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        PRIOR PRINTER'S NOS. 907, 1243                PRINTER'S NO. 1798

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 849 Session of 1999


        INTRODUCED BY KENNEY, FARGO, CLARK, WOGAN, MICOZZIE, ORIE,
           HENNESSEY, GODSHALL, HERMAN, ADOLPH, WALKO, PETRARCA,
           LAUGHLIN, JAMES, DeLUCA, SAINATO, PRESTON, WILT, STABACK,
           SAYLOR, GEIST, E. Z. TAYLOR, MAHER, PESCI, TIGUE, HARHAI,
           MELIO, CURRY, COLAFELLA, TRELLO, WILLIAMS, ROONEY, RUBLEY,
           STEELMAN AND RAMOS, MARCH 10, 1999

        AS REPORTED FROM COMMITTEE ON JUDICIARY, HOUSE OF
           REPRESENTATIVES, AS AMENDED, MAY 11, 1999

                                     AN ACT

     1  Prohibiting false claims; imposing duties on the Attorney
     2     General and on district attorneys; and providing for
     3     procedures and for penalties.

     4                         TABLE OF CONTENTS
     5  Chapter 1.  Preliminary Provisions
     6  Section 101.  Short title.
     7  Section 102.  Definitions.
     8  Section 103.  Construction.
     9  Chapter 3.  False Claims
    10  Section 301.  Offenses defined.
    11  Section 302.  False claims jurisdiction.
    12  Section 303.  Procedure.
    13  Chapter 5.  Qui Tam Actions
    14  Section 501.  General provisions.
    15  Section 502.  Commonwealth funds.
    16  Section 503.  Political subdivision funds.

     1  Section 504.  Complaints relating to Commonwealth and political
     2                 subdivision funds.
     3  Section 505.  Intervention by political subdivision.
     4  Section 506.  Extension of time.
     5  Section 507.  Other actions prohibited.
     6  Section 508.  Exclusions.
     7  Section 509.  Employment-related discovery of information.
     8  Section 510.  Responsibility for prosecution.
     9  Section 511.  Dismissal of action.
    10  Section 512.  Settlement.
    11  Section 513.  Election not to proceed.
    12  Section 514.  Intervention.
    13  Section 515.  Proceeds.
    14  Section 516.  Reversion to General Fund.
    15  Section 517.  Expenses.
    16  Chapter 7.  General Provisions
    17  Section 701.  Stay of discovery.                                  <--
    18  Section 702.  Limitations on participation.
    19  Section 703.  Employee protection.
    20  Section 704.  Limitations.
    21  Section 705.  Remedies.
    22  Section 706.  Enforcement.
    23  Section 707.  Civil investigative demand.
    24  Section 708.  Immunity.
    25  Section 709.  Effective date.
    26  SECTION 701.  RULES OF CIVIL PROCEDURE.                           <--
    27  SECTION 702.  STAY OF DISCOVERY.
    28  SECTION 703.  LIMITATIONS ON PARTICIPATION.
    29  SECTION 704.  EMPLOYEE PROTECTION.
    30  SECTION 705.  LIMITATIONS.
    19990H0849B1798                  - 2 -

     1  SECTION 706.  REMEDIES.
     2  SECTION 707.  ENFORCEMENT.
     3  SECTION 708.  CIVIL INVESTIGATIVE DEMAND.
     4  SECTION 709.  IMMUNITY.
     5  SECTION 710.  REGULATIONS.
     6  SECTION 711.  EFFECTIVE DATE.
     7     The General Assembly of the Commonwealth of Pennsylvania
     8  hereby enacts as follows:
     9                             CHAPTER 1
    10                       PRELIMINARY PROVISIONS
    11  Section 101.  Short title.
    12     This act shall be known and may be cited as the False Claims
    13  Act.
    14  Section 102.  Definitions.
    15     The following words and phrases when used in this act shall
    16  have the meanings given to them in this section unless the
    17  context clearly indicates otherwise:
    18     "Claim."  Any request or demand for money, property or
    19  services made to any employee, officer or agent of the
    20  Commonwealth or of any political subdivision thereof or to any
    21  contractor, subcontractor, grantee or other recipient of the
    22  Commonwealth or any political subdivision thereof, if any
    23  portion of the money, property or services requested or demanded
    24  issued from, was provided or will be reimbursed by the
    25  Commonwealth, referred to as Commonwealth funds, or by any
    26  political subdivision thereof, referred to as political
    27  subdivision funds.
    28     "False."  In addition to its ordinary meaning, this term also
    29  means fraudulent.
    30     "Knowing" or "knowingly."  A person who, with respect to
    19990H0849B1798                  - 3 -

