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A BILL TO BE ENTITLED
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AN ACT
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relating to pay-for-performance contracts for certain criminal |
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justice programs and services. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 495, Government Code, is amended by |
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adding Subchapter C to read as follows: |
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SUBCHAPTER C. PAY-FOR-PERFORMANCE CONTRACTS FOR CERTAIN |
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DEPARTMENT PROGRAMS AND SERVICES |
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Sec. 495.051. DEFINITIONS. In this subchapter: |
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(1) "Advisory committee" means the advisory committee |
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on pay-for-performance contracts established under Section |
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495.053. |
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(2) "Pilot program" means the pay-for-performance |
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contract pilot program developed and implemented as required by |
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Section 495.052. |
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Sec. 495.052. PAY-FOR-PERFORMANCE CONTRACT PILOT PROGRAM. |
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The board shall develop and implement a pilot program to assess the |
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feasibility, desirability, and cost-effectiveness of entering into |
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contracts: |
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(1) to operate programs or provide services that are: |
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(A) under the supervision of the rehabilitation |
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programs division or the reentry and integration division of the |
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department; |
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(B) designed for the primary purpose of |
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rehabilitating inmates or reintegrating former inmates; and |
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(C) selected by the board for inclusion in the |
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pilot program; and |
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(2) under which payments may be made only if: |
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(A) the contractor meets or exceeds specified |
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performance requirements; and |
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(B) the state realizes a positive return on |
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investment. |
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Sec. 495.053. ADVISORY COMMITTEE. (a) The advisory |
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committee on pay-for-performance contracts is established for the |
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primary purpose of advising the board regarding the |
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pay-for-performance contract pilot program. |
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(b) The advisory committee consists of the following |
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members: |
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(1) the executive commissioner of the Health and Human |
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Services Commission, or the executive commissioner's designee; |
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(2) the executive director of the Texas Workforce |
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Commission, or the executive director's designee; |
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(3) the comptroller, or the comptroller's designee; |
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(4) a representative of a nonprofit organization that |
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has participated in a pay-for-performance contract program or |
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similar program, appointed by the board; and |
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(5) any other person the board determines would be of |
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assistance in developing and implementing the pilot program, |
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appointed by the board. |
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(c) Members of the advisory committee appointed under |
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Subsections (b)(4) and (5) serve at the will of the board. |
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(d) The advisory committee shall: |
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(1) advise the board with respect to: |
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(A) criteria to be used for selecting the |
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programs and services to be included in the pilot program; |
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(B) performance requirements applicable to |
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contractors under the pilot program and desired outcomes for |
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persons served by each selected program or service; |
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(C) criteria to be used in evaluating whether a |
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contractor has met the performance requirements identified under |
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Paragraph (B); and |
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(D) establishing or revising the methodology for |
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computing the state's return on investment; and |
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(2) provide any other advice or information relating |
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to the pilot program that the board requests. |
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(e) Members of the advisory committee are not entitled to |
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compensation but are entitled to reimbursement for actual and |
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necessary expenses incurred in performing their official duties as |
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advisory committee members. |
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(f) Chapter 2110 applies to the advisory committee, except |
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for Section 2110.008. |
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Sec. 495.054. CONTRACTS AUTHORIZED. (a) The board may |
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enter into a contract for the operation of a program or performance |
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of a service that the board selects to be included in the pilot |
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program. Before the board enters into a contract under this |
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section, after considering information provided by the proposed |
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contractor and other information available to the board, the board |
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must determine that it is likely that having the program operated or |
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services performed under the contract will result in a positive |
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return on investment for the state in accordance with the |
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methodology established under Section 495.057. |
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(b) The contract must specify: |
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(1) the program to be operated or service to be |
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performed by the contractor; |
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(2) the period during which the contractor is to |
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operate the program or perform the service under the contract; |
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(3) a condition that certain performance requirements |
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must be met before any payment under the contract may be made |
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together with a description of: |
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(A) the performance requirements; and |
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(B) the criteria the board will use to evaluate |
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whether the contractor has met the performance requirements; and |
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(4) a condition that this state must realize a |
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positive return on investment from the contract before any payment |
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under the contract may be made together with a description of the |
