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<ns0:Id>20250SB__079997AMD</ns0:Id>
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<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-21</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2025-03-24</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2025-04-10</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:MeasureType>SB</ns0:MeasureType>
<ns0:MeasureNum>799</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Allen</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Allen</ns0:Name>
</ns0:Legislator>
</ns0:Authors>
<ns0:Title>An act to amend Sections 12651, 12652, and 12653 of the Government Code, relating to false claims.</ns0:Title>
<ns0:RelatingClause>false claims</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>False claims: taxation.</ns0:Subject>
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<ns0:DigestText>
<html:p>
(1)
<html:span class="EnSpace"/>
Existing law, the False Claims Act, provides that any person who commits specified acts, including, but not limited to, knowingly presenting a false or fraudulent claim for payment or approval or knowingly making or using a false record or statement material to a false or fraudulent claim, is liable to the state or to the political subdivision for 3 times the amount of damages that the state or political subdivision sustained because of the act and for the costs of a civil action brought to recover any penalties or damages, and is subject to a civil penalty. That act does not apply to claims, records, or statements made under the Revenue and Taxation Code.
</html:p>
<html:p>This bill would instead apply the False Claims Act to claims, records, obligations, or statements made under the Revenue and Taxation Code if the damages pleaded
in the action exceed $200,000, or the taxable income, gross receipts, or total sales of the individual or entity against whom the action is brought, as specified, exceeds $500,000 per taxable year. The bill would allow the Attorney General or prosecuting authority to obtain otherwise confidential records relating to taxes, fees, surcharges, or other obligations under the Revenue and Taxation Code needed to investigate or prosecute the suspected violations, but would otherwise require that information to be kept confidential and subject to the limitation, a violation of which is a crime, on taxpayer information’s collection and use. By expanding the scope of a crime, the bill would impose a state-mandated local program. </html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Existing law requires the Attorney General or the prosecuting authority of a political subdivision to diligently investigate violations of the False Claims Act involving state funds or political subdivision funds,
respectively, and authorizes the Attorney General, the prosecuting authority, or a qui tam plaintiff to bring a civil action against a person who commits those acts. Existing law requires a complaint filed by a private person to be filed in superior court in camera, authorizes the complaint to remain under seal for up to 60 days, and prohibits service on the defendant until the complaint is unsealed.
</html:p>
<html:p>This bill would instead require the complaint to remain under seal for at least 60 days, and would prohibit service on the defendant until the court orders it. The bill would deem a demand for payment or request for payment based on an alleged violation of the False Claims Act by an attorney representing a private person prior to filing a complaint to be a violation of the requirement that the complaint be filed in superior court in camera.</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Existing law provides that an employee, contractor, or agent
shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against because of lawful acts done by the employee, contractor, agent, or associated others in an effort to stop one or more violations of the False Claims Act.
</html:p>
<html:p>This bill would define lawful act for these purposes to include obtaining or transmitting documents, data, correspondence, electronic mail, or any other information, necessary to investigate, potentially file, or file a cause of action under the False Claims Act, even though that act may violate a contract, employment term, or duty owed to the employer or contractor. The bill would also specify that those provisions apply to current and former employees. </html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Existing constitutional provisions require
that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
</html:p>
<html:p>This bill would make legislative findings to that effect.</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
</html:p>
<html:p>This bill would provide that no reimbursement is required by this act for a specified reason.</html:p>
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<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
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<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>YES</ns0:LocalProgram>
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<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>NO</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
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<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 12651 of the
<ns0:DocName>Government Code</ns0:DocName>
is amended to read:
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<ns0:Num>12651.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
Any person who commits any of the following enumerated acts in this subdivision shall have violated this article and shall be liable to the state or to the political subdivision for three times the amount of damages that the state or political subdivision sustains because of the act of that person. A person who commits any of the following enumerated acts shall also be liable to the state or to the political subdivision for the costs of a civil action brought to recover any of those penalties or damages, and shall be liable to the state or political subdivision for a civil penalty of not less than five thousand five hundred dollars ($5,500) and not more than eleven thousand dollars ($11,000) for each violation, as adjusted by the Federal Civil
Penalties Inflation Adjustment Act of 1990, Public Law 101–410 Section 5, 104 Stat. 891, note following 28 U.S.C. Section 2461.