     1  information, does any of the following:
     2         (1)  has actual knowledge of the information;
     3         (2)  acts in deliberate ignorance of the truth or falsity
     4     of the information; or
     5         (3)  acts in reckless disregard of the truth or falsity
     6     of the information.
     7  Proof of specific intent to defraud shall not be required.
     8     "Person."  Any natural person, corporation, county, political
     9  subdivision, firm, association, legal entity, organization,
    10  partnership, business or trust.
    11     "Political subdivision."  Any city, county, tax or assessment
    12  district, municipal or government authority or other legally
    13  authorized local governmental entity in this Commonwealth.
    14     "Proceeds."  The term includes civil penalties as well as
    15  double or treble damages as provided in Chapter 3.
    16     "Prosecuting authority."  The Attorney General and where
    17  appropriate the district attorney of any county in which the
    18  political subdivision, including the county itself, lies.
    19  Section 103.  Construction.
    20     This act shall be liberally and broadly construed to
    21  effectuate its purposes. It shall be applied and interpreted to
    22  promote the public interest to eliminate fraud, waste and abuse
    23  through the submission of false or fraudulent claims in this
    24  Commonwealth or in any of its political subdivisions.
    25                             CHAPTER 3
    26                            FALSE CLAIMS
    27  Section 301.  Offenses defined.
    28     (a)  Liability.--A person who commits any of the following
    29  acts shall be liable to the Commonwealth or to the political
    30  subdivision for three times the amount of damages which the
    19990H0849B1798                  - 4 -

     1  Commonwealth or the political subdivision sustains because of
     2  the act of that person and shall also be liable to the
     3  Commonwealth or to the political subdivision for the costs of an
     4  action brought to recover any of those penalties or damages and
     5  shall be liable to the Commonwealth or political subdivision for
     6  a civil penalty of not less than $5,000 nor more than $10,000
     7  for each false claim:
     8         (1)  Knowingly presents or causes to be presented to an
     9     officer or employee of the Commonwealth or any political
    10     subdivision a false claim for payment or approval.
    11         (2)  Knowingly makes, uses or causes to be made or used a
    12     false record or statement to get a false claim paid or
    13     approved by the Commonwealth or by any political subdivision.
    14         (3)  Conspires to defraud the Commonwealth or any
    15     political subdivision by getting a false claim allowed or
    16     paid by the Commonwealth or by any political subdivision.
    17         (4)  Has possession, custody or control of public
    18     property or money used or to be used by the Commonwealth or
    19     by any political subdivision and knowingly delivers or causes
    20     to be delivered property of lesser quality, quantity or value
    21     than for which the person receives a certificate or receipt.
    22         (5)  Is authorized to make or deliver a document
    23     certifying receipt of property used or to be used by the
    24     Commonwealth or by any political subdivision and knowingly
    25     makes or delivers a receipt that falsely represents the
    26     quality, quantity or value of the property used or to be
    27     used.
    28         (6)  Knowingly buys or receives as a pledge of an
    29     obligation or debt public property from any person who
    30     lawfully may not sell or pledge the property.
    19990H0849B1798                  - 5 -

