Report Title:

AG proceeds of settlement; False Claims Trust Fund

 

Description:

Provides the AG with 33% of the proceeds or settlement from a false claim prosecution where the AG initiates or assumes control of the action.  (HB1239 HD2)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1239

TWENTY-FOURTH LEGISLATURE, 2007

H.D. 2

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO THE DEPARTMENT OF THE ATTORNEY GENERAL.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature enacted the state false claims act to establish a procedure for restitution of money taken from the State by fraud and to create a chilling effect to discourage fraud from occurring in the first place.  As the chief law enforcement officer in the state, the attorney general may bring an action for false claims or may intervene and assume primary responsibility for prosecuting an action brought by a person in the name of the State.  To accomplish this responsibility, the attorney general must investigate and litigate cases that are often document intensive and require the services of expert witnesses, accountants, investigators, and support staff.  The attorney general does not have sufficient resources to divert to these cases to vigorously fight fraud against the government.  The purpose of this Act is to establish a trust fund that will provide sufficient resources for the attorney general to enforce the false claims statutes.  Such a trust fund will yield direct benefits to the public and protect the health, safety, and welfare of the people of the State of Hawaii.

     SECTION 2.  Chapter 28, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

     "§28-    False claims trust fund.  (a)  There is established in the state treasury the false claims trust fund, into which shall be deposited:

     (1)  Thirty-three per cent of the proceeds of any action or settlement by the attorney general pursuant to section 661-22, except where the deposit is inconsistent with the court order or settlement agreement relating to the amount; and

     (2)  Appropriations made by the legislature for deposit into the trust fund.

     (b)  The false claims trust fund shall be administered by the department of the attorney general and shall be used for expenditures relating to the enforcement of false claims and qui tam actions pursuant to section 661-22, for staff, experts, training, equipment, and facilitating participation in multi-state false claim actions.

     (c)  All unencumbered and unexpended moneys in excess of $1,000,000 remaining on balance in the false claims trust fund at the close of June 30 of each year shall lapse to the credit of the general fund.

     (d)  The department of the attorney general shall submit a report to the legislature no later than twenty days prior to the convening of each regular session to provide an accounting of the receipts and expenditures of the fund."

     SECTION 3.  Section 661-22, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§661-22[]]  Civil actions for false claims.  The attorney general shall investigate any violation under section 661-21.  If the attorney general finds that a person has violated or is violating section 661-21, the attorney general may bring a civil action under this section.  If the attorney general initiates an action or assumes control of an action initiated by a private person pursuant to section 661-25, the attorney general shall receive pursuant to section 28-  a fixed thirty-three per cent of the proceeds of the action or settlement of the claim, which shall be used to support the attorney general's ongoing investigation and prosecution of false claims. 

     For purposes of this section, "proceeds of the action" includes civil penalties, as well as damages."

     SECTION 4.  Section 661-27, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  If the State proceeds with an action brought by a person under section 661-25, the person shall receive at least fifteen per cent but not more than twenty-five per cent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action.  Where the action is one that the court finds to be based primarily on disclosures of specific information, other than information provided by the person bringing the action, relating to allegations or transactions in a criminal, civil, or administrative hearing, in a legislative or administrative report, hearing, audit, or investigation, or from the news media, the court may award sums as it considers appropriate, but in no case more than ten per cent of the proceeds, taking into account the significance of the information and the role of the person bringing the action in advancing the case to litigation.  Any payment to a person under this subsection shall be made from the proceeds.  [[]The[]] person shall also receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorneys' fees and costs.  All reasonable expenses, fees, and costs shall be awarded against the defendant.  All such reasonable expenses, fees, and costs of the person bringing the action shall be awarded against the defendant separately from the proceeds of the action or settlement of the claim."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 2020.