March 11, 2014 - Introduced by Representatives C. Taylor, Johnson, Zamarripa,
Berceau, Ohnstad, Pasch, Ringhand, Sargent, Shankland, Wachs and
Jorgensen, cosponsored by Senators Harris and Miller. Referred to
Committee on Children and Families.
AB862,1,6 1An Act to repeal 49.155 (6d) (a) 3.; to amend 20.001 (2) (e), 20.437 (2) (me),
249.155 (6) (e) 3. (intro.), b., c. and e., 49.155 (6) (e) 3. d., 49.175 (1) (intro.), 49.197
3(1m) and 49.197 (2) (b) 1.; and to create 13.94 (1) (fm), 13.94 (1s) (c) 9., 20.437
4(2) (mf), 49.155 (6f) and 49.155 (7d) of the statutes; relating to: payments to
5child care providers, preventing fraud in the child care subsidy program, and
6making an appropriation.
Analysis by the Legislative Reference Bureau
The Wisconsin Works (W-2) program under current law provides work
experience and benefits for low-income custodial parents who are at least 18 years
old. Also, an individual who is the parent of a child under the age of 13 or, if the child
is disabled, under the age of 19, who needs child care services to participate in
various education or work activities, and who satisfies other eligibility criteria may
receive a child care subsidy for child care services under W-2. This child care subsidy
program is called Wisconsin Shares.
Under current law, the Department of Children and Families (DCF) sets the
maximum payment rates for child care providers who provide services under
Wisconsin Shares and may modify an individual child care provider's payment rate
in the following manner on the basis of the child care provider's quality rating under
the quality rating system known as Young Star: a provider who receives a one-star
rating may be denied payment; a provider who receives a two-star rating may have

the maximum payment rate reduced by up to 5 percent; a provider who receives a
three-star rating may receive up to the maximum payment rate; a provider who
receives a four-star rating may have the maximum payment rate increased by up to
10 percent; and a provider who receives a five-star rating may have the maximum
payment rate increased by up to 25 percent. Under the bill, DCF is required to pay
an individual child care provider on the basis of the child care provider's quality
rating under Young Star, as follows: a provider who receives a one-star rating is
denied payment; a provider who receives a two-star rating is paid the maximum
payment rate; a provider who receives a three-star rating is paid the maximum
payment rate plus 5 percent; a provider who receives a four-star rating is paid the
maximum payment rate plus 10 percent, and a provider who receives a five-star
rating is paid the maximum payment rate plus 25 percent.
For purposes of reducing the cost of Wisconsin Shares, current law allows DCF
to adjust the amount paid to child care providers under the program. Currently, DCF
pays or reimburses licensed family child care providers based on a child's actual
attendance, while DCF pays licensed group child care providers based on a child's
enrollment with the provider. Under the bill, DCF must base the payment for a child
receiving care from a licensed family child care provider on the child's enrollment and
may not base the payment to a licensed family child care provider on a child's actual
attendance. Additionally, the bill eliminates DCF's authority to adjust the amount
paid to child care providers for purposes of reducing costs in Wisconsin Shares.
Under current law, DCF must establish a program to investigate fraudulent
activity by participants in W-2, which includes Wisconsin Shares, and establish an
incentive program to provide rewards to local agencies administering Wisconsin
Shares for identifying fraud in the program. The bill requires DCF to establish
policies and procedures to prevent fraud in Wisconsin Shares and requires the
Legislative Audit Bureau to annually audit such policies and procedures. Finally,
the bill requires that any money recovered from overpayments in Wisconsin Shares
be used to pay for direct child care services under Wisconsin Shares or to reduce fraud
in Wisconsin Shares.
For further information see the state 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:
AB862,1 1Section 1. 13.94 (1) (fm) of the statutes is created to read:
AB862,2,52 13.94 (1) (fm) Annually, conduct a financial and performance evaluation audit
3of the polices and procedures established by the department of children and families
4under s. 49.155 (7d). The legislative audit bureau shall file a copy of the report of the
5audit under this paragraph with the distributees specified in par. (b).