     1         (7)  Knowingly makes, uses or causes to be made or used a
     2     false record or statement to conceal, avoid or decrease an
     3     obligation to pay or transmit money or property to the
     4     Commonwealth or any political subdivision.
     5         (8)  Unknowingly submits a false claim, is a beneficiary
     6     of payment by the Commonwealth or political subdivision for
     7     that claim, subsequently discovers or has reasonable grounds
     8     to discover that the claim was false and fails to disclose
     9     that the claim was false. Disclosure shall be made in writing  <--
    10     to the Commonwealth or political subdivision within a
    11     reasonable time, but in no event longer than 90 days after
    12     discovery of the false claim.
    13     (b)  Reduced assessment.--Notwithstanding subsection (a), the
    14  court shall assess not less than two times nor more than three
    15  times the amount of damages which the Commonwealth or the
    16  political subdivision sustains because of the act of the person
    17  described in subsection (a)(1), and no civil penalty, if the
    18  court finds all of the following:
    19         (1)  The person committing the violation furnished the
    20     prosecuting authority with all information known to that
    21     person about the violation within 60 days after the date on
    22     which the person first obtained the information.
    23         (2)  The person fully cooperated with any investigation
    24     by the prosecuting authority of the violation.
    25         (3)  At the time the person furnished the prosecuting
    26     authority with information about the violation, no criminal
    27     prosecution, civil action or administrative action had
    28     commenced with respect to the violation and the person did
    29     not have knowledge or notice of the existence of an
    30     investigation into the violation.
    19990H0849B1798                  - 6 -

     1     (c)  Joint and several liability.--Liability under this
     2  section shall be joint and several for any act committed by two
     3  or more persons.
     4     (d)  Limitation.--
     5         (1)  This section does not apply to any controversy
     6     involving an aggregate amount of less than $2,500 in value or
     7     to any claims involving benefits or compensation conferred
     8     under the act of June 2, 1915 (P.L.736, No.338), known as the
     9     Workers' Compensation Act, or the act of December 5, 1936
    10     (2nd Sp.Sess., 1937 P.L.2897, No.1), known as the
    11     Unemployment Compensation Law, or the act of June 13, 1967
    12     (P.L.31, No.21), known as the Public Welfare Code, except
    13     where the claim has not been filed by the individual
    14     recipient of benefits.
    15         (2)  As used in this subsection, the term "controversy"
    16     means any one or more false claims submitted or caused to be
    17     submitted by either a person or persons who act pursuant to a
    18     common plan, scheme or design in violation of this act.
    19  Section 302.  False claims jurisdiction.
    20     An action under this act shall be brought in the Commonwealth
    21  Court if any defendant can be found, resides or transacts
    22  business in this Commonwealth or if an act proscribed by this
    23  act occurred within this Commonwealth.
    24  Section 303.  Procedure.
    25     (a)  Commonwealth prosecution.--
    26         (1)  The Attorney General shall diligently investigate
    27     violations under section 301 involving Commonwealth funds. If
    28     the Attorney General finds that a person has violated or is
    29     violating section 301, the Attorney General may bring an
    30     action under this act against that person.
    19990H0849B1798                  - 7 -

     1         (2)  If the Attorney General brings an action under this
     2     act on a claim involving political subdivision funds as well
     3     as Commonwealth funds, the Attorney General shall, on the
     4     same date that the complaint is filed in this action, serve
     5     by mail, return receipt requested, a copy of the complaint on
     6     the appropriate district attorney.
     7         (3)  The district attorney shall have the right to
     8     intervene in an action brought by the district attorney        <--
     9     ATTORNEY GENERAL under this act within 90 days after receipt   <--
    10     of the complaint pursuant to paragraph (2).
    11     (b)  Political subdivision prosecution.--
    12         (1)  The district attorney shall diligently investigate
    13     violations under section 301 involving political subdivision
    14     funds. If the district attorney finds that a person has
    15     violated or is violating section 301, he may bring an action
    16     under this act against that person.
    17         (2)  The district attorney may refer a matter involving    <--
    18     political subdivision funds to the Attorney General at any
    19     time. The Attorney General may decline the referral or may
    20     accept it under such terms, as the Attorney General may
    21     determine, including, but not limited to, terms regarding the
    22     distribution of any recovery from such action, as both the
    23     Attorney General and the district attorney deem fit.
    24         (2)  THE DISTRICT ATTORNEY MAY REFER A MATTER INVOLVING    <--
    25     POLITICAL SUBDIVISION FUNDS TO THE ATTORNEY GENERAL AT ANY
    26     TIME. THE ATTORNEY GENERAL MAY DECLINE OR ACCEPT THE
    27     REFERRAL.
    28         (3)  If the district attorney brings an action on a claim
    29     involving Commonwealth funds as well as political subdivision
    30     funds, the district attorney shall, on the same date that the
    19990H0849B1798                  - 8 -

