LRB-2788/1
TJD:wlj
2017 - 2018 LEGISLATURE
April 13, 2017 - Introduced by Senators Cowles, Kapenga, Craig, Marklein and
Stroebel, cosponsored by Representatives Jacque, Krug, Brandtjen, R.
Brooks
, Duchow, Edming, Gannon, Horlacher, Katsma, Knodl, Kremer,
Murphy, Petersen, Skowronski, Steffen, Thiesfeldt, Tittl and Tusler.
Referred to Committee on Public Benefits, Licensing and State-Federal
Relations.
SB174,1,7 1An Act to amend 20.435 (4) (bm), 20.435 (4) (L), 20.435 (4) (nn), 20.435 (4) (pa),
220.437 (2) (dz), 20.437 (2) (L) and 49.793 (2) (a); and to create 49.79 (11) and
349.846 of the statutes; relating to: incentive programs for counties and tribes
4that identify fraudulent activity in certain public assistance programs,
5removing inactive FoodShare accounts, expunging unused FoodShare benefits,
6limiting the number of FoodShare replacement cards, requiring the exercise of
7rule-making authority, and making appropriations.
Analysis by the Legislative Reference Bureau
Generally, this bill requires the creation of optional incentive programs for
counties and tribes to receive reward payments for identifying fraudulent activity in
certain public assistance programs; the removal and offline storage of benefits from
certain inactive FoodShare accounts; and the expungement of FoodShare benefits
that have been unused for over one year. The bill also requires the Department of
Health Services to request a waiver to limit the number of replacement electronic
benefit cards a FoodShare recipient may receive. FoodShare is also known as the
food stamp program and the federal Supplemental Nutrition Assistance Program
and provides benefits to eligible low-income households for the purchase of food.
DHS administers FoodShare. The federal government pays the benefits for
FoodShare while the state and federal governments share the cost of administration.

Incentive programs
Under the bill, DHS is required to establish an optional incentive program, by
rule, under which a county with a population of less than 750,000 or tribe receives
a reward payment if an employee or officer of the county or tribe identifies fraudulent
activity in Medical Assistance or FoodShare. Under the bill, the amount of the
reward payment under the program is 20 percent of the amount that DHS
determines will be saved in the program over a 12-month period as the result of
eliminating the identified fraudulent activity. Under the bill, the Department of
Children and Families is required to establish a similar incentive program, by rule,
that applies to fraudulent activity in Wisconsin Works that is identified by an
employee or officer of a county or tribe.
Under current law, a county or tribe may retain a portion of incorrect
overpayments in public assistance programs administered by DHS, including
Medical Assistance and FoodShare, that are recovered as the result of the efforts of
an employee or officer of the county or tribe. Currently, DHS establishes by rule the
portion of FoodShare overpayment recoveries that a county or tribe may retain.
Under the bill, a county or tribe may retain the full amount of FoodShare
overpayment recoveries that the state is permitted to retain under federal law. The
bill also provides that, if a county or tribe receives a reward payment under the
optional incentive program, the county or tribe may not retain overpayments that
are recovered as the result of the identified fraudulent activity. Current law also
allows a county or tribe to retain a portion of incorrect overpayments that are
recovered in the Wisconsin Works program as the result of the efforts of an employee
or officer of the county or tribe. Under current law, Milwaukee County may not retain
a portion of incorrect payments that are recovered as a result of the efforts of an
employee or officer of the county.
FoodShare changes
The bill requires DHS to remove and store offline all FoodShare benefits posted
to a recipient's benefit account if the account has not been accessed in six months or
longer. The benefits must be made available again to the recipient if the recipient
requests them or reapplies for FoodShare benefits, whichever is appropriate under
the circumstances. DHS must attempt to notify the recipient before removing the
benefits and must describe how the benefits may be returned to the account. The bill
also directs DHS to expunge any FoodShare benefits that have not been used after
one year, regardless of whether the benefits are being stored offline from an inactive
account or are posted to active accounts.
