II 

113TH CONGRESS 

2D SESSION S. 2691 

To encourage and support partnerships between the public and private sectors 

to improve our nation’s social programs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 30, 2014 

Mr. BENNET (for himself and Mr. HATCH) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To encourage and support partnerships between the public 

and private sectors to improve our nation’s social programs, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Pay for Performance 

5 Act’’. 

6 SEC. 2. SOCIAL IMPACT PAY FOR PERFORMANCE CON7 TRACTS. 

8 Title XX of the Social Security Act (42 U.S.C. 1397) 

9 is amended— 


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1 (1) in the title heading, by striking ‘‘TO 

2 STATES’’ and inserting ‘‘AND PROJECTS’’; 

3 and 

4 (2) by adding at the end the following: 

5 ‘‘Subtitle C—Social Impact Pay for 

6 Performance Contracts 

7 ‘‘SEC. 2051. PURPOSES. 

8 ‘‘The purposes of this subtitle are the following: 

9 ‘‘(1) To improve the lives of families and indi10 viduals in need in the United States by funding so11 cial programs that achieve real results. 

12 ‘‘(2) To redirect funds away from programs 

13 that, based on objective data, are ineffective, and 

14 into programs that achieve demonstrable, measur15 able results. 

16 ‘‘(3) To ensure Federal funds are used effec17 tively on social services to produce positive outcomes 

18 for both service recipients and taxpayers. 

19 ‘‘(4) To establish the use of social impact pay 

20 for performance contracts to address some of our 

21 Nation’s most pressing problems. 

22 ‘‘(5) To facilitate the creation of public-private 

23 partnerships that bundle philanthropic and other 

24 private resources with existing public spending to 

25 scale up effective social interventions already being 


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1 implemented by private organizations, non-profits, 

2 charitable organizations, and local governments 

3 across the country. 

4 ‘‘(6) To bring pay-for-performance to the social 

5 services sector, allowing the United States to im6 prove the impact and effectiveness of vital social 

7 services programs while redirecting inefficient or du8 plicative spending. 

9 ‘‘SEC. 2052. SOCIAL IMPACT PAY FOR PERFORMANCE CON10 TRACT APPLICATION. 

11 ‘‘(a) NOTICE.—Not later than 1 year after the date 

12 of the enactment of this subtitle, the Secretary of the 

13 Treasury (referred to in this subtitle as the ‘Secretary’), 

14 in consultation with the Federal Interagency Council on 

15 Social Impact Pay for Performance Contracts (established 

16 by section 2056), shall publish in the Federal Register a 

17 request for proposals from States or local governments for 

18 social impact pay for performance contract projects in ac19 cordance with this section. 

20 ‘‘(b) REQUIRED OUTCOMES FOR SOCIAL IMPACT PAY

21 FOR PERFORMANCE CONTRACT PROJECT.—To qualify as 

22 a social impact pay for performance contract project under 

23 this subtitle, a project must produce a measurable, clearly 

24 defined outcome that results in social benefit and Federal 

25 savings through any of the following: 


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1 ‘‘(1) Increasing work and earnings by individ2 uals who have been unemployed in the United States 

3 for more than 6 consecutive months. 

4 ‘‘(2) Increasing employment and earnings of in5 dividuals age 16 to 24. 

6 ‘‘(3) Increasing employment among individuals 

7 receiving Federal disability benefits. 

8 ‘‘(4) Reducing the dependence of low-income 

9 families on Federal means-tested benefits. 

10 ‘‘(5) Improving rates of high school graduation. 

11 ‘‘(6) Reducing teen and unplanned pregnancies. 

12 ‘‘(7) Improving birth outcomes among low-in13 come families and individuals. 

14 ‘‘(8) Reducing rates of asthma, diabetes, or 

15 other preventable diseases among low-income fami16 lies and individuals. 

17 ‘‘(9) Increasing the proportion of children living 

18 in 2-parent families. 

19 ‘‘(10) Reducing incidences of child abuse and 

20 neglect. 

21 ‘‘(11) Reducing the number of youth in foster 

22 care who are emancipated from care by increasing 

23 adoptions, permanent guardianship arrangements, 

24 reunification, or placement with a fit and willing rel25 ative for children and youth in foster care. 


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1 ‘‘(12) Reducing the number of children and 

2 youth in foster care residing in group homes, child 

3 care institutions, agency-operated foster homes, or 

4 other non-family foster homes, unless it is deter5 mined that it is in the interest of the child’s long6 term health, safety, or psychological well-being to 

7 not be placed in a family foster home. 

8 ‘‘(13) Reducing recidivism among individuals 

9 released from prison. 

10 ‘‘(14) Other measurable outcomes defined by 

11 the State or local government that result in positive 

12 social outcomes and Federal savings. 

13 ‘‘(c) FEASIBILITY STUDY REQUIRED.—The notice 

14 described in subsection (a) shall require a State or local 

15 government to submit a feasibility study for the social im16 pact pay for performance contract project that contains 

17 the following information: 

18 ‘‘(1) The outcome goals of the project. 

19 ‘‘(2) A description of each intervention in the 

20 project and anticipated outcome of such interven21 tion. 