     1     complaint is filed in this action, serve by mail, return
     2     receipt requested, a copy of the complaint on the Attorney
     3     General.
     4         (4)  Within 90 days after receiving the complaint
     5     pursuant to paragraph (2), the Attorney General shall do one
     6     of the following:
     7             (i)  Notify the court that the district attorney       <--
     8         ATTORNEY GENERAL intends to proceed with the action, in    <--
     9         which case the Attorney General shall assume primary
    10         responsibility for conducting the action and the district
    11         attorney shall have the right to continue as a party.
    12             (ii)  Notify the court that the district attorney      <--
    13         ATTORNEY GENERAL declines to prosecute the action, in      <--
    14         which case the prosecuting authority representing the      <--
    15         political subdivision DISTRICT ATTORNEY shall have the     <--
    16         right to conduct the action on its own.
    17             (iii)  Proceed jointly with the prosecuting authority  <--
    18         DISTRICT ATTORNEY, assuming coequal responsibility for     <--
    19         prosecution of the action.
    20                             CHAPTER 5
    21                          QUI TAM ACTIONS
    22  Section 501.  General provisions.
    23     (a)  When action may be brought.--A person may bring a qui
    24  tam action for a violation of this act for the person and either
    25  for the Commonwealth in the name of the Commonwealth if any
    26  Commonwealth funds are involved or for a political subdivision
    27  in the name of the political subdivision if political
    28  subdivision funds are exclusively involved. A qui tam action may
    29  be brought alleging fraud involving both Commonwealth and
    30  political subdivision funds. The person bringing the qui tam
    19990H0849B1798                  - 9 -

     1  action shall be referred to as the qui tam plaintiff. Once
     2  filed, the qui tam action may be dismissed only by the written
     3  consent of the court and the district attorney PROSECUTING        <--
     4  AUTHORITY, taking into account the best interests of the parties
     5  involved and the public purposes of this act.
     6     (b)  Filing.--A complaint filed by a qui tam plaintiff under
     7  this act shall be filed ex parte under seal with the Clerk of
     8  the Commonwealth Court or ex parte under seal in the appropriate
     9  Federal district court if Federal funds are also involved, and
    10  the complaint and all related pleadings shall remain under seal
    11  for 90 days from the date of service. No service shall be made
    12  on the defendant until after the complaint is unsealed by order
    13  of the court.
    14     (c)  Service upon Attorney General.--Within three days of the  <--
    15  complaint being filed pursuant to subsection (b), the qui tam
    16  plaintiff shall serve by mail, return receipt requested, the
    17  Attorney General AND THE GENERAL COUNSEL with a copy of the       <--
    18  complaint and a written disclosure of substantially all material
    19  evidence and information the qui tam plaintiff possesses at that
    20  time.
    21  Section 502.  Commonwealth funds.
    22     Within 90 days after receiving a complaint alleging
    23  violations which involve Commonwealth funds, but not political
    24  subdivision funds, the Attorney General shall do either of the
    25  following:
    26         (1)  Notify the court that it intends to proceed with the
    27     action and petition the court to have the case unsealed. If
    28     the court grants the Attorney General's request, the seal may
    29     be lifted. The court may, upon motion by the Attorney
    30     General, order a partial unsealing where appropriate.
    19990H0849B1798                 - 10 -

