LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          April 24, 1995



 TO:     Honorable Curtis Seidlits, Chair       IN RE:  House Bill No. 2748
         Committee on State Affairs                     By: Alvarado
         House of Representatives
         Austin, Texas






FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
2748 (relating to false claims made with certain governmental
entities) this office has determined the following:

The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.

The bill would add Section 2258 to the Government Code
prohibiting a person from presenting to a governmental entity or
a governmental contractor a false claim for payment or approval.  
The bill defines "claim" as a claim for money, property or
service made to a governmental entity or a government contractor. 
The Office of the Attorney General (OAG) would be responsible for
investigating and prosecuting charges of false claims when state
funds are involved.  Local prosecuting authorities are
responsible for investigating, filing and conducting legal
proceedings when local governmental funds are involved.  The
state may assume primary responsibility in actions brought be a
local prosecuting attorney when state funds are involved.  It is
expected that the bill would result in increased investigations
and litigation by the Office of the Attorney General. 

Office of the Attorney General estimates indicate that 4
additional employees will be needed in order to comply with the
provisions of the bill, including 2 attorneys, 1 investigator and
1 legal assistant.  The OAG estimates that the cost to general
revenue would be $276,313 in FY 1996 and $261,044 annually in FY
1997-2000.    




The bill provides for actual damages, exemplary damages, 
attorney's fees and costs and a civil penalty of not more than
$10,000 for each false claim.  The civil penalty is waived if the
person who knowingly violated the list of "prohibited acts" in
Section 2258.0002 cooperated in the investigation.  The OAG and
Comptroller of Public Accounts cannot determine the amount of
estimated revenue to the state's general revenue fund from actual
and exemplary damages, reasonable expenses and civil penalties as
authorized by the bill.


The fiscal implication to the State or units of local government
cannot be determined.


Source:   Office of the Attorney General
          LBB Staff: JK, DC, DF, RR