PRINTER'S NO. 21
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 42
Session of
2021
INTRODUCED BY GROVE, DUNBAR, PICKETT, KEEFER, RYAN, SAYLOR,
ROWE, JAMES, MENTZER, JOZWIAK AND STRUZZI, JANUARY 11, 2021
REFERRED TO COMMITTEE ON JUDICIARY, JANUARY 11, 2021
AN ACT
1 Providing for liability for false claims, for adoption of
2 congressional intent of the Federal False Claims Act, for
3 damages, costs and civil penalties, for powers of Attorney
4 General, for civil investigative demands and for COVID-19-
5 related liability.
6 TABLE OF CONTENTS
7 Chapter 1. Preliminary Provisions
8 Section 101. Short title.
9 Section 102. Declaration of policy.
10 Section 103. Definitions.
11 Chapter 3. False Claims
12 Section 301. Acts subjecting persons to liability and damages.
13 Section 302. Attorney General investigations, prosecutions and
14 civil actions.
15 Section 303. Civil investigative demands.
16 Section 304. Disposition of Commonwealth's proceeds.
17 Section 305. Report.
18 Section 306. Statute of limitations, burden of proof and
19 estoppel.
 1 Section 307. Relief from retaliatory actions.
2 Section 308. Actions and remedies under other laws.
3 Section 309. Qualification of act for increase share of
4 recoveries.
5 Section 310. Rules of procedure.
6 Section 311. Implementation.
7 Section 312. Jurisdiction and Attorney General as relator in
8 Federal false claims actions.
9 Chapter 5. COVID-19 Related Liability
10 Section 501. Definitions.
11 Section 501.1. School and child care liability.
12 Section 502. Personal protective equipment liability.
13 Section 503. Business or government services liability.
14 Section 504. Covered provider liability.
15 Section 505. Application of chapter.
16 Section 506. Construction of chapter.
17 Chapter 7. Miscellaneous Provisions
18 Section 701. Nonseverability.
19 Section 702. Expiration.
20 Section 703. Effective date.
21 The General Assembly of the Commonwealth of Pennsylvania
22 hereby enacts as follows:
23 CHAPTER 1
24 PRELIMINARY PROVISIONS
25 Section 101. Short title.
26 This act shall be known and may be cited as the Commonwealth
27 Fraud Prevention and COVID-19-Related Liability Act.
28 Section 102. Declaration of policy.
29 The General Assembly declares that this act adopts the intent
30 of the Congress of the United States in enacting the False
20210HB0042PN0021 - 2 -
 1 Claims Act (Public Law 97-258, 31 U.S.C. §§ 3729-3733) on
2 September 13, 1982, including the amendments enacted October 27,
3 1986 (Public Law 99-562, 100 Stat. 3153), and all subsequent
4 amendments.
5 Section 103. Definitions.
6 The following words and phrases when used in this act shall
7 have the meanings given to them in this section unless the
8 context clearly indicates otherwise:
9 "Claim." As follows:
10 (1) From the effective date of this section through
11 December 31, 2021, a request or demand for money or property
12 utilizing Federal or State funds appropriated in response to
13 COVID-19.
14 (2) Beginning January 1, 2022, a request or demand for
15 money or property, whether under contract or otherwise and
16 regardless of whether the Commonwealth has title to the money
17 or property that is presented, submitted or otherwise made
18 to:
19 (i) An employee, officer or agent of the
20 Commonwealth.
21 (ii) A contractor, grantee or other recipient, and
22 any portion of the money or property will be spent or
23 used on the Commonwealth's behalf or to advance a program
24 or interest of the Commonwealth, and the Commonwealth:
25 (A) provides or has provided any portion of the
26 money or property requested or demanded; or
27 (B) will reimburse the contractor, grantee or
28 other recipient for any portion of the money or
29 property that is requested or demanded.
30 (3) The term does not include requests or demands for
20210HB0042PN0021 - 3 -
 1 money or property that the Commonwealth has paid to an
2 individual as compensation for employment or as an income
3 subsidy with no restrictions on the individual's use of the
4 money or property.
5 (4) To the extent it is not connected to a request or
6 demand for money or property, a filing with the Commonwealth
7 pursuant to the Commonwealth's insurance laws shall not
8 constitute a claim.
9 "COVID-19." The novel coronavirus as identified in the
10 Governor's proclamation of disaster emergency issued on March 6,
11 2020, published at 50 Pa.B. 1644 (March 21, 2020).
12 "Knowingly." As follows:
13 (1) Whenever a person, with respect to information, does
14 any of the following:
15 (i) Has actual knowledge of the information.
16 (ii) Acts in deliberate ignorance of the truth or
17 falsity of the information.
18 (iii) Acts in reckless disregard of the truth or
19 falsity of the information.
20 (2) Proof of specific intent to defraud is not required.
