LBD17863-04-0
S. 8378 2
3. "Knowing and knowingly" (A) means that [with respect to a claim, or
information relating to a claim,] a person, WITH RESPECT TO INFORMATION:
[(a)] (I) has actual knowledge of [such claim or] THE information;
[(b)] (II) acts in deliberate ignorance of the truth or falsity of
[such claim or] THE information; or
[(c)] (III) acts in reckless disregard of the truth or falsity of
[such claim or] THE information[.]; AND
[Proof] (B) REQUIRE NO PROOF of specific intent to defraud [is not
required], provided, however that acts occurring by mistake or as a
result of mere negligence are not covered by this article.
4. "OBLIGATION" MEANS AN ESTABLISHED DUTY, WHETHER OR NOT FIXED, ARIS-
ING FROM AN EXPRESS OR IMPLIED CONTRACTUAL, GRANTOR-GRANTEE, OR LICEN-
SOR-LICENSEE RELATIONSHIP, FROM A FEE-BASED OR SIMILAR RELATIONSHIP,
FROM STATUTE OR REGULATION, OR FROM THE RETENTION OF ANY OVERPAYMENT.
5. "MATERIAL" MEANS HAVING A NATURAL TENDENCY TO INFLUENCE, OR BE
CAPABLE OF INFLUENCING THE PAYMENT OR RECEIPT OF MONEY OR PROPERTY.
6. "Local government" means any NEW YORK county, city, town, village,
school district, board of cooperative educational services, local public
benefit corporation or other municipal corporation or political subdivi-
sion of the state, OR OF SUCH LOCAL GOVERNMENT.
[5.] 7. "Original source" means a person who (A) PRIOR TO A PUBLIC
DISCLOSURE UNDER PARAGRAPH (B) OF SUBDIVISION NINE OF SECTION ONE
HUNDRED NINETY OF THIS ARTICLE has [direct and independent] VOLUNTARILY
DISCLOSED TO THE STATE OR A LOCAL GOVERNMENT THE INFORMATION ON WHICH
ALLEGATIONS OR TRANSACTIONS IN A CAUSE OF ACTION ARE BASED, OR (B) WHO
HAS knowledge [of the information on which allegations are based, and]
THAT IS INDEPENDENT OF AND MATERIALLY ADDS TO THE PUBLICLY DISCLOSED
ALLEGATIONS OR TRANSACTIONS, AND WHO has voluntarily provided the infor-
mation to the state or a local government before OR SIMULTANEOUS WITH
filing an action under this article [which is based on the information].
[6.] 8. "Person" means any natural person, partnership, corporation,
association or any other legal entity or individual, other than the
state or a local government.
[7.] 9. "State" means the state of New York and any state department,
board, bureau, division, commission, committee, public benefit corpo-
ration, public authority, council, office or other governmental entity
performing a governmental or proprietary function for the state.
S 2. Subdivision 1 of section 189 of the state finance law, as added
by section 39 of part C of chapter 58 of the laws of 2007, is amended to
read as follows:
1. Subject to the provisions of subdivision two of this section, any
person who:
(a) knowingly presents, or causes to be presented[, to any employee,
officer or agent of the state or a local government,] a false or fraudu-
lent claim for payment or approval;
(b) knowingly makes, uses, or causes to be made or used, a false
record or statement MATERIAL to [get] a false or fraudulent claim [paid
or approved by the state or a local government];
(c) conspires to [defraud the state or a local government by getting a
false or fraudulent claim allowed or paid] COMMIT A VIOLATION OF PARA-
GRAPH (A), (B), (D), (E), (F) OR (G) OF THIS SUBDIVISION;
(d) has possession, custody, or control of property or money used, or
to be used, by the state or a local government and[, intending to
defraud the state or a local government or willfully to conceal the
property or money,] KNOWINGLY delivers, or causes to be delivered, less
S. 8378 3
[property or money] than [the amount for which the person receives a
certificate or receipt] ALL OF THAT MONEY OR PROPERTY;
(e) is authorized to make or deliver a document certifying receipt of
property used, or to be used, by the state or a local government and,
intending to defraud the state or a local government, makes or delivers
the receipt without completely knowing that the information on the
receipt is true;
(f) knowingly buys, or receives as a pledge of an obligation or debt,
public property from an officer or employee of the state or a local
government knowing that the officer or employee [lawfully may not sell
or pledge the property] VIOLATES A PROVISION OF LAW WHEN SELLING OR
PLEDGING SUCH PROPERTY; or
(g) knowingly makes, uses, or causes to be made or used, a false
record or statement MATERIAL to [conceal, avoid, or decrease] an obli-
gation to pay or transmit money or property to the state or a local
government[;] shall be liable[: (i)] to the state OR A LOCAL GOVERNMENT,
AS APPLICABLE, for a civil penalty of not less than six thousand dollars
and not more than twelve thousand dollars, plus three times the amount
of ALL damages, INCLUDING CONSEQUENTIAL DAMAGES, which the state OR
LOCAL GOVERNMENT sustains because of the act of that person[; and (ii)
to any local government for three times the amount of damages sustained
by such local government because of the act of that person].
