Representative Mike Schultz proposes the following substitute bill:




Chief Sponsor: Mike Schultz

Senate Sponsor: Allen M. Christensen

6     Cosponsors:
7     Carl R. Albrecht
8     Bruce R. Cutler
9     Brad M. Daw
10     Steve Eliason
11     Gage Froerer
12     Adam Gardiner
13     Francis D. Gibson
Timothy D. Hawkes
Lynn N. Hemingway
Eric K. Hutchings
John Knotwell
A. Cory Maloy
Kelly B. Miles
Derrin R. Owens
Lee B. Perry
Jeremy A. Peterson
Dixon M. Pitcher
Tim Quinn
Paul Ray
Norman K Thurston
Logan Wilde
Brad R. Wilson
Mike Winder

16     General Description:
17          This bill creates the Employability to Careers Program within the Governor's Office of
18     Management and Budget.
19     Highlighted Provisions:
20          This bill:
21          ▸     defines terms;
22          ▸     creates a restricted account called the Employability to Careers Program Restricted
23     Account;

24          ▸     creates the Employability to Careers Program Board within the Governor's Office of
25     Management and Budget;
26          ▸     authorizes the board to enter into a results-based contract with a fiscal intermediary;
27          ▸     requires the Governor's Office of Management and Budget to staff the board;
28          ▸     describes the components of an education, employability training, and workforce
29     placement program that may be funded by money from the restricted account;
30          ▸     authorizes the board to obtain the services of a programmatic intermediary to assist
31     the board with validating the feasibility of entering into a results-based contract;
32          ▸     requires an independent evaluation of the performance outcomes of the
33     Employability to Careers Program; and
34          ▸     authorizes payments from the restricted account to the fiscal intermediary if certain
35     benchmarks are met by a service provider.
36     Money Appropriated in this Bill:
37          This bill appropriates:
38          ▸     to the General Fund Restricted -- Employability to Careers Program Restricted
39     Account, as a one-time appropriation:
40               •     from the General Fund, $10,000,000;
41          ▸     to the Governor's Office of Management and Budget, as a one-time appropriation:
42               •     from the General Fund Restricted -- Employability to Careers Program
43     Restricted Account, $10,000,000.
44     Other Special Clauses:
45          None
46     Utah Code Sections Affected:
47     AMENDS:
48          63J-1-602.4, as last amended by Laws of Utah 2016, Chapters 193 and 240
49     ENACTS:
50          63J-4-701, Utah Code Annotated 1953
51          63J-4-702, Utah Code Annotated 1953
52          63J-4-703, Utah Code Annotated 1953
53          63J-4-704, Utah Code Annotated 1953
54          63J-4-705, Utah Code Annotated 1953

55          63J-4-706, Utah Code Annotated 1953
56          63J-4-707, Utah Code Annotated 1953
57          63J-4-708, Utah Code Annotated 1953

59     Be it enacted by the Legislature of the state of Utah:
60          Section 1. Section 63J-1-602.4 is amended to read:
61          63J-1-602.4. List of nonlapsing funds and accounts -- Title 61 through Title 63N.
62          (1) Funds paid to the Division of Real Estate for the cost of a criminal background
63     check for a mortgage loan license, as provided in Section 61-2c-202.
64          (2) Funds paid to the Division of Real Estate for the cost of a criminal background
65     check for principal broker, associate broker, and sales agent licenses, as provided in Section
66     61-2f-204.
67          (3) Certain funds donated to the Department of Human Services, as provided in
68     Section 62A-1-111.
69          (4) Appropriations from the National Professional Men's Basketball Team Support of
70     Women and Children Issues Restricted Account created in Section 62A-1-202.
71          (5) Certain funds donated to the Division of Child and Family Services, as provided in
72     Section 62A-4a-110.
73          (6) Appropriations from the Choose Life Adoption Support Restricted Account created
74     in Section 62A-4a-608.
75          (7) Appropriations to the Division of Services for People with Disabilities, as provided
76     in Section 62A-5-102.
77          (8) Appropriations to the Division of Fleet Operations for the purpose of upgrading
78     underground storage tanks under Section 63A-9-401.
79          (9) A portion of the funds appropriated to the Utah Seismic Safety Commission, as
80     provided in Section 63C-6-104.
81          (10) Funds appropriated or collected for publishing the Office of Administrative Rules'
82     publications, as provided in Section 63G-3-402.
83          (11) The Immigration Act Restricted Account created in Section 63G-12-103.
84          (12) Money received by the military installation development authority, as provided in
85     Section 63H-1-504.

