84R28081 KEL-D
By: Nelson, et al. S.B. No. 18
(Zerwas)
Substitute the following for S.B. No. 18: No.
A BILL TO BE ENTITLED
AN ACT
relating to measures to support or enhance graduate medical
education in this state, including the transfer of certain assets
from the Texas Medical Liability Insurance Underwriting
Association to the permanent fund supporting graduate medical
education and the authority of the association to issue new
policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 58A.001, Education Code, is amended to
read as follows:
Sec. 58A.001. DEFINITIONS [DEFINITION]. In this chapter:
(1) "Board"[, "board"] means the Texas Higher
Education Coordinating Board.
(2) "Center" means the comprehensive health
professions resource center established under Chapter 105, Health
and Safety Code.
(3) "Community-based, ambulatory patient care center"
includes:
(A) a federally qualified health center, as
defined by Section 1905(l)(2)(B), Social Security Act (42 U.S.C.
Section 1396d(l)(2)(B));
(B) a community mental health center, as defined
by Section 1861(ff)(3)(B), Social Security Act (42 U.S.C. Section
1395x(ff)(3)(B));
(C) a rural health clinic, as defined by Section
1861(aa)(2), Social Security Act (42 U.S.C. Section 1395x(aa)(2));
and
(D) a teaching health center, as defined by 42
U.S.C. Section 293l-1(f)(3)(A).
(4) "First-year residency position" means a residency
position offering first year training in a graduate medical
education program.
(5) "Graduate medical education program" means a
nationally accredited post-doctor of medicine (M.D.) or
post-doctor of osteopathic medicine (D.O.) program that prepares
physicians for the independent practice of medicine in a specific
specialty area.
(6) "Hospital" means:
(A) a facility licensed as a hospital under
Chapter 241, Health and Safety Code, or as a mental hospital under
Chapter 577, Health and Safety Code; or
(B) a similar facility owned or operated by this
state or an agency of this state.
(7) "Medical school" means a public or independent
educational institution that awards a doctor of medicine (M.D.) or
doctor of osteopathic medicine (D.O.) degree.
(8) "Sponsoring institution" means the entity that
assumes the ultimate financial or academic responsibility for a
graduate medical education program.
(9) "Teaching hospital" means a hospital that:
(A) is formally affiliated with a medical school
for purposes of providing a graduate medical education program; or
(B) serves as the sponsoring institution for a
graduate medical education program.
SECTION 2. Subchapter A, Chapter 58A, Education Code, is
amended by adding Sections 58A.002 and 58A.003 to read as follows:
Sec. 58A.002. PERMANENT FUND SUPPORTING GRADUATE MEDICAL
EDUCATION. (a) In this section, "trust company" means the Texas
Treasury Safekeeping Trust Company.
(b) The permanent fund supporting graduate medical
education is a special fund in the treasury outside the general
revenue fund. The fund is composed of:
(1) money transferred or appropriated to the fund by
the legislature;
(2) gifts and grants contributed to the fund; and
(3) the returns received from investment of money in
the fund.
(c) The trust company shall administer the fund. The trust
company shall determine the amount available for distribution from
the fund, determined in accordance with a distribution policy that
is adopted by the comptroller and designed to preserve the
purchasing power of the fund's assets and to provide a stable and
predictable stream of annual distributions. Expenses of managing
the fund's assets shall be paid from the fund. Except as provided
by this section, money in the fund may not be used for any purpose.
Sections 403.095 and 404.071, Government Code, do not apply to the
fund.
(d) In managing the assets of the fund, through procedures
and subject to restrictions the trust company considers
appropriate, the trust company may acquire, exchange, sell,
supervise, manage, or retain any kind of investment that a prudent
investor, exercising reasonable care, skill, and caution, would
acquire or retain in light of the purposes, terms, distribution
requirements, and other circumstances of the fund then prevailing,
taking into consideration the investment of all the assets of the
fund rather than a single investment.
(e) The amount available for distribution from the fund may
be appropriated only:
(1) to the board to fund the programs created under
this chapter; or
(2) as otherwise directed by the legislature.
(f) A public or private institution of higher education or
other entity that may receive money under a program described by
Subsection (e) may solicit and accept gifts and grants to be
deposited to the credit of the fund. A gift or grant to the fund
must be distributed and appropriated for the purposes of the fund,
subject to any limitation or requirement placed on the gift or grant
by the donor or granting entity.