S 3. Subdivision 4 of section 189 of the state finance law, as added
by section 39 of part C of chapter 58 of the laws of 2007, is amended to
read as follows:
4. (A) This section shall [not] apply to claims, records, or state-
ments made under the tax law ONLY IF (I) THE NET INCOME OR SALES OF THE
PERSON AGAINST WHOM THE ACTION IS BROUGHT EQUALS OR EXCEEDS ONE MILLION
DOLLARS FOR ANY TAXABLE YEAR SUBJECT TO ANY ACTION BROUGHT PURSUANT TO
THIS ARTICLE; AND (II) THE DAMAGES PLEADED IN SUCH ACTION EXCEED THREE
HUNDRED AND FIFTY THOUSAND DOLLARS.
(B) THE ATTORNEY GENERAL SHALL CONSULT WITH THE COMMISSIONER OF THE
DEPARTMENT OF TAXATION AND FINANCE PRIOR TO FILING OR INTERVENING IN ANY
ACTION UNDER THIS ARTICLE THAT IS BASED ON THE FILING OF FALSE CLAIMS,
RECORDS OR STATEMENTS MADE UNDER THE TAX LAW. IF THE STATE DECLINES TO
PARTICIPATE OR TO AUTHORIZE PARTICIPATION BY A LOCAL GOVERNMENT IN SUCH
AN ACTION PURSUANT TO SUBDIVISION TWO OF SECTION ONE HUNDRED NINETY OF
THIS ARTICLE, THE QUI TAM PLAINTIFF MUST OBTAIN APPROVAL FROM THE ATTOR-
NEY GENERAL BEFORE MAKING ANY MOTION TO COMPEL THE DEPARTMENT OF TAXA-
TION AND FINANCE TO DISCLOSE TAX RECORDS.
S 4. Subdivision 1 of section 190 of the state finance law, as added
by section 39 of part C of chapter 58 of the laws of 2007, is amended to
read as follows:
1. Civil enforcement actions. The attorney general shall have the
authority to investigate violations under section one hundred eighty-
nine of this article. If the attorney general believes that a person has
violated or is violating such section, then the attorney general may
bring a civil action on behalf of the people of the state of New York or
on behalf of a local government against such person. A local government
also shall have the authority to investigate violations that may have
resulted in damages to such local government under section one hundred
eighty-nine of this article, and may bring a civil action on its own
behalf, OR ON BEHALF OF ANY SUBDIVISION OF SUCH LOCAL GOVERNMENT, to
recover damages sustained by such local government as a result of such
violations. No action may be filed pursuant to this subdivision against
the federal government, the state or a local government, or any officer
S. 8378 4
or employee thereof acting in his or her official capacity. The attorney
general shall consult with the office of medicaid inspector general
prior to filing any action related to the medicaid program.
S 5. Paragraphs (a) and (b) of subdivision 2 of section 190 of the
state finance law, as added by section 39 of part C of chapter 58 of the
laws of 2007, are amended to read as follows:
(a) Any person may bring a qui tam civil action for a violation of
section one hundred eighty-nine of this article on behalf of the PERSON
AND THE people of the state of New York or a local government. No action
may be filed pursuant to this subdivision against the federal govern-
ment, the state or a local government, or any officer or employee there-
of acting in his or her official capacity.
(b) A copy of the complaint and written disclosure of substantially
all material evidence and information the person possesses shall be
served on the state pursuant to subdivision one of section three hundred
seven of the civil practice law and rules. [The] ANY complaint FILED IN
A COURT OF THE STATE OF NEW YORK shall be filed in supreme court in
camera, shall remain under seal for at least sixty days, and shall not
be served on the defendant until the court so orders. THE SEAL SHALL
NOT PRECLUDE THE ATTORNEY GENERAL, A LOCAL GOVERNMENT, OR THE QUI TAM
PLAINTIFF FROM SERVING THE COMPLAINT, ANY OTHER PLEADINGS, OR THE WRIT-
TEN DISCLOSURE OF SUBSTANTIALLY ALL MATERIAL EVIDENCE AND INFORMATION
POSSESSED BY THE PERSON BRINGING THE ACTION, ON RELEVANT STATE OR LOCAL
GOVERNMENT AGENCIES, OR ON LAW ENFORCEMENT AUTHORITIES OF THE STATE, A
LOCAL GOVERNMENT, OR OTHER JURISDICTIONS, SO THAT THE ACTIONS MAY BE
INVESTIGATED OR PROSECUTED, EXCEPT THAT SUCH SEAL APPLIES TO THE AGEN-
CIES OR AUTHORITIES SO SERVED TO THE SAME EXTENT AS THE SEAL APPLIES TO
OTHER PARTIES IN THE ACTION.
