Bill Text: HI HCR119 | 2013 | Regular Session | Introduced

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Bill Title: Social Impact Bonds; Early Learning Programs and Services

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Passed) 2013-04-25 - Received notice of Agreement and Adoption in House (Hse. Com. No. 738). [HCR119 Detail]

Download: Hawaii-2013-HCR119-Introduced.html

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HOUSE OF REPRESENTATIVES	H.C.R. NO.	119
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII

HOUSE CONCURRENT

RESOLUTION

 

 

Requesting the Executive Office on Early Learning, in consultation with the Department of Budget and Finance, to conduct a study on the feasibility of using social impact bonds to fund early learning programs and services in the State.

 

 

 

     WHEREAS, the new social and financial landscape and competition for scarce public dollars has required a sometimes painful prioritizing of government functions to provide for the public good in a fiscally prudent manner; and

 

     WHEREAS, legislators across the United States have been searching for new and creative ways to ensure that necessary programs and services do not suffer, but in the shuffle, programs focusing on prevention, that require more time to demonstrate effectiveness, have silently been languishing in the shadows; and

 

     WHEREAS, impact investment in nonprofit organizations and companies that address social issues has grown to fill this void; and

 

     WHEREAS, while the majority of impact investment has focused on microfinance, farming, and other fields for which return on investment is relatively obvious, social impact bonds may be an option more uniquely suited to a state government's efforts to address issues within the social sphere; and

 

     WHEREAS, social impact bonds connect private investors with government entities to fund social programs and services with no initial outlay of taxpayer funds; and

 

     WHEREAS, social impact bonds, also referred to as pay-for-success contracts, rely on defined and measurable outcomes to determine the rate of return, if any, on the money invested; and
     WHEREAS, social impact bonds bring together investors, nonprofits, and government to finance preventive programs expected to lead to overall cost savings in the long run; and

 

     WHEREAS, New York City, the first city in the United States to use social impact bonds, is currently funding programs aimed at reducing youth recidivism rates through social impact bonds "purchased" by Goldman Sachs; and

 

     WHEREAS, Goldman Sachs invested $9,600,000 over four years in the programs on the projection that the programs will reduce recidivism rates by ten percent in that time, and:

 

     (1)  If the projected outcome is met, New York City will use taxpayer funding to repay Goldman Sachs;

 

     (2)  If the projected outcome is exceeded, Goldman Sachs will receive an additional return on its investment from New York City; and

 

     (3)  If the projected outcome is not met, no taxpayer funds will be expended and Goldman Sachs will lose the money it invested; and

 

     WHEREAS, social impact bonds are structured to obtain proven solutions with no risk to taxpayer funds and public budgets; and

 

     WHEREAS, social impact bonds are a financing tool that may, according to Mayor Michael R. Bloomberg, "empower governments to innovate in ways they wouldn't otherwise attempt"; and

 

     WHEREAS, social impact bonds may be a creative and flexible way for the State to invest in early education programs and ensure that all children in Hawaii get off to a solid and supported beginning; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Twenty-seventh Legislature of the State of Hawaii, Regular Session of 2013, the Senate concurring, that the Executive Office on Early Learning, in consultation with the Department of Budget and Finance, is requested to conduct a study on the feasibility of using social impact bonds to fund early learning programs and services within the State; and
     BE IT FURTHER RESOLVED that the Executive Office on Early Learning, in consultation with the Department of Budget and Finance, is requested to consider:

 

     (1)  The potential pool of investors likely to invest in social impact bonds both in and outside the State;

 

     (2)  The State's capacity to effectively administer a social impact bond program;

 

     (3)  Nonprofit organizations with the capacity to make effective use of funding supplied through social impact bonds and with the likelihood to meet predefined and measurable outcomes based on the following factors:

 

          (A)  The economic feasibility of the programs and services provided;

 

          (B)  The degree to which the programs and services provided will advance statewide and local strategies and objectives;

 

          (C)  The degree to which the programs and services offered will maximize the leverage of other state funds; and

 

          (D)  The degree to which the programs and services align with the goals and objectives of the Executive Office on Early Learning, the improvement of social outcomes, and the stimulation of private sector investment and expansion;

 

     (4)  The size and characteristics of the target population that could benefit from early learning programs and services funded through social impact bonds;

 

     (5)  The projected financial value of the improvements that may result from social impact bond investments, including projected public sector savings and projected returns to investors;

     (6)  The availability of performance metrics to analyze projected financial value and impacts beyond financial savings and returns, such as social outcomes;

 

     (7)  Statutory changes necessary to effectuate a social impact bond program and any potential statutory prohibitions that may prevent such a program from being implemented; and

 

     (8)  Any other issues that may arise in the course of conducting the study; and

 

     BE IT FURTHER RESOLVED that the Executive Office on Early Learning, in consultation with the Department of Budget and Finance, is requested to also consider the feasibility of establishing a social impact bond pilot project and in determining the details of a pilot project, the Executive Office on Early Learning in consultation with the Department of Budget and Finance, is requested to consider the following elements:

 

     (1)  The solicitation of donations from philanthropic organizations and other private sources;

 

     (2)  Bond contract terms and conditions, including predefined public sector savings thresholds; and

 

     (3)  Performance metrics to project and measure financial and social outcomes; and

 

     BE IT FURTHER RESOLVED that the Executive Office on Early Learning, in consultation with the Department of Budget and Finance, is requested submit a report of its findings and recommendations, including any proposed legislation, to the Governor and the Legislature no later than 20 days prior to the convening of the Regular Session of 2014; and

 

     BE IT FURTHER RESOLVED that the Legislative Reference Bureau is requested to assist the Executive Office on Early Learning in preparing the report, including recommendations and proposed legislation, if any; provided that the Executive Office on Early Learning is requested to submit its findings and recommendations, including recommendations for proposed legislation, to the Legislative Reference Bureau no later than November 1, 2013; and
     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Governor, Director of Executive Office on Early Learning, Director of Human Services, Director of Finance, and Acting Director of the Legislative Reference Bureau.

 

 

 

	OFFERED BY:	_____________________________

Report Title: 

Social Impact Bonds; Early Learning Programs and Services