The bill directs DHS to request a waiver from the U.S. Department of
Agriculture, no later than six months after the bill goes into effect, to allow DHS to
limit the number of replacement cards that it must issue in a 12-month period to a
FoodShare recipient who reports that his or her electronic benefit card has been lost,
stolen, damaged, or destroyed to four replacement cards in a 12-month period. If the
USDA does not disapprove the waiver, DHS may limit, to the number authorized
under the waiver, the number of replacement cards that it issues to a FoodShare
recipient in a 12-month period. Under federal regulations, there is no limit on the
number of replacement cards that must be issued to a household for cards that are

reported lost, stolen, or damaged. However, under the federal regulations, a state
may opt to require a household member to contact the state agency to provide an
explanation if the number of replacement cards requested reaches a threshold that
is determined to be excessive. The threshold for an excessive number of replacement
cards may not be less than four within a 12-month period. The household must be
given notice that it has reached the threshold and that it must contact the state
agency. If a household member does not contact the state agency, no replacement
card is issued and the case is referred for investigation.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB174,1 1Section 1. 20.435 (4) (bm) of the statutes is amended to read:
SB174,4,32 20.435 (4) (bm) Medical Assistance, food stamps, and Badger Care
3administration; contract costs, insurer reports, and resource centers.
Biennially, the
4amounts in the schedule to provide a portion of the state share of administrative
5contract costs for the Medical Assistance program under subch. IV of ch. 49 and the
6Badger Care health care program under s. 49.665 and to provide the state share of
7administrative costs for the food stamp program under s. 49.79, other than payments
8under s. 49.78 (8), for reward payments under s. 49.846 (2), to develop and implement
9a registry of recipient immunizations, to reimburse 3rd parties for their costs under
10s. 49.475, for costs associated with outreach activities, for state administration of
11state supplemental grants to supplemental security income recipients under s.
1249.77, to administer the pharmacy benefits purchasing pool under s. 146.45, and for
13services of resource centers under s. 46.283. No state positions may be funded in the
14department of health services from this appropriation, except positions for the
15performance of duties under a contract in effect before January 1, 1987, related to
16the administration of the Medical Assistance program between the subunit of the
17department primarily responsible for administering the Medical Assistance

1program and another subunit of the department. Total administrative funding
2authorized for the program under s. 49.665 may not exceed 10% of the amounts
3budgeted under pars. (p) and (x).
SB174,2 4Section 2. 20.435 (4) (L) of the statutes is amended to read:
SB174,4,145 20.435 (4) (L) Fraud and error reduction. All moneys received as the state's
6share of the recovery of overpayments and incorrect payments under ss. 49.497 (1)
7and (1m), 49.793 (2) (a), and 49.847, all moneys received from counties and tribal
8governing bodies as a result of any error reduction activities under ss. 49.197 and
949.845, and all moneys credited to this appropriation account under ss. 49.497 (2) (b),
1049.793 (2) (b), and 49.847 (3) (b), for any contracts under s. 49.197 (5), for any
11activities to reduce error and fraud under s. 49.845, to pay federal sanctions under
12the food stamp program, for reward payments under 49.846 (2), and for food stamp
13reinvestment activities under reinvestment agreements with the federal
14department of agriculture that are designed to improve the food stamp program.
SB174,3 15Section 3. 20.435 (4) (nn) of the statutes is amended to read:
SB174,4,2116 20.435 (4) (nn) Federal aid; income maintenance. All moneys received from the
17federal government for the costs of contracting for the administration of the Medical
18Assistance program under subch. IV of ch. 49 and the Badger Care health care
19program under s. 49.665 and the food stamp program, other than moneys received
20under par. (pa), for costs to administer income maintenance programs, as defined in
21s. 49.78 (1) (b), and for reward payments under 49.846 (2).
SB174,4 22Section 4. 20.435 (4) (pa) of the statutes is amended to read:
SB174,5,423 20.435 (4) (pa) Federal aid; Medical Assistance and food stamp contracts
24administration.
All federal moneys received for the federal share of the cost of
25contracting for payment and services administration and reporting, other than

1moneys received under par. (nn), to reimburse 3rd parties for their costs under s.
