SB 572

Under current law, if a contractor or vendor does business with this state or a

local government, the terms of the contract or order govern the performance of, and

the price to be paid to, the contractor or vendor. If the contractor or vendor claims

payment for materials, supplies, equipment, or services that are not provided in

accordance with the contract or order, or at a price that is different from the price

specified in the contract or order, the state or a local government has a remedy

against the contractor or vendor for breach of contract. If the contractor or vendor

is asked to swear to the truth of a claim for payment and the claim is false, the

contractor or vendor may be prosecuted for false swearing. Currently, except with

regard to medical assistance, a private person has no means to recover, on behalf of

the state, damages sustained by the state as a result of a fraud committed against

the state.

This bill provides that whoever knowingly presents a false claim under any

contract or order for materials, supplies, equipment, or services to be provided to a

state agency is subject to a forfeiture (civil penalty) of not less than $5,000 nor more

than $10,000, plus three times the amount of the damages that were sustained by

the state or would have been sustained by the state, whichever is greater, as a result

of the false claim. The bill permits the attorney general to bring an action to recover

any forfeiture for which a contractor or vendor is liable as a result of a false claim

submitted to a state agency. The bill contains similar provisions that apply to local

governmental units. The bill creates separate prohibitions against state contractors,

grantees, vendors, and other recipients of state resources who knowingly commit

certain fraudulent acts against the state. The bill makes these persons liable for

three times the amount of damages sustained by the state resulting from such acts

and imposes additional forfeitures of not less than $5,000 nor more than $10,000 for

each violation. The bill permits the attorney general to pursue an alternate remedy,

such as an administrative remedy, against an alleged offender in lieu of an action in

court. With certain exceptions, the bill provides that a person who brings an action

on behalf of the state is entitled to receive his or her reasonable expenses of bringing

the action, including his or her costs and reasonable, actual attorney fees, which are

assessed against the defendant. The bill entitles an employee to all relief to make

the employee whole if the employee is discriminated against by an employer as a

result of lawful actions the employee took to further the investigation of any act of

fraud, as defined in the bill, the employer committed against the state. Under the

bill, the relief may include reinstatement and double back pay with interest from the

time of any discharge to the time of reinstatement. The bill also permits the employee

to recover any costs, including reasonable, actual attorney fees, from his or her

employer.

The provisions of the bill do not apply to certain contracts of the Department

of Transportation, including engineering and highway construction contracts, or to