AB862,2
1Section 2. 13.94 (1s) (c) 9. of the statutes is created to read:
AB862,3,32 13.94 (1s) (c) 9. The department of children and families for the cost of an audit
3performed under sub. (1) (fm).
AB862,3 4Section 3. 20.001 (2) (e) of the statutes is amended to read:
AB862,3,125 20.001 (2) (e) Federal revenues. "Federal revenues" consist of moneys received
6from the federal government, except that under s. 20.437 (2) (md) "federal revenues"
7also include moneys treated as refunds of expenditures, and under s. 20.437 (2) (me)
8and (mf) "federal revenues" consist only of moneys treated as received from the
9federal government. Federal revenues may be deposited as program revenues in the
10general fund or as segregated revenues in a segregated fund. In either case they are
11indicated in s. 20.005 by the addition of "-F" after the abbreviation assigned under
12pars. (b) and (d).
AB862,4 13Section 4. 20.437 (2) (me) of the statutes is amended to read:
AB862,3,2514 20.437 (2) (me) Child care and temporary assistance overpayment recovery. All
15Except as provided in par. (mf), all moneys received from the recovery of
16overpayments, and incorrect or disallowed payments, and voluntary repayments of
17federal Child Care and Development Fund block grant funds, of federal Temporary
18Assistance for Needy Families block grant funds, and of state moneys paid from other
19appropriations to meet maintenance-of-effort requirements under the federal
20Temporary Assistance for Needy Families block grant program under 42 USC 601
21to 619 and the federal Child Care and Development Fund block grant program under
2242 USC 9858 that the department elects to treat as federal revenue, for costs related
23to recovering the overpayments and incorrect or disallowed payments, for activities
24to reduce errors under the Wisconsin Works program under ss. 49.141 to 49.161, and
25for any of the purposes specified under s. 49.175 (1).
AB862,5
1Section 5. 20.437 (2) (mf) of the statutes is created to read:
AB862,4,52 20.437 (2) (mf) Wisconsin Shares overpayment recovery. All moneys received
3from the recovery of overpayments made under s. 49.155 that the department elects
4to treat as federal revenue, for activities to investigate and reduce fraud in the
5program under s. 49.155 and for direct child care services under s. 49.155.
AB862,6 6Section 6. 49.155 (6) (e) 3. (intro.), b., c. and e. of the statutes, as affected by
72013 Wisconsin Act 20, are amended to read:
AB862,4,108 49.155 (6) (e) 3. (intro.) The department may shall modify a child care
9provider's payment rate under subd. 2. on the basis of the provider's quality rating,
10as described in the quality rating plan, in the following manner:
AB862,4,1211 b. For a child care provider who receives a 2-star rating, the department may
12reduce
shall pay the maximum payment rate by up to 5 percent.
AB862,4,1413 c. For a child care provider who receives a 3-star rating, the department may
14pay up to shall increase the maximum payment rate by 5 percent.
AB862,4,1715 e. For a child care provider who receives a 5-star rating, the department may
16shall increase the maximum payment rate for such a child care provider by up to 25
17percent.
AB862,7 18Section 7. 49.155 (6) (e) 3. d. of the statutes, as affected by 2013 Wisconsin Act
1920
, section 1006, is amended to read:
AB862,4,2120 49.155 (6) (e) 3. d. For a child care provider who receives a 4-star rating, the
21department may shall increase the maximum payment rate by up to 10 percent.
AB862,8 22Section 8. 49.155 (6d) (a) 3. of the statutes, as affected by 2013 Wisconsin Act
2320
, is repealed.