22 ‘‘(3) Rigorous evidence demonstrating that the 

23 intervention can be expected to produce the desired 

24 outcomes. 


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1 ‘‘(4) The target population that will be served 

2 by the project. 

3 ‘‘(5) The expected social benefits to participants 

4 who receive the intervention and others who may be 

5 impacted. 

6 ‘‘(6) Projected Federal, State, and local govern7 ment costs and other costs to conduct the project. 

8 ‘‘(7) Projected Federal, State, and local govern9 ment savings and other savings, including an esti10 mate prepared by the State or local government of 

11 the savings to the Federal, State, and local govern12 ment, on a program-by-program basis and in the ag13 gregate, if the project is implemented and the out14 comes are achieved. 

15 ‘‘(8) If savings resulting from the successful 

16 completion of the project are estimated to accrue to 

17 the State or local government, the likelihood of the 

18 State or local government to realize those savings. 

19 ‘‘(9) A plan for delivering the intervention 

20 through a social impact pay for performance con21 tract model. 

22 ‘‘(10) A description of the expertise of each 

23 service provider that will administer the intervention. 

24 ‘‘(11) An explanation of the experience of the 

25 State or local government, the intermediary, or the 


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1 service provider in raising private and philanthropic 

2 capital to fund social service investments. 

3 ‘‘(12) The detailed roles and responsibilities of 

4 each entity involved in the project, including any 

5 State or local government entity, intermediary, serv6 ice provider, independent evaluator, investor, or 

7 other stakeholder. 

8 ‘‘(13) A summary of the experience of the serv9 ice provider delivering the proposed intervention or 

10 a similar intervention, or a summary demonstrating 

11 that the service provider has the expertise necessary 

12 to deliver the proposed intervention. 

13 ‘‘(14) A summary of the unmet need in the 

14 area where the intervention will be delivered or 

15 among the target population who will receive the 

16 intervention. 

17 ‘‘(15) The payment terms, the methodology 

18 used to calculate outcome payments, the payment 

19 schedule, and performance thresholds. 

20 ‘‘(16) The project budget. 

21 ‘‘(17) The project timeline. 

22 ‘‘(18) The criteria used to determine the eligi23 bility of an individual for the project, including how 

24 selected populations will be identified, how they will 


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1 be referred to the project, and how they will be en2 rolled in the project. 

3 ‘‘(19) The evaluation design. 

4 ‘‘(20) The metrics that will be used to deter5 mine whether the outcomes have been achieved and 

6 how such metrics will be measured. 

7 ‘‘(21) A summary explaining the independence 

8 of the evaluator from the other entities involved in 

9 the project and the evaluator’s experience in con10 ducting rigorous evaluations of program effective11 ness including, where available, well-implemented 

12 randomized controlled trials on the intervention or 

13 similar interventions. 

14 ‘‘(22) The capacity of the service provider to 

15 deliver the intervention to the number of partici16 pants the State or local government proposes to 

17 serve in the project. 

18 ‘‘(d) PROJECT INTERMEDIARY INFORMATION RE19 QUIRED.—The feasibility study described in subsection (c) 

20 shall also contain the following information about the 

21 intermediary for the social impact pay for performance 

22 contract project (whether the intermediary is the service 

23 provider or other entity): 


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1 ‘‘(1) Experience and capacity for providing or 

2 facilitating the provision of the type of intervention 

3 proposed. 

4 ‘‘(2) The mission and goals. 

5 ‘‘(3) Information on whether the intermediary 

6 is already working with service providers that pro7 vide this intervention or an explanation of the capac8 ity of the intermediary to begin working with service 

9 providers to provide the intervention. 

10 ‘‘(4) Experience working in a collaborative envi11 ronment across government and nongovernmental 

12 entities. 

13 ‘‘(5) Previous experience collaborating with 

14 public or private entities to implement evidence15 based programs. 

16 ‘‘(6) Ability to raise or provide funding to cover 

17 operating costs (if applicable to the project). 

18 ‘‘(7) Capacity and infrastructure to track out19 comes and measure results, including— 

20 ‘‘(A) capacity to track and analyze pro21 gram performance; and 

22 ‘‘(B) experience with performance-based 

23 contracting and achieving project milestones 

24 and targets. 

25 ‘‘(8) Role in delivering the intervention. 


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1 ‘‘(9) How the intermediary would monitor pro2 gram success, including a description of the interim 

3 benchmarks and outcome measures. 

4 ‘‘SEC. 2053. AWARDING CONTRACTS FOR SOCIAL IMPACT 

5 PAY FOR PERFORMANCE CONTRACT 

6 PROJECTS. 

7 ‘‘(a) TIMELINE IN AWARDING CONTRACT.—Not later 

8 than 6 months after receiving an application in accordance 

9 with section 2052, the Secretary shall determine whether 

10 to enter into a contract for a social impact pay for per11 formance contract project with the State or local govern12 ment that submitted such application. 

13 ‘‘(b) CONSIDERATIONS IN AWARDING CONTRACT.— 

14 In determining whether to enter into a contract for a so15 cial impact pay for performance contract project with a 

16 State or local government, the Secretary, in consultation 

17 with the Federal Interagency Council on Social Impact 

18 Pay for Performance Contracts and the head of any Fed19 eral agency administering a similar intervention or serving 

20 a population similar to that served by the project, shall 

21 consider each of the following: 

22 ‘‘(1) The value to the Federal Government of 

23 the outcome expected to be achieved if the outcomes 

24 specified in the contract are achieved. 


