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S.B. 71

             1     

RESULTS-BASED FINANCING FOR EARLY CHILDHOOD

             2     
EDUCATION

             3     
2013 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Aaron Osmond

             6     
House Sponsor: Gregory H. Hughes

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill creates the Results-based Early Education Board, which may enter into certain
             11      contracts with private investors to provide funding for early childhood education
             12      programs for at-risk students.
             13      Highlighted Provisions:
             14          This bill:
             15          .    defines terms;
             16          .    creates the Results-based Early Education Restricted Account;
             17          .    creates the Results-based Early Education Board (board) to negotiate contracts with
             18      private investors to fund certain early education programs;
             19          .    requires the repayment to private investors to be conditioned on meeting
             20      performance outcomes set in the contract;
             21          .    requires an independent evaluation of the performance outcomes;
             22          .    requires the Department of Workforce Services to staff the board;
             23          .    allows the board no more than $10,000,000 of outstanding obligations at any one
             24      time;
             25          .    details components of a high quality preschool program that may be funded through
             26      a results-based contract between the board and private investors;
             27          .    describes a home-based technology program that may be funded through a


             28      results-based contract between the board and private investors; and
             29          .    establishes reporting requirements.
             30      Money Appropriated in this Bill:
             31          This bill appropriates in fiscal year 2014:
             32          .    to the General Fund Restricted - Results-based Early Education Restricted Account,
             33      as an ongoing appropriation:
             34              .    from the General Fund, $1,000,000
             35          .    to Department of Workforce Services - Administration,
             36              .    from the Results-based Early Education Restricted Account, $75,000
             37          .    to Department of Workforce Services - Administration,
             38              .    from the Results-based Early Education Restricted Account, $100,000.
             39      Other Special Clauses:
             40          This bill provides an effective date.
             41      Utah Code Sections Affected:
             42      ENACTS:
             43          35A-11-101, Utah Code Annotated 1953
             44          35A-11-102, Utah Code Annotated 1953
             45          35A-11-103, Utah Code Annotated 1953
             46          35A-11-104, Utah Code Annotated 1953
             47          35A-11-105, Utah Code Annotated 1953
             48          35A-11-106, Utah Code Annotated 1953
             49     
             50      Be it enacted by the Legislature of the state of Utah:
             51          Section 1. Section 35A-11-101 is enacted to read:
             52     
CHAPTER 11. RESULTS-BASED FINANCING

             53     
Part 1. Results-based Early Education Act

             54          35A-11-101. Title.
             55          This chapter is known as "Results-based Financing."
             56          Section 2. Section 35A-11-102 is enacted to read:
             57          35A-11-102. Definitions.
             58          As used in this part:


             59          (1) "Board" means the Results-based Early Education Board, created in Section
             60      35A-11-104 .
             61          (2) "Department" means the Department of Workforce Services, created in Section
             62      35A-1-103 .
             63          (3) "Economically disadvantaged" means a student who:
             64          (a) is eligible to receive free lunch;
             65          (b) is eligible to receive reduced price lunch; or
             66          (c) (i) is not otherwise accounted for in Subsection (3)(a) or (b); and
             67          (ii) (A) is enrolled in a Provision 2 or Provision 3 school, as defined by the United
             68      States Department of Agriculture;
             69          (B) has a Declaration of Household Income on file;
             70          (C) is eligible for a fee waiver; or
             71          (D) is enrolled at a school that does not offer a lunch program and is a sibling of a
             72      student accounted for in Subsection (3)(a) or (b).
             73          (4) "Eligible home-based educational technology provider" means a provider that:
             74          (a) intends to offer a home-based educational technology program through a
             75      results-based contract; and
             76          (b) has entered into a contract and signed a memorandum of understanding with the
             77      State Board of Education for the purpose of accessing student data for eligible students served
             78      by the home-based educational technology provider.
             79          (5) "Eligible LEA" means an LEA that:
             80          (a) receives federal money under Title I of the No Child Left Behind Act of 2001, 20
             81      U.S.C. Sec. 6301-6578, for a school-wide or targeted assistance program;
             82          (b) agrees to fund a portion of its preschool program funded under this part with
             83      federal funds described in Subsection (5)(a); and
             84          (c) has a data system capacity to collect longitudinal academic outcome data, including
             85      special education use by student, by identifying each student with a statewide unique student
             86      identifier.
             87          (6) (a) "Eligible private provider" means a child care program that:
             88          (i) (A) except as provided in Subsection (6)(b), is licensed under Title 26, Chapter 39,
             89      Utah Child Care Licensing Act; or