86           (13) The Employability to Careers Program Restricted Account created in Section
87     63J-4-703.
88          [(13)] (14) Appropriations to the Utah Science Technology and Research Initiative
89     created in Section 63M-2-301.
90          [(14)] (15) Appropriations to fund the Governor's Office of Economic Development's
91     Enterprise Zone Act, as provided in Title 63N, Chapter 2, Part 2, Enterprise Zone Act.
92          [(15)] (16) The Motion Picture Incentive Account created in Section 63N-8-103.
93          [(16)] (17) Certain money payable for commission expenses of the Pete Suazo Utah
94     Athletic Commission, as provided under Section 63N-10-301.
95          Section 2. Section 63J-4-701 is enacted to read:
Part 7. Employability to Careers Program

97          63J-4-701. Definitions.
98          As used in this chapter:
99          (1) "Board" means the Employability to Careers Program Board created in Section
100     35A-14-201.
101          (2) "Education, employability training, and workforce placement program" means a
102     pay-for-success program that helps adults earn a high school diploma and obtain a full-time job
103     with benefits in a career path through integrated employability skills development.
104          (3) (a) "Eligible participant" means an individual who at the time of enrollment in an
105     education, employability training, and workforce placement program:
106          (i) is between 18 and 50 years of age;
107          (ii) does not have a high school diploma or the equivalent; and
108          (iii) (A) is enrolled in a public assistance program; or
109          (B) is unemployed.
110          (4) "Eligible program provider" means an organization or group of organizations with
111     the demonstrated capability of operating an education, employability training, and workforce
112     placement program.
113          (5) "Employability programs and services" means programs that assist adults in
114     developing job skills, attaining education, obtaining employment, increasing income, and
115     realizing self-sufficiency.
116          (6) "Employability skills" means technical, professional, and life skills that are

117     necessary for success in the labor market, which may include verbal and written
118     communication, time management, problem solving, professionalism, and teamwork.
119          (7) "Fiscal intermediary" means a nonprofit community foundation located in the state
120     that establishes and manages charitable funds and that has the necessary experience to
121     coordinate the funding and management of a results-based contract and related program.
122          (8) "Multitiered system of supports" means a systemic, continuous improvement
123     framework in which data-based problem solving and decision making is practiced for
124     supporting participants.
125          (9) "Performance outcome measure" means an education or workforce placement
126     outcome for an eligible participant, including earning an accredited high school diploma,
127     employment placement, job retention, and wage advancement within a career path, which
128     results in a demonstrated benefit to the state through increased tax revenue or lower state
129     expenditures for public assistance programs.
130          (10) "Programmatic intermediary" means a nonprofit entity or academic institution that
131     has the necessary experience in results-based financing and evidence-based policy to:
132          (a) validate a feasibility analysis of an eligible program provider;
133          (b) structure the terms and conditions of results-based contracts by developing
134     cost-benefit financial models, performance outcome measures, payment schedules, and
135     performance thresholds; and
136          (c) raise the private investment capital necessary to fund program services related to a
137     results-based contract.
138          (11) "Restricted account" means the Employability to Careers Program Restricted
139     Account created in Section 63J-4-703.
140          (12) "Results-based contract" means a contract entered into between the board, a fiscal
141     intermediary, and an eligible program provider that will result in repayment to the fiscal
142     intermediary if certain performance outcome measures are achieved.
143          Section 3. Section 63J-4-702 is enacted to read:
144          63J-4-702. Employability to Careers Program Board.
145          (1) There is created within the office the Employability to Careers Program Board
146     composed of the following members:
147          (a) two members appointed by the governor;

