LRB-1279/1
FFK:wlj:rs
2013 - 2014 LEGISLATURE
May 13, 2013 - Introduced by Representatives Weininger, Jacque, Honadel, Nass,
Stone, Bies, Tittl, Bernier, A. Ott, Strachota, Schraa, Born and Endsley,
cosponsored by Senators Gudex, Lasee and Leibham. Referred to Committee
on Government Operations and State Licensing.
AB196,1,3 1An Act to create 16.32 and 20.505 (1) (kn) of the statutes; relating to: creating
2an incentive program for reporting fraud to a state hotline, granting
3rule-making authority, and making an appropriation.
Analysis by the Legislative Reference Bureau
Currently, the state has established two hotlines that receive reports from
individuals who suspect fraudulent activity in state programs. The Legislative
Audit Bureau administers the first hotline to receive reports of fraud, waste, and
mismanagement in state government. The office of the inspector general in the
Department of Health Services maintains the second hotline to receive reports on
suspected fraudulent activity in public assistance programs.
Under this bill, the Department of Administration (DOA) must establish an
incentive program, by rule, for individuals who report suspected fraudulent activity
or agency mismanagement to an existing fraud hotline or to any other fraud hotline
established by a state agency. The incentive program established by DOA must
include a reward payment of up to 5 percent of the amount of state funds that are
recovered or saved as the result of a report to the individual who made the report that
led to the recovery or savings.
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:
AB196,1
1Section 1. 16.32 of the statutes is created to read:
AB196,2,2 216.32 Incentives to report fraud to a fraud hotline. (1) In this section:
AB196,2,83 (a) "Agency" means an office, department, independent agency, association, or
4other body in state government created or authorized to be created by the
5constitution or any law, that is entitled to expend moneys appropriated by law,
6including the legislature and the courts, but not including an authority created in
7subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 232, 233, 234, 237, 238, or
8279.
AB196,2,129 (b) "Fraud hotline" means the toll-free telephone number established under s.
1013.94 (1) (br), a hotline maintained by the department of health services to receive
11reports of fraud in public assistance programs, or any other hotline maintained by
12an agency to receive reports of fraud in state government.
AB196,2,17 13(2) The department shall establish an incentive program, by rule, that rewards
14an individual who reports suspected fraudulent activity or mismanagement in a
15program that is administered by an agency. The department shall pay reward
16payments under this subsection from the appropriation under s. 20.505 (1) (kn). The
17department shall establish the incentive program to provide all of the following:
AB196,2,2318 (a) If a report of suspected fraudulent activity to a fraud hotline leads to a
19recovery of state funds, the department shall provide a reward payment to the
20individual or individuals who reported the fraudulent activity to the fraud hotline.
21The total amount the department may provide as reward payments for a single
22recovery is 5 percent of the state funds that are recovered as a result of eliminating
23the reported fraudulent activity.
AB196,3,524 (b) If a report to a fraud hotline of suspected mismanagement by an agency
25leads to an agency saving state funds, the department shall provide a reward

1payment to the individual or individuals who reported the mismanagement to the
2fraud hotline. The total amount the department may provide as reward payments
3for a single act of mismanagement is 5 percent of the state funds that are saved over
4a 12-month period, as determined by the department, as a result of eliminating the
5reported mismanagement.
AB196,3,17 6(3) The department may assess an agency that recovers or saves state funds
7as the result of a report to a fraud hotline for the amount of a reward payment made
8under sub. (2) related to a report that led to the recovery or savings. An agency that
9pays an assessment under this subsection shall pay the assessment from the
10appropriation for administration of the program in which the reported fraudulent
11activity occurred unless payment from that appropriation is prohibited.
12Notwithstanding ss. 20.115 to 20.765, if payment from the appropriation for
13administration of the program is prohibited, the agency shall pay the assessment
14from a general program operations appropriation of the agency, as determined by the
15agency. If the program is administered from more than one appropriation, the
16agency shall pay the assessment from the appropriation or appropriations for
17program administration, as determined by the agency.
AB196,2 18Section 2. 20.505 (1) (kn) of the statutes is created to read:
AB196,3,2019 20.505 (1) (kn) Reward payments for reporting fraud. All moneys received from
20assessments under s. 16.32 (3) to provide reward payments under s. 16.32 (2).
AB196,3 21Section 3. Nonstatutory provisions.
AB196,4,522 (1) Department of Administration; rules. The department of administration
23shall present the statement of scope of the rules required under section 16.32 (2) of
24the statutes, as created by this act, to the governor for approval under section
25227.135 (2) of the statutes, no later than the first day of the 4th month beginning after

1the effective date of this subsection. The department of administration shall submit,
2in proposed form, the rules required under section 16.32 (2) of the statutes, as created
3by this act, to the legislative council staff under section 227.15 (1) of the statutes no
4later than the first day of the 7th month beginning after the day on which the
5governor approves the statement of scope for the rules.
AB196,4,66 (End)
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