249.475, for administrative contract costs for the food stamp program under s. 49.79,
3for reward payments under s. 49.846 (2), and for services of resource centers under
4s. 46.283.
SB174,5 5Section 5. 20.437 (2) (dz) of the statutes is amended to read:
SB174,6,26 20.437 (2) (dz) Temporary Assistance for Needy Families programs;
7maintenance of effort.
The amounts in the schedule for administration and benefit
8payments under Wisconsin Works under ss. 49.141 to 49.161, the learnfare program
9under s. 49.26, and the work experience program for noncustodial parents under s.
1049.36; for payments to local governments, organizations, tribal governing bodies,
11and Wisconsin Works agencies; for kinship care and long-term kinship care
12assistance as specified under s. 49.175 (1) (s); for aid payments and local
13administration with respect to any services or program specified under s. 49.175 (1);
14for reward payments under s. 49.846 (3); and for emergency assistance for families
15with needy children under s. 49.138. Payments may be made from this appropriation
16account for any contracts under s. 49.845 (4) and for any fraud investigation and
17error reduction activities under s. 49.197 (1m). Moneys appropriated under this
18paragraph may be used to match federal funds received under par. (md).
19Notwithstanding ss. 20.001 (3) (a) and 20.002 (1), the department may transfer funds
20between fiscal years under this paragraph. Notwithstanding ss. 20.001 (3) and
2120.002 (1), the department of health services shall credit to this appropriation
22account funds for the purposes of this appropriation that the department transfers
23from the appropriation account under s. 20.435 (5) (bc). All funds allocated by the
24department but not encumbered by December 31 of each year lapse to the general

1fund on the next January 1 unless transferred to the next calendar year by the joint
2committee on finance.
SB174,6 3Section 6. 20.437 (2) (L) of the statutes is amended to read:
SB174,6,124 20.437 (2) (L) Public assistance overpayment recovery, fraud investigation, and
5error reduction.
All moneys received as the state's share of the recovery of
6overpayments and incorrect payments under s. 49.191 (3) (c), 1997 stats., and s.
749.195, 1997 stats., for any contracts under s. 49.845 (4), for any activities under s.
849.197 (1m) to investigate fraud relating to the Aid to Families with Dependent
9Children program and the Wisconsin Works program, for any activities under s.
1049.197 (3) to reduce payment errors in the Wisconsin Works program, for reward
11payments under s. 49.846 (3),
and for costs associated with collection of public
12assistance overpayments.
SB174,7 13Section 7. 49.79 (11) of the statutes is created to read:
SB174,6,2514 49.79 (11) Treatment of inactive accounts; expungement of unused benefits.
15(a) If, for a period of 6 months or longer, an individual or household that is receiving
16benefits under this section through an electronic benefit transfer system uses no
17benefits that have been posted to the individual's or household's benefit account, the
18department shall remove all benefits from the account electronically and store them
19offline. The benefits being stored offline shall be made available to the individual or
20household again within 48 hours after a request by the individual or a member of the
21household to restore the benefits or upon reapplication by the individual or
22household for benefits under this section, whichever is applicable. The department
23shall attempt to notify the individual or household before benefits are removed from
24the account under this paragraph and shall describe the steps that the individual or
25household must take to get the benefits returned to the account.
SB174,7,2
1(b) The department shall expunge any benefits that have not been used after
2a period of one year, regardless of whether either of the following applies:
SB174,7,43 1. The benefits have been removed from an inactive benefit account under par.
4(a) and are being stored offline.
SB174,7,55 2. The benefits are still posted to an active account.
SB174,8 6Section 8. 49.793 (2) (a) of the statutes is amended to read:
SB174,7,157 49.793 (2) (a) Except as provided in par. (b), a county, multicounty consortium,
8as defined in s. 49.78 (1) (br), or governing body of a federally recognized American
9Indian tribe may retain a portion of the full amount of an overpayment the state is
10authorized to retain under 7 USC 2025 that is recovered under sub. (1) due to the
11efforts of an employee or officer of the county, multicounty consortium, or tribe. The
12department shall promulgate a rule establishing the portion of the amount of the
13overpayment that the county, multicounty consortium, or governing body may
14retain.