             90          (B) is exempt from licensure under Section 26-39-403 ; and
             91          (ii) meets other criteria as established by the board, consistent with Utah Constitution
             92      Article X, Section 1.
             93          (b) "Eligible private provider" does not include a residential child care, as defined in
             94      Section 26-39-102 .
             95          (7) "Eligible student" means a student who:
             96          (a) lives in the attendance boundaries of an eligible LEA; and
             97          (b) (i) is economically disadvantaged; or
             98          (ii) is classified as an English language learner.
             99          (8) "Local Education Agency" or "LEA" means a school district or charter school.
             100          (9) "Results-based contract" means a contract entered into by the board, a private
             101      investor, and a provider of early childhood education that may result in repayment to a private
             102      investor if certain performance outcome measures are achieved.
             103          Section 3. Section 35A-11-103 is enacted to read:
             104          35A-11-103. Results-based Early Education Restricted Account -- Creation --
             105      Funding -- Distribution of funds.
             106          (1) There is created a restricted account in the General Fund known as the
             107      "Results-based Early Education Restricted Account" to fund results-based contracts for eligible
             108      students to participate in:
             109          (a) a high quality preschool program described in Section 35A-11-105 ; or
             110          (b) a home-based educational technology program described in Section 35A-11-106 .
             111          (2) The restricted account consists of:
             112          (a) money appropriated to the restricted account by the Legislature;
             113          (b) all income and interest derived from the deposit and investment of money in the
             114      account;
             115          (c) federal grants; and
             116          (d) private donations.
             117          (3) The board shall distribute funds in the restricted account in accordance with
             118      Subsection (4) to one or more investors that the board has entered into a contract with under
             119      this part if the independent evaluator determines that the performance-based results have been
             120      met.


             121          (4) (a) At the end of each year of a contract, the independent evaluator shall determine
             122      whether the performance outcome measures set in the contract have been met.
             123          (b) If the independent evaluator determines under Subsection (4)(a) that the
             124      performance outcome measures have been met, the board shall determine what the repayment
             125      to the private investor for that year would be, but not pay the private investor until the end of
             126      the fourth year of the contract.
             127          (c) The fourth year payment described in Subsection (4)(b) shall include each annual
             128      accrued payment plus interest.
             129          (d) After the fourth year, the board may pay the private investor on an annual basis, if
             130      the independent evaluator determines that the performance outcome measures set in the
             131      contract have been met.
             132          (5) The Legislature may appropriate no more than:
             133          (a) $75,000 annually from the restricted account for administrative purposes; and
             134          (b) $100,000 annually from the restricted account for the independent evaluation of the
             135      performance-based results by an independent evaluator required under Section 35A-11-104 .
             136          Section 4. Section 35A-11-104 is enacted to read:
             137          35A-11-104. Establishment of the Results-based Early Education Board --
             138      Membership -- Duties.
             139          (1) There is created a Results-based Early Education Board composed of:
             140          (a) the director of the Department of Workforces Services or the director's designee;
             141          (b) the state treasurer or the treasurer's designee;
             142          (c) the superintendent of public instruction or the superintendent's designee; and
             143          (d) the following individuals appointed by the governor:
             144          (i) two representatives of nonprofit entities that study or advocate for early childhood
             145      education;
             146          (ii) an attorney with expertise in financial contracts; and
             147          (iii) a child development expert.
             148          (2) (a) A member described in Subsection (1)(d) shall serve for a term of two years.
             149          (b) If a vacancy occurs for a member described in Subsection (1)(d), the governor shall
             150      appoint a replacement to serve the remainder of the member's term.
             151          (3) A member may not receive compensation or benefits for the member's service.