21 "Legal claim." A claim for relief at law or equity, whether
22 contemplated or asserted, including any claim, demand, account,
23 note or any other cause of action or liability.
24 "Material." A natural tendency to influence, or be capable
25 of influencing, the payment or receipt of money or property.
26 "Obligation." An established duty, whether or not fixed,
27 arising from any of the following:
28 (1) An express or implied contractual relationship.
29 (2) An express or implied grantor-grantee relationship.
30 (3) An express or implied licensor-licensee
20210HB0042PN0021 - 4 -
 1 relationship.
2 (4) A fee-based or similar relationship.
3 (5) A statute or regulation.
4 (6) The retention of an overpayment.
5 "Official use." A use that is consistent with the law and
6 the regulations and policies of the Office of Attorney General,
7 including the following:
8 (1) Use in connection with internal memoranda and
9 reports.
10 (2) Communications between the Office of Attorney
11 General and a Federal, State or local government agency or a
12 contractor of a Federal, State or local government agency,
13 undertaken in furtherance of an investigation or prosecution
14 of an action.
15 (3) Interviews of a qui tam plaintiff or other witness.
16 (4) Oral examinations.
17 (5) Depositions.
18 (6) Preparation for and response to civil discovery
19 requests.
20 (7) Introduction into the record of an action or
21 proceeding.
22 (8) Applications, motions, memoranda and briefs
23 submitted to a court or other tribunal.
24 (9) Communications with investigators, auditors,
25 consultants and experts, the counsel of other parties,
26 arbitrators and mediators, concerning an investigation,
27 action or proceeding.
28 "Original source." An individual who:
29 (1) prior to a public disclosure under section 302(f)
30 (2), has voluntarily disclosed to the Commonwealth the
20210HB0042PN0021 - 5 -
 1 information on which the allegations or transactions in a
2 claim are based; or
3 (2) has knowledge that is independent of and materially
4 adds to the publicly disclosed allegations or transactions
5 and who has voluntarily provided the information to the
6 Commonwealth before filing an action under section 302.
7 "Person." A natural person, corporation, firm, association,
8 organization, partnership, limited liability company, business,
9 trust, business trust, estate or foundation.
10 "Qui tam plaintiff." A person bringing a civil action under
11 section 302.
12 CHAPTER 3
13 FALSE CLAIMS
14 Section 301. Acts subjecting persons to liability and damages.
15 (a) Liability.--A person who commits an act prohibited under
16 subsection (b) shall be liable to the Commonwealth for three
17 times the amount of damages that the Commonwealth sustains
18 because of the act of that person.
19 (b) Prohibited acts.--A person who commits any of the
20 following acts shall also be liable to the Commonwealth, subject
21 to subsection (f), for a civil penalty of not less than $5,500
22 and not more than $11,000 for each violation:
23 (1) Knowingly presents or causes to be presented a false
24 or fraudulent claim for payment or approval.
25 (2) Knowingly makes, uses or causes to be made or used,
26 a false record or statement material to a false or fraudulent
27 claim.
28 (3) Has possession, custody or control of property or
29 money used or to be used by the Commonwealth and knowingly
30 delivers or causes to be delivered less than all of the money
20210HB0042PN0021 - 6 -
 1 or property.
2 (4) Is authorized to make or deliver a document
3 certifying receipt of property used or to be used by the
4 Commonwealth and, intending to defraud the Commonwealth,
5 makes or delivers a receipt without completely knowing that
6 the information on the receipt is true.
7 (5) Knowingly buys or receives as a pledge of an
8 obligation or debt, public property from an officer or
9 employee of the Commonwealth who lawfully may not sell or
10 pledge the property.
11 (6) Knowingly makes, uses or causes to be made or used,
12 a false record or statement material to an obligation to pay
13 or transmit money or property to the Commonwealth or
14 knowingly conceals, or knowingly and improperly avoids or
15 decreases, an obligation to pay or transmit money or property
16 to the Commonwealth.
17 (7) Knowingly fails to disclose a fact, event or
18 occurrence material to an obligation to pay or transmit money
19 or property to Commonwealth.
20 (8) Is a beneficiary of an inadvertent submission of a
21 false claim, subsequently discovers the falsity of the claim
22 and fails to disclose the false claim to the Commonwealth
23 within a reasonable time after discovery of the false claim.
24 (9) Conspires to commit a violation of paragraph (1),
25 (2), (3), (4), (5), (6), (7) or (8).
26 (c) Damage limitation.--Notwithstanding the provisions of
27 subsection (a), the court may assess not less than two times the
28 amount of damages that the Commonwealth sustains because of the
29 act of the person if the court finds all of the following:
30 (1) The person that commits the violation under this
20210HB0042PN0021 - 7 -
 1 section furnished to the Commonwealth officials who are
2 responsible for investigating false claims violations with
3 all information known to that person about the violation
4 within 45 days after the date on which the person first
5 obtained the information.
