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SB-387 The False Claims Act.(2017-2018)

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Date Published: 02/14/2017 09:00 PM
SB387:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 387


Introduced by Senator Jackson

February 14, 2017


An act to amend Section 12651 of the Government Code, relating to the False Claims Act.


LEGISLATIVE COUNSEL'S DIGEST


SB 387, as introduced, Jackson. The False Claims Act.
Existing law, the False Claims Act, provides that a person who commits any one of several enumerated acts relating to the submission to the state or a political subdivision of the state of a false claim for money, property, or services, as specified, shall be liable to the state or political subdivision for certain damages and a civil penalty. Existing federal law requires the Office of Inspector General, in consultation with the United States Attorney General, to determine whether a state has a false claims act that qualifies the state for a 10-percentage-point increase under the Social Security Act in the state’s share of any amounts recovered under that law, by, among other things, imposing a civil penalty that is not less than the amount of the civil penalty authorized under the Federal False Claims Act. Existing federal law, the Federal Civil Penalties Inflation Adjustment Act of 1990, requires federal agencies to adjust the levels of civil monetary penalties for inflation to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect.
This bill would specify that the fines imposed for violation of the False Claims Act shall be imposed as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 12651 of the Government Code is amended to read:

12651.
 (a) Any person who commits any of the following enumerated acts in this subdivision shall have violated this article and shall be liable to the state or to the political subdivision for three times the amount of damages that the state or political subdivision sustains because of the act of that person. A person who commits any of the following enumerated acts shall also be liable to the state or to the political subdivision for the costs of a civil action brought to recover any of those penalties or damages, and shall be liable to the state or political subdivision for a civil penalty of not less than five thousand five hundred dollars ($5,500) and not more than eleven thousand dollars ($11,000) for each violation: violation, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990, Pub. L. 101– 410 section 5, 104 Stat. 891, note following 28 U.S.C. section 2461.
(1) Knowingly presents or causes to be presented a false or fraudulent claim for payment or approval.
(2) Knowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim.
(3) Conspires to commit a violation of this subdivision.
(4) Has possession, custody, or control of public property or money used or to be used by the state or by any political subdivision and knowingly delivers or causes to be delivered less than all of that property.
(5) Is authorized to make or deliver a document certifying receipt of property used or to be used by the state or by any political subdivision and knowingly makes or delivers a receipt that falsely represents the property used or to be used.
(6) Knowingly buys, or receives as a pledge of an obligation or debt, public property from any person who lawfully may not sell or pledge the property.
(7) Knowingly makes, uses, or causes to be made or used a false record or statement material to an obligation to pay or transmit money or property to the state or to any political subdivision, or knowingly conceals or knowingly and improperly avoids, or decreases an obligation to pay or transmit money or property to the state or to any political subdivision.
(8) Is a beneficiary of an inadvertent submission of a false claim, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the state or the political subdivision within a reasonable time after discovery of the false claim.
(b) Notwithstanding subdivision (a), the court may assess not less than two times and not more than three times the amount of damages which the state or the political subdivision sustains because of the act of the person described in that subdivision, and no civil penalty, if the court finds all of the following:
(1) The person committing the violation furnished officials of the state or of the political subdivision responsible for investigating false claims violations with all information known to that person about the violation within 30 days after the date on which the person first obtained the information.
(2) The person fully cooperated with any investigation by the state or a political subdivision of the violation.
(3) At the time the person furnished the state or the political subdivision with information about the violation, no criminal prosecution, civil action, or administrative action had commenced with respect to the violation, and the person did not have actual knowledge of the existence of an investigation into the violation.
(c)  Liability under this section shall be joint and several for any act committed by two or more persons.
(d) This section does not apply to any controversy involving an amount of less than five hundred dollars ($500) in value. For purposes of this subdivision, “controversy” means any one or more false claims submitted by the same person in violation of this article.
(e) This section does not apply to claims, records, or statements made pursuant to Division 3.6 (commencing with Section 810) of Title 1 or to workers’ compensation claims filed pursuant to Division 4 (commencing with Section 3200) of the Labor Code.
(f) This section does not apply to claims, records, or statements made under the Revenue and Taxation Code.
(g) This section does not apply to claims, records, or statements for the assets of a person that have been transferred to the Commissioner of Insurance, pursuant to Section 1011 of the Insurance Code.