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1 ‘‘(2) The ability of the State or local govern2 ment, in collaboration with the intermediary and the 

3 service providers, to achieve the outcomes. 

4 ‘‘(3) The savings to the Federal Government if 

5 the outcomes specified in contract are achieved. 

6 ‘‘(4) The savings to the State and local govern7 ments if the outcomes specific in the contract are 

8 achieved. 

9 ‘‘(5) The expected quality of the evaluation that 

10 would be conducted with respect to the contract. 

11 ‘‘(c) CONTRACT AUTHORITY.— 

12 ‘‘(1) CONTRACT REQUIREMENTS.—In accord13 ance with this section, the Secretary, in consultation 

14 with the Federal Interagency Council on Social Im15 pact Pay for Performance Contracts and the head of 

16 any Federal agency administering a similar interven17 tion or serving a population similar to that served by 

18 the project, may enter into a contract for a social 

19 impact pay for performance contract project with a 

20 State or local government if the Secretary deter21 mines that each of the following requirements are 

22 met: 

23 ‘‘(A) The State or local government agrees 

24 to achieve an outcome specified in the contract 

25 in order to receive payment. 


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1 ‘‘(B) The Federal payment to the State or 

2 local government for each outcome specified 

3 does not exceed the monetary value of the out4 come to the Federal Government over a period 

5 not to exceed 10 years, as determined by the 

6 Secretary, in consultation with the State or 

7 local government. 

8 ‘‘(C) The duration of the project does not 

9 exceed 10 years. 

10 ‘‘(D) The State or local government has 

11 demonstrated, through the application sub12 mitted under section 2052, that, based on prior 

13 rigorous experimental evaluations or rigorous 

14 quasi-experimental studies, the intervention can 

15 be expected to achieve each outcome specified in 

16 the contract. 

17 ‘‘(E) The State, local government, inter18 mediary, or service provider has experience rais19 ing private or philanthropic capital to fund so20 cial service investments (if applicable to the 

21 project). 

22 ‘‘(F) The State or local government has 

23 shown that each service provider has experience 

24 delivering the intervention, a similar intervenVerDate Mar 15 2010 23:36 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2691.IS S2691

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1 tion, or has otherwise demonstrated the exper2 tise necessary to deliver the intervention. 

3 ‘‘(2) PAYMENT.—The Secretary shall pay the 

4 State or local government only if the independent 

5 evaluator described in section 2055 determines that 

6 the social impact pay for performance contract 

7 project has met the requirements specified in the 

8 contract and achieved an outcome specified in the 

9 contract. 

10 ‘‘(3) LIMITATION.—The Secretary shall not 

11 enter into a contract for a social impact pay for per12 formance contract project under paragraph (1) after 

13 the date that is 10 years after the date of the enact14 ment of this subtitle and shall not obligate any 

15 funds made available under section 2057(a) after 

16 such date. 

17 ‘‘(d) NOTICE OF CONTRACT AWARD.—Not later than 

18 30 days after entering into a contract under this section, 

19 the Secretary shall publish a notice in the Federal Reg20 ister that includes, with regard to such contract, the fol21 lowing: 

22 ‘‘(1) The outcome goals of the social impact pay 

23 for performance contract project. 

24 ‘‘(2) A description of each intervention in the 

25 project. 


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1 ‘‘(3) The target population that will be served 

2 by the project. 

3 ‘‘(4) The expected social benefits to participants 

4 who receive the intervention and others who may be 

5 impacted. 

6 ‘‘(5) The detailed roles, responsibilities, and 

7 purposes of each Federal, State, or local government 

8 entity, intermediary, service provider, independent 

9 evaluator, investor, or other stakeholder. 

10 ‘‘(6) The payment terms, the methodology used 

11 to calculate outcome payments, the payment sched12 ule, and performance thresholds. 

13 ‘‘(7) The project budget. 

14 ‘‘(8) The project timeline. 

15 ‘‘(9) The project eligibility criteria. 

16 ‘‘(10) The evaluation design. 

17 ‘‘(11) The metrics that will be used to deter18 mine whether the outcomes have been achieved and 

19 how these metrics will be measured. 

20 ‘‘(12) The estimate prepared by the State or 

21 local government of the savings to the Federal, 

22 State, and local government, on a program-by-pro23 gram basis and in the aggregate, if the contract is 

24 entered into and implemented and the outcomes are 

25 achieved. 


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1 ‘‘SEC. 2054. FEASIBILITY STUDY FUNDING. 

2 ‘‘(a) REQUESTS FOR FUNDING FOR FEASIBILITY

3 STUDIES.—The Secretary shall reserve a portion of the 

4 funding provided in section 2057 to assist States or local 

5 governments in developing feasibility studies required by 

6 section 2052. To be eligible to receive funding to assist 

7 with completing a feasibility study, a State or local govern8 ment shall submit an application for feasibility study fund9 ing containing the following information: 

10 ‘‘(1) A description of the outcome goals of the 

11 social impact pay for performance contract project. 

