BILL NUMBER: SB 593 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 2, 2014
AMENDED IN ASSEMBLY JUNE 10, 2014
AMENDED IN SENATE JANUARY 27, 2014
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
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 3 pay-for-success
social impact partnerships, as defined, each fiscal
year before December 31, 2019, to address
policies or programs not currently funded by the state, to address
a particular components of state programs
component of a state program 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 partnership is not used to
operate entire state programs, does not cause the
displacement of any state employee, employee
and the contractual agreement contains specified provisions.
The bill would require a pay-for-success 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
would 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
contract 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 Legislature
.
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. The Legislature finds and declares all of the
following:
(a) This act shall be known, and may be cited, as the California
Social Impact Partnership Act.
(b)
(a) Over six million people are currently living in
poverty in California, and 22 percent are children. One in five
children in California lives in poverty and nearly one-half of
children in California either live in poverty or perilously close to
it.
(c)
(b) The recidivism rates in California are among the
highest in the nation. According to a 2012 report by the Department
of Corrections and Rehabilitation, just over 65 percent of those
released from California's prison system return within three years.
(d)
(c) Approximately 55,000 children are in the foster
care system in California, yet, according to the Pew Charitable
Trusts, by 19 years of age only 57 percent of emancipated foster
youth have received high school diplomas or general education
development (GED). Over 70 percent of all state prison inmates have
spent time in the foster care system.
(e)
(d) Despite current efforts to address these
challenges, there are simply not sufficient resources available
through traditional funding mechanisms. Innovative approaches that
can be shown to achieve defined goals should be pursued.
(f)
(e) Social impact partnerships are essentially
pay-for-performance pay-for-success contracts
that can be used for social programs administered by nongovernmental
organizations whereby governmental agencies pay only for successful
programs with real, measurable outcomes after the results have been
achieved.
(g)
(f) This act will authorize the state to contract with
nongovernmental organizations to provide a service to a targeted
population over a specified period of time. If the results of the
services provided meet predetermined program goals, the state will
repay the nongovernmental organization for the services rendered plus
an agreed upon rate of return. If the social program does not meet
the targets, the government pays nothing.
(g) This act will authorize the state to enter into at least three
pay-for-success contracts to meet state goals to reduce recidivism
and improve outcomes in the child welfare system.
(h) The social impact partnership model was first used in the
United Kingdom in 2010 and has since been adopted in New
York City, Massachusetts, and Ohio, and contracts are being
formulated in other states such as Michigan, Colorado, Utah, North
Carolina, and New Jersey York. Twelve other states are
developing social impact partnerships, including Illinois, Michigan,
New Jersey, Ohio, and Washington .
(i) In a time of limited public funds and a decrease in
philanthropy, the social impact partnership model is being used
across the nation to address social problems, to reduce recidivism,
to reduce chronic homelessness, and to fund early childhood
intervention and prevention services and job training programs.
SEC. 2. 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. This act shall be known, and may be cited, as the Social
Impact Partnership Program.
97000. 97000.5. (a) For purposes of
this title, "social impact partnership," also referred to
as a "pay for success contract," means a contract for services to
address a defined demographic group's particular needs for which
payment will be made after predetermined measurable results have been
achieved. the following definitions shall apply:
(1) "Pay-for-success contract" means a type of contract that the
state may enter into with a service provider that sets performance
and quality standards that must be met in order for the service
provider to be paid. Pay-for-success contracts are often used to
address a defined demographic group's particular needs for which
payment will be made after predetermined measurable results have been
achieved.
(2) "Social impact partnership" means a contractual relationship
between a public entity and one or more private entities for the
purpose of addressing a social, economic, or educational challenge.
The context, authorities, and responsibilities of a social impact
partnership are laid out in a pay-for-success contract.
(b) Social impact partnerships
Pay-for-success contracts may be entered into, subject to
subdivision (d), the conditions and
requirements of this chapter, for any of the following:
(1) To address policies or programs that may be appropriate
to meet a defined demographic group's particular need, but that are
not currently funded by the state.
(2) To address a particular components of
state programs component of a state program in
order to improve outcomes or lower state costs.
(3) To improve outcomes in programs a
program designed to reduce recidivism in the population of
formerly incarcerated individuals.
(4) To reduce the incidence of child abuse and neglect through
prevention and treatment, to improve the stability of at-risk and
foster children through behavioral health and other trauma-informed
care, and to improve educational outcomes and job
preparedness for at-risk and foster children care
.
(c) Social impact partnerships A social
impact partnership shall not be used for the operation
of entire state programs in lieu of funding or
administering an existing state program nor cause the
displacement of any state employee.
(d) The Governor is authorized to enter into a social impact
partnership , subject to the conditions and requirements of this
chapter, for the purposes set forth in subdivision (b) if the
contractual agreement pay-for-success
contract contains all of the following:
(1) A requirement that payments for services be conditioned upon
the achievement of specific outcomes based on defined baseline
metrics, performance measures , and quality standards
.
(2) A requirement that an independent evaluator be used to
determine whether the performance outcomes and quality standards
have been achieved.
(3) Specifications for how success will be measured and payments
for services are earned.
(4) A calculation for the amount of, and the timing of, payments
that will be earned by the service provider during each year of the
agreement, if performance outcomes are achieved as determined by the
independent evaluator.
(5) If applicable, pursuant to paragraph (2) of subdivision (b), a
statement that the contract will result in significant performance
improvements or budgetary savings if the performance outcomes are
achieved.
(e) If the Governor exercises the authority set forth in
subdivision (d), he or she shall enter into at least three
contracted agreements for social impact partnerships during the
fiscal year in which the state enters into the first contractual
agreement pay-for-success contracts for social impact
partnerships before December 31, 2019 .
(f) Before finalizing the terms and conditions of the
pay-for-success contract, the state agency that is assigned to
administer or oversee the pay-for-success contract shall undertake an
assessment to determine appropriate baseline metrics, performance
standards, and quality measures to be included in the pay-for-success
contract. At the conclusion of the pay-for-success contract, the
state agency shall provide the Joint Legislative Budget Committee,
the Senate Committee on Business, Professions, and Economic
Development, and the Assembly Committee on Jobs, Economic
Development, and the Economy, with an assessment of how effective the
social impact partnership model was in meeting the particular needs
of the targeted demographic group and make recommendations on how the
structure or process of undertaking a social impact partnership
through pay-for-success contracts may be improved.
97001. (a) A pay-for-success contract for a social
impact partnership shall be submitted to the Legislature as part of
the Governor's proposed budget, and any
including any statutory changes that may be necessary for the
pay-for-success contract to move forward. Any funding of the
contract for that fiscal year shall be included in the Governor's
proposed budget for the state agency that would administer or oversee
the contract. A pay-for-success contract shall not be entered
into without funding approval by the Legislature.
(b) For contracts approved by the Legislature for prior fiscal
years, payments made under the contract shall be subject to
appropriation according to the terms of the contract.
(b) The Treasurer shall separately account for moneys within the
State Treasury for pay-for-success contracts that have been approved
by the Legislature and the Governor, and hold those moneys, until the
outcome of the social impact partnership has been evaluated,
pursuant to subdivision (g) of Section 97000.5, and the moneys
appropriated by the Legislature for payment of the pay-for-success
contract.
97002. This title shall be repealed on January 1, 2020.