Sec. 58A.003. REDUCTION IN FUNDING. (a) The board shall
limit or withhold funding from any grant recipient under this
chapter that does not comply with reporting requirements or that
uses grant funds for a purpose not authorized by this chapter for
the grant awarded.
(b) The board shall seek reimbursement with respect to any
grant funds that are not used for purposes authorized by this
chapter for the grant awarded.
SECTION 3. Section 58A.022, Education Code, is amended to
read as follows:
Sec. 58A.022. GRADUATE MEDICAL EDUCATION PLANNING AND
PARTNERSHIP GRANTS. (a) The board shall award one-time graduate
medical education planning and partnership grants to hospitals,
medical schools, and community-based, ambulatory patient care
centers [entities] located in this state that seek to develop new
graduate medical education programs with first-year residency
positions, regardless of whether the grant recipient currently
offers or has previously offered[:
[(1) have never had] a graduate medical education
program with first-year residency positions[; and
[(2) are eligible for Medicare funding of graduate
medical education].
(b) The board shall award graduate medical education
planning and partnership grants on a competitive basis according to
criteria adopted by the board. The board shall determine the number
of grants awarded and the amount of each grant consistent with any
conditions provided by legislative appropriation. A grant received
under this section must be used for the purpose of planning a new
graduate medical education program with [additional] first-year
residency positions.
(c) A hospital, medical school, or community-based,
ambulatory patient care center [An application for a planning grant
for a state fiscal year must be submitted to the board not later
than July 15 preceding that fiscal year. Not later than August 15,
the board shall make decisions about grant awards for the following
state fiscal year.
[(d) An entity] that is awarded a graduate medical education
planning and partnership grant and that establishes new first-year
residency positions after receipt of the grant is eligible to apply
for additional funds under Section 58A.024 for each such position
established, as provided by appropriation.
(d) A hospital, medical school, or community-based,
ambulatory patient care center may partner with an existing
graduate medical education program or sponsoring institution for
purposes of planning a new graduate medical education program using
grant funds awarded under this section.
SECTION 4. Section 58A.023, Education Code, is amended to
read as follows:
Sec. 58A.023. GRANTS FOR UNFILLED RESIDENCY POSITIONS.
(a) The board shall award grants to graduate medical education
programs to enable those programs to fill first-year residency
positions that are accredited but unfilled as of July 1, 2013
[first-year residency positions]. The board shall determine the
number of grants awarded and the amount of each grant consistent
with any conditions provided by legislative appropriation.
(b) A grant received under this section must be expended to
support:
(1) resident stipends and benefits; and
(2) other [the] direct resident costs to the program[,
including the resident stipend and benefits].
(c) A grant application must include proof of the accredited
but unfilled positions to which the application applies. [An
application for a grant must be submitted to the board not later
than October 1 preceding the period for which the grant is made.
The board shall make decisions about grant awards not later than
January 1 preceding the grant period.]
(d) The board may distribute a grant amount for a residency
position only on receiving verification that the applicable
residency position has been filled.
(e) Grant amounts are awarded under this section for the
duration of the period in which the resident who initially fills the
residency position continues to hold that position [two consecutive
state fiscal years. For each first-year residency position for
which a program receives an initial grant amount in a fiscal year,
the board shall award the program an equal grant amount for the
following fiscal year].
SECTION 5. Section 58A.024, Education Code, is amended to
read as follows:
Sec. 58A.024. GRANTS FOR PROGRAM EXPANSION OR NEW PROGRAM.
(a) The board shall award grants to enable new or existing
graduate medical education programs to increase the number of
first-year residency positions [or to provide for the establishment
of new graduate medical education programs with first-year
residency positions]. The board shall determine the number of
grants awarded and the amount of each grant consistent with any
conditions provided by legislative appropriation.
(b) [A grant received under this section must be expended to
support the direct resident costs to the program, including the
resident stipend and benefits.
[(c)] A grant application must include a plan for receiving
accreditation for the increased number of positions or for the new
program, as applicable. [An application for a grant must be
submitted to the board not later than October 1 preceding the period
for which the grant is made. The board shall make decisions about
grant awards not later than January 1 preceding the grant period.]
(c) [(d)] The board may distribute a grant amount for a
residency position only on receiving verification that the
applicable residency position has been filled.
(d) [(e)] Grant amounts are awarded under this section for
the duration of the period in which the resident who initially fills
the residency position continues to hold that position [three
consecutive state fiscal years. For each first-year residency
position for which a program receives an initial grant amount in a
fiscal year, the board shall award the program an equal grant amount
for the following two fiscal years].
