Relates to fraud enforcement

BILL NUMBER:S8378 REVISED 06/28/10

Title of bill

An act to amend the state finance law, in relation to establishing the New York fraud, enforcement and recovery act

Purpose

The purpose of this act is to conform article thirteen of state finance law with 31 U.S.C. 3729 et seq. to ensure that the state continues to receive additional federal funds under section 6031 of the United States Deficit Reduction Act of 2005, and to empower and protect whistleblowers that file an action related to the theft of government funds or property.

Legislative history

This is a new bill.

Summary of provisions

Section 1: Amends section 188 of article 13 of state finance law to modify and conform certain definitions to with recent amendments to federal law.

Sections 2 and 3: Amends section 189(1) of article 13 of state finance law to conform liability provisions for defrauding the government with recent amendments to federal law, and changes other provisions related to fraud under the tax law.

Section 4: Amends section 190(1) of article 13 of the state finance law to make a technical correction related to local government enforcement actions.

Section 5: Amends section 190(2) (a) and (b) of article 13 of state finance law to conform the seal provision for civil fraud actions filed by relators with that of federal law.

Section 6: Amends section 190(2) (d) of article 13 of state finance law to apply the "relation back" doctrine in accordance with recent amendments to federal law.

Section 7; Amends section 190(2) (f) of state finance law to list rules for whistle-blowers who act on behalf of the state or a. local government.

Section 8: Amends section 190(9) of article 13 of state finance law in accordance with recent amendments to federal law with respect to civil fraud actions filed by relators, and to clarify definitions that have resulted in confusion or inconsistent law enforcement.

Section 9: Amends section 191 of article 13 of state finance law in accordance with recent amendments to federal law, and adopts additional protections for whistle-blowers against retaliation by employers.

Section 10: Amends section 192(1) of article 13 of state finance law so that the six-to-ten years statute of limitations for filing a civil fraud action to recover stolen government funds or property is changed to ten years for all cases, thus eliminating inconsistent litigation and confusion over the current factoral-based test of when a certain limitations applies to a corresponding fraud action.

Section 12: Amendments section 192 of article 13 of state finance law to clarify how section 3016 of the CPLR applies to a civil fraud action filed under article 13.

Section 13: Sets the effective date for the statute for 14 days after enactment, and makes it apply to false claims, records or statements covered under current law.

Fiscal implications

This bill will ensure that the state receives its current share of health care recoveries from the federal government, which amount to approximately to over $20 million a year if the share was reduced because of recent changes to federal law.

The bill will also increase the amount of stolen funds and property recovered by the state and local governments. It will also decrease the amount of state and local government funds and property lost to fraud by deterring would-be fraudsters from using false claims, records or statements to obtain government funds or property.

Provides additional recoveries to local governments that successfully prosecute false claims, records or statements.

Effective date

This bill would be effective 14 days after passage.