     1         (2)  Notify the court that it declines to prosecute the
     2     action, in which case the complaint may be unsealed by the
     3     court within 20 days after written notification is made by
     4     the Attorney General to the qui tam plaintiff and counsel
     5     that the Attorney General does not wish to intervene. Upon
     6     such notification, the qui tam plaintiff shall have the right
     7     to conduct the action.
     8  Section 503.  Political subdivision funds.
     9     (a)  Procedure.--Within 30 days after receiving a complaint
    10  alleging violations which exclusively involve political
    11  subdivision funds, the Attorney General shall promptly forward
    12  the complaint and written disclosure to the appropriate district
    13  attorney for review and disposition and shall notify in writing
    14  the qui tam plaintiff and counsel of the transfer.
    15     (b)  Duty of district attorney.--Within 60 days after the
    16  Attorney General forwards the complaint and written disclosure
    17  under subsection (a), the district attorney shall do either of
    18  the following:
    19         (1)  Notify the court that it intends to proceed with the
    20     action and petition the court to have the case unsealed. If
    21     the court grants the district attorney's request, the seal
    22     shall be lifted.
    23         (2)  Notify the court that it declines to take over the
    24     action, in which case the seal may be lifted within 20 days
    25     after such notification has been made and the qui tam
    26     plaintiff shall have the right to conduct the action.
    27  Section 504.  Complaints relating to Commonwealth and political
    28                 subdivision funds.
    29     (a)  Complaints.--Within 30 days after receiving a complaint
    30  alleging violations which involve or allege both Commonwealth
    19990H0849B1798                 - 11 -

     1  and political subdivision funds, the Attorney General shall
     2  forward copies of the complaint and written disclosure to the
     3  appropriate district attorney and shall coordinate its review
     4  and investigation with those of the prosecuting authority         <--
     5  DISTRICT ATTORNEY.                                                <--
     6     (b)  Procedure.--Within 90 days after receiving a complaint
     7  alleging violations which involve or allege both Commonwealth
     8  and political subdivision funds, the Attorney General shall do
     9  one of the following:
    10         (1)  Notify the court in writing that the Attorney
    11     General intends to proceed with the action, in which case the
    12     seal shall be lifted and service effected on the defendant.
    13         (2)  Notify the court in writing that the Attorney
    14     General declines to take over the action but that the
    15     district attorney involved intends to proceed with the
    16     action, in which case the seal shall be lifted and the action
    17     shall be conducted by the district attorney.
    18         (3)  Notify the court that both the Attorney General and
    19     the district attorney decline to take over the action, in
    20     which case the seal may be lifted within 20 days after
    21     notification has been made and the qui tam plaintiff shall
    22     have the right to conduct the action.
    23  Section 505.  Intervention by political subdivision.
    24     If the Attorney General proceeds with the action under
    25  section 503(b)(1), the district attorney shall be permitted to
    26  intervene in the action within 60 days after the Attorney
    27  General notifies the court of his intentions.
    28  Section 506.  Extension of time.
    29     Upon a showing of good cause and reasonable diligence in his
    30  investigation, the district attorney PROSECUTING AUTHORITY may    <--
    19990H0849B1798                 - 12 -

     1  move the court for reasonable extensions of time during which
     2  the complaint will remain under seal. The qui tam plaintiff
     3  shall be notified of any extensions requested under this
     4  section. Any such motions may be supported by affidavits or
     5  other submissions in camera.
     6  Section 507.  Other actions prohibited.
     7     When a qui tam plaintiff brings an action under this act, no
     8  other person shall be permitted to bring a related action under
     9  this act based on the same or similar facts underlying the
    10  pending action.
    11  Section 508.  Exclusions.
    12     (a)  General rule.--No court shall have jurisdiction over an
    13  action brought under this act CHAPTER:                            <--
    14         (1)  against a member of the General Assembly, a member    <--
    15     of the judiciary of the Commonwealth, an elected official in
    16     the executive branch of the government AN OFFICIAL OR          <--
    17     EMPLOYEE of the Commonwealth or a member of the governing      <--
    18     body or elected official of any political subdivision if the
    19     action is NOT based on evidence or information known to the    <--
    20     Commonwealth or political subdivision when the action was
    21     brought. ACTUAL KNOWLEDGE AND BAD FAITH OF THE OFFICIAL OR     <--
    22     EMPLOYEE.
    23         (2)  Which relies upon the public disclosure of specific
    24     allegations or transactions in a criminal, civil or
    25     administrative hearing, in a governmental report, hearing,
    26     audit or investigation or from the news media, unless the
    27     action is brought by or intervened in by a prosecuting
    28     authority or the qui tam plaintiff is an original source of
    29     the information.
    30         (3)  BY A PRISONER AGAINST ANY OFFICIAL OR EMPLOYEE OF     <--
    19990H0849B1798                 - 13 -