148          (b) two members appointed by the speaker of the House of Representatives; and
149          (c) two members appointed by the president of the Senate.
150          (2) (a) A member of the board shall serve for a term of three years, but may be
151     reappointed for one additional term.
152          (b) If a vacancy occurs in the board for any reason, the person appointing the board
153     member shall appoint a replacement to serve the remainder of the board member's term.
154          (3) The governor shall appoint a chair from among the board's membership.
155          (4) The board shall meet at least quarterly upon the call of the chair.
156          (5) Four members of the board constitute a quorum.
157          (6) Action by a majority present constitutes the action of the board.
158          (7) A board member may not receive compensation or benefits for the member's
159     service, but a member who is not a legislator may receive per diem and travel expenses in
160     accordance with:
161          (a) Section 63A-3-106;
162          (b) Section 63A-3-107; and
163          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
164     63A-3-107.
165          (8) The office shall provide staff support to the board.
166          Section 4. Section 63J-4-703 is enacted to read:
167          63J-4-703. Employability to Careers Program Restricted Account.
168          (1) There is created in the General Fund a restricted account known as the
169     "Employability to Careers Program Restricted Account."
170          (2) The restricted account consists of:
171          (a) money appropriated to the restricted account by the Legislature;
172          (b) income and interest derived from the deposit and investment of money in the
173     account; and
174          (c) private donations.
175          (3) Subject to legislative appropriations, money in the restricted account may be used
176     for the following purposes:
177          (a) to contract with a fiscal intermediary for the management of a results-based
178     contract;

179          (b) to contract with a programmatic intermediary to validate a feasibility analysis and
180     structure the terms and conditions of a results-based contract, including developing cost-benefit
181     financial models, performance outcome measures, payment schedules, and success thresholds;
182          (c) to contract with an independent evaluator as described in Section 63J-4-704;
183          (d) to pay for office expenses related to administering the Employability to Careers
184     Program and providing staff support to the board;
185          (e) to make payments to a fiscal intermediary that has entered into a results-based
186     contract with the board as described in Section 63J-4-704, if the independent evaluator selected
187     by the board determines that the performance-based results have been met; and
188          (f) to contract for other services as necessary to implement the Employability to
189     Careers Program.
190          Section 5. Section 63J-4-704 is enacted to read:
191          63J-4-704. Results-based contracts -- Board duties.
192          (1) (a) The board may negotiate and enter into a results-based contract with a fiscal
193     intermediary to provide payments to the fiscal intermediary upon the successful achievement of
194     specific outcome measures in accordance with Subsection 63J-4-706(2)(i) and the other
195     requirements of this part.
196          (b) The board may not issue a results-based contract that would cause the total
197     outstanding obligations under this part to exceed $15,000,000.
198          (2) A results-based contract shall include:
199          (a) a requirement that the repayment to the fiscal intermediary be conditioned on
200     specific performance outcome measures described in the results-based contract and in
201     accordance with this part;
202          (b) a requirement for an independent evaluator to determine whether the performance
203     outcome measures have been achieved; and
204          (c) a provision that payment to the program intermediary is:
205          (i) based upon available money in the restricted account at the time of payment; and
206          (ii) subject to legislative appropriation.
207          (3) The board shall select an independent program evaluator that:
208          (a) is a research organization;
209          (b) has experience conducting research in labor economics;