12 ‘‘(2) A description of the intervention, including 

13 anticipated program design, target population, an 

14 estimate regarding the number of individuals to be 

15 served, and setting for the intervention. 

16 ‘‘(3) Evidence to support the likelihood that 

17 such intervention will produce the desired outcome. 

18 ‘‘(4) The expected social benefits to participants 

19 who receive the intervention and others who may be 

20 impacted. 

21 ‘‘(5) Estimated costs to conduct the project. 

22 ‘‘(6) Estimates of Federal, State, and local gov23 ernment savings and other savings if the project is 

24 implemented and the outcomes are achieved. 


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1 ‘‘(7) An estimated timeline for implementation 

2 and completion of the project, which shall not exceed 

3 10 years. 

4 ‘‘(8) With respect to a project for which the 

5 State or local government selects an intermediary to 

6 operate the project, any partnerships needed to suc7 cessfully execute the project and the ability of the 

8 intermediary to foster such partnerships. 

9 ‘‘(9) The expected resources needed to complete 

10 the feasibility study for the State or local govern11 ment to apply for social impact pay for performance 

12 contract funding under section 2052. 

13 ‘‘(b) FEDERAL SELECTION OF APPLICATIONS FOR

14 FEASIBILITY STUDY.—Not later than 6 months after re15 ceiving an application for feasibility study funding under 

16 subsection (a), the Secretary, in consultation with the 

17 Federal Interagency Council on Social Impact Pay for 

18 Performance Contracts and the head of any Federal agen19 cy administering a similar intervention or serving a popu20 lation similar to that served by the project, shall select 

21 State or local government feasibility study proposals for 

22 funding based on the following: 

23 ‘‘(1) The likelihood that the proposal will 

24 achieve the desired outcome. 


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1 ‘‘(2) The value of the outcome expected to be 

2 achieved. 

3 ‘‘(3) The potential savings to the Federal Gov4 ernment if the social impact pay for performance 

5 contract project is successful. 

6 ‘‘(4) The potential savings to the State and 

7 local governments if the project is successful. 

8 ‘‘(c) PUBLIC DISCLOSURE.—Not later than 30 days 

9 after selecting a State or local government for feasibility 

10 study funding under this section, the Secretary shall pub11 lish on the website of the Federal Interagency Council on 

12 Social Impact Pay for Performance Contracts information 

13 explaining why the State or local government was granted 

14 feasibility study funding. 

15 ‘‘(d) FUNDING RESTRICTIONS; NO GUARANTEE OF

16 FUNDING.— 

17 ‘‘(1) FEASIBILITY STUDY RESTRICTION.—The 

18 Secretary shall not provide feasibility study funding 

19 under this section for more than 50 percent of the 

20 estimated total cost of the feasibility study reported 

21 in the State or local government application sub22 mitted under subsection (a). 

23 ‘‘(2) AGGREGATE RESTRICTION.—Of the total 

24 amount appropriated under section 2057, the Sec25 retary shall not use more than $10,000,000 to proVerDate Mar 15 2010 23:36 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S2691.IS S2691

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1 vide feasibility study funding to States or local gov2 ernments under this section. 

3 ‘‘(3) NO GUARANTEE OF FUNDING.—The Sec4 retary shall have the option to award no funding 

5 under this section. 

6 ‘‘(e) SUBMISSION OF FEASIBILITY STUDY RE7 QUIRED.—Not later than 6 months after the receipt of 

8 feasibility study funding under this section, a State or 

9 local government receiving such funding shall complete the 

10 feasibility study and submit the study to the Federal 

11 Interagency Council on Social Impact Pay for Perform12 ance Contracts. 

13 ‘‘SEC. 2055. EVALUATIONS. 

14 ‘‘(a) CONTRACT AUTHORITY.—For each State or 

15 local government awarded a social impact pay for perform16 ance contract project approved by the Secretary under this 

17 subtitle, the head of the relevant agency, as determined 

18 by the Federal Interagency Council on Social Impact Pay 

19 for Performance Contracts, shall enter into a contract 

20 with such State or local government to pay for the inde21 pendent evaluation required under section 2053(a)(2) to 

22 determine whether the State or local government project 

23 has met an outcome specified in the contract in order for 

24 the State or local government to receive outcome payments 

25 under this subtitle. 


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1 ‘‘(b) EVALUATOR QUALIFICATIONS.—The head of the 

2 relevant agency may not enter into a contract with a State 

3 or local government under subsection (a) unless the head 

4 determines that the evaluator is independent of the other 

5 parties to the contract and has demonstrated substantial 

6 experience in conducting rigorous evaluations of program 

7 effectiveness including, where available and appropriate, 

8 well-implemented randomized controlled trials on the 

9 intervention or similar interventions. 

10 ‘‘(c) METHODOLOGIES TO BE USED.— 

11 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

12 the evaluation used to determine whether a State or 

13 local government will receive outcome payments 

14 under this subtitle shall, to the extent practicable, 

15 use methodologies based on experimental designs 

16 using random assignment, or, when random assign17 ment is not feasible or appropriate, other reliable, 

18 evidence-based research methodologies, as certified 

19 by the Federal Interagency Council on Social Impact 

20 Pay for Performance Contracts, that allow for the 

21 strongest possible direct, causal inferences. 