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Knowingly presents or causes to be presented a false or fraudulent claim for payment or approval.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Knowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Conspires to commit a violation of this subdivision.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Has possession, custody, or control of public property or money used or to be used by the state or by any political subdivision and knowingly delivers or causes to be delivered less than all of that property.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Is authorized to make or deliver a document certifying receipt of property used or to be used by the state or by any political subdivision and knowingly makes or delivers a receipt that falsely represents the property used or to be used.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Knowingly buys, or receives as a pledge of an obligation or debt, public property from any person who lawfully may not sell or pledge the property.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Knowingly makes, uses, or causes to be made or used a false record or statement material to an obligation to pay or transmit money or property to the state or to any political subdivision, or knowingly conceals or knowingly and improperly avoids, or decreases an obligation to pay or transmit money or property to the state or to any political subdivision.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
Is a beneficiary of an inadvertent submission of a false claim, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the state or the political subdivision within a reasonable time after discovery of the false claim.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Notwithstanding subdivision (a), the court may assess not less than two times and not more than three times the amount of damages which the state or the political subdivision sustains because of the act of the person described in that subdivision, and no civil penalty, if the court finds all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The person committing the violation furnished officials of the state or of the political subdivision responsible for investigating false claims violations
with all information known to that person about the violation within 30 days after the date on which the person first obtained the information.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The person fully cooperated with any investigation by the state or a political subdivision of the violation.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
At the time the person furnished the state or the political subdivision with information about the violation, no criminal prosecution, civil action, or administrative action had commenced with respect to the violation, and the person did not have actual knowledge of the existence of an investigation into the violation.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Liability under this section shall be joint and several for any act committed by two or more persons.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
This section does not apply to any controversy involving an amount of less than five hundred dollars ($500) in value. For purposes of this subdivision, “controversy” means any one or more false claims submitted by the same person in violation of this article.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
This section does not apply to claims, records, or statements made pursuant to Division 3.6 (commencing with Section 810) of Title 1 or to workers’ compensation claims filed pursuant to Division 4 (commencing with Section 3200) of the Labor Code.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
This section shall apply to claims, records, obligations, or statements made under the Revenue and Taxation Code only if both of the following apply:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The damages pleaded in
the action exceed two hundred thousand dollars ($200,000).
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
One of the following equals or exceeds five hundred thousand dollars ($500,000) for any taxable year subject to any action brought pursuant to this article:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
The taxable income of any person other than a corporation against whom the action is brought, under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
The gross receipts, as defined in Section 25120 of the Revenue and Taxation Code, less returns and allowances of any corporation or other person other than an individual against whom the action is brought, under Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
The sales of any person against whom the action is brought, under Part 1 (commencing with Section 6001) or Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
For purposes of this subdivision only, “person” shall have the meaning ascribed to it in Section 17007 of the Revenue and Taxation Code.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The Attorney General or prosecuting authority shall consult with the taxing authorities to whom the claim, record, or statement was submitted or to whom the obligation was owed 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 Revenue and Taxation Code.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Notwithstanding any other law, the Attorney General or prosecuting authority, but not the qui tam plaintiff, is hereby authorized to obtain otherwise confidential records relating to taxes, fees, surcharges, or other obligations under the Revenue and Taxation Code needed to investigate or prosecute suspected violations of this subdivision from state and local taxing and other governmental authorities in possession of such information and records, and such authorities are hereby authorized to make those disclosures. The taxing and other governmental authorities shall not provide federal tax information without authorization from the Internal Revenue Service.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Any information received pursuant to paragraphs
(3) and (4) shall be kept confidential, except as necessary to investigate and prosecute suspected violations of this subdivision.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
This section does not apply to claims, records, or statements for the assets of a person that have been transferred to the Commissioner of Insurance, pursuant to Section 1011 of the Insurance Code.
