By: Guerra H.B. No. 3920
A BILL TO BE ENTITLED
AN ACT
relating to financing arrangements between political subdivisions
and private entities for the implementation of pay for success
initiatives.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 140, Local Government Code, is amended
by adding Section 140.011 to read as follows:
Sec. 140.011. PRIVATE FINANCING ARRANGEMENTS FOR PAY FOR
SUCCESS INITIATIVES. (a) The governing body of a political
subdivision with the authority to issue general obligation or
revenue bonds may by order, ordinance, or similar measure enter
into a private financing arrangement for a program designed and
intended to address a problem facing the political subdivision.
(b) Under the financing arrangement:
(1) private investors provide capital for the program;
(2) a private entity enacts the program;
(3) an independent reviewer determines the success of
the program; and
(4) the political subdivision pays the initial capital
with interest to the private investors only if the independent
reviewer determines that the program is successful.
(c) The Bond Review Board shall by rule establish procedures
for entering into the private financing arrangements, including
procedures for the manner in which:
(1) the financing arrangement is approved;
(2) the financing arrangement is implemented; and
(3) a payment under the financing arrangement is
received.
SECTION 2. This Act takes effect September 1, 2015.