22 ‘‘(2) LIMITATION.—In determining whether an 

23 outcome has been achieved, the evaluation method24 ology selected under paragraph (1) shall not con25 sider indirect potential savings to the Federal GovVerDate Mar 15 2010 23:36 Aug 05, 2014 Jkt 039200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S2691.IS S2691

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1 ernment that may be realized from increased in2 come, employment, output, or other economic meas3 ures derived from multiplier effects external to the 

4 outcome metrics upon which contract payments are 

5 based. 

6 ‘‘(3) APPLICATION OF EXECUTIVE ORDER

7 13563.—Executive Order 13563 (76 Fed. Reg. 3,821; 

8 relating to regulatory review) shall not apply to the 

9 development and selection of methodologies under 

10 this subsection. 

11 ‘‘(d) PROGRESS REPORT.— 

12 ‘‘(1) SUBMISSION OF REPORT.—The inde13 pendent evaluator shall— 

14 ‘‘(A) not later than 2 years after a project 

15 has been approved by the Secretary and bian16 nually thereafter until the project is concluded, 

17 submit to the head of the relevant agency and 

18 the Federal Interagency Council on Social Im19 pact Pay for Performance Contracts a written 

20 report summarizing the progress that has been 

21 made in achieving each outcome specified in the 

22 contract; and 

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1 evant agency and the Federal Interagency 

2 Council on Social Impact Pay for Performance 

3 Contracts a written report that includes the re4 sults of the evaluation conducted to determine 

5 whether an outcome payment should be made 

6 along with information on the unique factors 

7 that contributed to achieving or failing to 

8 achieve the outcome, the challenges faced in at9 tempting to achieve the outcome, and informa10 tion on the improved future delivery of this or 

11 similar interventions. 

12 ‘‘(2) SUBMISSION TO CONGRESS.—Not later 

13 than 30 days after receipt of the written report pur14 suant to paragraph (1)(B), the Federal Interagency 

15 Council on Social Impact Pay for Performance Con16 tracts shall submit such report to each committee of 

17 jurisdiction in the House of Representatives and the 

18 Senate. 

19 ‘‘(e) FINAL REPORT.— 

20 ‘‘(1) SUBMISSION OF REPORT.—Within 6 

21 months after the social impact pay for performance 

22 contract project is completed, the independent eval23 uator shall— 

24 ‘‘(A) evaluate the effects of the activities 

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1 gard to each outcome specified in the contract; 

2 and 

3 ‘‘(B) submit to the head of the relevant 

4 agency and the Federal Interagency Council on 

5 Social Impact Pay for Performance Contracts a 

6 written report that includes the results of the 

7 evaluation and the conclusion of the evaluator 

8 as to whether the State or local government has 

9 fulfilled each obligation of the contract, along 

10 with information on the unique factors that 

11 contributed to the success or failure of the 

12 project, the challenges faced in attempting to 

13 achieve the outcome, and information on the 

14 improved future delivery of this or similar inter15 ventions. 

16 ‘‘(2) SUBMISSION TO CONGRESS.—Not later 

17 than 30 days after receipt of the written report pur18 suant to paragraph (1)(B), the Federal Interagency 

19 Council on Social Impact Pay for Performance Con20 tracts shall submit such report to each committee of 

21 jurisdiction in the House of Representatives and the 

22 Senate. 

23 ‘‘(f) LIMITATION ON COST OF EVALUATIONS.—Of 

24 the amount made available for social impact pay for per25 formance contract projects in section 2057, the Secretary 


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1 may not obligate more than 15 percent of such amount 

2 to evaluate the implementation and outcomes of such 

3 projects. 

4 ‘‘SEC. 2056. FEDERAL INTERAGENCY COUNCIL ON SOCIAL 

5 IMPACT PAY FOR PERFORMANCE CON6 TRACTS. 

7 ‘‘(a) ESTABLISHMENT; DUTIES.—There is estab8 lished the Federal Interagency Council on Social Impact 

9 Pay for Performance Contracts (in this section, referred 

10 to as the ‘Council’). The duties of the Council shall be 

11 to— 

12 ‘‘(1) coordinate the efforts of social impact pay 

13 for performance contract projects funded by this 

14 subtitle; 

15 ‘‘(2) advise and assist the Secretary in the de16 velopment and implementation of such projects; 

17 ‘‘(3) advise the Secretary on specific pro18 grammatic and policy matter related to such 

19 projects; 

20 ‘‘(4) provide subject-matter expertise to the 

21 Secretary with regard to such projects; 

22 ‘‘(5) ensure that each State or local government 

23 that has entered into a contract with the Secretary 

24 for a social impact pay for performance contract 

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1 lected by the head of the relevant agency under sec2 tion 2055 has access to Federal administrative data 

3 to assist the State or local government and the eval4 uator in evaluating the performance and outcomes of 

5 the project; 

6 ‘‘(6) provide guidance to the executive branch 

7 on the future of social impact pay for performance 

8 contract projects in the United States; 

9 ‘‘(7) review State and local government applica10 tions for social impact pay for performance contract 