             152          (4) Upon request, the department shall provide staff support to the board.
             153          (5) (a) The board members shall elect a chair of the board from the board's
             154      membership.
             155          (b) The board shall meet upon the call of the chair or a majority of the board members.
             156          (6) (a) The board may enter into a contract with a private investor to fund a high
             157      quality preschool program described in Section 35A-11-105 or a home-based education
             158      technology program described in Section 35A-11-106 .
             159          (b) The board may provide for a repayment to a private investor to include an
             160      additional return on investment, dependent on achievement of specific performance outcome
             161      measures set in the contract.
             162          (7) A contract shall include:
             163          (a) a requirement that the repayment to the private investor be conditioned on specific
             164      performance outcome measures set in the contract;
             165          (b) a requirement for an independent evaluator to determine whether the performance
             166      outcomes have been achieved; and
             167          (c) a provision that repayment to the private investor is:
             168          (i) based upon available money in the Results-based Early Education Restricted
             169      Account; and
             170          (ii) subject to legislative appropriation.
             171          (8) The board may not issue a contract if the total outstanding obligations of contracts
             172      issued by the board under this part exceed $10,000,000.
             173          (9) The board shall contract with an independent, nationally-recognized early
             174      childhood education evaluator, selected through a request for proposals, to annually evaluate
             175      performance outcome measures set in a results-based contract of the board.
             176          (10) The board shall determine a uniform assessment that:
             177          (a) is a nationally norm-based measure of age-appropriate cognitive or language skills;
             178          (b) has established reliability; and
             179          (c) has established validity with other similar measures and with later school outcomes.
             180          (11) The board may contract with an independent entity to provide project management
             181      and ensure required implementation.
             182          Section 5. Section 35A-11-105 is enacted to read:


             183          35A-11-105. High quality preschool.
             184          (1) To receive funding pursuant to a contract awarded under Section 35A-11-104 , an
             185      eligible LEA shall establish or currently operate a high quality preschool, and pursuant to
             186      Subsection (7) partner with a private entity providing high quality preschool, with the
             187      following components:
             188          (a) a research-based curriculum that addresses the following developmental domains
             189      through explicit instruction in whole and small group settings:
             190          (i) oral language and listening comprehension;
             191          (ii) phonological awareness and prereading;
             192          (iii) alphabet and word knowledge;
             193          (iv) prewriting, fine motor, and visual arts;
             194          (v) book knowledge and print awareness;
             195          (vi) numeracy;
             196          (vii) social and emotional;
             197          (viii) gross motor and performing arts;
             198          (ix) science and technology; and
             199          (x) social studies, health, and safety;
             200          (b) ongoing, focused, and intensive professional development for staff of the preschool
             201      program;
             202          (c) ongoing assessment of a student's educational growth and developmental progress
             203      to inform instruction;
             204          (d) a pre- and post-assessment, designated by the board in accordance with Section
             205      35A-11-104 , of each student;
             206          (e) a class size that does not exceed 20 students, with one adult for every 10 students in
             207      the class;
             208          (f) ongoing program evaluation and data collection to monitor program goal
             209      achievement and implementation of required program components;
             210          (g) monthly family involvement, including class participation, frequent communication
             211      between home and school, and parent education opportunities based on each family's
             212      circumstances; and
             213          (h) teachers with at least a bachelor's degree or a child development associate


             214      certification.
             215          (2) An eligible LEA shall work in conjunction with the State Board of Education to
             216      assign a statewide unique student identifier to each eligible student funded pursuant to a
             217      contract issued under this part.
             218          (3) An eligible LEA may not use funds awarded pursuant to a contract issued under
             219      this part to supplant funds for an existing high quality preschool program, but may use the
             220      funds to supplement an existing high quality preschool program.
             221          (4) If permitted under Title 1 of the No Child Left Behind Act of 2001, 20 U.S.C. Sec.
             222      6301-6578, an LEA may charge a sliding scale fee to a student participating in a high quality
             223      preschool program under this section, based on household income.
             224          (5) A student funded pursuant to a contract under this part may not exceed the
             225      following amount of time in the classroom:
             226          (a) 16 hours per week for a four-year-old student; and
             227          (b) 12 hours per week for a three-year-old student.
             228          (6) (a) An LEA that receives funds under this section shall report annually to the board
             229      the following information for eligible students funded in whole or in part pursuant to contracts
             230      issued under this part:
             231          (i) number of eligible students served by the LEA's preschool, reported by
             232      economically disadvantaged status and English language learner status;
             233          (ii) attendance;
             234          (iii) cost per eligible student;
             235          (iv) assessment results; and
             236          (v) longitudinal data on each eligible student currently receiving funding under this
             237      part and any eligible students who previously received funding under this part, including:
             238          (A) academic achievement outcomes;
             239          (B) special education use; and
             240          (C) English language learner services.
             241          (b) For each year of a contract, the board shall report to the Economic Development
             242      and Workforce Services Interim Committee the following:
             243          (i) information collected under Subsection (6)(a) for each participating LEA; and
             244          (ii) the terms of the contract, including:


