BILL NUMBER: SB 593 AMENDED
BILL TEXT
AMENDED IN SENATE JANUARY 6, 2014
AMENDED IN SENATE APRIL 23, 2013
INTRODUCED BY Senator Lieu
FEBRUARY 22, 2013
An act to add and repeal Title 15.5 (commencing with Section
97000) of the Government Code, relating to social impact
partnerships.
LEGISLATIVE COUNSEL'S DIGEST
SB 593, as amended, Lieu. Social impact partnerships: pilot
project. program.
Existing law establishes the Office of Planning and Research and
sets forth its powers and duties as the comprehensive state planning
agency.
This bill would require the Office of Planning and Research to
establish a pilot program to study and test the usefulness
of social impact partnerships, as specified, as a mechanism for
social programs operated and administered by nongovernmental
organizations pursuant to a proposed contract entered into with a
state agency. The bill would require the office to issue a request
for applications to receive proposals for the pilot program from
non-governmental organizations to address state goals in the areas of
reduction of inmate recidivism, improving health care, and improving
outcomes for children in the foster care system and those exiting
out of the system. The bill would require the office to report its
recommendations to the Governor and the Legislature on which social
programs to authorize by September 15, 2014. conduct
the Social Impact Partnership Pilot Program. The bill would require
the director of the Office of Planning and Research to identify and
submit at least 3 proposed social impact partnerships to the
Legislature for consideration with the May Revision of the Governor's
Budget each year beginning in 2015. The bill would create the Social
Innovation Financing Trust Fund from which funds appropriated by the
Legislature would be spent on contracts entered into by the office
with approved applicants, as specified. The bill would authorize the
office to adopt regulations to implement these provisions. The bill
would also require the director to report annually to the
Governor and Legislature on the status of ongoing social impact
partnerships and the Social Innovation Financing Trust
Fund, as specified. This bill would repeal these provisions on
January 1, 2020.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Title 15.5 (commencing with Section 97000) is added to
the Government Code, to read:
TITLE 15.5. SOCIAL IMPACT PARTNERSHIPS PILOT PROGRAM
CHAPTER 1. GENERAL
97000. (a) For purposes of this title, "social impact
partnerships," partnership," also referred to as
"social impact bonds," means a financing mechanism for
social programs operated and administered by nongovernmental
organizations pursuant to a contract entered into with a state
agency. Under the contract, the nongovernmental organization and the
state agency shall agree upon specific program goals with
quantifiable target results and a set timeframe to achieve those
targets. Under the contract, the nongovernmental organization shall
pay for the entire cost of providing the agreed upon service. If the
nongovernmental organization providing the service meets the agreed
upon quantifiable results under the contract, the state agency shall,
upon appropriation by the Legislature, reimburse the nongovernmental
organization for the cost of the service along with an agreed upon
rate of financial return. a "pay for success contract,"
means a contract for services provided to address a defined
demographic group's particular needs that are traditionally addressed
through state programs and funding therefor, in order to improve
outcomes and lower costs because payment is made only after measured
results are achieved.
(b) "Director" means the director of the Office of Planning and
Research established pursuant to Section 65037.
(b) "Office" means the Office of Planning and Research established
pursuant to Section 65037.
97001. (a) The office shall, in addition to its powers
and duties set forth in Article 4 (commencing with Section 65040) of
Chapter 1.5 of Division 1 of Title 7, Office of
Planning and Research shall conduct the Social Impact
Partnerships Pilot Program, which is hereby established to
study and test the usefulness of social impact partnerships as a
mechanism to help state agencies meet their statutory goals in an
efficient and cost-effective manner. Program.
(b) (1) The director shall identify and submit at least three
proposed social impact partnerships to the Chair of the Assembly and
Senate Budget Committees and the Chair of the relevant subcommittee
for consideration with the May Revision of the Governor's Budget each
year beginning in 2015.
(2) Prior to the submission of any proposed social impact
partnerships, the director shall consult with the appropriate state
agency or department responsible for administering any affected state
program.
(b) The office shall issue a request for applications to receive
proposals from nongovernmental organizations to address the state
goals under subdivision (b) of Section 97002.
(c) The request for applications shall require proposals to
include all of the following:
(1)
(3) At a minimum, each submission shall include all of the
following:
(A) A description of how the
proposed social program will meet the state goals under
subdivision (b) of Section 97002. program.
(2)
(B) A description of the organization's experience in
providing the proposed social program.
(3)
(C) A description of the financial stability of the
organization.
(4)
(D) An identification of each component of the social
program to be provided.
