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A01431 Summary:

BILL NOA01431
 
SAME ASSAME AS S01120
 
SPONSORDinowitz
 
COSPNSRGriffin, Englebright, Galef, Abinanti, Seawright
 
MLTSPNSRMcDonough
 
Amd §190, St Fin L
 
Requires the court to increase the amount of the award to a person who initiates a qui tam action where such action includes disclosure of information related to the use of government funds during a state of emergency.
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A01431 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1431
 
SPONSOR: Dinowitz
  TITLE OF BILL: An act to amend the state finance law, in relation to increasing the amount of the award to a person who initiates a qui tam action where such action includes disclosure of information related to the use of government funds during a state of emergency   PURPOSE: This legislation will permit courts to increase the award granted to persons who initiate a qui tam action related to information disclosures during a declaration of a state of emergency.   SUMMARY OF PROVISIONS: Section 1: Amends the state finance law to increase the amount awarded to an individual who initiates the qui tam action if the action is based on the disclosure of specific information on the use of government funds during a declaration of a state of emergency. Section 2: Effective date.   JUSTIFICATION: COVID-19 is a public health crisis, which has crippled the economy, disrupted supply chains and financial markets, and has created a short- age of vital materials like ventilators, testing kits, and personal protective equipment. In response to the pandemic, the state government has taken unprecedented action to suspend normal procurement protocols and spend billions of dollars to secure critical supplies and equipment to prioritize the health and safety of New Yorkers. As with other states of emergency - like superstorm Sandy or after September 11th - the need to respond swiftly creates opportunities for perpetrators of fraud. The Federal government has already announced it will "prioritize the investigation and prosecution of Coronavirus-related fraud schemes" and established a national hotline for whistleblowers to report suspected fraud. Indeed, there are widespread media accounts of potentially frau- dulent acts perpetrated on our state during the COVID-19 emergency and the state has admitted that it had to cancel a number of large contracts. New York's False Claims Act helps combat fraud, since it allows private citizens to file civil lawsuits on behalf of the government to help recover defrauded money. By filing a qui tam whistleblower lawsuit, citizens may be rewarded a percentage of the money recovered, depending on the circumstances. This legislation will require courts to take into consideration, when deciding the percentage of money to reward to a private citizen, whether the information brought forward pertains to the use of government funds during a state of emergency. If the government prevails, the whistleblower will be able to recover five percent above the base recovery amount. Currently, a successful whistleblower will receive between 15 and 30 percent of the. proceeds. With New York combating a pandemic, government funds are limited, and in such dire circumstances, we must incentivize whistleblowers to come forward with information to assist the state recover funds and deter criminal deal- ings. This legislation will change the current law to allow courts to increase the amount of proceeds by up to 5 percent if the government intervenes, 10 percent if it does not, and the disclosure is about the use of government funds defrauded during a state of emergency.   LEGISLATIVE HISTORY: 2019-20 - A.10461 - reported referred to ways and means / S.8353 - REFERRED TO FINANCE   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: This act shall take effect immediately.
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A01431 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1431
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 11, 2021
                                       ___________
 
        Introduced  by M. of A. DINOWITZ, GRIFFIN, ENGLEBRIGHT, GALEF, ABINANTI,
          SEAWRIGHT -- Multi-Sponsored by -- M. of A. McDONOUGH -- read once and
          referred to the Committee on Judiciary
 
        AN ACT to amend the state finance law, in  relation  to  increasing  the
          amount  of  the award to a person who initiates a qui tam action where
          such action includes disclosure of information related to the  use  of
          government funds during a state of emergency
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1.  Paragraphs (a) and (b) of subdivision 6 of section 190  of
     2  the state finance law, as amended by section 9-b of part A of chapter 56
     3  of the laws of 2013, are amended to read as follows:
     4    (a) If the attorney general elects to convert the qui tam civil action
     5  into  an  attorney  general  enforcement  action,  or  to permit a local
     6  government to convert the action into a civil enforcement action by such
     7  local government, or if the  attorney  general  or  a  local  government
     8  elects  to  intervene  in  the  qui tam civil action, then the person or
     9  persons who initiated the qui tam civil  action  collectively  shall  be
    10  entitled  to  receive  between  fifteen  and  twenty-five percent of the
    11  proceeds recovered in the action or in settlement  of  the  action.  The
    12  court  shall  determine the percentage of the proceeds to which a person
    13  commencing a qui tam civil action is entitled, by considering the extent
    14  to which the plaintiff substantially contributed to the  prosecution  of
    15  the action. Where the court finds that the action was based primarily on
    16  disclosures  of specific information (other than information provided by
    17  the person bringing the action) relating to allegations or  transactions
    18  in  a  criminal,  civil  or  administrative hearing, in a legislative or
    19  administrative report, hearing, audit or investigation, or from the news
    20  media, the court may award such sums as it considers appropriate, but in
    21  no case more than ten percent of the proceeds, taking into  account  the
    22  significance  of  the  information and the role of the person or persons
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01221-01-1

        A. 1431                             2
 
     1  bringing the action in advancing the case to litigation. Where the court
     2  finds that the action was based on disclosure  of  specific  information
     3  related  to  the use of government funds during a declaration of a state
     4  of emergency, the court shall increase the percentage of the proceeds to
     5  which  the person commencing such qui tam civil action is entitled by up
     6  to five percent more than the maximum  percentage  allowed  pursuant  to
     7  this paragraph. Any such person shall also receive an amount for reason-
     8  able  expenses  that  the court finds to have been necessarily incurred,
     9  reasonable attorneys' fees, and costs pursuant to article eighty-one  of
    10  the  civil  practice  law  and rules. All such expenses, fees, and costs
    11  shall be awarded against the defendant.
    12    (b) If the attorney general or a local government does  not  elect  to
    13  intervene  or convert the action, and the action is successful, then the
    14  person or persons  who  initiated  the  qui  tam  action  which  obtains
    15  proceeds  shall  be  entitled  to receive between twenty-five and thirty
    16  percent of the proceeds recovered in the action  or  settlement  of  the
    17  action.  The  court  shall  determine  the percentage of the proceeds to
    18  which a person commencing a qui tam civil action is entitled, by consid-
    19  ering the extent to which the plaintiff substantially contributed to the
    20  prosecution of the action. Where the court finds  that  the  action  was
    21  based  on  disclosure  of  specific  information  related  to the use of
    22  government funds during a declaration of a state of emergency, the court
    23  shall increase the percentage  of  the  proceeds  to  which  the  person
    24  commencing  such  qui  tam civil action is entitled by up to ten percent
    25  more than the maximum percentage allowed  pursuant  to  this  paragraph.
    26  Such  person  shall  also receive an amount for reasonable expenses that
    27  the court finds to have been necessarily incurred, reasonable attorneys'
    28  fees, and costs pursuant to article eighty-one of the civil practice law
    29  and rules. All such expenses, fees, and costs shall be  awarded  against
    30  the defendant.
    31    § 2. This act shall take effect immediately.
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