This bill requires the department of correction ("department") to develop and implement a program for each contractor with which it contracts to provide correctional services to inmates under the custody of the department to incentivize improved performance and outcomes from the contractor. Only a contractor holding the primary contract for the contracted services is subject to the program, and such contractor assumes all risk of losing the conditional funds. A subcontractor of the primary contractor must not be held at risk for the outcomes under the program and payment of conditional funds, and must not be held at risk for declining performance and subsequent consequences throughout the program. This bill requires the department to develop the program no later than six months from the effective date of this bill. The department must include provisions requiring the contractor to adhere to the program in each contract entered into or renewed after the program is developed The division of state audit of the comptroller of the treasury ("division") must conduct an audit of the program no less than quarterly to ensure that the department has implemented the program to fidelity. The comptroller of the treasury ("comptroller") must deliver the findings of the audit to the general assembly and make the findings available to the public on the comptroller's website. PROGRAM DESIGN Pursuant to the program developed by the department, this bill requires the department to make the payment of an amount equal to 25% of the total funds appropriated to the contractor during a fiscal year conditional upon yearly performance improvements based upon a set of performance measures, including 14 such measures described in the bill. This bill requires the program to condition the release of the conditional funds to the contractor based on the contractor's measurable improvements for each performance measure relative to a baseline performance. The department must remit the conditional funds to the general fund in proportion to allocated amounts outlined below if the contractor does not achieve its targeted improvements. In developing the program, this bill requires the department to (i) incorporate nationally recognized performance measures within each selected performance domain and (ii) develop relevant performance measures that directly improve operations and outcomes in the instance where there are no nationally recognized performance measures. This bill requires the department to collect and maintain the data necessary to measure and monitor performance measures under the program and to enable an independent and rigorous evaluation of the program, including data as described in the bill. The department may collaborate with the necessary departments, agencies, or community partners to obtain the necessary data to measure and monitor relevant performance outcomes under the program. In the first two years of the program, this bill requires the department to determine how to allocate the conditional funds based on performance across all measures, subject to the review and approval of the comptroller. Beginning in the third year of the program, (i) the department must allocate no less than 50% of the conditional funds based upon improved recidivism, (ii) the department must allocate no less than 15% of the conditional funds based upon measures pertaining to improved inmate safety, and (iii) the department must allocate the remaining 35% of the conditional funds based upon the remaining measures. This bill requires the department to update the program and its performance measures as necessary and in collaboration with the comptroller. However, the domains of recidivism and inmate safety must remain in the program regardless of its iteration. This bill authorizes the department to implement the phase-in period outlined above if a new contractor assumes the full responsibility for the respective contracted services during the middle of or at the beginning of a procurement cycle. This bill authorizes the department to cancel the respective contract following three years, successive or intermittent, of declining performance outcomes on recidivism or inmate safety under the program. PROGRAM MANUAL This bill requires the commissioner of correction ("commissioner") to develop and provide the manual to the comptroller no later than six months from the effective date of this bill. The commissioner must submit updates to the manual to the comptroller no later than one month after finalizing the updates. The commissioner must publish on the department's website the manual and any subsequent updates no later than one month after finalizing the most current version of the manual. PROGRAM ACCOUNTABILITY This bill requires the commissioner to report to the comptroller and the fiscal review committee on the overall progress and outcomes of the program no less than quarterly. The report must include quantitative data on performance measures and qualitative data on the operational adjustments made to improve performance. The department must publish data on programmatic measures no less than quarterly on the department's website. The department must publish progress reports and any external evaluations of the program no less than once annually on the department's website. PROGRAM EVALUATION This bill requires the department to use an evaluator to independently evaluate the progress and outcomes of the program. The evaluation so required must, to the extent feasible and appropriate, make use of experimental or quasi-experimental designs that allow for the strongest possible causal inferences with respect to program outcomes. The evaluator must have access to all data necessary to conduct a rigorous and independent evaluation of the program. The evaluator must submit a report to the department, comptroller, and chair of the fiscal review committee summarizing the results of the evaluation no later than three years following the implementation of the program. The department must publish the evaluation report available on the department's website. As used in the paragraph above, an "evaluator" means an external evaluator with demonstrated and substantial experience and training in conducting rigorous impact evaluations of program effectiveness such as the use of either well-implemented randomized controlled trials or other evidence-based research methodologies that allow for strong causal inferences, including difference-in-differences, instrumental variable, or regression discontinuity approaches.