If the allegations in the complaint allege a violation of section one
hundred eighty-nine of this article involving damages to a local govern-
ment, then the attorney general may at any time provide a copy of such
complaint and written disclosure to the attorney for such local govern-
ment; provided, however, that if the allegations in the complaint
involve damages only to a city with a population of one million or more,
or only to the state and such a city, then the attorney general shall
provide such complaint and written disclosure to the corporation counsel
of such city within thirty days.
The state may elect to supersede or intervene and proceed with the
action, or to authorize a local government that may have sustained
damages to supersede or intervene, within sixty days after it receives
both the complaint and the material evidence and information; provided,
however, that if the allegations in the complaint involve damages only
to a city with a population of one million or more, then the attorney
general may not supersede or intervene in such action without the
consent of the corporation counsel of such city. The attorney general
shall consult with the office of the medicaid inspector general prior to
superseding or intervening in any action related to the medicaid
program. The attorney general may, for good cause shown, move the court
for extensions of the time during which the complaint remains under seal
under this subdivision. Any such motions may be supported by affidavits
or other submissions in camera.
S 6. Paragraph (d) of subdivision 2 of section 190 of the state
finance law, as added by section 39 of part C of chapter 58 of the laws
of 2007, is amended to read as follows:
(d) If the state notifies the court that it intends to file a
complaint against the defendant and thereby be substituted as the plain-
S. 8378 5
tiff in the action, or to permit a local government to do so, such
complaint must be filed within thirty days after the notification to the
court. FOR STATUTE OF LIMITATIONS PURPOSES, ANY SUCH COMPLAINT FILED BY
THE STATE OR A LOCAL GOVERNMENT SHALL RELATE BACK TO THE FILING DATE OF
THE COMPLAINT OF THE QUI TAM PLAINTIFF, TO THE EXTENT THAT THE CAUSE OF
ACTION OF THE STATE OR LOCAL GOVERNMENT ARISES OUT OF THE CONDUCT, TRAN-
SACTIONS, OR OCCURRENCES SET FORTH, OR ATTEMPTED TO BE SET FORTH, IN THE
PRIOR COMPLAINT OF THE QUI TAM PLAINTIFF.
S 7. Paragraph (f) of subdivision 2 of section 190 of the state
finance law is amended by adding a new closing paragraph to read as
follows:
THE QUI TAM PLAINTIFF SHALL PROVIDE THE STATE OR ANY APPLICABLE LOCAL
GOVERNMENT WITH A COPY OF ANY DOCUMENT FILED WITH THE COURT ON OR ABOUT
THE DATE IT IS FILED, OR ANY ORDER ISSUED BY THE COURT ON OR ABOUT THE
DATE IT IS ISSUED. A QUI TAM PLAINTIFF SHALL NOTIFY THE STATE OR ANY
APPLICABLE LOCAL GOVERNMENT WITHIN FIVE BUSINESS DAYS OF ANY DECISION,
ORDER OR VERDICT RESULTING IN JUDGMENT IN FAVOR OF THE STATE OR LOCAL
GOVERNMENT.
S 8. Subdivision 9 of section 190 of the state finance law, as added
by section 39 of part C of chapter 58 of the laws of 2007, is amended to
read as follows:
9. Certain actions barred. [No court shall have jurisdiction over a
qui tam civil action brought pursuant to subdivision two of this
section:
(a) based on allegations or transactions which are the subject of a
pending civil action or an administrative action in which the state or a
local government is already a party;
(b) derived from public disclosure of allegations or transactions in a
criminal, civil, or administrative hearing, in a legislative or adminis-
trative report, hearing, audit or investigation, or from the news media,
unless the person who initiated the action is an original source of the
information;]
(A) THE COURT SHALL DISMISS A QUI TAM ACTION UNDER THIS ARTICLE IF:
[(c)] (I) IT IS BASED ON ALLEGATIONS OR TRANSACTIONS WHICH ARE THE
SUBJECT OF A PENDING CIVIL ACTION OR AN ADMINISTRATIVE ACTION IN WHICH
THE STATE OR A LOCAL GOVERNMENT IS ALREADY A PARTY;
(II) the [agency] STATE OR LOCAL GOVERNMENT has reached a binding
settlement or other agreement with the person who [submitted such false
claims] VIOLATED SECTION ONE HUNDRED EIGHTY-NINE OF THIS ARTICLE resolv-
ing the matter and such agreement has been approved in writing by the
attorney general, or by the APPLICABLE local government attorney [if the
matter involves allegations of false claims submitted to a local govern-
ment]; or
[(d)] (III) against a member of the legislature, a member of the judi-
ciary, or a senior executive branch official if the action is based on
evidence or information known to the state when the action was brought.