             245          (A) the name of each private investor;
             246          (B) the amount of money each private investor has invested;
             247          (C) the performance outcome measures set in the contract by which repayment will be
             248      determined; and
             249          (D) the repayment schedule to the private investor if the performance outcomes are
             250      met.
             251          (7) (a) Except as provided in Subsection (11), an eligible LEA shall contract with an
             252      eligible private provider, located within the LEA's attendance boundaries, to provide the high
             253      quality preschool program to a portion of the LEA's eligible students funded by a results-based
             254      contract.
             255          (b) The board shall determine in the contract the portion of an LEA's eligible students
             256      funded by a results-based contract to be served by an eligible private provider.
             257          (8) (a) Except as provided in Subsection (8)(b), to receive funding pursuant to a
             258      contract under this part, an eligible private provider shall:
             259          (i) offer a preschool program that contains the components described in Section
             260      35A-11-105 ;
             261          (ii) align its assessments, early learning standards, and professional development with
             262      the contracting LEA;
             263          (iii) allow classroom visits by the contracting LEA, the evaluator chosen in accordance
             264      with Section 35A-11-104 , the board, the private investor, or a project manager to ensure the
             265      components described in Subsection (8)(a) are being implemented;
             266          (iv) (A) allow the contracting LEA to administer the required pre- and
             267      post-assessments to eligible students funded under this part; or
             268          (B) at the discretion of the contracting LEA, administer the required pre- and
             269      post-assessments to students funded under this part; and
             270          (v) report the information described in Subsection (6)(a) to the contracting LEA.
             271          (b) An eligible private provider is not required to meet the requirements of Subsection
             272      (1)(e).
             273          (9) An LEA may provide the eligible private provider with:
             274          (a) professional development;
             275          (b) staffing or staff support;


             276          (c) materials; and
             277          (d) assessments.
             278          (10) (a) If permitted under Title 1 of the No Child Left Behind Act of 2001, 20 U.S.C.
             279      Sec. 6301-6578, an eligible private provider may charge a sliding scale fee to a student
             280      participating in a high quality preschool program under this section, based on household
             281      income.
             282          (b) The eligible private provider may use grants, scholarships, or other funds to help
             283      fund the preschool program.
             284          (11) If there is no eligible private provider that is willing to contract with an eligible
             285      LEA, the eligible LEA is not required to contract with an eligible private provider.
             286          (12) A contractual partnership established under Subsection (1) shall be consistent with
             287      Utah Constitution Article X, Section 1.
             288          (13) The evaluator selected pursuant to Section 35A-11-104 shall annually evaluate the
             289      quality and outcomes of the high quality preschool program funded by a contract between a
             290      private investor and the board, including:
             291          (a) adherence to required components described in Subsection (1); and
             292          (b) the pre- and post-assessment results of the assessment, designated by the board
             293      under Section 35A-11-104 , of eligible students in the high quality preschool program.
             294          Section 6. Section 35A-11-106 is enacted to read:
             295          35A-11-106. Home-based educational technology for school readiness.
             296          (1) To receive funding pursuant to a contract awarded under Section 35A-11-104 , an
             297      eligible home-based educational technology provider shall administer a home-based
             298      educational technology program designed to prepare eligible students for kindergarten.
             299          (2) A program described in Subsection (1) shall:
             300          (a) be an evidence-based and age appropriate interactive computer program that
             301      teaches eligible students early literacy and numeracy skills needed to be successful upon entry
             302      into kindergarten;
             303          (b) require regular parental engagement with the student in the student's use of the
             304      home-based technology program;
             305          (c) be aligned to the Utah early childhood core standards in language arts and
             306      mathematics; and


