84R19071 JJT-F
By: Parker, Burkett, Guerra H.B. No. 3014
A BILL TO BE ENTITLED
AN ACT
relating to the administration of "pay for success" contracts for
state agencies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter G, Chapter 403, Government Code, is
amended by adding Section 403.110 to read as follows:
Sec. 403.110. SUCCESS CONTRACT PAYMENTS TRUST FUND. (a)
The success contract payments trust fund is established as a trust
fund outside the state treasury with the comptroller as trustee.
(b) The trust fund is established to provide a fund from
which the comptroller as trustee may make success contract payments
due in accordance with the contract terms without the necessity of
an appropriation for the contract payment.
(c) The trust fund consists of money appropriated for
deposit to the credit of the trust fund and any interest or other
earnings attributable to the trust fund. The comptroller shall hold
money credited to the trust fund for use only for payments due in
accordance with success contract terms and expenses incurred in
administering the trust fund or in administering the success
contracts for which the trust fund is established. The balance of
the trust fund may not exceed $50 million at any time. The
comptroller may establish in the trust fund one or more accounts to
administer money for a particular success contract for which money
has been credited to the trust fund.
(d) Notwithstanding any other law, a state agency and the
comptroller jointly may enter into a success contract with any
person the terms of which must include:
(1) that a majority of the contract payment is
conditioned on the contractor meeting or exceeding certain
specified performance measures toward the outcome of the contract's
objectives;
(2) a defined objective procedure by which an
independent evaluator is to determine whether the specified
performance measures have been met or exceeded; and
(3) a schedule of the amounts and timing of payments to
be earned by the contractor during each year or other specified
period of the contract that indicates the payment amounts
conditioned on meeting or exceeding the specified performance
measures.
(e) The comptroller and a state agency may not finally
execute a proposed success contract under this section unless:
(1) the comptroller and the Legislative Budget Board
certify that the proposed contract is expected to result in
significant performance improvements and significant budgetary
savings for the state agency or agencies party to the contract if
the performance targets are achieved; and
(2) the legislature has appropriated for deposit to
the credit of the trust fund, contingent on the execution of the
contract, an amount of money necessary to administer the contract
and make all payments that may become due under the contract over
the effective period of the contract.
(f) The comptroller shall make the contract payments for the
success contracts only from the trust fund and only in accordance
with the terms of the success contracts. The comptroller shall
deposit to the credit of the trust fund any money the comptroller
recovers from a contractor for overpayment or for a penalty or other
amount recoverable under the terms of a success contract and shall
hold the money in the trust fund in the same manner as the money held
for payments for the success contract. To the extent that any money
credited to the trust fund for a particular success contract
remains unpaid at the time the particular contract expires or is
terminated, as soon after the contract expiration as is
practicable, the comptroller shall return the unpaid amount to the
state treasury fund or account from which the money was
appropriated.
(g) The comptroller shall provide to each legislature not
later than the first day of the regular legislative session a report
that:
(1) provides details about the success in achieving
the specified performance measures of each success contract entered
into under this section that has not expired or been terminated or
that expired or was terminated since the date of the preceding
report under this subsection; and
(2) provides details about proposed success contracts
that have not been executed at the time of the report.
(h) The comptroller may adopt rules as necessary to
administer this section or success contracts entered into under
this section, including joint rules adopted with other agencies
that may be party to success contracts under this section.
SECTION 2. This Act takes effect September 1, 2015.