(B) THE COURT SHALL DISMISS A QUI TAM ACTION UNDER THIS ARTICLE,
UNLESS OPPOSED BY THE STATE OR AN APPLICABLE LOCAL GOVERNMENT, OR UNLESS
THE QUI TAM PLAINTIFF IS AN ORIGINAL SOURCE OF THE INFORMATION, IF
SUBSTANTIALLY THE SAME ALLEGATIONS OR TRANSACTIONS AS ALLEGED IN THE
ACTION WERE PUBLICLY DISCLOSED:
(I) IN A STATE OR LOCAL GOVERNMENT CRIMINAL, CIVIL, OR ADMINISTRATIVE
HEARING IN WHICH THE STATE OR A LOCAL GOVERNMENT OR ITS AGENT IS A
PARTY;
(II) IN A FEDERAL, NEW YORK STATE OR NEW YORK LOCAL GOVERNMENT REPORT,
HEARING, AUDIT, OR INVESTIGATION THAT IS MADE ON THE PUBLIC RECORD OR
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DISSEMINATED BROADLY TO THE GENERAL PUBLIC; PROVIDED THAT SUCH INFORMA-
TION SHALL NOT BE DEEMED "PUBLICLY DISCLOSED" IN A REPORT OR INVESTI-
GATION BECAUSE IT WAS DISCLOSED OR PROVIDED PURSUANT TO ARTICLE SIX OF
THE PUBLIC OFFICERS LAW, OR UNDER ANY OTHER FEDERAL, STATE OR LOCAL LAW,
RULE OR PROGRAM ENABLING THE PUBLIC TO REQUEST, RECEIVE OR VIEW DOCU-
MENTS OR INFORMATION IN THE POSSESSION OF PUBLIC OFFICIALS OR PUBLIC
AGENCIES;
(III) IN THE NEWS MEDIA, PROVIDED THAT SUCH ALLEGATIONS OR TRANS-
ACTIONS ARE NOT "PUBLICLY DISCLOSED" IN THE "NEWS MEDIA" MERELY BECAUSE
INFORMATION OF ALLEGATIONS OR TRANSACTIONS HAVE BEEN POSTED ON THE
INTERNET OR ON A COMPUTER NETWORK.
S 9. Section 191 of the state finance law, as added by section 39 of
part C of chapter 58 of the laws of 2007, is amended to read as follows:
S 191. Remedies [of employees]. 1. Any CURRENT OR FORMER employee,
CONTRACTOR, OR AGENT of any private or public employer who is
discharged, demoted, suspended, threatened, harassed or in any other
manner discriminated against in the terms and conditions of employment,
[by his or her employer] OR OTHERWISE HARMED OR PENALIZED BY AN EMPLOY-
ER, OR A PROSPECTIVE EMPLOYER, because of lawful acts done by the
employee [on behalf of the employer], CONTRACTOR, AGENT, or ASSOCIATED
others in furtherance of an action brought under this article[, includ-
ing the investigation for, initiation of, testimony for, or assistance
in an action filed or to be filed under this section] OR OTHER EFFORTS
TO STOP ONE OR MORE VIOLATIONS OF THIS ARTICLE, shall be entitled to all
relief necessary to make the employee, CONTRACTOR OR AGENT whole. Such
relief shall include but not be limited to:
(a) an injunction to restrain continued discrimination;
(b) HIRING, CONTRACTING OR reinstatement to the position such [employ-
ee] PERSON would have had but for the discrimination or to an equivalent
position;
(c) reinstatement of full fringe benefits and seniority rights;
(d) payment of two times back pay, plus interest; and
(e) compensation for any special damages sustained as a result of the
discrimination, including litigation costs and reasonable attorneys'
fees.
