treasury to allow for more flexible investment and distribution management.

The bill amends Section 62.003(1) of the Education Code to include this new subchapter under the existing framework for allocating higher education funds. It establishes eligibility criteria, requiring institutions to be classified as comprehensive, doctoral, or master's universities and to have awarded health care-related degrees in the preceding fiscal year. Distributions from the fund are based on a weighted formula that rewards institutions for the volume and level of degrees conferred.

Under the proposed framework, 95 percent of annual appropriations from the fund will be directed toward permanent institutional endowments to sustain health education programs long-term, while the remaining 5 percent will support startup and expansion efforts. The fund may also accept gifts, grants, and donations from public and private sources. HB 5265 emphasizes preserving the purchasing power of the fund’s assets and providing consistent, predictable funding for health care education across economic cycles.

The Committee Substitute for HB 5265 introduces several important changes compared to the originally filed version. Most notably, it renames the fund from the "Health Care Professional Education Fund" to the "Texas Health Care Workforce Education Fund," signaling a broader and more workforce-driven mission beyond merely producing degrees. This renaming is accompanied by adjustments throughout the bill to emphasize meeting Texas's long-term health care workforce needs.

A major substantive change is the removal of the original 25% cap that limited how much funding a single institution or university system could receive. The Committee Substitute instead ties funding more directly and proportionally to the number and type of health care professional degrees awarded, without imposing strict caps, allowing institutions that produce the most degrees to benefit fully. Additionally, while the original bill gave the Texas Higher Education Coordinating Board explicit control over startup grants and included specific loan repayment incentives for students entering teaching roles, the substitute consolidates fund management more clearly under the Texas Treasury Safekeeping Trust Company and simplifies permitted uses of startup funds without prescribing particular incentive programs.

Finally, the effective date language was updated to align more precisely with the anticipated constitutional amendment that would authorize the fund. Overall, the Committee Substitute streamlines administration, increases flexibility for distributing resources, and sharpens the bill's emphasis on expanding the overall supply of health care professionals to meet critical statewide needs.

Author

Terry Wilson

Drew Darby

Donna Howard

Joanne Shofner

Stan Kitzman

Co-Author

Ann Johnson

Penny Morales Shaw

Charlene Ward Johnson

Contact the Author

Rep. Terry Wilson

Capitol Phone:

(512) 463-0309

Capitol Office:

EXT E2.722

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), HB 5265 would have no significant fiscal implications to the state unless the legislature chooses to appropriate funds to the newly created Texas Health Care Workforce Education Fund. In other words, while the bill establishes the legal and administrative framework for the fund, it does not appropriate any money directly. Any actual financial impact will depend on future legislative actions to fund it.

The bill establishes the Texas Health Care Workforce Education Fund outside the state treasury to be administered by the Texas Treasury Safekeeping Trust Company. The Comptroller would manage distributions and may accept gifts, grants, or donations to grow the fund. The total distribution each year is capped at 7% of the fund’s average investment market value, promoting financial stability. Within each fiscal year’s distribution, 95% would support permanent institutional endowments, and 5% would fund startup programs through grants managed by the Texas Higher Education Coordinating Board.

Importantly, there is no projected fiscal impact on local governments. Units of local government are not responsible for contributing to the fund, nor are they directly affected by its operation. However, the establishment of a new fund outside of the General Revenue Fund will be subject to the Legislature’s fund consolidation review, as it creates a dedicated revenue source with potential long-term fiscal implications if significant appropriations are later made.

Vote Recommendation Notes

While HB 5265 is well-intentioned in seeking to expand Texas's health care workforce, it ultimately represents an unnecessary and concerning expansion of state government. The bill establishes a new, permanent government-managed fund — the Texas Health Care Workforce Education Fund — which will inevitably add to the size and scope of state operations. Even though the bill does not require immediate appropriations, it creates a framework that invites future taxpayer obligations, increasing the long-term burden on public resources.

Furthermore, the bill bypasses market-driven solutions by inserting government funding into a space that could and should be addressed by private universities, private-sector partnerships, and employer-led training initiatives. Rather than empowering free enterprise and competition to solve workforce challenges, it builds a new centralized program that risks politicization, inefficiency, and waste.

HB 5265 also lacks key safeguards such as automatic sunset or review provisions to ensure that the fund's effectiveness is evaluated and that the program remains necessary. Without those protections, there is a strong likelihood the fund will continue indefinitely regardless of whether it delivers measurable results. For these reasons — unnecessary government expansion, the risk of future taxpayer burden, interference with free markets, and lack of accountability — Texas Policy Research recommends that lawmakers vote NO on HB 5265.

Individual Liberty: The bill does not restrict or expand personal freedoms for individuals. Participation by universities is voluntary, and there are no mandates placed on students, workers, or private citizens. It neither infringes upon nor directly enhances individual liberty.
Personal Responsibility: By funding the expansion of health care education programs, the bill could help individuals pursue self-sufficiency and professional success in high-demand fields. However, the reliance on government-managed funding (rather than individual initiative or private effort) tempers the positive impact on the principle of personal responsibility.
Free Enterprise: The bill undermines free enterprise by injecting public funds into what could be addressed through private market solutions. Public universities receiving state-managed funds to expand health care degree programs could crowd out private universities or independent training providers, distorting normal market competition.
Private Property Rights: The bill does not impact private property rights. It does not involve any takings, restrictions, or changes to individual or institutional ownership rights.
Limited Government: The bill clearly grows the size and role of government by creating a new, permanent state fund and administrative structure. Even though initial fiscal impacts are muted, the expansion of permanent programs without clear sunset provisions or funding limits is inconsistent with the principle of limited government.

Related Legislation

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