Senate Study Bill 1199 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON HUMAN RESOURCES BILL BY CHAIRPERSON MATHIS) A BILL FOR An Act requesting the establishment of a social impact bond 1 interim study committee. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1374XC (5) 86 rh/nh

S.F. _____ Section 1. SOCIAL IMPACT BOND INTERIM STUDY COMMITTEE. 1 1. The legislative council is requested to establish an 2 interim study committee to determine whether opportunities 3 exist for the use of social impact bonds in Iowa. As used in 4 this section, “social impact bond” means a financial instrument 5 in which private investors provide working capital to nonprofit 6 organizations to implement preventive programs aimed at 7 achieving predefined social outcomes. If an independent 8 evaluator determines that the predefined outcomes have been 9 achieved, the government repays the investors their principal 10 and a rate of return; otherwise, the investors lose their 11 capital. 12 2. The committee shall be comprised of the following voting 13 members: 14 a. Five members who are members of the senate, three of 15 whom shall be appointed by the majority leader of the senate 16 and two of whom shall be appointed by the minority leader of 17 the senate. 18 b. Five members who are members of the house of 19 representatives, three of whom shall be appointed by the 20 speaker of the house of representatives and two of whom 21 shall be appointed by the minority leader of the house of 22 representatives. 23 3. The committee shall be comprised of the following 24 nonvoting members: 25 a. One representative from the department of human 26 services, one representative from the Iowa finance authority, 27 and one representative from the state treasurer’s office who 28 shall be appointed by the governor. 29 b. Two representatives from nongovernmental social service 30 or community organizations who shall be appointed by the 31 majority leader of the senate and the speaker of the house of 32 representatives in consultation with the minority leaders of 33 the senate and the house of representatives. 34 4. The interim committee shall study the advisability 35 -1- LSB 1374XC (5) 86 rh/nh 1/ 3

S.F. _____ and feasibility of using social impact bonds in Iowa. The 1 committee’s study shall include but not be limited to all of 2 the following: 3 a. Reviewing existing social innovation programs in this 4 state and in states with social impact bond programs. 5 b. Identifying opportunities for the use of social impact 6 bonds in this state, particularly any opportunities that would 7 be strong candidates for a pilot program. 8 c. Identifying potential challenges and risks of a social 9 impact bond program. 10 d. Identifying statutory changes that would be necessary 11 for the establishment of a social impact bond program in this 12 state. 13 e. Developing legislation to provide the necessary 14 statutory framework for a social impact bond program in this 15 state. 16 5. The interim committee shall present a summary of its 17 review and recommendations in a report to the 2016 session of 18 the general assembly no later than December 15, 2015. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 This bill requests the legislative council to establish an 23 interim study committee to determine whether opportunities 24 exist for the use of social impact bonds in Iowa. The bill 25 defines “social impact bond” to mean a financial instrument in 26 which private investors provide working capital to nonprofit 27 organizations to implement preventive programs aimed at 28 achieving predefined social outcomes. If an independent 29 evaluator determines that the predefined outcomes have been 30 achieved, the government repays the investors their principal 31 and a rate of return; otherwise, the investors lose their 32 capital. 33 The legislative interim committee is to be comprised 34 of legislative members who shall be voting members of the 35 -2- LSB 1374XC (5) 86 rh/nh 2/ 3

S.F. _____ committee, and representatives from the department of 1 human services, the Iowa finance authority, and the state 2 treasurer’s office, and nongovernmental social service 3 or community organizations who shall be nonvoting members 4 of the committee. The committee is directed to study the 5 advisability and feasibility of using social impact bonds 6 in Iowa which shall include but not be limited to reviewing 7 existing social innovation programs in this state and in states 8 with social impact bond programs; identifying opportunities 9 for the use of social impact bonds in this state; identifying 10 potential challenges and risks of a social impact bond program; 11 identifying necessary statutory changes; and developing 12 legislation. 13 The committee is required to present a summary of its review 14 and recommendations in a report to the 2016 session of the 15 general assembly no later than December 15, 2015. 16 -3- LSB 1374XC (5) 86 rh/nh 3/ 3