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AB-862 Social innovation financing.(2017-2018)

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Date Published: 03/23/2017 09:00 PM
AB862:v98#DOCUMENT

Amended  IN  Assembly  March 23, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 862


Introduced by Assembly Member Maienschein

February 16, 2017


An act to amend Section 97009 Sections 97010, 97011, 97013, and 97015 of the Government Code, relating to corrections.


LEGISLATIVE COUNSEL'S DIGEST


AB 862, as amended, Maienschein. Social innovation financing.
Existing law, until January 1, 2022, establishes the Social Innovation Financing Program to award grant funding to 3 counties to reduce recidivism through contracts between the 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. Existing law, upon appropriation by the Legislature, requires the Board of State and Community Corrections to issue grants in an amount of not less than $500,000 and not more than $2,000,000 to each county selected, up to a maximum of $5,000,000.
This bill would make technical, nonsubstantive changes to those provisions. require the board to select 6 counties to receive funding and would require the board to issue grants in an amount of not less than $300,000 and not more than $2,000,000, up to a maximum of $10,000,000. The bill would extend the program until January 1, 2025.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 97010 of the Government Code is amended to read:

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 six 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.

SEC. 2.

 Section 97011 of the Government Code is amended to read:

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 three hundred thousand dollars ($500,000) ($300,000) 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 ten million dollars ($5,000,000). ($10,000,000). 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.

SEC. 3.

 Section 97013 of the Government Code is amended to read:

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, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, deletes or extends that date.

SEC. 4.

 Section 97015 of the Government Code is amended to read:

This title shall remain in effect only until January 1, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, deletes or extends that date.

97015.
 This title shall remain in effect only until January 1, 2025, and as of that date is repealed.

SECTION 1.Section 97009 of the Government Code is amended to read:
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.