2. FOR PURPOSES OF THIS SECTION, A "LAWFUL ACT" SHALL INCLUDE, BUT NOT
BE LIMITED TO, OBTAINING OR TRANSMITTING TO THE STATE, A LOCAL GOVERN-
MENT, A QUI TAM PLAINTIFF, OR PRIVATE COUNSEL SOLELY EMPLOYED TO INVES-
TIGATE, POTENTIALLY FILE, OR FILE A CAUSE OF ACTION UNDER THIS ARTICLE,
DOCUMENTS, DATA, CORRESPONDENCE, ELECTRONIC MAIL, OR ANY OTHER INFORMA-
TION, EVEN THOUGH SUCH ACT MAY VIOLATE A CONTRACT, EMPLOYMENT TERM, OR
DUTY OWED TO THE EMPLOYER OR CONTRACTOR, SO LONG AS THE POSSESSION AND
TRANSMISSION OF SUCH DOCUMENTS ARE FOR THE SOLE PURPOSE OF FURTHERING
EFFORTS TO STOP ONE OR MORE VIOLATIONS OF THIS ARTICLE. NOTHING IN THIS
SUBDIVISION SHALL BE INTERPRETED TO PREVENT ANY LAW ENFORCEMENT AUTHORI-
TY FROM BRINGING A CIVIL OR CRIMINAL ACTION AGAINST ANY PERSON FOR
VIOLATING ANY PROVISION OF LAW.
3. An employee, CONTRACTOR OR AGENT described in subdivision one of
this section may bring an action in the appropriate supreme court for
the relief provided in this section.
S 10. Subdivision 1 of section 192 of the state finance law, as added
by section 39 of part C of chapter 58 of the laws of 2007, is amended to
read as follows:
1. A civil action under this article shall be commenced no later
than[:
S. 8378 7
(a) six years after the date on which the violation of section one
hundred eighty-nine of this article is committed; or
(b) three years after the date when facts material to the right of
action are known or reasonably should have been known by the official of
the state or local government charged with responsibility to act in the
circumstances, but in no event more than] ten years after the date on
which the violation OF THIS ARTICLE is committed[, whichever occurs
last]. Notwithstanding any other provision of law, for the purposes of
this article, an action under this article is commenced by the filing of
the complaint [in the supreme court].
S 11. Section 192 of the state finance law is amended by adding a new
subdivision 1-a to read as follows:
(1-A) FOR PURPOSES OF APPLYING RULE THREE THOUSAND SIXTEEN OF THE
CIVIL PRACTICE LAW AND RULES, IN PLEADING AN ACTION BROUGHT UNDER THIS
ARTICLE THE QUI TAM PLAINTIFF SHALL NOT BE REQUIRED TO IDENTIFY SPECIFIC
CLAIMS THAT RESULT FROM AN ALLEGED COURSE OF MISCONDUCT, OR ANY SPECIFIC
RECORDS OR STATEMENTS USED, IF THE FACTS ALLEGED IN THE COMPLAINT, IF
ULTIMATELY PROVEN TRUE, WOULD PROVIDE A REASONABLE INDICATION THAT ONE
OR MORE VIOLATIONS OF SECTION ONE HUNDRED EIGHTY-NINE OF THIS ARTICLE
ARE LIKELY TO HAVE OCCURRED, AND IF THE ALLEGATIONS IN THE PLEADING
PROVIDE ADEQUATE NOTICE OF THE SPECIFIC NATURE OF THE ALLEGED MISCONDUCT
TO PERMIT THE STATE OR A LOCAL GOVERNMENT EFFECTIVELY TO INVESTIGATE AND
DEFENDANTS FAIRLY TO DEFEND THE ALLEGATIONS MADE.
S 12. Paragraph (a) of subdivision 2 of section 190 of the state
finance law, is amended by adding a new closing paragraph to read as
follows:
FOR PURPOSES OF SUBPARAGRAPHS (I) AND (IV) OF PARAGRAPH (A) OF SUBDI-
VISION EIGHT OF SECTION SEVENTY-THREE OF THE PUBLIC OFFICERS LAW, ANY
ACTIVITY BY A FORMER GOVERNMENT EMPLOYEE IN CONNECTION WITH THE SECURING
OF RIGHTS, PROTECTIONS OR BENEFITS RELATED TO PREPARING OR FILING AN
ACTION UNDER THIS ARTICLE SHALL NOT BE DEEMED TO BE AN APPEARANCE OR
PRACTICE BEFORE ANY AGENCY.
S 13. This act shall take effect fourteen days after it shall have
become a law and shall apply to claims, records or statements made or
used prior to, on or after April 1, 2007.
