LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 20, 1999 TO: Honorable Fred Bosse, Chair, House Committee on Civil Practices FROM: John Keel, Director, Legislative Budget Board IN RE: HB101 by Alvarado (Relating to false claims made with certain governmental entities), Committee Report 1st House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB101, Committee Report 1st House, Substituted: negative impact * * of $(319,944) through the biennium ending August 31, 2001. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(169,484) * * 2001 (150,460) * * 2002 (150,460) * * 2003 (150,460) * * 2004 (150,460) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Change in Number of State * * Year General Revenue Fund Employees from FY 1999 * * 0001 * * 2000 $(169,484) 3.5 * * 2001 (150,460) 3.5 * * 2002 (150,460) 3.5 * * 2003 (150,460) 3.5 * * 2004 (150,460) 3.5 * *************************************************************************** Fiscal Analysis The bill would amend the Government Code to prohibit the making of false claims for payment or approval to certain governmental entities or government contractors. The bill would also prohibit certain other actions (prohibited acts) that would defraud a governmental entity or government contractor. The bill would also permit private individuals to bring a civil action for a violation of the prohibited acts. A new "whistleblower" protection would be provided to employees disclosing information, assisting or testifying in an action, and employees would have a new cause of action against governmental employers for violation of these protections. The bill would require a court that finds a person knowingly committed a prohibited act to award the affected entity's actual damages, exemplary damages equal to two times the actual damages, and attorney's fees and costs. The court could also award the affected entity a civil penalty of not more than $10,000 for each false claim. Money collected on behalf of a governmental entity would be deposited to the credit of the general revenue fund of the state or the local governmental entity, as appropriate. The Office of the Attorney General (OAG) would be required to investigate alleged violations of prohibited acts involving state funds, and local authorities would be required to investigate alleged violations involving local government funds. The bill would increase the workload of the OAG because of increased litigation and additional investigative responsibilities. The General Services Commission (GSC) could also incur additional costs for providing litigation assistance and support to the investigations. Methodology The OAG would represent agencies with contracts that could be the subject of a false claim under the bill and would be involved in the investigation of such claims, which would require additional staff as follows: Assistant Attorney General III -- 1.5; Investigator I -- 1; Legal Assistant II -- 0.5; Legal Secretary I -- 0.5. The OAG would also incur expenditures for capital items. Local Government Impact Local governments, through their attorneys or other appropriate offices, would have the same responsibility as the OAG to investigate and file lawsuits on false claims. To the extent that this bill adds new mandatory responsibilities not currently performed by local governments, the bill will have an impact on local governments. Source Agencies: 303 General Services Comm, 304 Comptroller Of Pub Accts, 302 Office Of The Attorney General LBB Staff: JK, PE, SC