210          (c) has experience in conducting experimental or quasi-experimental design or other
211     research methodologies as described in Subsection 63J-4-706(2)(j) that allow for the strongest
212     possible causal inferences to determine whether the initiative has met the initiative's proposed
213     outcomes; and
214          (d) has access to state data required to implement the evaluation design.
215          (4) (a) In accordance with timelines established in a results-based contract, the
216     independent evaluator shall implement an experimental or quasi-experimental evaluation
217     design to determine whether the performance outcome measures set in the results-based
218     contract have been met.
219          (b) If the independent evaluator determines under Subsection (4)(a) that the
220     performance outcome measures have been met, the board shall pay the fiscal intermediary
221     according to the terms of a results-based contract.
222          (5) (a) The eligible program provider described in Section 63J-4-705 shall ensure that
223     each participant in a program funded in a results-based contract has given written permission
224     and signed an acknowledgment that the participant's data may be shared with a fiscal
225     intermediary, an independent evaluator, and the office for evaluation and reporting purposes.
226          (b) The board shall maintain a record of each written permission and signed
227     acknowledgment described in Subsection (5)(a).
228          (6) As further described in Section 63J-4-705, for an education, employability training,
229     and workforce placement program funded under this part, the board shall:
230          (a) select an eligible program provider;
231          (b) consider the recommendations of the programmatic intermediary in selecting an
232     eligible program provider; and
233          (c) engage the services of the programmatic intermediary to complete a feasibility
234     analysis in accordance with Section 63J-4-706 to assess the viability of the board entering into
235     a results-based contract with the selected eligible program provider.
236          (7) The board, with the assistance of the office and other state agencies that provide
237     services to eligible participants, may cooperate with an eligible program provider to identify
238     and refer eligible participants for the program.
239          Section 6. Section 63J-4-705 is enacted to read:
240          63J-4-705. Employability to Careers Program.

241          (1) There is created the Employability to Careers Program to provide funding for the
242     implementation of a results-based education, employability training, and workforce placement
243     program for eligible participants.
244          (2) With the assistance of the programmatic intermediary, the board shall establish
245     evaluation criteria for selecting an eligible program provider and shall consider
246     recommendations from the programmatic intermediary in evaluating and selecting an eligible
247     program provider.
248          (3) The board and the programmatic intermediary shall consider the following
249     requirements and criteria for selecting an eligible program provider:
250          (a) the potential eligible program provider's capacity to effectively implement the
251     components of an education, employability training, and workforce placement program as
252     described in Section 63J-4-707;
253          (b) the potential eligible program provider's experience in enrolling and serving the
254     eligible participants the program intends to serve, including participants who are economically
255     disadvantaged;
256          (c) the potential eligible program provider's ability to access state collaborative partner
257     networks and community resources;
258          (d) the potential eligible program provider's ability to address labor market needs and
259     workforce demands;
260          (e) the potential eligible program provider's ability to demonstrate that performance
261     outcome measures for the education, employability training, and workforce placement program
262     can be measured through an experimental or quasi-experimental design;
263          (f) the potential eligible program provider's ability to attract private or philanthropic
264     investors;
265          (g) the potential eligible program provider's strategy to implement the components of
266     an education, employability skills, and workforce placement program; and
267          (h) the potential eligible program provider's ability to provide the necessary data to a
268     programmatic intermediary for the feasibility analysis described in Section 63J-4-706.
269          (4) To be selected as an eligible program provider under this chapter, the eligible
270     program provider shall agree to:
271          (a) allow the evaluator, chosen in accordance with Section 63J-4-704, to review data

272     from the provider to ensure that the components described in Section 63J-4-707 are
273     implemented; and
274          (b) assign a unique identifier to each eligible participant enrolled in an education,
275     employability training, and workforce placement program with the eligible program provider
276     and maintain records of the performance outcome measures achieved by each eligible
277     participant.
278          Section 7. Section 63J-4-706 is enacted to read:
279          63J-4-706. Feasibility analysis.
280          (1) The board shall engage a programmatic intermediary to complete, within two
281     months of selecting an eligible program provider in accordance with Section 63J-4-705, a
282     feasibility analysis that assesses the ability of the potential eligible program provider to provide
283     a program that will successfully achieve performance outcome measures that are cost effective
284     and will result in cost savings or increased tax revenue to the state.
285          (2) The feasibility analysis shall include:
286          (a) assessing the size and characteristics of the eligible population in the state that
287     could benefit from the employment programs and services funded through the Employability to
288     Careers Program;
289          (b) assessing the eligible program provider's capacity to make effective use of funding
290     supplied through the Employability to Careers Program and with the likelihood to meet
291     predefined and measurable outcomes based on the following factors:
292          (i) the economic feasibility of the programs and services provided;
293          (ii) the capacity of the program to serve an increased customer base; and
294          (iii) the degree to which the program and services will help individuals attain
295     self-sufficiency;
296          (c) developing a viable expansion plan and determining how much the expansion plan
297     will cost;
298          (d) projecting the impact of the expansion plan on outcomes to the community;
299          (e) projecting the financial value of the improvements that may result from the
300     Employability to Careers Program investment, including projected public sector savings and
301     projected returns to investors;
302          (f) developing a cost-benefit analysis of the program;