     1     THE COMMONWEALTH OR A POLITICAL SUBDIVISION FOR ACTS RELATING
     2     TO THE OPERATIONS AND EXPENDITURES OF A CORRECTIONAL AGENCY
     3     OR FACILITY.
     4         (4)  BASED UPON ALLEGATIONS OR TRANSACTIONS WHICH ARE THE
     5     SUBJECT OF AN INVESTIGATION, SETTLEMENT DISCUSSION, A
     6     SETTLEMENT AGREEMENT, OR ANY CIVIL OR ADMINISTRATIVE
     7     PROCEEDING, IN WHICH THE COMMONWEALTH OR POLITICAL
     8     SUBDIVISION IS ALREADY A PARTY.
     9     (b)  Definition.--As used in this section, the term "original
    10  source" means an individual who has voluntarily provided the
    11  information to the prosecuting authority before filing an action
    12  based on that information and either has direct and independent
    13  knowledge of the information on which the allegations are based
    14  or directly or indirectly provided the impetus, basis or
    15  catalyst for the investigation, hearing, audit or report which
    16  led to the public disclosure.
    17  Section 509.  Employment-related discovery of information.
    18     No court shall have jurisdiction over an action brought under
    19  this act based upon information discovered by a present or
    20  former employee of the Commonwealth or a political subdivision
    21  during the course of his employment unless that employee first
    22  in good faith attempts to use existing internal procedures for
    23  reporting and seeking recovery of the falsely claimed sums
    24  through official channels and unless the prosecuting authority    <--
    25  COMMONWEALTH OR POLITICAL SUBDIVISION failed to act on the        <--
    26  information provided within a reasonable period of time. A
    27  reasonable period of time shall mean no longer than six months
    28  after information has been disclosed.
    29  Section 510.  Responsibility for prosecution.
    30     If the prosecuting authority proceeds with the action, it
    19990H0849B1798                 - 14 -

     1  shall have the primary responsibility for prosecuting the
     2  action. The qui tam plaintiff shall have the right to continue
     3  with all rights and obligations as a full party to the action.
     4  Section 511.  Dismissal of action.
     5     The Commonwealth or political subdivision may seek to dismiss
     6  the action for good cause notwithstanding the objections of the
     7  qui tam plaintiff if the qui tam plaintiff has been notified by
     8  the prosecuting authority of the filing of the motion and the
     9  court has provided the qui tam plaintiff with an adequate
    10  opportunity to oppose the motion.
    11  Section 512.  Settlement.
    12     The prosecuting authority may settle the action with the
    13  defendant notwithstanding the objections of the qui tam
    14  plaintiff if the court determines that the proposed settlement
    15  is fair, adequate and reasonable under all of the circumstances
    16  to all parties involved.
    17  Section 513.  Election not to proceed.
    18     If the prosecuting authority elects not to proceed, the qui
    19  tam plaintiff shall have the right to conduct the action. If the
    20  prosecuting authority so requests, it shall be served with
    21  copies of all pleadings filed in the action and supplied with
    22  copies of all deposition transcripts.
    23  Section 514.  Intervention.
    24     Upon timely application, the court may permit the prosecuting
    25  authority to intervene in an action with which it had initially
    26  declined to proceed if the interest of the Commonwealth or
    27  political subdivision in recovery of the property or funds
    28  involved is not being adequately represented by the qui tam
    29  plaintiff.
    30  Section 515.  Proceeds.
    19990H0849B1798                 - 15 -

