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