COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 3003-02
BILL NO.: SB 732
SUBJECT: Civil Procedure; State Attorney General; Contracts and Contractors
TYPE: Original
DATE: January 18, 2000
FISCAL SUMMARY
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| General Revenue | Unknown | Unknown | Unknown |
| Whistleblower Reward and Protection Fund | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
Unknown | Unknown | Unknown |
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| None | |||
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 5 pages.
ASSUMPTION
Officials from the Office of State Courts Administrator (CTS) assume the proposed legislation 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 filed; however, CTS does not expect the volume to be significant. CTS assumes any increase in costs should not be significant to the budget of the judiciary.
Officials from the Office of Administration, the Department of Public Safety, the Office of the State Auditor, and the State Tax Commission assume the proposed legislation would have no fiscal impact on their agencies.
Officials from the Department of Transportation (DHT) assume the proposal would provide that the balance of funds recovered in false claims suits 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 the 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, or 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 some of that payment is later recovered, then DHT could be obligated to repay to the Federal Highway Administration a portion of the recovery equal to the federal share percentage for construction of the project. Overall, DHT assumes the proposal would have an unknown fiscal impact on their agency.
In response to a similar proposal, officials from the Department of Revenue assumed there would be no fiscal impact on their agency.
In response to a similar proposal, officials from the Office of the Attorney General assumed that the costs could be absorbed with existing resources.
In response to a similar proposal, the Office of the State Treasurer (STO) assumed a new accounting fund would be created in the state treasury known as the "Whistleblower Reward and Protection Fund." STO assumed there would be a slight increase in the number of accounting transactions processed through their accounting system with a corresponding increase in the funds available for investment. However, STO assumed their agency would absorb any costs associated with the increased accounting transactions and investments through current
appropriations.
FISCAL IMPACT - State Government FY 2001 FY 2002 FY 2003
(10 Mo.)
GENERAL REVENUE FUND
Income - Transfers from Whistleblower
Reward and Protection Fund Unknown Unknown Unknown
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND Unknown Unknown Unknown
WHISTLEBLOWER REWARD
AND PROTECTION FUND
Income -- Settlements of claims Unknown Unknown Unknown
Costs - Distributions to Attorney (Unknown) (Unknown) (Unknown)
General and Highway Patrol
Costs - Transfer to General Revenue (Unknown) (Unknown) (Unknown)
ESTIMATED NET EFFECT ON
WHISTLEBLOWER REWARD
AND PROTECTION FUND $0 $0 $0
FISCAL IMPACT - Local Government FY 2001 FY 2002 FY 2003
(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
The proposed legislation would create a civil action to recover fraud committed against the state, commonly known as Qui Tam in the Federal False Claims Act. Sections 33.850 to 33.868 would codify portions of the current federal false claims law into Missouri law. The proposal would
DESCRIPTION (continued)
also authorize filing of suit by the attorney general or citizen plaintiffs on behalf of the state for false or fraudulent claims against the state. The state would retain independent rights over a citizen plaintiff, including the right to exclude the citizen from participation. Citizen plaintiffs would receive 15% to 25% of recovery if the state would take over the case; 25% to 30% if the citizen brought the action alone; and nothing if the citizen was convicted of a crime in relation to the case. Section 33.862 would also allow a payment of up to 10% for informers.
Section 33.865 would limit who could bring a suit when they have special inside knowledge, including various state officials, or when the information of fraudulent claims is commonly known. It would also establish protections for whistleblowers. The proposal would also contain procedural aspects for subpoena service, statute of limitations, burden of proof, and estoppel of defendants found guilty in criminal trials from denying the essential elements of the case. Civil investigative demands (CID) would be authorized by Section 33.871, with the procedures governed by existing Missouri law. CID's would provide for greater discovery authority by the Attorney General in civil cases. In general, it would be the power of the Attorney General to investigate a civil case using discovery devices not available normally until after suit is filed. Oral testimony could also be taken in a CID under Section 33.880. The procedures for the custodian to keep CID documents, their release and return, including being deemed a closed record would be detailed in Sections 33.883 to 33.889. The whistleblower fund and procedures for distribution of any recovery would be set forth in Section 33.895. Any financial recovery would not directly reimburse the state or the department that was the victim of the fraudulent claim, but would be disbursed to the Attorney General, the State Highway Patrol, citizen plaintiffs and witnesses, and to the cost of investigation. Any remaining funds would be transferred to the General Revenue Fund.
This legislation is not federally mandated, would not duplicate any other program, and would not require additional capital improvements or rental space.
This proposal could affect Total State Revenues.
SOURCES OF INFORMATION
Office of State Courts Administrator
Office of Administration
Department of Public Safety
Office of the State Auditor
State Tax Commission
Department of Transportation
Department of Revenue
Office of the Attorney General
Office of the State Treasurer
Jeanne Jarrett, CPA
Director
January 18, 2000