(5)
(E) A description of how the social program will be
provided.
(6)
(F) A description of the recruitment or selection
process, or both, for participants in the social program.
(7)
(G) The proposed quantifiable results upon which
success of the social program will be measured.
(8)
(H) An itemization of all expenses proposed to be
reimbursed under the contract.
97002. (a) The pilot program shall consist of contracts with
nongovernmental organizations to accomplish the state goals under
subdivision (b).
(b) In order to adequately test and fully evaluate the social
impact partnership model, the pilot program shall be designed to
achieve three state goals, as follows:
(1) Reduce recidivism rates for the incarcerated population of
this state.
(2) Improve health care. The focus of the pilot program is to
further the triple aims of health care reform which includes
improving health quality, reducing costs, and improving the patient
experience. The social programs under this paragraph shall focus on
low-income or underserved communities, or both. The social programs
under this paragraph may include, but are not limited to, programs
that reduce emergency room visits and hospitalizations, incentivize
the use of primary care and preventative health services, and
coordinate the care of patients across health care settings and
providers.
(3) Improve outcomes for children under the jurisdiction of the
foster care system or those exiting out of the system. Those outcomes
include, but are not limited to, improving the health and well-being
of the children.
97004. The pilot program shall be outcome oriented, and payment
to the nongovernmental organizations under the contract shall be
based on the successful completion of the terms of the contract.
These terms shall be determined and approved by the office in
coordination with the relevant state department or agency.
97005. The office shall report its recommendations to the
Governor and the Legislature by September 15, 2014, regarding which
social programs to authorize. The recommendations shall include
proposed contracts with specific nongovernmental organizations for
specific social programs. The contracts shall also include metrics
for determining the success of the social programs and the terms
governing the proposed rate of financial return.
97002. (a) Upon appropriation of sufficient funds by the
Legislature, the director shall enter into a contract with the
approved applicant.
(b) Each contract 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 director, will determine whether the performance
targets have been achieved.
(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 director that the contract will result
in significant performance improvements and budgetary savings across
impacted agencies or departments if the performance targets are
achieved.
(c) The director shall not enter into any contract that exceeds
the funds appropriated for it by the Legislature.
97003. (a) The Social Innovation Financing Trust Fund is hereby
created in the State Treasury. All funds appropriated by the
Legislature pursuant to Section 97002 shall be deposited into the
Social Innovation Financing Trust Fund.
(b) Social impact partnership contracts entered into by the office
with approved applicants shall be paid from the Social Innovation
Financing Trust Fund.
97004. The Office of Planning and Research may adopt regulations
to implement this title.
97005. The director shall report annually to the Governor and
Legislature on the status of each ongoing social impact partnership,
including, but not limited to, a description of the desired outcome
and an overview of the independent evaluator's findings. The report
shall also contain an accounting of the Social Innovation Financing
Trust Fund.
97006. This title shall not create a statutory entitlement to
services or any contractual obligation on the part of the state. It
is the intent of the Legislature that a proposed contract under
Section 97005 97001 is subject to
legislative review and approval before its execution, and that any
appropriation only occur after the review and approval.
97007. This title shall be repealed on January 1, 2020.
CHAPTER 2. SOCIAL IMPACT PARTNERSHIP TO REDUCE RECIDIVISM
97020. (a) The office shall, in consultation with the Department
of Corrections and Rehabilitation, issue a request for applications
for two social impact partnerships to reduce recidivism at the state
or county incarceration facilities, or both.
(b) The office shall consult with the Department of Corrections
and Rehabilitation to review received applications and the proposed
contracts negotiated with the selected applicants.
CHAPTER 3. SOCIAL IMPACT PARTNERSHIP TO IMPROVE HEALTH CARE
97030. (a) The office shall, in consultation with the California
Health and Human Services Agency, issue a request for applications
for two social impact partnerships to improve health care.
(b) The office shall consult with the California Health and Human
Services Agency to review received applications and the proposed
contracts negotiated with the selected applicants.
CHAPTER 4. SOCIAL IMPACT PARTNERSHIP TO IMPROVE OUTCOMES FOR
FOSTER CHILDREN AND THOSE EXITING OUT OF THE FOSTER CARE SYSTEM
97040. (a) The office shall, in consultation with the California
Health and Human Services Agency, issue a request for application for
two social impact partnerships to improve outcomes for foster
children and those exiting out of the system including, but not
limited to, their health care and well-being.
(b) The office shall consult with the California Health and Human
Services Agency to review received applications and the proposed
contracts negotiated with the selected applicants.