BILL NUMBER: AB 1837INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Atkins FEBRUARY 18, 2014 An act to add Section 12096.3.7 to the Government Code, relating to state government. LEGISLATIVE COUNSEL'S DIGEST AB 1837, as introduced, Atkins. Governor's Office of Business and Economic Development. The Economic Revitalization Act establishes the Governor's Office of Business and Economic Development, also known as "GO-Biz," to, among other duties, serve the Governor as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. This bill would require GO-Biz to serve as the lead entity for efforts to explore social innovation financing, defined as an investment arrangement using private funding to finance a social program administered by a nonprofit organization or for-profit service provider on behalf of a government agency pursuant to a performance-based contract. This bill would also require GO-Biz to develop model provisions for performance-based contracts that allow private investors to provide up-front financing to service providers to achieve preagreed upon social outcomes and require a contracting government agency to pay the private investor a return on investment if successful programmatic outcomes are achieved by the service provider. This bill would also make legislative findings and declarations in this regard. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) It is the intent of the Legislature to establish partnerships between government agencies, private investors, nonprofit organizations, and for-profit service providers to facilitate the use of social innovation financing to achieve measurable social benefits. (b) The focus of initial social innovation financing efforts should be towards decreasing recidivism rates in our criminal justice system, reducing homelessness, and promoting workforce development. SEC. 2. Section 12096.3.7 is added to the Government Code, to read: 12096.3.7. (a) The office shall serve as the lead entity for efforts to explore social innovation financing and provide technical assistance to local governments that are exploring the creation of social innovation financing. (b) The office shall develop model provisions for performance-based contracts. (c) For purposes of this section only, the following terms shall have the following meanings: (1) "Performance-based contracts" means contractual agreements between government, private investors, and service providers where private investors agree to provide up-front financing to service providers to achieve preagreed upon social outcomes and the government agency agrees to pay a return on investment to the investors if successful programmatic outcomes are achieved by the service provider. (2) "Social innovation financing" means an investment arrangement using private funding to finance a social program administered by a nonprofit organization or for-profit service provider on behalf of a government agency pursuant to a performance-based contract.