6 (2) The person fully cooperated with an investigation by
7 the Commonwealth.
8 (3) At the time when the person furnished the
9 Commonwealth with information about the violation under this
10 section or at the time when an administrative action is
11 commenced with respect to the violation, the person did not
12 have actual knowledge of the existence of an investigation
13 into the violation.
14 (d) Exclusion.--This section does not apply to claims,
15 records or statements made under the act of March 4, 1971
16 (P.L.6, No.2), known as the Tax Reform Code of 1971.
17 (e) Actions to recover damages.--A person who is liable for
18 damages or civil penalties under subsection (a) or (b) shall
19 also be liable to the Commonwealth for the reasonable costs of a
20 civil action brought to recover the damages or civil penalties
21 under subsection (a) or (b), including reasonable costs to the
22 Office of Attorney General.
23 (f) Adjustments.--The civil penalties payable under
24 subsection (b) shall be adjusted from time to time consistent
25 with the Federal Civil Penalties Inflation Adjustment Act of
26 1990 (Public Law 104-410, 28 U.S.C. § 2461).
27 (g) Exemption from disclosure.--Information furnished under
28 subsection (c) shall be exempt from disclosure under the act of
29 February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law.
30 (h) Recipient liability restricted.--A person who is a
20210HB0042PN0021 - 8 -
 1 recipient of public support services shall not be liable under
2 this section unless the person intentionally violates subsection
3 (a) and benefits financially from the violation.
4 Section 302. Attorney General investigations, prosecutions and
5 civil actions.
6 (a) Responsibilities.--The following shall apply:
7 (1) The Attorney General shall investigate a violation
8 of section 301. If the Attorney General finds that a person
9 has violated or is violating section 301, the Attorney
10 General may bring a civil action under this section against
11 that person. Nothing under section 1407 of the act of June
12 13, 1967 (P.L.31, No.21), known as the Human Services Code,
13 shall be construed to limit the authority of the Attorney
14 General to investigate or prosecute violations under section
15 301.
16 (2) The Attorney General may designate a district
17 attorney to serve as the Attorney General's designee,
18 investigate a violation of section 301 and bring a civil
19 action under this section against a person that has violated
20 or is violating section 301. The Attorney General may rescind
21 the designation made under this paragraph.
22 (b) Actions by qui tam plaintiffs.--
23 (1) A qui tam plaintiff may bring a civil action for a
24 violation of section 301 for the qui tam plaintiff and for
25 the Commonwealth in the name of the Commonwealth. Once filed,
26 the action may be dismissed only if the court and the
27 Attorney General give written consent to the dismissal and
28 their reasons for consenting.
29 (2) A copy of the complaint and written disclosure of
30 substantially all material evidence and information the qui
20210HB0042PN0021 - 9 -
 1 tam plaintiff possesses shall be served promptly on the
2 Attorney General as provided for in the Pennsylvania Rules of
3 Civil Procedure or applicable court rules. The complaint
4 shall be filed in camera and shall remain under seal for at
5 least 120 days and shall not be served on the defendant until
6 the court orders the service. The Commonwealth may elect to
7 intervene and proceed with the action within 120 days after
8 the Commonwealth receives the complaint and the material
9 evidence and information.
10 (3) The Commonwealth may, for good cause shown, move the
11 court for extensions of the time during which the complaint
12 remains under seal under paragraph (2). The motions may be
13 supported by affidavits or other submissions in camera. The
14 defendant shall not be required to respond to a complaint
15 filed under this section until the complaint is unsealed and
16 served upon the defendant under the Pennsylvania Rules of
17 Civil Procedure or applicable court rule.
18 (4) Before the expiration of the 120-day period or any
19 extensions obtained under paragraph (3), the Commonwealth
20 shall:
21 (i) proceed with the action; or
22 (ii) notify the court that the Commonwealth declines
23 to take over the action, in which case the qui tam
24 plaintiff shall have the right to conduct the action.
25 (c) Intervention.--When a qui tam plaintiff brings an action
26 under subsection (b), no person other than the Commonwealth may
27 intervene or bring a related action based on the facts
28 underlying the pending action.
29 (d) Rights in qui tam actions.--
30 (1) If the Commonwealth proceeds with the action, the
20210HB0042PN0021 - 10 -
 1 Commonwealth shall have the primary responsibility for
2 prosecuting the action and shall not be bound by an act of
3 the qui tam plaintiff. The qui tam plaintiff shall have the
4 right to continue as a party to the action, subject to the
5 limitations set forth under paragraph (2).
6 (2) The following apply:
7 (i) Upon notice provided to the qui tam plaintiff,
8 the Commonwealth may move to dismiss the action despite
9