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