(a) As used in this section, unless the context otherwise requires:

(1) “Additional Tennessee students” means an annual increase in the number of entering Tennessee students over the average number of entering Tennessee students for the immediate past ten (10) years;

(2) “Medical college” means an accredited institution offering courses leading to the degree of doctor of medicine acting through its governing body; and

(3) “Tennessee student” means any student who qualifies as a resident for purposes of tuition according to rules and regulations of the University of Tennessee.

(b) The commission is authorized to contract with privately owned or endowed medical colleges in this state for the purpose of providing financial payments to the colleges in exchange for the colleges' accepting additional Tennessee students.

(c) Any financial payment authorized under this section shall be made in accordance with the following provisions and limitations:

(1) Each medical college that annually enrolls additional Tennessee students may receive annual financial payments for each of the maximum of ten (10) entering Tennessee students;

(2) Financial payments may be made for each additional Tennessee student in an amount not to exceed the per student appropriation to the University of Tennessee College of Medicine for the fiscal year ending prior to the academic year in which the additional Tennessee student or students are enrolled in the medical school;

(3) The financial assistance may be continued from year to year until the entering Tennessee student has been granted a degree in medicine, and contracts provided for in this section may set forth the terms and provisions for continuation of the payments; and

(4) The total financial payments to each medical college shall not exceed payments for more than forty (40) Tennessee students at each medical college during any fiscal year.