</html:p>
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 12652 of the
<ns0:DocName>Government Code</ns0:DocName>
is amended to read:
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<ns0:Num>12652.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The Attorney General shall diligently investigate violations under Section 12651 involving state funds. If the Attorney General finds that a person has violated or is violating Section 12651, the Attorney General may bring a civil action under this section against that person.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If the Attorney General brings a civil action under this subdivision on a claim involving political subdivision funds as well as state funds, the Attorney General shall, on the same date that the complaint is filed in this action, serve by mail with “return receipt requested” a copy of the complaint on the appropriate prosecuting authority.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The prosecuting authority shall have the right to intervene in an action brought by the Attorney General under this subdivision within 60 days after receipt of the complaint pursuant to paragraph (2). The court may permit intervention thereafter upon a showing that all of the requirements of Section 387 of the Code of Civil Procedure have been met.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The prosecuting authority of a political subdivision shall diligently investigate violations under Section 12651 involving political subdivision funds. If the prosecuting authority finds that a person has violated or is violating Section 12651, the prosecuting authority may bring a civil action under this section against that person.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If the prosecuting authority brings a civil action under
this section on a claim involving state funds as well as political subdivision funds, the prosecuting authority shall, on the same date that the complaint is filed in this action, serve a copy of the complaint on the Attorney General.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Within 60 days after receiving the complaint pursuant to paragraph (2), the Attorney General shall do either of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Notify the court that it intends to proceed with the action, in which case the Attorney General shall assume primary responsibility for conducting the action and the prosecuting authority shall have the right to continue as a party.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Notify the court that it declines to proceed with the action, in which case the prosecuting authority shall have the right to conduct
the action.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A person may bring a civil action for a violation of this article for the person and either for the State of California in the name of the state, if any state funds are involved, or for a political subdivision in the name of the political subdivision, if political subdivision funds are exclusively involved. The person bringing the action shall be referred to as the qui tam plaintiff. Once filed, the action may be dismissed only with the written consent of the court and the Attorney General or prosecuting authority of a political subdivision, or both, as appropriate under the allegations of the civil action, taking into account the best interests of the parties involved and the public purposes behind this act. No claim for any violation of Section 12651 may be waived or released by any private person,
except if the action is part of a court-approved settlement of a false claim civil action brought under this section. Nothing in this paragraph shall be construed to limit the ability of the state or political subdivision to decline to pursue any claim brought under this section.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A complaint filed by a private person under this subdivision shall be filed in superior court in camera and shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders. A demand for payment or request for payment based on an alleged violation of Section 12651 that is made prior to filing a complaint under this
subdivision by an attorney representing a private person shall be deemed a violation of the requirement that the complaint be filed in superior court in camera.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
On the same day as the complaint is filed pursuant to paragraph (2), the qui tam plaintiff shall serve by mail with “return receipt requested” the Attorney General with a copy of the complaint and a written disclosure of substantially all material evidence and information the person possesses.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Within 60 days after receiving a complaint and written disclosure of material evidence and information alleging violations that involve state funds but not political subdivision funds, the Attorney General may elect to intervene and proceed with the action.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The
Attorney General may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal pursuant to paragraph (2). The motion may be supported by affidavits or other submissions in camera.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Before the expiration of the 60-day period or any extensions obtained under paragraph (5), the Attorney General shall do either of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Notify the court that it intends to proceed with the action, in which case the action shall be conducted by the Attorney General and the seal shall be lifted.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Notify the court that it declines to proceed with the action, in which case the seal shall be lifted and the qui tam plaintiff shall have the right to conduct the action.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Within 15 days after receiving a complaint alleging violations that exclusively involve political subdivision funds, the Attorney General shall forward copies of the complaint and written disclosure of material evidence and information to the appropriate prosecuting authority for disposition, and shall notify the qui tam plaintiff of the transfer.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Within 45 days after the Attorney General forwards the complaint and written disclosure pursuant to subparagraph (A), the prosecuting authority may elect to intervene and proceed with the action.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The prosecuting authority may, for good cause shown, move for extensions of the time during which the complaint remains under seal. The
motion may be supported by affidavits or other submissions in camera.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Before the expiration of the 45-day period or any extensions obtained under subparagraph (C), the prosecuting authority shall do either of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Notify the court that it intends to proceed with the action, in which case the action shall be conducted by the prosecuting authority and the seal shall be lifted.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Notify the court that it declines to proceed with the action, in which case the seal shall be lifted and the qui tam plaintiff shall have the right to conduct the action.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Within 15 days after receiving a complaint alleging violations that
involve both state and political subdivision funds, the Attorney General shall forward copies of the complaint and written disclosure to the appropriate prosecuting authority, and shall coordinate its review and investigation with those of the prosecuting authority.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Within 60 days after receiving a complaint and written disclosure of material evidence and information alleging violations that involve both state and political subdivision funds, the Attorney General or the prosecuting authority, or both, may elect to intervene and proceed with the action.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The Attorney General or the prosecuting authority, or both, may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2). The motion may be
supported by affidavits or other submissions in camera.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Before the expiration of the 60-day period or any extensions obtained under subparagraph (C), the Attorney General shall do one of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Notify the court that it intends to proceed with the action, in which case the action shall be conducted by the Attorney General and the seal shall be lifted.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Notify the court that it declines to proceed with the action but that the prosecuting authority of the political subdivision involved intends to proceed with the action, in which case the seal shall be lifted and the action shall be conducted by the prosecuting authority.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Notify the court that both it and the prosecuting authority decline to proceed with the action, in which case the seal shall be lifted and the qui tam plaintiff shall have the right to conduct the action.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
If the Attorney General proceeds with the action pursuant to clause (i) of subparagraph (D), the prosecuting authority of the political subdivision shall be permitted to intervene in the action within 60 days after the Attorney General notifies the court of its intentions. The court may authorize intervention thereafter upon a showing that all the requirements of Section 387 of the Code of Civil Procedure have been met.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
The defendant shall not be required to respond to any complaint filed under this section until 30 days after the complaint is unsealed and
served upon the defendant pursuant to Section 583.210 of the Code of Civil Procedure.
