(1) There is hereby created in the state department the Title IV-E waiver demonstration project, referred to in this section as the "project". In administering the project, the state department shall develop a process by which counties or groups of counties will participate in the project. Individual counties or groups of counties may participate in the project for the delivery of child welfare services.

(2) (a) Pursuant to the terms and conditions of the project established to integrate systemic child welfare reforms and innovative practices and any subsequent written documentation that modifies the federal requirements governing the implementation of the project, the state department is hereby authorized to enter into performance agreements with individual counties or groups of counties. An individual county or group of counties that enters into a performance agreement with the state department is exempt from the rules of the state department and state board governing the delivery of child welfare services, as such exemptions to rules are identified in the performance agreement. An exemption in a performance agreement must not negatively impact child safety, permanency, well-being, or compliance with federal requirements.

(b) Any moneys provided to an individual county or a group of counties through a performance agreement may be awarded to the individual county or group of counties separate from and in addition to the capped or targeted allocation received pursuant to paragraph (a) of subsection (4) of this section.

(3) An individual county or group of counties that has entered into a performance agreement with the state department pursuant to subsection (2) of this section is required to participate in an evaluation of the project.

(4) (a) An individual county or group of counties that has entered into a performance agreement with the state department and that underspends in any state fiscal year the Title IV-E portion of its capped or targeted allocation or the moneys awarded to the individual county or group of counties through the project shall use fifty percent of the underspent moneys for additional child welfare services as defined in section 26-5-101 (3) and in a manner and time frame as described in their performance agreement. The balance of such underspent county Title IV-E moneys shall be transmitted to the state treasurer who shall credit the same to the Title IV-E waiver demonstration project cash fund, created in paragraph (b) of this subsection (4).

(b) There is hereby created the Title IV-E waiver demonstration project cash fund, referred to in this subsection as the "fund". Moneys credited to the fund are subject to annual appropriation by the general assembly to the state department for allocation to counties to help defray the costs of performing functions as defined in the performance agreement related to the implementation of the Title IV-E waiver demonstration project. Any moneys in the fund not expended for the purposes specified in this section may be invested by the state treasurer as provided by law. All interest and income derived from the investment and deposit of moneys in the fund must be credited to the fund. Any unexpended and unencumbered moneys remaining in the fund at the end of a fiscal year must remain in the fund and must not be credited or transferred or revert to the general fund or any other fund.

(c) The general fund portion of the capped or targeted allocation of any individual county or group of counties that has entered into a performance agreement with the state department and underspends must continue to be distributed in accordance with sections 26-5-104 (7), 26-5-105.5, and 24-1.9-102 (2)(h), C.R.S. General fund savings distributed in accordance with either section 26-5-105.5 or 24-1.9-102 (2)(h), C.R.S., must be reinvested in child welfare services as stipulated in the performance agreement.

(5) Subsection (4) of this section supersedes the requirements found in section 26-1-111 (2)(d)(II)(A) concerning federal revenues earned by the state pursuant to Title IV-E of the federal "Social Security Act", as amended, that exceed the amount necessary to fully fund program, training, and administrative costs.

(6) The state department is authorized to contract for an external evaluation of the project, including the project activities completed by individual counties or groups of counties that have entered into performance agreements with the state department pursuant to this section.

(7) The state board shall promulgate rules as necessary for the implementation of this section.

(8) (a) On or before December 31, 2013, and each December 31 thereafter, the state department shall prepare a report concerning the status of the Title IV-E waiver demonstration project, as described in this section. Notwithstanding section 24-1-136 (11)(a)(I), the state department shall deliver the report to the joint budget committee, the health and human services committee of the senate, the health, insurance, and environment committee of the house of representatives, and the public health care and human services committee of the house of representatives, or any successor committees, no later than December 31 of each year.

(b) To the extent that the state department is able to provide the data, the report must include, but need not be limited to:

(I) The number of counties participating in the project;

(II) The interventions implemented by each county participating in the project;

(III) The outcomes achieved by the project as reported to the federal administration for children and families;

(IV) The moneys expended for the project; and

(V) Any need for additional legislation to further the accomplishment of goals of the project related to child safety, permanency, and well-being.

(9) This section is repealed, effective June 30, 2019.