SB 593, as amended, Lieu. Social impact partnerships: pilot program.
Existing law establishes the Office of Planning and Research in the Governor’s office and sets forth its powers and duties as the comprehensive state planning agency, including, among other things, to evaluate plans and programs of departments and agencies of state government.
This bill would state findings and declarations of the Legislature regarding the social problems currently facing the state and the function of social impact partnerships. The bill would authorize the Governor to enter into at least 3begin insert pay-for-successend insert social impact partnerships, as defined,begin delete each fiscal yearend deletebegin insert
before December 31, 2019,end insert to address policies or programs not currently funded by the state, to addressbegin insert aend insert particularbegin delete components of state programsend deletebegin insert component of a state programend insert in order to improve outcomes or lower state costs, to reduce recidivism, to reduce child abuse and neglect, or to assist at-risk and foster children, provided that the social impact partnershipbegin delete is not used to operate entire state programs,end delete does not cause the displacement of any statebegin delete employee,end deletebegin insert
employeeend insert and the contractual agreement contains specified provisions. The bill would require abegin insert
pay-for-successend insert contract for a social impact partnership to be submitted to the Legislature as part of the Governor’s proposed budget, and any funding necessary for that fiscal year to be included in the Governor’s proposed budget for the state agency that would administer or oversee the contract. The bill wouldbegin delete provide that for contracts approved by the Legislature in prior fiscal years, payments made under the contract would be subject to appropriation according to the terms of the contractend deletebegin insert require the Treasurer to separately account for moneys approved by the Legislature and the Governor to use for payment for these contracts, upon appropriation by the Legislatureend insert.
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:
The Legislature finds and declares all of the
2following:
3(a) This act shall be known, and may be cited, as the California
4Social Impact Partnership Act.
5(b)
end delete
6begin insert(a)end insert Over six million people are currently living in poverty in
7California, and 22 percent are children. One in five
children in
8California lives in poverty and nearly one-half of children in
9California either live in poverty or perilously close to it.
10(c)
end delete
11begin insert(b)end insert The recidivism rates in California are among the highest in
12the nation. According to a 2012 report by the Department of
13Corrections and Rehabilitation, just over 65 percent of those
14released from California’s prison system return within three years.
15(d)
end delete
16begin insert(c)end insert Approximately 55,000 children are in the foster care system
17in California, yet, according to the Pew Charitable Trusts, by 19
18years of age only 57 percent of emancipated foster youth have
19received high school diplomas or general education development
20(GED). Over 70 percent of all state prison inmates have spent time
21in the foster care system.
P3 1(e)
end delete
2begin insert(d)end insert Despite current efforts to address these challenges, there are
3simply not sufficient resources available
through traditional funding
4mechanisms. Innovative approaches that can be shown to achieve
5defined goals should be pursued.
6(f)
end delete
7begin insert(e)end insert Social impact partnerships are essentially
8begin delete pay-for-performanceend deletebegin insert pay-for-successend insert contracts that can be used
9for social programs administered by nongovernmental
10organizations whereby governmental agencies pay only for
11successful programs with real, measurable outcomes after the
12results have
been achieved.
13(g)
end delete
14begin insert(f)end insert This act will authorize the state to contract with
15nongovernmental organizations to provide a service to a targeted
16population over a specified period of time. If the results of the
17services provided meet predetermined program goals, the state
18will repay the nongovernmental organization for the services
19rendered plus an agreed upon rate of return. If the social program
20does not meet the targets, the government pays nothing.
21(g) This act will
authorize the state to enter into at least three
22pay-for-success contracts to meet state goals to reduce recidivism
23and improve outcomes in the child welfare system.
23 24(h) The social impact partnership model was first used in the
25United Kingdom in 2010 and has since been adopted in Newbegin delete York begin insert
York. Twelve other states are developing social
26City, Massachusetts, and Ohio, and contracts are being formulated
27in other states such as Michigan, Colorado, Utah, North Carolina,
28and New Jerseyend delete
29impact partnerships, including Illinois, Michigan, New Jersey,
30Ohio, and Washingtonend insert.
28 31(i) In a time of limited public funds and a decrease in
32philanthropy, the social impact partnership model is being used
33across the nation to address social problems, to reduce recidivism,
34to reduce chronic homelessness, and to fund early childhood
35intervention and prevention services and job training programs.
Title 15.5 (commencing with Section 97000) is added
37to the Government Code, to read:
3
begin insert
This act shall be known, and may be cited, as the Social
7Impact Partnership Program.
(a) For purposes of this title,begin delete “social impact begin insert the following
10partnership,” also referred to as a “pay for success contract,” means
11a contract for services to address a defined demographic group’s
12particular needs for which payment will be made after
13predetermined measurable results have been achieved.end delete
14definitions shall apply:end insert
15(1) “Pay-for-success contract” means a type of contract that
16the state may enter into with a service provider that sets
17performance and quality standards that must be met in order for
18the service provider to be paid. Pay-for-success contracts are often
19used to address a defined demographic group’s particular needs
20for which payment will be made after predetermined measurable
21results have been achieved.