</html:p>
<html:p>
(10)
<html:span class="EnSpace"/>
When a person brings an action under this subdivision, no other person may bring a related action based on the facts underlying the pending action.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
No court shall have jurisdiction over an action brought under subdivision (c) against a Member of the State Senate or Assembly, a member of the state judiciary, an elected official in the executive branch of the state, or a member of the governing body of any political subdivision if the action is based on evidence or information known to the state or political subdivision when the action was brought.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A person may not bring an action under subdivision (c)
that is based upon allegations or transactions that are the subject of a civil suit or an administrative civil money penalty proceeding in which the state or political subdivision is already a party.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The court shall dismiss an action or claim under this section, unless opposed by the Attorney General or prosecuting authority of a political subdivision, if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed in any of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
A criminal, civil, or administrative hearing in which the state or prosecuting authority of a political subdivision or their agents are a party.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
A report, hearing, audit, or investigation of the
Legislature, the state, or governing body of a political subdivision.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
The news media.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Subparagraph (A) shall not apply if the action is brought by the Attorney General or prosecuting authority of a political subdivision, or the person bringing the action is an original source of the information.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
For purposes of subparagraph (B), “original source” means an individual who either:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Prior to a public disclosure under subparagraph (A), has voluntarily disclosed to the state or political subdivision the information on which allegations or transactions in a claim are based.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Has knowledge that is independent of, and materially adds to, the publicly disclosed allegations or transactions, and has voluntarily provided the information to the state or political subdivision before filing an action under this section.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
In all actions brought under subdivision (c), except for those in which the complaint alleges one or more violations under Section 12651 involving claims related to California’s Medicaid Program, as defined by the Medi-Cal Act (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code) a court shall not have jurisdiction over an action based upon information discovered by a present or former employee of the state or a political subdivision during the course of that employee’s employment unless that employee first, in good faith, exhausted
existing internal procedures for reporting and seeking recovery of the falsely claimed sums through official channels and unless the state or political subdivision failed to act on the information provided within a reasonable period of time.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
If the state or political subdivision proceeds with the action, it shall have the primary responsibility for prosecuting the action. The qui tam plaintiff shall have the right to continue as a full party to the action.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The state or political subdivision may seek to dismiss the action for good cause notwithstanding the objections of the qui tam plaintiff if the qui tam plaintiff has been notified by the state or political subdivision of the filing of the motion and the court has provided the
qui tam plaintiff with an opportunity to oppose the motion and present evidence at a hearing.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The state or political subdivision may settle the action with the defendant notwithstanding the objections of the qui tam plaintiff if the court determines, after a hearing providing the qui tam plaintiff an opportunity to present evidence, that the proposed settlement is fair, adequate, and reasonable under all of the circumstances.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
If the state or political subdivision elects not to proceed, the qui tam plaintiff shall have the same right to conduct the action as the Attorney General or prosecuting authority would have had if it had chosen to proceed under subdivision (c). If the state or political subdivision so requests, and at its expense, the state or political
subdivision shall be served with copies of all pleadings filed in the action and supplied with copies of all deposition transcripts.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Upon timely application, the court shall permit the state or political subdivision to intervene in an action with which it had initially declined to proceed if the interest of the state or political subdivision in recovery of the property or funds involved is not being adequately represented by the qui tam plaintiff.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
If the state or political subdivision is allowed to intervene under subparagraph (A), the qui tam plaintiff shall retain principal responsibility for the action and the recovery of the parties shall be determined as if the state or political subdivision had elected not to proceed.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
