H.B. No. 3014

	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 state agency 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)  Each state agency 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 the
	state agency has 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 the state agency has not 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.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 3014 was passed by the House on April
	27, 2015, by the following vote:  Yeas 137, Nays 0, 1 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 3014 on May 26, 2015, by the following vote:  Yeas 141, Nays 4,
	2 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 3014 was passed by the Senate, with
	amendments, on May 22, 2015, by the following vote:  Yeas 29, Nays
	2.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor