HB42

HB42 raises annual Higher Education Fund allocations from $393.75 million to $590.625 million—a 50% increase—and redistributes that money among eligible institutions. The new amounts begin with fiscal 2026, which started September 1, 2025. The governor signed the law June 20; it took effect September 1, 2025. The required two-thirds legislative approval for the increase was achieved. Final law; official history.

The 31 listed allocations add up to $590,625,001—one dollar more than the stated annual total. The figures here follow the enacted text without silently changing that discrepancy.

This is capital funding, not a general tuition subsidy or unrestricted operating grant. The constitutional purposes include land, construction, major repairs, capital equipment and library materials. Facilities used only for student housing, intercollegiate athletics or auxiliary enterprises are excluded. HB42 also expressly lets participating boards use allocations to pay principal and interest on Chapter 55 bonds whose proceeds were spent for the eligible constitutional purposes. Constitution, Article VII, Section 17(a), (f); final law, Section 1.

The revised formula considers space shortages, building condition and institutional complexity, with a separate Texas State Technical College allocation. Examples of annual amounts are:

• Texas Tech University: $82,671,774; University of Houston: $70,708,909; Texas State University: $57,704,160.
• University of North Texas and its Frisco branch: $65,142,741, divided by the system’s regents.
• New separate lines for Sam Houston State University’s College of Osteopathic Medicine: $7,555,972, and the University of Houston College of Medicine: $5,746,678.
• Texas State Technical College: $12,993,750, with an updated county-based list of campuses, excluding extension centers and programs.

The law also specifies shared allocations for Texas Tech’s health sciences center and its Abilene and Dallas branches, and for the Texas Woman’s University System. Victoria’s $6,030,405 follows the university into the Texas A&M system: the related transfer law, SB2361, was signed May 27, 2025 and provides for that September transfer. SB2361 expressly preserves HB42’s allocation amounts if both become law. Repealing an obsolete exclusion concerning UT–Pan American and UT–Brownsville does not add a new allocation to either institution. HB42 allocation table and Sections 4–6; SB2361, Sections 23–24; SB2361 history.