11 projects to ensure that contracts will only be award12 ed under this subtitle when rigorous, independent 

13 data and reliable, evidence-based research meth14 odologies support the conclusion that a contract will 

15 yield savings to the Federal Government that are 

16 equal to or greater than the size of the outlay 

17 through the contract before such applications are 

18 approved by the Secretary; 

19 ‘‘(8) certify, in the case of each approved social 

20 impact pay for performance contract project, that 

21 the project will yield a projected savings to the Fed22 eral Government, and coordinate with the relevant 

23 Federal agency to produce an after-action account24 ing once the project is complete to determine the ac25 tual Federal savings realized, and the extent to 


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1 which actual savings aligned with projected savings; 

2 and 

3 ‘‘(9) provide oversight of the actions of the Sec4 retary and other Federal officials under this subtitle, 

5 and report periodically to Congress and the public 

6 on the implementation of this subtitle. 

7 ‘‘(b) COMPOSITION OF COUNCIL.— 

8 ‘‘(1) PRESIDENTIAL APPOINTEES.—The Presi9 dent of the United States shall select 3 members of 

10 the Council, at least 1 of whom shall be an official 

11 of the Department of the Treasury and at least 1 of 

12 whom shall not be an employee of the Federal Gov13 ernment. The President shall designate 1 of these 3 

14 members as the Chair of the Council. The Chair 

15 shall serve for a term of 7 years, and the other 

16 members selected by the President shall serve terms 

17 of 4 and 6 years. The President shall determine 

18 which member serves 4 years and which serves 6 

19 years. 

20 ‘‘(2) ADDITIONAL APPOINTEES.—In addition to 

21 the 3 members appointed under paragraph (1), the 

22 Council shall be further composed of the following 8 

23 members: 


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1 ‘‘(A) 1 member selected by the President 

2 of the United States from a list of candidates 

3 provided by the Majority Leader of the Senate; 

4 ‘‘(B) 1 member selected by the President 

5 from a list of candidates provided by the Minor6 ity Leader of the Senate; 

7 ‘‘(C) 1 member selected by the President 

8 from a list of candidates provided by the Speak9 er of the House of Representatives; 

10 ‘‘(D) 1 member selected by the President 

11 from a list of candidates provided by the Minor12 ity Leader of the House of Representatives; 

13 ‘‘(E) 1 member selected by the President 

14 from a list of candidates provided by the Chair15 man of the Committee on Finance of the Sen16 ate; 

17 ‘‘(F) 1 member selected by the President 

18 from a list of candidates provided by the Rank19 ing Member of the Committee on Finance of 

20 the Senate; 

21 ‘‘(G) 1 member selected by the President 

22 from a list of candidates provided by the Chair23 man of the Committee on Ways and Means of 

24 the House of Representatives; and 


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1 ‘‘(H) 1 member selected by the President 

2 from a list of candidates provided by the Rank3 ing Member of the Committee on Ways and 

4 Means of the House of Representatives. 

5 ‘‘(3) QUALIFICATIONS.—The membership of the 

6 Council shall consist of individuals who— 

7 ‘‘(A) are experienced in finance, economics, 

8 pay for performance finance or statistics; 

9 ‘‘(B) have relevant professional or personal 

10 experience in a field related to 1 or more of the 

11 outcomes listed in section 2052(b); and 

12 ‘‘(C) are qualified to review applications 

13 for social impact pay for performance contract 

14 projects to determine whether the proposed 

15 metrics and evaluation methodologies are ap16 propriately rigorous and reliant upon inde17 pendent data and evidence-based research. 

18 ‘‘(4) TIMING OF APPOINTMENTS.— 

19 ‘‘(A) CANDIDATE LISTS.—With respect to 

20 the candidate lists described in paragraph (2), 

21 the designated member of Congress shall pro22 vide a list of candidates to the President not 

23 later than 90 days after the date of the enact24 ment of this subtitle, or, in the event of a va25 cancy, not later than 90 days after the date 


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1 upon which the vacancy arises. If a member of 

2 Congress fails to provide a list of candidates to 

3 the President by such date, the President may 

4 select a member of the President’s choice on be5 half of such member of Congress. 

6 ‘‘(B) APPOINTMENT DATE.—All appoint7 ments of the members of the Council shall be 

8 made not later than 120 days after the date of 

9 the enactment of this subtitle. Notwithstanding 

10 the preceding sentence, if not all appointments 

11 have been made to the Council as of such date, 

12 the Council may operate with fewer than all 11 

13 members until all appointments have been 

14 made. 

15 ‘‘(5) TERM OF APPOINTMENTS.— 

16 ‘‘(A) IN GENERAL.—The members ap17 pointed under paragraph (2) shall serve as fol18 lows: 

19 ‘‘(i) 2 members shall serve for 3 

20 years. 

21 ‘‘(ii) 2 members shall serve for 4 

22 years. 

23 ‘‘(iii) 2 members shall serve for 5 

24 years. 


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1 ‘‘(iv) 2 members shall serve for 6 

2 years. 

3 ‘‘(B) ASSIGNMENT OF TERMS.—The Coun4 cil shall designate the term length that each 

5 member appointed under paragraph (2) shall 

6 serve by unanimous agreement. In the event 

7 that unanimous agreement cannot be reached, 

8 term lengths shall be assigned to such members 

9 by a random process. 