     1     (a)  Attorney General.--If the Attorney General initiates an
     2  action under section 303(a) or assumes control of an action
     3  initiated by the district attorney pursuant to section
     4  303(b)(4)(ii), the Attorney General shall receive a fixed 33% of
     5  the proceeds of the action or settlement of the claim, which
     6  funds shall be used to support and expand its ongoing
     7  investigation and prosecution of false claims violations in this
     8  Commonwealth or to support other investigation and prosecution
     9  efforts.
    10     (b)  District attorney.--If a district attorney initiates and
    11  conducts an action pursuant to section 303(b), the office of the
    12  district attorney shall receive a fixed 33% of the proceeds of
    13  the action or settlement of the claim, which funds shall be used
    14  to support and expand its ongoing investigation and prosecution
    15  of false claims violations within its jurisdiction or to support
    16  other investigation and prosecution efforts.
    17     (c)  Award of portion of recovery.--If a district attorney
    18  intervenes in an action initiated by the Attorney General
    19  pursuant to section 303(a)(3) or remains a party to an action
    20  assumed by the Attorney General pursuant to section 303(b)(4)(i)
    21  AND (III), the court may award the office of the district         <--
    22  attorney a portion of the Attorney General's fixed 33% of the
    23  recovery under subsection (a), taking into account the district
    24  attorney's role in investigating and conducting the action and
    25  the resources of the office expended on the prosecution.
    26     (d)  Qui tam recovery.--
    27         (1)  If the prosecuting authority proceeds with an action
    28     brought by a qui tam plaintiff under this act, the qui tam
    29     plaintiff shall, subject to subsections (f) and (g), receive
    30     not less than 20% nor more than 33% of the full proceeds of
    19990H0849B1798                 - 16 -

     1     the action or settlement of the claim, depending upon the
     2     extent to which the qui tam plaintiff substantially
     3     contributed to the overall prosecution of the action. If the
     4     prosecuting authority and the qui tam plaintiff cannot reach
     5     an agreement concerning the percentage of proceeds to be
     6     distributed to the qui tam plaintiff, the determination shall  <--
     7     be made by the court.
     8         (2)  When it conducts the action, the Office of Attorney   <--
     9     General or the district attorney shall receive a fixed 33% of
    10     the proceeds of the action or settlement of the claim, which
    11     funds shall be used to support and expand its ongoing
    12     investigation and prosecution of false claims made against
    13     the Commonwealth or political subdivision or otherwise to
    14     investigate or prosecute consistent with the duties of these
    15     offices.
    16         (3)  When both the Attorney General and the district
    17     attorney representing the political subdivision are involved   <--
    18     as coparties in a qui tam action pursuant to section 504, the
    19     court in its discretion may award the district attorney a
    20     portion of the Attorney General's fixed 33% of the recovery,
    21     taking into account the district attorney's cooperation and
    22     contribution to investigating and conducting the action.
    23     (e)  Decline to proceed.--If the prosecuting authority
    24  declines to proceed with an action under subsection (c), the qui  <--
    25  tam plaintiff shall, subject to subsections (f) and (g), receive
    26  an amount which the court decides is reasonable for collecting
    27  the civil penalty and damages on behalf of the Commonwealth or
    28  political subdivision. The amount awarded by the court shall be
    29  not less than 30% nor more than 50% of the proceeds of the
    30  action or settlement and shall be paid out of the proceeds.
    19990H0849B1798                 - 17 -

     1     (f)  Present or former employee.--If a qui tam action is
     2  brought by a present or former employee of the Commonwealth or
     3  political subdivision, the qui tam plaintiff shall not be
     4  entitled to any minimum guaranteed recovery from the proceeds.
     5  If the prosecuting authority and the qui tam plaintiff cannot
     6  reach an agreement concerning the percentage of proceeds to be
     7  distributed to the qui tam plaintiff, the determination shall be
     8  made by the court. The court may award the qui tam plaintiff
     9  those sums from the proceeds as it considers appropriate, but in
    10  no case more than 33% of the proceeds if the prosecuting
    11  authority goes forth with the action or 50% if it declines to go
    12  forth, taking into account the significance of the information,
    13  the role of the qui tam plaintiff in advancing the case to
    14  litigation and the scope of and response to the qui tam
    15  plaintiff's attempts to report and gain recovery of the falsely
    16  claimed funds through official channels.
    17     (g)  Fraudulent activity.--
    18         (1)  Where the action is one which the court finds to be
    19     based primarily on information from a qui tam plaintiff who
    20     actively participated in the fraudulent activity, the qui tam
    21     plaintiff shall not be entitled to any minimum guaranteed
    22     recovery from the proceeds. If the prosecuting authority and
    23     the qui tam plaintiff cannot reach an agreement concerning
    24     the percentage of proceeds to be distributed to the qui tam
    25     plaintiff, the determination shall be made by the court. The
    26     court, in its sole discretion after a full review of all the
    27     facts and circumstances, may award the qui tam plaintiff such
    28     sums from the proceeds as it considers appropriate under the
    29     circumstances, but in no case more than 33% of the proceeds
    30     if the prosecuting authority goes forth with the action or
    19990H0849B1798                 - 18 -