This paragraph does not apply to recovery of an overpayment that was made
15as a result of state, county, multicounty consortium, or tribal governing body error.
SB174,9 16Section 9. 49.846 of the statutes is created to read:
SB174,7,19 1749.846 Optional incentive program for counties and tribes that
18identify fraud in certain public assistance programs.
(1) Definitions. In this
19section:
SB174,7,2120 (a) “County or tribe" means a county having a population of less than 750,000
21or a federally recognized American Indian tribe or band in this state.
SB174,7,2222 (b) “Food stamp program" has the meaning given in s. 49.79 (1) (c).
SB174,7,2323 (c) “Medical Assistance program" means the program under subch. IV.
SB174,7,2424 (d) “Wisconsin Works" has the meaning given in s. 49.141 (1) (p).
SB174,8,8
1(2) Department of health services; public assistance programs. (a) Medical
2Assistance program.
The department of health services shall establish an optional
3incentive program, by rule, under which the department will provide a reward
4payment to a county or tribe if an employee or officer of the county or tribe identifies
5fraudulent activity in the Medical Assistance program. The department of health
6services may make reward payments under the optional incentive program from the
7appropriations under s. 20.435 (4) (bm), (L), (nn), and (pa). The department of health
8services shall establish the optional incentive program to include all of the following:
SB174,8,119 1. That a county or tribe shall choose to receive a reward payment in the
10amount determined under subd. 2. or to retain funds under s. 49.49 (5) or 49.497 (2)
11(a).
SB174,8,1912 2. That the amount of a reward payment to a county or tribe under the program
13is equal to 20 percent of the amount that the department determines will be saved
14in the Medical Assistance program as the result of eliminating the identified
15fraudulent activity during the 12-month period after the fraudulent activity is
16eliminated. Notwithstanding ss. 49.49 (5) and 49.497 (2) (a), a county or tribe that
17receives a reward payment under this subdivision may not retain any funds that are
18incorrectly paid as the result of the identified fraudulent activity and recovered due
19to the efforts of an employee or officer of the county or tribe.
SB174,9,220 (b) Food stamp program. The department of health services shall establish an
21optional incentive program, by rule, under which the department will provide a
22reward payment to a county or tribe if an employee or officer of the county or tribe
23identifies fraudulent activity in the food stamp program. The department of health
24services may make reward payments under the optional incentive program from the

1appropriations under s. 20.435 (4) (bm), (L), (nn), and (pa). The department shall
2establish the optional incentive program to include all of the following:
SB174,9,43 1. That a county or tribe shall choose to receive a reward payment in the
4amount determined under subd. 2. or to retain funds under s. 49.793 (2) (a).
SB174,9,125 2. That the amount of a reward payment to a county or tribe under the program
6is equal to 20 percent of the amount that the department determines will be saved
7in the food stamp program as the result of eliminating the identified fraudulent
8activity during the 12-month period after the fraudulent activity is eliminated.
9Notwithstanding s. 49.793 (2) (a), a county or tribe that receives a reward payment
10under this subdivision may not retain any funds that are incorrectly paid as the
11result of the identified fraudulent activity and recovered due to the efforts of an
12employee or officer of the county or tribe.
SB174,9,19 13(3) Wisconsin Works. The department of children and families shall establish
14an optional incentive program, by rule, under which the department will provide a
15reward payment to a county or tribe if an employee or officer of the county or tribe
16identifies fraudulent activity in Wisconsin Works. The department of children and
17families may make reward payments under the optional incentive program from the
18appropriation under s. 20.437 (2) (dz), (L), and (mc). The department of children and
19families shall establish the optional incentive program to include all of the following:
SB174,9,2220 (a) That a county or tribe shall choose to receive a reward payment in the
21amount determined under par. (b), to receive a reward under the incentive program
22under s. 49.197 (2), or to retain funds under s. 49.195 (4).
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