10 ‘‘(6) VACANCIES.— 

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (B), in the event of a vacancy in the 

13 Council, whether due to the resignation of a 

14 member, the expiration of a member’s term, or 

15 any other reason, such vacancy shall be filled in 

16 the manner in which the original appointment 

17 was made and shall not affect the powers of the 

18 Council. 

19 ‘‘(B) POLITICAL PARTY BALANCE RULE.— 

20 If the member of Congress required to provide 

21 a list of candidates under paragraph (2) to fill 

22 a vacancy in a position in accordance with this 

23 paragraph is not of the same political party as 

24 the member of Congress providing the list of 

25 candidates for the original appointment to such 


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1 position, the list of candidates to fill such va2 cancy shall be provided instead by the member 

3 of the other political party occupying the cor4 responding position in the House of Congress 

5 or congressional committee concerned. 

6 ‘‘(7) APPOINTMENT POWER.—Members of the 

7 Council appointed under this section shall not be 

8 subject to confirmation by the Senate. 

9 ‘‘(c) RULES OF THE COUNCIL.— 

10 ‘‘(1) CHARTER.—The Council shall file a char11 ter that meets the requirements of section 9(c) of 

12 the Federal Advisory Committee Act (5 U.S.C. 

13 App.) with the Secretary. Such charter shall be pub14 lished on the website the Council is required to es15 tablish under section 2058. 

16 ‘‘(2) COUNCIL PROCEDURES.—Section 10 of the 

17 Federal Advisory Committee Act (5 U.S.C. App.), 

18 other than subsections (e) and (f), shall apply to the 

19 Council. 

20 ‘‘(3) TRANSCRIPTS.—Section 11 of the Federal 

21 Advisory Committee Act (5 U.S.C. App.) shall apply 

22 to the Council. 

23 ‘‘(4) COMPENSATION.—Members of the Coun24 cil— 


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1 ‘‘(A) shall not receive compensation for 

2 service on the Council; and 

3 ‘‘(B) shall be allowed travel expenses, in4 cluding per diem in lieu of subsistence, at rates 

5 authorized for employees of agencies under sub6 chapter I of chapter 57 of title 5, United States 

7 Code, while away from their homes or regular 

8 places of business in the performance of service 

9 for the Council. 

10 ‘‘(d) AGENCY LIAISONS.—The Council shall liaise, as 

11 needed, with officers or employees of each Federal agency 

12 that becomes involved with the social impact pay for per13 formance contract selection and obligation process who are 

14 designated by the head of the agency to serve as liaison 

15 to the Council. 

16 ‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec17 tion shall give the Council the authority to abrogate a con18 tract entered into by the Secretary under section 2053, 

19 or any payment associated with such contract that is pay20 able under such section. 

21 ‘‘SEC. 2057. FUNDING. 

22 ‘‘(a) IN GENERAL.—Out of any money in the Treas23 ury not otherwise appropriated, there is hereby appro24 priated $300,000,000 to remain available until 10 years 

25 after the date specified in section 2053(c)(3) to carry out 


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1 the activities authorized under this subtitle. Amounts ap2 propriated under this subsection that are unobligated as 

3 of such date shall be rescinded on such date, except that 

4 the Secretary may retain an amount not to exceed 

5 $6,000,000 for an additional 3 years for purposes of car6 rying out functions necessary to administer contracts that 

7 were awarded under this subtitle prior to such date. 

8 ‘‘(b) LIMITATION.—Of the amounts made available 

9 under subsection (a), the Secretary may not use more than 

10 $3,000,000 in any fiscal year to support the review, ap11 proval, and oversight of social impact pay for performance 

12 contract projects, including activities conducted by— 

13 ‘‘(1) the Federal Interagency Council on Social 

14 Impact Pay for Performance Contracts; and 

15 ‘‘(2) any other agency consulted by the Sec16 retary before approving a social impact pay for per17 formance contract project or a feasibility study 

18 under section 2054. 

19 ‘‘SEC. 2058. WEBSITE. 

20 ‘‘The Federal Interagency Council on Social Impact 

21 Pay for Performance Contracts shall establish and main22 tain a public website that shall display the following: 

23 ‘‘(1) A copy of, or method of accessing, each 

24 notice published regarding a social impact pay for 


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1 performance contract project pursuant to this sub2 title. 

3 ‘‘(2) For each State or local government that 

4 has entered into a contract with the Secretary for a 

5 social impact pay for performance contract project, 

6 the website shall contain the following information: 

7 ‘‘(A) The outcome goals of the project. 

8 ‘‘(B) A description of each intervention in 

9 the project. 

10 ‘‘(C) The target population that will be 

11 served by the project. 

12 ‘‘(D) The expected social benefits to par13 ticipants who receive the intervention and oth14 ers who may be impacted. 

15 ‘‘(E) The detailed roles, responsibilities, 

16 and purposes of each Federal, State, or local 

17 government entity, intermediary, service pro18 vider, independent evaluator, investor, or other 

19 stakeholder. 

20 ‘‘(F) The payment terms, methodology 

21 used to calculate outcome payments, the pay22 ment schedule, and performance thresholds. 

