AB 1837, as introduced, Atkins. Governor’s Office of Business and Economic Development.
The Economic Revitalization Act establishes the Governor’s Office of Business and Economic Development, also known as “GO-Biz,” to, among other duties, serve the Governor as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth.
This bill would require GO-Biz to serve as the lead entity for efforts to explore social innovation financing, defined as an investment arrangement using private funding to finance a social program administered by a nonprofit organization or for-profit service provider on behalf of a government agency pursuant to a performance-based contract. This bill would also require GO-Biz to develop model provisions for performance-based contracts that allow private investors to provide up-front financing to service providers to achieve preagreed upon social outcomes and require a contracting government agency to pay the private investor a return on investment if successful programmatic outcomes are achieved by the service provider.
This bill would also make legislative findings and declarations in this regard.
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) It is the intent of the Legislature to establish partnerships
4between government agencies, private investors, nonprofit
5organizations, and for-profit service providers to facilitate the use
6of social innovation financing to achieve measurable social
7benefits.
8(b) The focus of initial social innovation financing efforts should
9be towards decreasing recidivism rates in our criminal justice
10system, reducing homelessness, and promoting workforce
11development.
Section 12096.3.7 is added to the Government Code,
13to read:
(a) The office shall serve as the lead entity for
15efforts to explore social innovation financing and provide technical
16assistance to local governments that are exploring the creation of
17social innovation financing.
18(b) The office shall develop model provisions for
19performance-based contracts.
20(c) For purposes of this section only, the following terms shall
21have the following meanings:
22(1) “Performance-based contracts” means contractual
23agreements between government, private investors, and service
24providers where private investors agree to provide up-front
25financing to service providers to achieve preagreed upon
social
26outcomes and the government agency agrees to pay a return on
27investment to the investors if successful programmatic outcomes
28are achieved by the service provider.
29(2) “Social innovation financing” means an investment
30arrangement using private funding to finance a social program
31administered by a nonprofit organization or for-profit service
32provider on behalf of a government agency pursuant to a
33performance-based contract.
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