             307          (d) have a component to provide the pre- and post-assessment, designated by the board
             308      in accordance with Section 35A-11-104 , of each eligible student.
             309          (3) An eligible home-based educational technology provider shall work in conjunction
             310      with the State Board of Education to assign a statewide unique student identifier to each
             311      eligible student funded pursuant to a contract issued under this part.
             312          (4) An eligible home-based educational technology provider may not use funds
             313      awarded pursuant to a contract issued under this part to supplant funds for an existing
             314      home-based educational technology program, but may use the funds to supplement an existing
             315      home-based educational technology program.
             316          (5) If permitted under Title 1 of the No Child Left Behind Act of 2001, 20 U.S.C. Sec.
             317      6301-6578, an eligible home-based educational technology provider may charge a sliding scale
             318      fee to a student participating in a home-based educational technology program under this
             319      section, based on household income.
             320          (6) (a) An eligible home-based educational technology provider that receives funds
             321      under this section shall report annually to the board the following information for eligible
             322      students funded in whole or in part pursuant to contracts issued under this part:
             323          (i) number of eligible students served by the home-based educational technology
             324      program, reported by economically disadvantaged status and English language learner status;
             325          (ii) average time, and range of time usage, an eligible student spent using the program
             326      per week;
             327          (iii) cost per eligible student;
             328          (iv) assessment results;
             329          (v) longitudinal data on each eligible student currently receiving funding under this
             330      section and any eligible students who previously received funding under this section, including:
             331          (A) academic achievement outcomes;
             332          (B) special education use; and
             333          (C) English language learner services; and
             334          (vi) number of eligible students served by the home-based educational technology
             335      program who participated in any other public or private preschool program, including the type
             336      of preschool attended.
             337          (b) For each year of a contract, the board shall report to the Economic Development


             338      and Workforce Services Interim Committee the following:
             339          (i) information collected under Subsection (6)(a) for each participating eligible
             340      home-based educational technology provider; and
             341          (ii) the terms of the contract, including:
             342          (A) the name of each private investor;
             343          (B) the amount of money each private investor has invested;
             344          (C) the performance outcome measures set in the contract, by which repayment will be
             345      determined; and
             346          (D) the repayment schedule to the private investor if the performance outcomes are
             347      met.
             348          (7) The evaluator selected pursuant to Section 35A-11-104 shall annually evaluate the
             349      quality and outcomes of a home-based technology program funded by a contract between a
             350      private investor and the board, including the pre- and post-assessment results, of the
             351      assessment designated by the board under Section 35A-11-104 , of eligible students in the
             352      program.
             353          Section 7. Appropriation.
             354          Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, for
             355      the fiscal year beginning July 1, 2013, and ending June 30, 2014, the following sums of money
             356      are appropriated from resources not otherwise appropriated, or reduced from amounts
             357      previously appropriated, out of the funds or accounts indicated. These sums of money are in
             358      addition to any amounts previously appropriated for fiscal year 2014.
             359          To General Fund Restricted - Results-based Early
             360          Education Restricted Account
             361              From General Fund
$1,000,000

             362              Schedule of Programs:
             363                  General Fund Restricted - Results-based Early Education
             364                   Restricted Account                $1,000,000
             365          To Department of Workforce Services - Administration
             366              From Results-based Early Education Restricted Account
$75,000

             367              Schedule of Programs:
             368                  Executive Director's Office            $75,000


             369          To Department of Workforce Services - Administration
             370              From Results-based Early Education Restricted Account
$100,000

             371              Schedule of Programs:
             372                  Executive Director's Office            $100,000
             373          The Legislature intends that:
             374          (1) the $75,000 appropriation under this section be used to carry out administrative
             375      duties pursuant to Subsection 35A-11-104 (4); and
             376          (2) the $100,000 appropriation under this section be used to carry out the requirements
             377      of Subsection 35A-11-104 (9).
             378          Section 8. Effective date.
             379          (1) Except as provided in Subsection (2), this bill takes effect on May 14, 2013.
             380          (2) Uncodified Section 7, Appropriation, takes effect on July 1, 2013.




Legislative Review Note
    as of 2-11-13 5:58 PM


Office of Legislative Research and General Counsel


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