BILL NUMBER: AB 1837 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 25, 2014
PASSED THE ASSEMBLY AUGUST 27, 2014
AMENDED IN SENATE AUGUST 21, 2014
AMENDED IN SENATE AUGUST 4, 2014
AMENDED IN ASSEMBLY MAY 1, 2014
INTRODUCED BY Assembly Member Atkins
(Principal coauthor: Assembly Member Campos)
(Principal coauthor: Senator Lieu)
(Coauthors: Assembly Members Fox, Medina, and V. Manuel Pérez)
FEBRUARY 18, 2014
An act to add and repeal Title 15.8 (commencing with Section
97008) of, and to repeal Section 97013 of, the Government Code,
relating to corrections.
LEGISLATIVE COUNSEL'S DIGEST
AB 1837, Atkins. Board of State and Community Corrections.
Existing law establishes the Board of State and Community
Corrections to collect and maintain available information and data
about state and community correctional policies, practices,
capacities, and needs, as specified. Existing law also requires the
board to develop incentives for units of local government to develop
comprehensive regional partnerships whereby adjacent jurisdictions
pool grant funds in order to deliver services to a broader target
population and maximize the impact of state funds at the local level.
This bill would enact, until January 1, 2020, the Social
Innovation Financing Program, and would require the board to
administer the program. The bill would, among other things, authorize
the Board of State and Community Corrections, upon appropriation of
funds by the Legislature for deposit in the Recidivism Reduction
Fund, to award grants in amounts of not less than $500,000 and not
more than $2,000,000 to each of 3 counties, selected as specified,
for the purpose of entering into a pay for success or social
innovation financing contract, pursuant to which private investors
agree to provide financing to service providers to achieve social
outcomes agreed upon in advance and the government agency that is a
party to the contractual agreement agrees to pay a return on the
investment to the investors if successful programmatic outcomes are
achieved by the service provider. The bill would limit the total
amount of the grants awarded to $5,000,000. The bill would require
each county receiving an award to report annually to the Governor and
Legislature on the status of its program. The bill would require the
board to compile the county reports and submit a summary report to
the Governor and the Legislature annually. The bill would also make
legislative findings and declarations in this regard.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) It is the intent of the Legislature to establish partnerships
between local governmental agencies, private investors, nonprofit
organizations, and for-profit service providers to facilitate the use
of social innovation financing to achieve measurable social
benefits.
(b) Social innovation financing and the use of performance-based
contracting can serve as an effective tool for addressing social and
community development challenges where private sector innovations may
be useful and multiple approaches may be appropriate. Research shows
that the selection and design of these types of social interventions
should be done with care in order to ensure successful outcomes.
Among other criteria, selected projects should meet the following
requirements:
(1) Address social needs that are unmet, high priority, and
large-scale.
(2) Address target populations that are well-defined and can be
measured with scientific rigor.
(3) Result in outcomes that are credible and readily available by
cost-effective means.
(4) Propose interventions that are highly likely to achieve
targeted impact goals.
(5) Be carried out by proven service providers that are prepared
to scale with quality.
(6) Include safeguards to protect the well-being of the
populations served.
(7) Be cost-effective programs that can demonstrate financial
savings for government.
SEC. 2. Title 15.8 (commencing with Section 97008) is added to the
Government Code, to read:
TITLE 15.8. Social Innovation Financing Program
97008. For purposes of this title, the following definitions
apply:
(a) "Board" means the Board of State and Community Corrections.
(b) "Social innovation financing contract," which may also be
known and referred to as a "pay for success contract," refers to a
contractual agreement between government, private investors, and
service providers pursuant to which private investors agree to
provide financing to service providers to achieve social outcomes
agreed upon in advance and the government agency agrees to pay a
return on the investment to the investors if successful programmatic
outcomes are achieved by the service provider.
97009. (a) It is the intent of the Legislature that as part of
the package to reduce recidivism in California, the concept of "pay
for success" or social innovation financing should be included to
take advantage of available philanthropic and private investment.
(b) The Legislature hereby declares that a variety of approaches
have been shown to be successful in reducing recidivism, including
addressing homelessness, substance use disorder and unemployment
among specific demographic groups.