If the Attorney General initiates an action pursuant to subdivision (a) or assumes control of an action initiated by a prosecuting authority pursuant to subparagraph (A) of paragraph (3) of subdivision (b), the office of the Attorney General shall receive a fixed 33 percent of the proceeds of the action or settlement of the claim, which shall be used to support its ongoing investigation and prosecution of false claims.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
If a prosecuting authority initiates and conducts an action pursuant to subdivision (b), the office of the prosecuting authority shall receive a fixed 33 percent of the proceeds of the action or settlement of the claim, which shall be used to support its ongoing investigation and prosecution of false claims.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
If a prosecuting authority intervenes in an action initiated by the Attorney General pursuant to paragraph (3) of subdivision (a) or remains a party to an action assumed by the Attorney General pursuant to subparagraph (A) of paragraph (3) of subdivision (b), the court may award the office of the prosecuting authority a portion of the Attorney General’s fixed 33 percent of the recovery under subparagraph (A), taking into account the prosecuting authority’s role in investigating and conducting the action.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If the state or political subdivision proceeds with an action brought by a qui tam plaintiff under subdivision (c), the qui tam plaintiff shall, subject to paragraphs (4) and (5), receive at least 15 percent but not more than 33 percent of the proceeds of the action or
settlement of the claim, depending upon the extent to which the qui tam plaintiff substantially contributed to the prosecution of the action. When it conducts the action, the Attorney General’s office or the office of the prosecuting authority of the political subdivision shall receive a fixed 33 percent of the proceeds of the action or settlement of the claim, which shall be used to support its ongoing investigation and prosecution of false claims made against the state or political subdivision. When both the Attorney General and a prosecuting authority are involved in a qui tam action pursuant to subparagraph (C) of paragraph (6) of subdivision (c), the court at its discretion may award the prosecuting authority a portion of the Attorney General’s fixed 33 percent of the recovery, taking into account the prosecuting authority’s contribution to investigating and conducting the action.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
If the state or political subdivision does not proceed with an action under subdivision (c), the qui tam plaintiff shall, subject to paragraphs (4) and (5), receive an amount that the court decides is reasonable for collecting the civil penalty and damages on behalf of the government. The amount shall be not less than 25 percent and not more than 50 percent of the proceeds of the action or settlement and shall be paid out of these proceeds.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
If the action is one provided for under paragraph (4) of subdivision (d), the present or former employee of the state or political subdivision is not entitled to any minimum guaranteed recovery from the proceeds. The court, however, may award the qui tam plaintiff those sums from the proceeds as it considers appropriate, but in no case
more than 33 percent of the proceeds if the state or political subdivision goes forth with the action or 50 percent if the state or political subdivision declines to go forth, taking into account the significance of the information, the role of the qui tam plaintiff in advancing the case to litigation, and the scope of, and response to, the employee’s attempts to report and gain recovery of the falsely claimed funds through official channels.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Whether or not the state or political subdivision proceeds with the action, if the court finds that the action was brought by a person who planned and initiated the violation of Section 12651 upon which the action was brought, then the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action that the person would otherwise receive under this
subdivision, taking into account the role of that person in advancing the case to litigation and any relevant circumstances pertaining to the violation. The court, however, shall not award the qui tam plaintiff more than 33 percent of the proceeds if the state or political subdivision goes forth with the action or 50 percent if the state or political subdivision declines to go forth, taking into account the significance of the information, the role of the qui tam plaintiff in advancing the case to litigation, the scope of the person’s involvement in the fraudulent activity, the person’s attempts to avoid or resist the activity, and all other circumstances surrounding the activity.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
The portion of the recovery not distributed pursuant to paragraphs (1) to (5), inclusive, shall revert to the state if the underlying false claims involved state
funds exclusively and to the political subdivision if the underlying false claims involved political subdivision funds exclusively. If the violation involved both state and political subdivision funds, the court shall make an apportionment between the state and political subdivision based on their relative share of the funds falsely claimed.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
For purposes of this section, “proceeds” include civil penalties as well as double or treble damages as provided in Section 12651.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
If the state, political subdivision, or the qui tam plaintiff prevails in or settles any action under subdivision (c), the qui tam plaintiff shall receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable costs and attorney’s fees. All expenses,
costs, and fees shall be awarded against the defendant and under no circumstances shall they be the responsibility of the state or political subdivision.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
