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LRB-5282/1
MPG:ahe
January 2018 Special Session
2017 - 2018 LEGISLATURE
January 26, 2018 - Introduced by Committee on Senate Organization, Senators
Kapenga, Darling, Stroebel and Wanggaard, cosponsored by
Representatives Vos, Felzkowski, Sanfelippo, Tusler, Petersen, Duchow,
Petryk, Kuglitsch, Tittl, Horlacher, Knodl, Brandtjen, Murphy,
Wichgers, Bernier, Krug, Kleefisch, Rohrkaste, Katsma, Kremer and
Swearingen, by request of Governor Scott Walker. Referred to Committee on
Public Benefits, Licensing and State-Federal Relations.
SB7,1,3 1An Act to create 16.298, 20.505 (1) (rm), 25.17 (1) (kq) and 25.76 of the statutes;
2relating to: pay for success contracting, establishment of pay for success trust
3fund, and making an appropriation.
Analysis by the Legislative Reference Bureau
This bill authorizes the Department of Administration to contract with a
private service provider for payments to provide social, employment, or correctional
services to individuals. The bill also creates a nonlapsible trust fund to be known as
the “pay for success trust fund,” from which payments under such a contract are to
be made. The balance of the fund may not exceed $20,000,000 at any time.
DOA may not execute a contract under the bill unless DOA determines that the
contract is expected to result in significant performance improvements or significant
budgetary savings for the state or a local governmental unit if the contract objectives
are achieved. Additionally, each contract under the bill is subject to approval by the
Joint Committee on Finance and must include all of the following:
1. A requirement that a majority of the total contract payment must be
conditioned on the service provider achieving certain performance measures
specified in the contract toward the outcome of the contract objectives.
2. A defined objective procedure by which an independent evaluator is required
to determine whether the performance measures have been achieved.
3. A schedule of the amounts and timing of payments to be earned by the service
provider during each year or other specified period of the contract.
The bill also requires the Departments of Health Services, Corrections,
Children and Families, and Workforce Development to submit, after study, reports

to the legislature concerning the programs those departments administer and advise
whether and how the kind of contracting provided for under the bill could be utilized
as an alternative to current funding models for those agencies' provision of program
services.
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:
SB7,1 1Section 1. 16.298 of the statutes is created to read:
SB7,2,2 216.298 Pay for success contracting. (1) Definitions. In this section:
SB7,2,43 (a) “Eligible services” means social, employment, or correctional services, as
4determined by the department.
SB7,2,55 (b) “Fund” means the pay for success trust fund.
SB7,2,66 (c) “Pay for success contract” means a contract authorized under sub. (2) (a).
SB7,2,87 (d) “Service provider” means a private organization, whether operated for
8profit or not for profit, that provides eligible services to individuals.
SB7,2,12 9(2) Contract execution. (a) The department may contract, including jointly
10with another state agency or a local governmental unit, with a service provider for
11the payment of moneys to the service provider for the provision of eligible services
12to individuals.
SB7,2,1313 (b) Each pay for success contract shall provide all of the following:
SB7,2,1614 1. That a majority of the total contract payment is conditioned on the service
15provider achieving performance measures, as specified in the contract, toward the
16outcome of the contract objectives.
SB7,2,1917 2. A defined objective procedure by which an independent evaluator is required
18to determine whether the performance measures specified under subd. 1. have been
19achieved.
SB7,3,2
13. A schedule of the amounts and timing of payments to be earned by the service
2provider during each year or other specified period of the contract.
SB7,3,43 (c) For each pay for success contract, the department may not execute the
4contract unless all of the following occur first:
SB7,3,85 1. The department determines that the contract is expected to result in
6significant performance improvements or significant budgetary savings for the state
7or, if appropriate, a local governmental unit, if the contract objectives specified in the
8proposed contract are achieved.
SB7,3,199 2. The department notifies the joint committee on finance in writing of the
10proposed contract. The notification shall describe in detail the department's
11proposal for the contract. If the cochairpersons of the committee do not notify the
12department within 14 working days after the date of the department's notification
13that the committee has scheduled a meeting for the purpose of reviewing the
14proposed contract, the department may execute the contract as proposed in its
15notification subject to subds. 1. and 3. If, within 14 working days after the date of
16the department's notification, the cochairpersons of the committee notify the
17department that the committee has scheduled a meeting for the purpose of reviewing
18the proposed contract, the department may execute the contract only with the
19approval of the committee.
SB7,3,2020 3. The department makes the deposit under sub. (4) (a).
SB7,3,23 21(3) Contract payments. For each pay for success contract, from the
22appropriation under s. 20.505 (1) (rm), the department shall make payments under
23sub. (2) (b) 3. subject to the contract terms.
SB7,4,3 24(4) Fund administration. (a) For each pay for success contract, subject to
25approval of the contract by the joint committee on finance under sub. (2) (c) 2., the

1secretary shall transfer to the fund from the general fund an amount sufficient to
2administer the contract and make all payments that may become due under sub. (2)
3(b) 3. over the effective period of the contract.
SB7,4,54 (b) For each pay for success contract, the secretary shall transfer to the general
5fund from the fund all of the following:
SB7,4,76 1. If the contract is terminated or otherwise expires, an amount equal to the
7amount transferred in the fund under par. (a) but not expended under the contract.
SB7,4,108 2. All amounts the department recovers from a service provider for
9overpayment or for another amount recovered by the department under the terms
10of a pay for success contract.
SB7,4,1111 (c) The balance of the fund may not exceed $20,000,000 at any time.
SB7,4,16 12(5) Reports. (a) Upon completion of each pay for success contract, the
13department shall submit a report to the appropriate standing committees of the
14legislature under s. 13.172 (3) that describes in detail the performance measures
15specified for the contract under sub. (2) (b) 1. and the extent to which those
16performance measures were achieved.
SB7,4,2017 (b) Upon completion of each pay for success contract under which another state
18agency jointly contracts with the department under sub. (2) (a), the other state
19agency shall submit to the appropriate standing committees of the legislature under
20s. 13.172 (3) a report that describes in detail the outcomes of the contract.
SB7,4,22 21(6) Purchasing exemption. A contract is subject to ss. 16.753 and 16.765, but
22is otherwise exempt from subch. IV.
SB7,2 23Section 2. 20.505 (1) (rm) of the statutes is created to read:
SB7,5,3
120.505 (1) (rm) Pay for success contracting. From the pay for success trust fund,
2all moneys transferred under s. 16.298 (4) for the purpose of administering and
3making payments for pay for success contracts under s. 16.298.
SB7,3 4Section 3. 25.17 (1) (kq) of the statutes is created to read:
SB7,5,55 25.17 (1) (kq) Pay for success trust fund (s. 25.76);
SB7,4 6Section 4. 25.76 of the statutes is created to read:
SB7,5,9 725.76 Pay for success trust fund. There is established a separate
8nonlapsible trust fund designated as the pay for success trust fund consisting of
9transfers made by the department of administration under s. 16.298 (4) (a).
SB7,5 10Section 5. Nonstatutory provisions.
SB7,5,18 11(1) Agency studies and reports. The departments of health services,
12corrections, children and families, and workforce development shall each conduct a
13study of the programs it administers to determine whether and how pay for success
14contracting under section 16.298 of the statutes could be utilized as an alternative
15to current funding models for the provision of services under the programs. Each of
16those departments shall submit to the joint committee on finance and the
17appropriate standing committees of the legislature under section 13.172 (3) of the
18statutes a report that details its findings from the study.
SB7,5,1919 (End)
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