AB862,9 24Section 9. 49.155 (6f) of the statutes is created to read:
AB862,5,6
149.155 (6f) Basis for payments to licensed family child care centers. The
2department may not calculate the payment under this section for a child receiving
3care from a family child care center, as defined in s. 49.136 (1) (j), that is licensed
4under s. 48.65 based on the actual attendance of the child. The department shall
5calculate payment for a child who receives care from a licensed family child care
6center based on the enrollment of the child at the licensed family child care center.
AB862,10 7Section 10. 49.155 (7d) of the statutes is created to read:
AB862,5,118 49.155 (7d) Fraud prevention program. The department shall establish
9policies and procedures to prevent fraud in the program under this section.
10Notwithstanding s. 227.10 (1), the department need not promulgate policies and
11procedures under this section as rules under ch. 227.
AB862,11 12Section 11. 49.175 (1) (intro.) of the statutes is amended to read:
AB862,5,1613 49.175 (1) Allocation of funds. (intro.) Except as provided in sub. (2), within
14the limits of the appropriations under s. 20.437 (2) (a), (cm), (dz), (k), (kx), (L), (mc),
15(md), (me), (mf), and (s), the department shall allocate the following amounts for the
16following purposes:
AB862,12 17Section 12. 49.197 (1m) of the statutes is amended to read:
AB862,6,1018 49.197 (1m) Fraud investigation. From the appropriations under s. 20.437 (2)
19(dz), (kx), (L), (mc), (md), (me), (mf), and (nL), the department shall establish a
20program to investigate suspected fraudulent activity on the part of recipients of aid
21to families with dependent children under s. 49.19, on the part of participants in the
22Wisconsin Works program under ss. 49.141 to 49.161, and, if the department of
23health services contracts with the department under sub. (5), on the part of
24recipients of medical assistance under subch. IV, food stamp benefits under the food
25stamp program under 7 USC 2011 to 2036, supplemental security income payments

1under s. 49.77, payments for the support of children of supplemental security income
2recipients under s. 49.775, and health care benefits under the Badger Care health
3care program under s. 49.665. The department's activities under this subsection may
4include, but are not limited to, comparisons of information provided to the
5department by an applicant and information provided by the applicant to other
6federal, state, and local agencies, development of an advisory welfare investigation
7prosecution standard, and provision of funds to county departments under ss.
846.215, 46.22, and 46.23 or multicounty consortia, as defined in s. 49.78 (1) (br), and
9to Wisconsin Works agencies to encourage activities to detect fraud. The department
10shall cooperate with district attorneys regarding fraud prosecutions.
AB862,13 11Section 13. 49.197 (2) (b) 1. of the statutes is amended to read:
AB862,6,2512 49.197 (2) (b) 1. Subject to subd. 2., the department shall by rule establish an
13incentive program that, from the appropriation under s. 20.437 (2) (mf) and using
14moneys from the allocation under s. 49.175 (1) (p), rewards county departments,
15Wisconsin Works agencies, and tribal governing bodies that administer the subsidy
16program for identifying fraud in the subsidy program. The rules shall specify that
17a county department, Wisconsin Works agency, or tribal governing body shall
18receive, for identifying fraudulent activity under the subsidy program on the part of
19a child care provider, an amount equal to the average monthly subsidy payment per
20child during the prior fiscal year, multiplied by the number of children participating
21in the subsidy program for whom the provider provides care, multiplied by 1.5
22months. A county department, Wisconsin Works agency, or tribal governing body
23may use payments received under this subsection for any purpose for which moneys
24under the Temporary Assistance for Needy Families block grant program may be
25used under federal law.
AB862,14
1Section 14. Initial applicability.
AB862,7,42 (1) Child care provider payments. The treatment of section 49.155 (6) (e) 3.
3(intro.), b., c., d., and e. and (6f) of the statutes first applies to payment for child care
4provided on the effective date of this subsection.
AB862,15 5Section 15. Effective date.
AB862,7,76 (1) This act takes effect on the first day of the first month beginning after
7publication.
AB862,7,88 (End)
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