If the state or political subdivision does not proceed with the action and the qui tam plaintiff conducts the action, the court may award to the defendant its reasonable attorney’s fees and expenses against the party that proceeded with the action if the defendant prevails in the action and the court finds that the claim was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
If the state or political subdivision proceeds with the action, the court may award the defendant its reasonable attorney’s fees and expenses against the state or political subdivision that proceeded
with the action if the defendant prevails in the action and the court finds that the claim was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
The court may stay an act of discovery of the person initiating the action for a period of not more than 60 days if the Attorney General or local prosecuting authority show that the act of discovery would interfere with an investigation or a prosecution of a criminal or civil matter arising out of the same facts, regardless of whether the Attorney General or local prosecuting authority proceeds with the action. This showing shall be conducted in camera. The court may extend the 60-day period upon a further showing in camera that the Attorney General or local prosecuting authority has pursued the criminal or civil investigation or proceedings with reasonable
diligence and any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceedings.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Upon a showing by the Attorney General or local prosecuting authority that unrestricted participation during the course of the litigation by the person initiating the action would interfere with or unduly delay the Attorney General’s or local prosecuting authority’s prosecution of the case, or would be repetitious, irrelevant, or for purposes of harassment, the court may, in its discretion, impose limitations on the person’s participation, including the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Limiting the number of witnesses the person may call.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Limiting the length of the testimony of the witnesses.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Limiting the person’s cross-examination of witnesses.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Otherwise limiting the participation by the person in the litigation.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
The False Claims Act Fund is hereby created in the State Treasury. Proceeds from the action or settlement of the claim by the Attorney General pursuant to this article shall be deposited into this fund. Moneys in this fund, upon appropriation by the Legislature, shall be used by the Attorney General to support the ongoing investigation and prosecution of false claims in furtherance of this article.
</html:p>
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</ns0:BillSection>
<ns0:BillSection id="id_DCB0721C-408A-402D-B5E1-7795F277BA47">
<ns0:Num>SEC. 3.</ns0:Num>
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Section 12653 of the
<ns0:DocName>Government Code</ns0:DocName>
is amended to read:
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<ns0:LawSection id="id_5CAB7675-0313-4058-A690-61A7F5E47DF1">
<ns0:Num>12653.</ns0:Num>
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<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Any current or former employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of their employment or otherwise harmed or penalized by an employer or contractor because of lawful acts done by the employee, contractor, agent, or associated others in furtherance of an action under this section or other efforts to stop one or more violations of this article.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
For purposes of this section, a “lawful act” shall include, but
not be limited to, obtaining or transmitting to the state, a political subdivision, a qui tam plaintiff, or private counsel employed to investigate, potentially file, or file a cause of action under this article, documents, data, correspondence, electronic mail, or any other information, even though that act may violate a contract, employment term, or duty owed to the employer or contractor.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Nothing in this subdivision shall be interpreted to prevent any law enforcement authority from bringing a civil or criminal action against any person for violating any provision of law.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Relief under this section shall include reinstatement with the same seniority status that the employee, contractor, or agent would have had but for the discrimination, two times the amount of back
pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, and, where appropriate, punitive damages. The defendant shall also be required to pay litigation costs and reasonable attorney’s fees. An action under this section may be brought in the appropriate superior court of the state.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A civil action under this section shall not be brought more than three years after the date when the retaliation occurred.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_41B3CB6A-6302-4143-9C05-0C887ABF4FF0">
<ns0:Num>SEC. 4.</ns0:Num>
<ns0:Content>
<html:p> The Legislature finds and declares that Section 1 of this act, which amends Section 12651 of the Government Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:</html:p>
<html:p>In order to protect the existing confidentiality of tax records, it is necessary to limit the public’s access to these documents. </html:p>
</ns0:Content>
</ns0:BillSection>
<ns0:BillSection id="id_5D6FB43F-50F0-4823-BD95-6C88E23CFEAF">
<ns0:Num>SEC. 5.</ns0:Num>
<ns0:Content>
<html:p>
No reimbursement is required by this act pursuant to Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution.
</html:p>
</ns0:Content>
</ns0:BillSection>
</ns0:Bill>
</ns0:MeasureDoc>
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