Florida Senate - 2020 SB 1182 By Senator Montford 3-01313-20 20201182__ 1 A bill to be entitled 2 An act relating to pay-for-success contracts; creating 3 s. 287.05715, F.S.; providing definitions; authorizing 4 a state agency to enter into a pay-for-success 5 contract with a private entity under certain 6 conditions, subject to an appropriation and specified 7 language in the General Appropriations Act; 8 authorizing the carryforward of certain unexpended 9 appropriations; providing contract requirements; 10 authorizing cancellation of the contract under 11 specified circumstances; specifying services and 12 programs eligible for funding under the contract; 13 prohibiting a private entity from viewing or receiving 14 certain information that is otherwise confidential and 15 exempt from public records requirements; requiring an 16 agency to provide an annual report containing certain 17 data to the chairs of the legislative appropriations 18 committees by a specified date; requiring the 19 Department of Management Services to prescribe certain 20 procedures by a specified date; providing an effective 21 date. 22 23 Be It Enacted by the Legislature of the State of Florida: 24 25 Section 1. Section 287.05715, Florida Statutes, is created 26 to read: 27 287.05715 Pay-for-success contracts.— 28 (1) As used in this section, the term: 29 (a) “Pay–for-success contract” or “contract” means a 30 written agreement executed between an agency and a private 31 entity in which the agency agrees, contingent upon a specified 32 service or program meeting specified performance targets and 33 outcome measures, to reimburse the private entity for up-front 34 capital it will provide to fund a service or program identified 35 in subsection (4) which addresses a critical public problem. 36 (b) “Private entity” means a private, not-for-profit 37 organization, or a subsidiary or an affiliate thereof, that is 38 exempt from federal income taxation pursuant to s. 501(c)(3) of 39 the Internal Revenue Code of 1986, as amended, and that enters 40 into a pay-for-success contract with an agency. 41 (c) “Service provider” means an entity that provides 42 services on behalf of a private entity under a pay-for-success 43 contract. 44 (d) “Success payment” means a single payment or schedule of 45 payments that is identified in a pay-for-success contract to be 46 paid to a private entity when specified performance targets and 47 outcome measures are met. 48 (2)(a) Contingent upon a specific appropriation in the 49 General Appropriations Act which includes funding for a service 50 or program identified in subsection (4) and contains proviso, as 51 defined in s. 216.011, authorizing a pay-for-success contract 52 and specifying the term of such contract, an agency may enter 53 into a pay-for-success contract with a private entity to receive 54 up-front capital from the entity to fund the service or program. 55 The agency may not enter into a pay-for-success contract until 56 the state agency head determines with reasonable certainty that 57 the contract will result in quantifiable public benefits and 58 monetary savings to the state or a local government by reducing 59 or avoiding costs, increasing economic productivity, or 60 improving client outcomes. 61 (b) Notwithstanding s. 216.301 and pursuant to s. 216.351, 62 the balance of any appropriation from the General Revenue Fund 63 for a pay-for-success contract which is not disbursed but which 64 is obligated pursuant to contract or committed to be expended by 65 June 30 of the fiscal year in which the funds are appropriated 66 may be carried forward for up to 3 years after the effective 67 date of the original appropriation. 68 (3) Each pay-for-success contract must: 69 (a) Require a private entity to underwrite or secure up 70 front capital from private funding sources, including 71 foundations, financial institutions, businesses, or individuals. 72 (b) Identify the specific service or program, as set forth 73 in subsection (4), to be funded under the contract. 74 (c) Identify performance targets and outcome measures 75 against which the service or program’s success can be measured 76 to determine whether the service or program has achieved 77 quantifiable public benefits and monetary savings. 78 (d) Require an independent third-party evaluator to review 79 and issue a report in the middle and at the end of the contract 80 term specifying the degree to which the service or program met 81 the identified performance targets and outcome measures. 82 (e) Identify the calculation or algorithm to be used by the 83 agency in determining the amount and timing of reimbursable 84 success payments to the private entity. The amount of each 85 success payment must correlate with the independent third-party 86 evaluator’s review under paragraph (d). 87 (f) Contain a statement that the service provider will 88 annually provide a report to the agency which includes data 89 deemed relevant by the agency. 90 (g) Contain a statement that the amount of funds to be 91 reimbursed to the private entity is contingent upon the degree 92 to which the service or program has met the performance targets 93 and outcome measures as evaluated by the independent third-party 94 evaluator. 95 (h) Require the agency to make the appropriate success 96 payment to the private entity within 60 days after receiving a 97 report from the independent third-party evaluator. 98 (i) Contain a provision authorizing cancellation of the 99 contract if the agency believes the degree to which the service 100 or program has met the identified performance targets and 101 outcome measures, as reported by the third-party evaluation, is 102 insufficient to warrant continuation of the service or program. 103 (4) Services or programs that are eligible for funding 104 under a pay-for-success contract are limited to: 105 (a) Early childhood care and education programs, including 106 prekindergarten and school readiness programs from birth to 5 107 years of age. 108 (b) Education, workforce preparedness, and employment 109 programs, including school-to-work programs and alternative 110 education services. 111 (c) Public safety programs, including programs that reduce 112 recidivism and address juvenile justice. 113 (d) Health and human services and programs, including drug 114 and alcohol addiction, mental health, chronic homelessness, 115 supportive housing, and child welfare. 116 (e) Long-term, home-based, and community-based care 117 services and programs. 118 (5) The private entity may not view or receive any personal 119 client information that is otherwise confidential and exempt. 120 (6) By April 1 annually, the agency shall provide a report 121 to the chairs of the legislative appropriations committees which 122 contains the data provided by each service provider under 123 paragraph (3)(f) and, if available, the evaluations from each of 124 the independent third-party evaluators. 125 (7) By December 1, 2020, the department shall prescribe 126 procedures to be used by an agency when executing a pay-for 127 success contract with a private entity, consistent with this 128 section. 129 Section 2. This act shall take effect July 1, 2020.