23 ‘‘(G) The project budget. 

24 ‘‘(H) The project timeline. 

25 ‘‘(I) The project eligibility criteria. 


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1 ‘‘(J) The evaluation design. 

2 ‘‘(K) The metrics used to determine wheth3 er the proposed outcomes have been achieved 

4 and how these metrics are measured. 

5 ‘‘(3) A copy of the progress reports and the 

6 final reports relating to each social impact pay for 

7 performance contract project. 

8 ‘‘(4) An estimate of the savings to the Federal, 

9 State, and local government, on a program-by-pro10 gram basis and in the aggregate, resulting from the 

11 successful completion of the social impact pay for 

12 performance contract project. 

13 ‘‘(5) A copy of the Council’s charter. 

14 ‘‘SEC. 2059. REGULATIONS. 

15 ‘‘The Secretary, in consultation with the Federal 

16 Interagency Council on Social Impact Pay for Perform17 ance Contracts, may issue regulations as necessary to 

18 carry out this subtitle. 

19 ‘‘SEC. 2060. GAO AUDITS. 

20 ‘‘(a) AUTHORITY TO AUDIT.—The Comptroller Gen21 eral of the United States may audit the activities of any 

22 State, local government, or nongovernmental entity that 

23 receives funds under this subtitle. 

24 ‘‘(b) ACCESS TO INFORMATION.— 


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1 ‘‘(1) IN GENERAL.—Notwithstanding any other 

2 provision of law, the Comptroller General shall, upon 

3 request and at such reasonable time and in such rea4 sonable form as the Comptroller General may re5 quest, have access to— 

6 ‘‘(A) any records or other information 

7 under the control of or used by any State, local 

8 government, or nongovernmental entity that re9 ceives funds under this subtitle; 

10 ‘‘(B) any records or other information 

11 under the control of a person or entity acting 

12 on behalf of or under the authority of a State, 

13 local government, or nongovernmental entity 

14 that receives funds under this subtitle, to the 

15 extent that such records or other information is 

16 relevant to an audit under subsection (a); and 

17 ‘‘(C) the officers, directors, employees, fi18 nancial advisors, staff, working groups, and 

19 agents and representatives of any State, local 

20 government, or nongovernmental entity that re21 ceives funds under this subtitle (as related to 

22 the activities on behalf of such State, local gov23 ernment, or nongovernmental entity of such 

24 agent or representative), at such reasonable 

25 times as the Comptroller General may request. 


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1 ‘‘(2) COPIES.—The Comptroller General may 

2 make and retain copies of such books, accounts, and 

3 other records, access to which is granted under this 

4 section, as the Comptroller General considers appro5 priate. 

6 ‘‘SEC. 2061. DEFINITIONS. 

7 ‘‘In this subtitle: 

8 ‘‘(1) AGENCY.—The term ‘agency’ has the 

9 meaning given that term in section 551 of title 5, 

10 United States Code. 

11 ‘‘(2) INTERVENTION.—The term ‘intervention’ 

12 means a specific service delivered to achieve an im13 pact through a social impact pay for performance 

14 contract project. 

15 ‘‘(3) SECRETARY.—The term ‘Secretary’ means 

16 the Secretary of the Treasury. 

17 ‘‘(4) SOCIAL IMPACT PAY FOR PERFORMANCE

18 CONTRACT PROJECT.—The term ‘social impact pay 

19 for performance contract project’ means a project 

20 that finances social services using a social impact 

21 pay for performance contract model. 

22 ‘‘(5) SOCIAL IMPACT PAY FOR PERFORMANCE

23 CONTRACT MODEL.—The term ‘social impact pay for 

24 performance contract model’ means a method of fi25 nancing social services in which— 


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1 ‘‘(A) Federal funds are awarded to a State 

2 or local government only if a State or local gov3 ernment achieves certain outcomes agreed upon 

4 by the State or local government and the Sec5 retary; and 

6 ‘‘(B) the State or local government coordi7 nates with service providers, investors (if appli8 cable to the project), and (if necessary) an 

9 intermediary to identify— 

10 ‘‘(i) an intervention expected to 

11 produce the outcome; 

12 ‘‘(ii) a service provider to deliver the 

13 intervention to the target population; and 

14 ‘‘(iii) investors to fund the delivery of 

15 the intervention. 

16 ‘‘(6) STATE.—The term ‘State’ means each 

17 State of the United States, the District of Columbia, 

18 each commonwealth, territory or possession of the 

19 United States, and each federally recognized Indian 

20 tribe.’’. 

21 SEC. 3. COMMUNITY REINVESTMENT ACT. 

22 Section 804 of the Community Reinvestment Act of 

23 1977 (12 U.S.C. 2903) is amended by adding at the end 

24 the following: 


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1 ‘‘(e) SOCIAL IMPACT PAY FOR PERFORMANCE CON2 TRACT PROJECTS.—In assessing and taking into account, 

3 under subsection (a), the record of a financial institution, 

4 the appropriate Federal financial supervisory agency shall 

5 consider, as a factor, investments made by the financial 

6 institution in social impact pay for performance contract 

7 projects under subtitle C of title XX of the Social Security 

8 Act.’’. 

Æ 


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