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methodology to be used to determine the state's return on |
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investment. |
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Sec. 495.055. ISSUANCE OF GENERAL OBLIGATION BONDS FOR |
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PAY-FOR-PERFORMANCE CONTRACTS. (a) The Texas Public Finance |
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Authority shall issue and sell general obligation bonds of the |
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state, as authorized by Section 49-q, Article III, Texas |
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Constitution, in a total amount sufficient to provide money for |
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payments anticipated to be due under contracts entered into under |
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this subchapter. |
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(b) The Texas Public Finance Authority shall remit to the |
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comptroller the bond proceeds for deposit to the credit of the |
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special fund created as required by Section 49-q(b), Article III, |
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Texas Constitution. The proceeds may be appropriated only: |
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(1) to the Texas Department of Criminal Justice to |
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make payments under contracts entered into under this subchapter; |
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or |
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(2) to the authority to pay the principal of or |
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interest on the bonds. |
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Sec. 495.056. CONTRACT PAYMENTS. Using money appropriated |
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to the Texas Department of Criminal Justice from the special fund |
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established under Section 49-q, Article III, Texas Constitution, |
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the board shall make payments under contracts entered into under |
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this subchapter, provided that: |
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(1) the contractor has met the performance |
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requirements specified in the contract; |
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(2) the state's return on investment under the |
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contract is positive; and |
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(3) all other contract terms have been satisfied. |
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Sec. 495.057. RETURN ON INVESTMENT COMPUTATION. (a) The |
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board, with advice from the advisory committee, shall establish a |
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methodology for computing the state's return on investment to |
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determine whether that return is positive for purposes of making |
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contract payments in accordance with Section 495.056. The |
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methodology must: |
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(1) define a positive return on investment for the |
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state as increases in state revenue, costs avoided by the state, or |
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a combination of increased revenue and avoided costs in a total |
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amount that equals or exceeds the state's financing and |
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administration costs associated with a contract; and |
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(2) include considerations of the following: |
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(A) state tax revenue and any other state revenue |
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collected during the state fiscal year after the state fiscal year |
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during which the contract was entered into that would not have been |
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collected if the contract had not been entered into; |
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(B) costs avoided by the state by operating the |
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program or providing the services through the contract; and |
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(C) costs of debt service on bonds issued under |
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this subchapter to provide money for payments due under the |
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contract. |
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(b) The comptroller shall assist the board in collecting |
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information useful for purposes of determining the state's return |
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on investment under a contract. |
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Sec. 495.058. REPORT. (a) On or before December 15 of each |
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year following the year in which the pilot program is implemented, |
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the department shall submit to the governor and the standing |
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committees of the legislature with primary jurisdiction over |
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criminal justice and corrections a report regarding the operation |
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of the pilot program. The report must: |
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(1) explain the criteria the board uses for selecting |
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the programs and services to be included in the pilot program; |
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(2) explain the performance requirements applicable |
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to contractors under the pilot program and desired outcomes for |
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persons served by each selected program or service; |
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(3) explain the criteria the board uses to evaluate |
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whether a contractor has met the performance requirements described |
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by Subdivision (2); |
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(4) identify the net benefits to the state of the pilot |
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program; |
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(5) explain the methodology the board uses to |
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determine the state's return on investment before pilot program |
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contract payments are made and the period during which those |
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payments may be made; |
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(6) include a comparison of the costs to the state of |
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providing programs and services under contracts entered into under |
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this subchapter and the costs to the state of directly providing |
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those programs and services for a comparable period; |
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(7) include a summary of the amounts and terms of the |
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bonds issued under Section 49-q, Article III, Texas Constitution; |
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and |
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(8) include a recommendation regarding continuation |
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or expansion of the pilot program. |
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(b) The Texas Public Finance Authority shall provide to the |
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department information necessary for the department to provide the |
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summary required by Subsection (a)(7). |
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SECTION 2. This Act takes effect January 1, 2014, but only |
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if the constitutional amendment proposed by the 83rd Legislature, |
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Regular Session, 2013, providing for the issuance of general |
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obligation bonds to finance pay-for-performance contracts for |
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certain programs and services for certain offenders is approved by |
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the voters. If that amendment is not approved by the voters, this |
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Act has no effect. |