SB 0526 - Fiscal Note

Fiscal Note - SB 0526 - Creates civil recovery for false or fraudulent monetary claims made to the state

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 2195-01

BILL NO.: SB 526

SUBJECT: Civil recovery for false or fraudulent monetary claims.

TYPE: Original

DATE: March 22, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
General Revenue Fund	Unknown	Unknown	Unknown
Whistleblower Reward and Protection Fund	Unknown	Unknown	Unknown
Total Estimated Net Effect on All State Funds	Unknown	Unknown	Unknown

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

The Office of the State Courts Administrator (CTS) assumes the proposal would appear to simplify the process and make it easier to seek recovery for false claims. As a result, there may be an increase in the number of cases; however, CTS does not expect the volume to be significant. Any increase in costs should not be significant to the budget of the judiciary.

The Office of Administration, Department of Revenue, Department of Public Safety, and the State Tax Commission assume the proposed legislation would have no fiscal impact on their agencies.

The Department of Transportation (DHT) assumes the proposal provides that the balance of funds recovered in false claims suits is to be transmitted to the State Treasurer and deposited into general revenue. Assuming such an action would be brought as a result of a claim made against Missouri Highway Transportation Commission or one actually paid, it could be one of the following: contractor claims, claims arising from purchase of materials or services by General Services, claims arising from condemnation as to the value of property, claims for personal injury in a General Liability/Fleet Vehicle Liability case. If the claim is one by a contractor on a construction project that is federally funded and is paid and some of that payment is later recovered, then DHT is obligated to repay to the Federal Highway Administration a portion of the recovery equal to the federal share percentage for construction of the project.

Also, there is a problem regarding the deposit of recovered monies from fraudulent claims to general revenue in relation to any claim in any of the above circumstances where money was originally paid out of the State Road Fund. DHT's position has been that anything that is paid out of the Road Fund that is later recovered would properly belong to the Road Fund and distribution to General Revenue would be improper. DHT cannot estimate the number or amount of claims. Therefore, the fiscal impact on DHT cannot be determined.

Oversight notes that there would be no cost or loss to the Road Fund. There might, arguably, be foregone income; however, that impact is beyond the scope of a fiscal note.

The Office of the Attorney General assumes the costs resulting from the proposed legislation can be absorbed with existing resources.

The Office of the State Treasurer (STO) assumes a new accounting fund would be created in the state treasury for the Whistleblower Reward and Protection Fund. The proposed legislation would slightly increase the number of accounting transactions processed through STO's accounting system and increase the available funds for investment. STO would absorb the costs associated with increased accounting transactions and investments through the current ASSUMPTION (continued)

appropriations.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
GENERAL REVENUE
Income - recovery of fraudulent claims	Unknown	Unknown	Unknown
WHISTLEBLOWER REWARD AND
PROTECTION FUND	Unknown	Unknown	Unknown
ESTIMATED NET EFFECT ON
STATE FUNDS	Unknown	Unknown	Unknown
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
	0	0	0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

This proposal creates a civil action to recover fraud committed against the state, commonly known as Qui Tam in the Federal False Claims Act.

This legislation is not federally mandated, would not duplicate any other program, and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Office of the State Courts Administrator

Office of Administration

State Tax Commission

Department of Transportation

Office of the Attorney General

Department of Revenue

SOURCES OF INFORMATION (continued)

Office of the State Treasurer

Department of Public Safety

NOT RESPONDING: Office of the State Auditor.

Jeanne Jarrett, CPA

Director

March 22, 1999