ZEM H.B. 494 75(R)BILL ANALYSIS
CIVIL PRACTICES
H.B. 494
By: Alvarado
3-25-97
Committee Report (Unamended)
BACKGROUND
Texas does not have a statutory provision addressing false claims against
state and local entities. Currently, there is no offense or remedy under
which a governmental entity can find relief when a false claim for money,
property, or services is brought against that governmental entity.
PURPOSE
Creates an offense and remedies for exposing and prosecuting false claims
against state and local entities and their agents.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subtitle F, Title 10, Government Code by adding Chapter
2259 as follows:
CHAPTER 2259. FALSE CLAIMS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2259.001 Defines "claim," "government contractor," "governmental
entity," "local governmental entity," "managing official," and
"prosecuting authority."
Sec. 2259.002 Sets out the Subchapter's prohibited acts (9).
Sec. 2259.003-
2259.010 Reserves sections for expansion.
SUBCHAPTER B. LIABILITY FOR VIOLATIONS
Sec. 2259.011 (a) Provides that a court shall grant the following awards
to a government entity when a person knowingly violates Sec.
2259.002:
(1) actual damages suffered by the government entity due to the
violation;
(2) exemplary damages equal to two times the amount of actual
damages; and
(3) attorney's fees and costs of the government entity incurred
to recover the damages and penalty.
(b) Provides reduction of exemplary damages of (a)(2) to an
amount not less than the actual damages if the person who knowingly
violated Sec. 2259.002:
(1) assists in the investigation of the false claim within 30 days
of a request for such assistance; and
(2) otherwise fully cooperates in any investigation by the
government entity.
(c) Provides that a person knowingly violates Sec. 2259.002 if the
person:
(1) acts with actual knowledge of the violation;
(2) acts with deliberate ignorance or reckless disregard of the
violation; or
(3) acts without actual knowledge, but after the violation,
learns of the violation and does not take action to mitigate or
rectify the violation.
Sec. 2259.012 Provides the court with the option of awarding an
additional $10,000 civil penalty for each false claim if the violator
of Sec. 2259.002 does not cooperate in the investigation as described
in Secs. 2259.011(b)(1) and (2).
Sec. 2259.013 Provides that if a violation is committed by more than one
person, the liability under this subchapter is joint and several.
Specifies that comparative responsibility is not applicable.
Sec. 2259.014 (a) Exempts attorney's fees and costs, exemplary damages
and the $10,000 civil penalty awards under Secs. 2259.011 and 2259.012
if actual damages are less than $500.
(b) Provides that this chapter does not apply to Texas workers'
compensation laws.
Sec. 2259.015 (a) Specifies where collected money shall be deposited.
(b) Specifies how collected money shall be apportioned if the action is
brought in the names of both the state and one or more local
governmental entities.
Sec. 2259.016 Specifies the deadlines for bringing an action under this
subchapter.
Sec. 2259.017 Provides that Chapter 41, Civil Practice and Remedies Code,
is inapplicable to the exemplary damages and civil penalty awards of
this Chapter.
Secs. 2259.018-
2259.020 Reserves sections for expansion.
SUBCHAPTER C. ATTORNEY GENERAL ACTION
Sec. 2259.021 (a) Provides that the attorney general shall investigate
alleged violations of Sec. 2259.002 involving state funds.
(b) Provides that if the attorney general determines that there is
a violation of Sec. 2259.002, the attorney general may bring
Subchapter B action.
Sec. 2259.022 (a) Provides that if the attorney general brings
Subsection B action on a claim involving both local government and
state funds, the attorney general shall provide a copy of the
complaint to the appropriate prosecuting authority.
(b) Provides when and how the attorney general shall mail the
complaint to the prosecuting authority.
(c) Specifies when the prosecuting authority may intervene in an
action brought by the attorney general.
Secs. 2259.023-
2259.030 Reserves sections for expansion.
SUBCHAPTER D. ACTION BROUGHT BY PROSECUTING AUTHORITY
Sec. 2259.031 (a) Provides that a prosecuting authority shall investigate
alleged violations of Sec. 2259.002 involving local government funds.
(b) Provides that if the prosecuting authority determines that there is
a violation of Sec. 2259.002, the prosecuting authority may bring
Subchapter B action.
Sec. 2259.032 (a) Provides that if the prosecuting authority brings
Subchapter B action on a claim involving both local government and
state funds, the prosecuting authority shall provide a copy of the
compliant to the attorney general.
(b) Provides when and how the prosecuting authority shall mail the
complaint to the attorney general.
(c) Specifies when the attorney general must notify the court whether
or not the attorney general intends to assume primary responsibility
for conducting the action.
(d) Determines the role of the prosecuting authority, dependant on the
choice of the attorney general of whether or not to conduct the
action.
Secs. 2259.033-
2259.040 Reserves sections for expansion.
SUBCHAPTER E. PRIVATE CAUSE OF ACTION
Sec. 2259.041 Provides that a person may bring a civil action in a Texas
district court for a violation of Sec. 2259.002. Determines the proper
names in which the person may bring such action.
Sec. 2259.042 (a) Specifies the appropriate authorities that should
receive a copy of the petition in a private action.
(b) Provides that Rule 21a, Texas Rules of Civil Procedure governs
the appropriate service of petition.
Sec. 2259.043 Provides for intervention by the attorney general and/or
prosecuting authority in a private cause of action. Specifies the
deadlines for the attorney general and/or the prosecuting authority's
intervention, dependant on the roles of the attorney general and the
prosecuting authority in the action.
Sec. 2259.044 (a) Provides that if the attorney general or prosecuting
authority assumes responsibility for prosecution of action under this
subchapter, a reasonable portion of a judgment or settlement shall be
awarded to the person who commenced the action.
(b) Specifies considerations of the court in determining the person's
award; states that 10 percent of the settlement or judgment is
presumed to be reasonable.
Sec. 2259.045 (a) Provides that if the attorney general or prosecuting
authority does not assume responsibility for prosecution of action
under this subchapter, a reasonable portion of a judgment or
settlement shall be awarded to the person who prosecuted the action.
(b) Specifies considerations of the court in determining the person's
award; states that 25 percent of the settlement or judgment is
presumed to be reasonable.
(c) Specifies that the court may also award the prosecuting person
reasonable expenses incurred by the person in prosecuting the action.
Sec. 2259.046-
2259.050 Reserves sections for expansion.
SUBCHAPTER F. INTERFERENCE WITH DISCLOSURE BY EMPLOYEES
Sec. 2259.051 Outlines a person's rights in disclosing information and
participating in the action.
Sec. 2259.052 (a) Outlines prohibited conduct by an employer that would
interfere with an employee's rights outlined in Sec. 2259.051 or
discriminate against the employee because the employee has exercised
the rights outlined in Sec. 2259.051.
(b) Outlines the liability of an employer who violates Subsection (a).
(c) Provides when an employee may recover under Subsection (b).
SECTION 2 Effective date: September 1, 1997. Savings clause.
SECTION 3 Emergency clause.