Title: Pay-For-Success Contracts

Summary: Authorizes state agency to enter into pay-for-success contract with private entity under certain conditions, subject to appropriation & specified language in GAA; authorizes carryforward of specified unexpended appropriations; provides contract requirements; authorizes cancellation of contract; specifies services & programs that may be eligible for funding under contract; prohibits private entity from viewing or receiving personal client information that is otherwise confidential & exempt from public records law; requires agency to provide annual report to legislative appropriations committees by specified date; requires DMS to prescribe certain procedures by specified date.

Full Text:
An act relating to pay-for-success contracts; creating s. 287.05715, F.S.; providing definitions; authorizing a state agency to enter into a pay-for-success contract with a private entity under certain conditions, subject to an appropriation and specified language in the General Appropriations Act; authorizing the carryforward of certain unexpended appropriations; providing contract requirements; authorizing cancellat ion of the contract under specified circumstances; specifying services and programs that may be eligible for funding under the contract; prohibiting a private entity from viewing or receiving certain information that is otherwise confidential and exempt fr om the public records law; requiring an agency to provide an annual report containing certain data to the chairs of the legislative appropriations committees by a specified date; requiring the Department of Management Services to prescribe certain procedur es by a specified date; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1. Section 287.05715, Florida Statutes, is created HB 2018 to read: 287.05715 Pay-for-success contracts.-(1) As used in this secti on, the term: (a) "Pay  for-success contract" or "contract" means a written agreement executed between an agency and a private entity in which the agency agrees, contingent upon a specified service or program meeting specified performance targets and outcome measures, to reimburse the private entity for up-front capital it will provide to fund a service or program identified in subsection (4) that addresses a critical public problem. (b) "Private entity" means a private, not-for-profit organization, or a subsidiary or an affiliate thereof, that is exempt from federal income taxation pursuant to s. 501(c)(3) of the Internal Revenue Code of 1986 and that enters into a pay for-success contract with an agency. (c) "Service provider" means an entity that pro vides services on behalf of a private entity under a pay-for-success contract. (d) "Success payment" means a single payment or schedule of payments that is identified in a pay-for-success contract to be paid to a private entity when specified performance targets and outcome measures are met. (2)(a) Contingent upon a specific appropriation in the General Appropriations Act that includes funding for a service or program identified in subsection (4) and contains proviso, as HB 2018 defined in s. 216.011, authorizi ng a pay-for success contract and specifying the term of such contract, an agency may enter into a pay-for-success contract with a private entity to receive upfront capital from the entity to fund the service or program. The agency may not enter into a pay-for-success contract until the state agency head determines with reasonable certainty that the contract will result in quantifiable public benefits and monetary savings to the state or a local government by reducing or avoiding costs, increasing economic productivity, or improving client outcomes. (b) Notwithstanding s. 216.301 and pursuant to s. 216.351, the balance of any appropriation from the General Revenue Fund for a pay-for-success contract which is not disbursed but which is obligated pursuant to contract or committed to be expended by June of the fiscal year in which the funds are appropriated may be carried forward for up to years after the effective date of the original appropriation. (3) Each pay-for-success contract shall: (a) Requir ea private entity to underwrite or secure upfront capital from private funding sources, including foundations, financial institutions, businesses, or individuals. (b) Identify the specific service or program, as set forth in subsection (4), to be funded under the contract. (c) Identify performance targets and outcome measures against which the service or program's success can be measured HB 2018 to determine whether the service or program has achieved quantifiable public benefits and monetary savings. (d) Require an independent third-party evaluator to review and issue a report in the middle and at the end of the contract term specifying the degree to which the service or program has met the identified performance targets and outcome measures. (e) Identify the calculation or algorithm to be used by the agency in determining the amount and timing of reimbursable success payments to the private entity. The amount of each success payment must correlate with the independent third-party evaluator's review under paragraph (d). (f) Contain a statement that the service provider will annually provide a report to the agency that includes data deemed relevant by the agency. (g) State that the amount of funds to be reimbursed to the private entity is contingent upon the degree to which the service or program has met the performance targets and outcome measures as evaluated by the independent third-party evaluator. (h) Require the agency to make the appropriate success payment to the private entity within days aft er receiving a report from the independent third-party evaluator. (i) Contain a provision authorizing cancellation of the contract if the agency believes the degree to which the service or program has met the identified performance targets and outcome me asures, as reported by the third-party evaluation, is HB 2018 insufficient to warrant continuation of the service or program. (4) Services or programs that are eligible for funding under a pay-for-success contract are limited to: (a) Early childhood care and education programs, including prekindergarten and school readiness programs from birth to 105 years of age. (b) Education, workforce preparedness, and employment programs, including school-to-work programs and alternative education services. (c) Public safety programs, including programs that reduce recidivism and address juvenile justice. (d) Health and human services, including drug and alcohol addiction, mental health, chronic homelessness, supportive housing, and child welfare services and programs. (e) Long-term, home-based, and community-based care services and programs. (5) The private entity may not view or receive any personal client information that is otherwise confidential and exempt. (6) By April annually, the agency shall provide a report to the chairs of the legislative appropriations committees that contains the data provided by each service provider under paragraph (3)(f) and, if available, each evaluation from each independent third-party evaluator. (7) By December 1, 2018, th edepartment shall prescribe HB 2018 procedures to be used by an agency when executing a pay-for-success contract with a private entity, consistent with this section. Section 2. This act shall take effect July 1, 2018.