303          (g) determining feasible results-based contract terms and financing structures;
304          (h) determining the potential pool of investors likely to invest both in and outside the
305     state;
306          (i) developing performance measures to project and measure financial and social
307     outcomes;
308          (j) ensuring an experimental or quasi-experimental research design can be used to
309     measure the attained performance measures attributable to the intervention;
310          (k) estimating how many eligible participants the potential eligible program provider
311     plans to serve;
312          (l) preparing a financial model, including the proposed payment terms, the
313     methodology used to calculate outcome payments, the payment schedule, and performance
314     thresholds; and
315          (m) reviewing the project budget and timeline.
316          Section 8. Section 63J-4-707 is enacted to read:
317          63J-4-707. Components of an education, employability training, and workforce
318     placement program.
319          (1) In addition to the other requirements of this part, an education, employability
320     training, and workforce placement program approved under this part may include the following
321     components:
322          (a) an employability skills certification program;
323          (b) resilience intervention for eligible participants;
324          (c) a multitiered system of supports for eligible participants; and
325          (d) a learning and employability plan for each eligible participant.
326          (2) Subject to money in the restricted account, and in accordance with the contract
327     between the board and the fiscal intermediary, a separate payment shall be made by the board
328     from the restricted account to the fiscal intermediary in a specific amount for each successful
329     result in accordance with the terms and conditions of the results-based contract.
330          Section 9. Section 63J-4-708 is enacted to read:
331          63J-4-708. Reporting.
332          (1) On or before October 1, the board shall provide an annual written report to the
333     Social Services Appropriations Subcommittee and the Economic Development and Workforce

334     Services Interim Committee.
335          (2) The written report shall include:
336          (a) information regarding the fiscal intermediary, the programmatic intermediary, the
337     eligible program provider, and the independent evaluator that have been selected;
338          (b) the results of the feasibility analysis conducted in accordance with Section
339     63J-4-706;
340          (c) information regarding how many eligible participants have been served by the
341     education, employability training, and workforce placement program;
342          (d) a description of program expenses, including what payments have been made to the
343     intermediary and the cost to the state for each successful eligible participant outcome; and
344          (e) recommendations to the Legislature on any potential improvements to the
345     Employability to Careers Program, including whether the program should continue to receive
346     funding from the state.
347          Section 10. Appropriation.
348          The following sums of money are appropriated for the fiscal year beginning July 1,
349     2017, and ending June 30, 2018. These are additions to amounts previously appropriated for
350     fiscal year 2018. Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures
351     Act, the Legislature appropriates the following sums of money from the funds or accounts
352     indicated for the use and support of the government of the state of Utah.
353     ITEM 1
354          To Restricted Fund and Account Transfers -- General Fund Restricted --
355          Employability to Careers Program Restricted Account
356               From General Fund, One-time

357               Schedule of Programs:
358                    General Fund Restricted -- Employability to
359                     Careers Program Restricted Account          $10,000,000
360     ITEM 2
361          To Governor's Office of Management and Budget -- Operations and Policy
362               From General Fund Restricted -- Employability to Careers Program
363                Restricted Account, One-time

364               Schedule of Programs:

365                    Employability to Careers Program          $10,000,000
366          The Legislature intends that:
367          (1) under Subsection 63J-1-601(2), appropriations provided under this section not
368     lapse; and
369          (2) the use of any nonlapsing funds be limited to the purposes described in Section
370     63J-4-703.