22(2) “Social impact partnership” means a contractual
23relationship between a public entity and one or more private
24entities for the purpose of addressing a social, economic, or
25educational challenge. The context, authorities, and responsibilities
26of a social impact partnership are laid out in a pay-for-success
27contract.
28(b) begin deleteSocial impact partnerships end deletebegin insertPay-for-success contracts end insertmay
29be entered into, subject tobegin delete subdivision (d),end deletebegin insert the conditions and
30requirements of this chapter,end insert for any of the following:
31(1) To address policies or programsbegin insert that may be appropriate to
32meet a defined demographic group’s particular need, but that areend insert
33 not currently funded by the state.
34(2) To addressbegin insert aend insert particularbegin delete components of state programsend delete
35begin insert component of a state programend insert in order to improve outcomes or
36lower state costs.
37(3) To improve outcomes inbegin delete programsend deletebegin insert a programend insert designed to
38reduce recidivism in the population of formerly incarcerated
39individuals.
P5 1(4) To reduce the incidence of
child abuse and neglect through
2prevention and treatment, to improve the stability of at-risk and
3foster children through behavioral health and other
4trauma-informedbegin delete care, and to improve educational outcomes and begin insert careend insert.
5job preparedness for at-risk and foster childrenend delete
6(c) begin deleteSocial impact partnerships end deletebegin insertA social impact partnership end insertshall
7not be usedbegin delete for the operation of entire state programsend deletebegin insert
in lieu of
8funding or administering an existing state programend insert nor cause the
9displacement of any state employee.
10(d) The Governor is authorized to enter into a social impact
11partnershipbegin insert, subject to the conditions and requirements of this
12chapter,end insert for the purposes set forth in subdivision (b) if the
13begin delete contractual agreementend deletebegin insert pay-for-success contractend insert contains all of the
14following:
15(1) A requirement that payments for services be conditioned
16upon the achievement of specific outcomes based on
defined
17begin insert
baseline metrics,end insert performance measuresbegin insert, and quality standardsend insert.
18(2) A requirement that an independent evaluator be used to
19determine whether the performance outcomesbegin insert and quality
20standardsend insert have been achieved.
21(3) Specifications for how success will be measured and
22payments for services are earned.
23(4) A calculation for the amount of, and the timing of, payments
24that will be earned by the service provider during each year of the
25agreement, if performance outcomes are achieved as determined
26by
the independent evaluator.
27(5) If applicable, pursuant to paragraph (2) of subdivision (b),
28a statement that the contract will result in significant performance
29improvements or budgetary savings if the performance outcomes
30are achieved.
31(e) If the Governor exercises the authority set forth in
32subdivision (d), he or she shall enter into at least threebegin delete contracted
33agreements for social impact partnerships during the fiscal year
34in which the state enters into the first contractual agreementend delete
35begin insert pay-for-success contracts for social impact partnerships before
36December 31, 2019end insert.
37(f) Before finalizing the terms and conditions of the
38pay-for-success contract, the state agency that is assigned to
39administer or oversee the pay-for-success contract shall undertake
40an assessment to determine appropriate baseline metrics,
P6 1performance standards, and quality measures to be included in
2the pay-for-success contract. At the conclusion of the
3pay-for-success contract, the state agency shall provide the Joint
4Legislative Budget Committee, the Senate Committee on Business,
5Professions, and Economic Development, and the Assembly
6Committee on Jobs, Economic Development, and the Economy,
7with an assessment of how effective the social impact partnership
8model was in meeting the particular needs of the targeted
9demographic group and make recommendations on how the
10structure or process of undertaking a social impact partnership
11through pay-for-success contracts may be improved.
(a) Abegin insert pay-for-successend insert contract for a social impact
13partnership shall be submitted to the Legislature as part of the
14Governor’s proposed budget,begin delete and anyend deletebegin insert including any statutory
15changes that may be necessary for the pay-for-success contract
16to move forward. Anyend insert funding of the contract for that fiscal year
17shall be included in the Governor’s proposed budget for the state
18agency that would administer or oversee the contract.begin insert
A
19pay-for-success contract shall not be entered into without funding
20approval by the Legislature.end insert
21(b) For contracts approved by the Legislature for prior fiscal
22years, payments made under the contract shall be subject to
23appropriation according to the terms of the contract.
24(b) The Treasurer shall separately account for moneys within
25the State Treasury for pay-for-success contracts that have been
26approved by the Legislature and the Governor, and hold those
27moneys, until the outcome of the social impact partnership has
28been evaluated, pursuant to subdivision (g) of
Section 97000.5,
29and the moneys appropriated by the Legislature for payment of
30the pay-for-success contract.
This title shall be repealed on January 1, 2020.
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