Regular Session 2015-2016 House Bill 1147 P.N. 1657

PRINTER'S NO. 1657

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1147

Session of

2015

INTRODUCED BY SCHLOSSBERG, DERMODY, HANNA, MARKOSEK, FRANKEL,

YOUNGBLOOD, GOODMAN, STURLA, BROWNLEE, SCHREIBER, PASHINSKI,

DONATUCCI, KINSEY, DEAN, WATERS, M. DALEY, COHEN, MURT,

McNEILL, FABRIZIO, DAVIS, WHEATLEY, THOMAS AND ROEBUCK,

JUNE 1, 2015

REFERRED TO COMMITTEE ON STATE GOVERNMENT, JUNE 1, 2015

AN ACT

Amending the act of April 9, 1929 (P.L.343, No.176), entitled,

as amended, "An act relating to the finances of the State

government; providing for the settlement, assessment,

collection, and lien of taxes, bonus, and all other accounts

due the Commonwealth, the collection and recovery of fees and

other money or property due or belonging to the Commonwealth,

or any agency thereof, including escheated property and the

proceeds of its sale, the custody and disbursement or other

disposition of funds and securities belonging to or in the

possession of the Commonwealth, and the settlement of claims

against the Commonwealth, the resettlement of accounts and

appeals to the courts, refunds of moneys erroneously paid to

the Commonwealth, auditing the accounts of the Commonwealth

and all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

Commonwealth," providing for Pay for Success Contracts.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of April 9, 1929 (P.L.343, No.176), known

as The Fiscal Code, is amended by adding an article to read:

ARTICLE XVII-E.2

PAY FOR SUCCESS CONTRACTS

Section 1701-E.2. Applicability.

This article applies to appropriations from every General

Appropriation Act or other act making an appropriation.

Section 1702-E.2. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Agency." An agency, department, board or commission of the

Commonwealth. The term does not include:

(1) An independent agency, board or commission of the

Commonwealth.

(2) A corporate or political body of the Commonwealth.

"Contract." A Pay for Success Contract authorized under this

article.

"Intermediary." A not-for-profit funding intermediary or

private funding intermediary created to coordinate raising

private investment capital and the delivery of programs by

service providers to citizens of this Commonwealth.

"Not-for-profit funding intermediary." An intermediary which

is exempt from Federal taxation under section 501(c)(3) of the

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

501(c)(3)).

"Office." The Office of the Budget.

"Private funding intermediary." An intermediary which is not

20150HB1147PN1657 - 2 -

a not-for-profit funding intermediary.

"Private investment capital." Funding which does not include

money sourced from the Commonwealth or from an agency,

department, board, commission or other entity of the

Commonwealth.

"Program." The Pay for Success Program established under

section 1703-E.2.

"Secretary." The Secretary of the Budget.

"Service providers." Entities retained by an intermediary to

deliver programs to residents of this Commonwealth under a Pay

for Success Contract.

"Third-party evaluator." A person, organization or entity

contracted by the Commonwealth to be responsible for

independently determining whether the predefined performance

targets and outcomes for the Pay for Success Contract have been

achieved.

Section 1703-E.2. Pay for Success Program.

The Pay for Success Program is established under the Office

of the Budget.

Section 1704-E.2. Pay for Success Contracts.

(a) Authority.--

(1) Notwithstanding any law to the contrary, the office

may procure, or may authorize one or more agencies to

procure, contracts with one or more intermediaries to provide

evidence-based services to improve economic opportunity,

health or safety for Commonwealth residents.

(2) Each contract shall include:

(i) A requirement that payment to the intermediary

be conditioned on the achievement of specific outcomes

based on defined performance targets and outcomes based

20150HB1147PN1657 - 3 -

on quantifiable public benefits and monetary savings.

(ii) An objective process by which a third-party

evaluator will determine whether the performance targets

and outcomes have been achieved.

(iii) A calculation of the amount and timing of

payments if performance targets and outcomes have been

achieved.

(3) Prior to the award of a contract, the secretary must

have determined that the contract will result in the

generation of quantifiable public benefits and monetary

savings by the Commonwealth, an agency or a local government

entity, or any combination thereof, through cost avoidance,

increased economic productivity or other factors as

determined by the secretary.

(b) Competitive procurement process.--Each contract shall be

procured in accordance with a request for proposal under 62

Pa.C.S. (relating to procurement), except that 62 Pa.C.S. §§ 514

(relating to small procurements) and 515 (relating to sole

source procurement) shall not apply to a contract awarded under

this article. For each contract to be procured, the office, and

if applicable the authorized agency, shall establish specific,

quantifiable performance targets and outcomes which are capable

of objective measurement.

under contracts include:

(1) Early childhood care and education, including pre-

kindergarten education and services that address maternal and

child outcomes from pregnancy through two years of age.

(2) Education, work force preparedness and employment,

including school-to-work programs and alternative education

20150HB1147PN1657 - 4 -

services.

(3) Public safety, including programs that reduce

recidivism and address juvenile justice.

(4) Health and human services, including drug and

alcohol addiction treatment, mental health, chronic

homelessness, supportive housing and child welfare.

(5) Long-term living and home-based and community-based

services.

(d) Documentation of capital.--An intermediary's private

investment capital shall be documented at the commencement, and

then throughout the full term, of a contract.

Section 1705-E.2. Payment.

(a) Payment authorized.--Except as provided in subsection

(b), the office or an agency that has entered into a contract is

authorized to pay the intermediary from appropriations made for

the programs or activities which are the subject of the

contract.

(b) Performance and savings.--Neither the office nor an

agency may make a payment to an intermediary under a contract

until a third-party evaluator has verified and the office has

affirmed that:

(1) The performance targets and outcomes specified in

the contract have been achieved.

(2) The savings or other benefits delineated in the

contract have been achieved or received.

Section 2. This act shall take effect immediately.

20150HB1147PN1657 - 5 -