SECTION 6. Subchapter B, Chapter 58A, Education Code, is
amended by adding Sections 58A.0245 and 58A.0246 to read as
follows:
Sec. 58A.0245. CRITICAL SHORTAGE LEVELS. (a) If the board
determines that the number of first-year residency positions
proposed by eligible applicants under Sections 58A.023 and 58A.024
exceeds the number of first-year residency positions for which
grant funding under those sections is appropriated, in awarding
grants under those sections the board shall prioritize the awarding
of new grants to medical specialties determined by the board to be
at critical shortage levels.
(b) In determining critical shortage levels under this
section, the board shall consider:
(1) the available results of research conducted by the
center under Section 105.009, Health and Safety Code;
(2) other relevant research and criteria, including
research and criteria related to the designation of health
professional shortage areas; and
(3) research performed by other appropriate entities.
Sec. 58A.0246. CONTINUATION OF GRANTS AWARDED FOR 2015
STATE FISCAL YEAR. The board shall award additional grants to fund
eligible graduate medical education programs that, for the state
fiscal year ending on August 31, 2015, received a grant awarded
under Section 58A.023 or 58A.024 or under Section 61.511, as that
section existed immediately before September 1, 2015, if those
programs continue to meet the applicable grant requirements that
existed at the time of the initial award.
SECTION 7. Chapter 105, Health and Safety Code, is amended
by adding Section 105.009 to read as follows:
Sec. 105.009. RESEARCH REGARDING GRADUATE MEDICAL
EDUCATION SYSTEM. (a) The comprehensive health professions
resource center shall conduct research:
(1) to identify all medical specialties and
subspecialties that are at critical shortage levels in this state,
together with the geographic location of the physicians in those
specialties and subspecialties; and
(2) regarding the overall supply of physicians in this
state and any other issues that are relevant to the status of the
state's graduate medical education system and the ability of that
system to meet the current and future health care needs of this
state.
(b) Not later than May 1 of each even-numbered year, the
council shall report the results of the center's research to the
Legislative Budget Board, the Texas Higher Education Coordinating
Board, the office of the governor, and the standing committees of
each house of the legislature with primary jurisdiction over state
finance or appropriations.
SECTION 8. Chapter 2203, Insurance Code, is amended by
adding Subchapter J to read as follows:
SUBCHAPTER J. TRANSFER OF ASSETS; SUSPENSION OF NEW BUSINESS
Sec. 2203.451. TRANSFER OF ASSETS. (a) Not later than the
90th day after the effective date of this section, the department
shall complete an actuarial study to determine the amount of assets
necessary for:
(1) the association's known and unknown insurance
claims and costs associated with those claims; and
(2) administrative expenses of the association,
including liabilities for employee retirement plans.
(b) The association shall cooperate with the department in
completing the actuarial study required by Subsection (a).
(c) Not later than the 60th day after the date on which the
department completes the actuarial study required by Subsection
(a), the association shall transfer the amount of association
assets not necessary for the purposes described by Subsection (a)
to the permanent fund supporting graduate medical education
established under Section 58A.002, Education Code. If that fund is
not in existence on the date of transfer, the association shall
transfer the assets to an account created by the comptroller
outside of the state treasury, and the comptroller shall hold the
assets in trust pending creation of the fund.
Sec. 2203.4515. SUSPENSION OF NEW BUSINESS. (a) Promptly
after the completion of the actuarial study required by Section
2203.451, the commissioner, after notice and hearing, shall
determine whether a necessity exists to suspend the association's
authority to issue new insurance policies pending a future
enactment by the legislature that becomes law or the expiration of
this subchapter under Section 2203.452, whichever occurs earlier.
(b) If the commissioner determines that a necessity
described by Subsection (a) exists, the commissioner shall order
the association to cease issuing new policies immediately, and the
association may not issue a new policy before the expiration of this
subchapter under Section 2203.452 unless authorized by a law that
takes effect before the expiration of this subchapter.
(c) Notwithstanding any order under this section, the
association may continue to renew policies in effect immediately
before the effective date of the order in accordance with the
association's plan of operation.
Sec. 2203.452. EXPIRATION OF SUBCHAPTER. This subchapter
expires September 1, 2017.
SECTION 9. The following provisions of the Education Code
are repealed:
(1) Section 58A.025; and
(2) Section 61.511.
SECTION 10. This Act takes effect September 1, 2015.