97010. (a) There is hereby established the Social Innovation
Financing Program.
(b) The board shall administer the Social Innovation Financing
Program.
(c) (1) The board shall solicit proposals for social innovation
financing from county boards of supervisors and shall select three
counties to receive grant funding.
(2) Before awarding a grant pursuant to paragraph (1), the board
shall evaluate the quality of the proposal for which the grant is to
be awarded.
(3) At a minimum, each application for a grant shall include all
of the following:
(A) A description of the proposed social program.
(B) A description of the organization's experience in providing
the proposed social program.
(C) A description of the financial stability of the organization.
(D) An identification of each component of the social program to
be provided.
(E) A description of the manner in which the social program will
be provided.
(F) A description of the recruitment or selection process, or
both, for participants in the social program.
(G) The proposed quantifiable results and performance thresholds
upon which success of the social program will be measured.
(H) An itemization of all expenses proposed to be reimbursed under
the contract.
(I) The amount of matching funds provided by the county.
(J) A description of how the final payments for successful
programmatic outcomes will be calculated and structured in the
contract.
(K) A description of all parties to the proposed contract,
including prospective investors and philanthropic foundations.
97011. (a) Upon appropriation of funds by the Legislature for
deposit in the Recidivism Reduction Fund for the purposes of this
title, the board shall award a grant in an amount of not less than
five hundred thousand dollars ($500,000) and not more than two
million dollars ($2,000,000) to each county selected pursuant to
Section 97010 for the purposes of entering into a pay for success or
social innovation financing contract. The total amount of the grants
awarded pursuant to this section shall not exceed five million
dollars ($5,000,000). Any unused state moneys shall revert to the
General Fund.
(b) Each county contract described in subdivision (a) shall
include all of the following:
(1) A requirement that the payment be conditioned on the
achievement of specific outcomes based upon defined performance
targets.
(2) An objective process by which an independent evaluator,
selected by the county, will determine whether the performance
targets have been achieved. This process shall include defined
performance metrics and a monitoring plan.
(3) A calculation of the amount and timing of payments that would
be earned by the service provider during each year of the agreement
if performance targets are achieved as determined by the independent
evaluator.
(4) A determination by the county that the contract will result in
significant performance improvements, such as a reduction in
rearrests or an increase in the number of jail days avoided, and
budgetary savings if the performance targets are achieved.
(5) A requirement that an amount equal to a minimum of 100 percent
of the Social Innovation Financing Program grant awarded to the
county be matched by other county, federal, private, or
philanthropic, funds. The board may adopt regulations allowing
in-kind contributions in lieu of monetary contributions for this
purpose.
(c) Up to 10 percent of the grant funds awarded pursuant to this
title may be used by the counties for administrative expenses related
to the development of the pay for success or social innovation
financing contract. The remainder of the grant shall be contributed
toward final payments to investors for successful programmatic
outcomes achieved, as stipulated in the contract.
(d) If, after receiving a grant pursuant to this title, a county
does not enter into a contract for which the grant was awarded, the
county shall return all moneys awarded by the board pursuant to this
title, to the state.
97012. The board is encouraged to form an executive steering
committee with members from relevant state agencies and departments
with expertise in public health, homelessness and housing, workforce
development, economic development, and effective rehabilitative
treatment for adult and juvenile offenders in the evaluation of the
social innovation financing program, including, but not limited to,
the Governor's Office of Business and Economic Development, the
Department of Housing and Community Development, the California
Workforce Investment Board, and the Office of Health Equity, to make
recommendations to the board regarding the efficacy and viability of
proposals.
97013. (a) Each county receiving an award shall report annually
to the board on the status of its ongoing social innovation financing
program. The report shall also contain an accounting of the moneys
awarded.
(b) The board shall compile the county reports and submit a
summary report to the Governor and Legislature annually.
(c) A report made pursuant to this section shall be made in
accordance with the requirements of Section 9795.
(d) This section shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
97014. This title does not create a statutory entitlement to
services or any contractual obligation on the part of the state.
97015. This title shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.