     1     50% if it declines to go forth, taking into account the
     2     significance of the information, the role of the qui tam
     3     plaintiff in advancing the case to litigation, the scope of
     4     the qui tam plaintiff's involvement in the fraudulent
     5     activity, the qui tam plaintiff's attempts to avoid or resist
     6     such activity and all other circumstances surrounding the
     7     activity.
     8         (2)  A person who has been convicted of a crime, either
     9     in the same or another jurisdiction, based on participation
    10     in the fraudulent activity at issue in the action under this
    11     act shall under no circumstances be permitted to participate
    12     in any action under this act as a qui tam plaintiff.
    13     (h)  Present or former sworn law enforcement officer or other
    14  governmental investigator.--Any present or former sworn law
    15  enforcement officer or other governmental investigator who
    16  obtains information regarding a false claim in the course of
    17  that officer's or investigator's official duties shall be
    18  precluded from participating in the proceeds of a qui tam action
    19  on the basis of that information.
    20     (i)  Use of recoveries.--Proceeds recovered under this act by
    21  the prosecuting authority shall be placed in the operating fund
    22  of the Commonwealth, the county of the district attorney, or
    23  both, as appropriate. The Commonwealth, the county of the
    24  district attorney, or both, as appropriate, shall immediately
    25  release from the operating fund, without restriction, a like
    26  amount for the use of the prosecuting authority for the purposes
    27  elsewhere specified in this act. The entity having budgetary
    28  control shall not anticipate future recoveries in adoption and
    29  approval of the budget for the prosecuting authority.
    30     (j)  Annual audit of recoveries.--It shall be the
    19990H0849B1798                 - 19 -

     1  responsibility of the Commonwealth, the county of the district
     2  attorney, or both, as appropriate, to provide, through the
     3  controller, board of auditors or other appropriate auditor, an
     4  annual audit of all recoveries under this act. The audit shall
     5  not be made public but shall be submitted to the Attorney
     6  General's office by September 30 of each year.
     7     (k)  Annual report.--The Attorney General shall annually
     8  submit a report to the Appropriations Committee and the
     9  Judiciary Committee of the Senate and the Appropriations
    10  Committee and Judiciary Committee of the House of
    11  Representatives, specifying the recoveries obtained under this
    12  act. The report shall give an accounting of all moneys recovered
    13  through the sale of any property seized in satisfaction of any
    14  judgment arising from an action under this act.
    15     (l)  Recoveries and appropriations.--Recoveries or future
    16  recoveries under this act shall be in addition to any
    17  appropriation made to the office of the prosecuting authority.
    18  Section 516.  Reversion to General Fund.
    19     (a)  General rule.--The portion of the proceeds not
    20  distributed under section 516 515 shall revert to the General     <--
    21  Fund when the underlying false claims involved Commonwealth
    22  funds exclusively and to the political subdivision when the
    23  underlying false claims involved political subdivision funds
    24  exclusively. When petitioned to do so, the court shall make an
    25  apportionment of the recovered proceeds between the Commonwealth
    26  and political subdivision based on their relative share of the
    27  funds falsely claimed.
    28     (b)  Reimbursement.--When an insurer, guarantor or surety has
    29  suffered a loss on an underlying false claim through either:
    30         (1)  reimbursing the Commonwealth or political
    19990H0849B1798                 - 20 -

     1     subdivision; or
     2         (2)  directly paying a claimant;                           <--
     3  It IT shall be reimbursed for both. When the reversion to the     <--
     4  General Fund is inadequate to compensate the Commonwealth or
     5  political subdivision for damages sustained and the insurer,
     6  guarantor or surety for all moneys reimbursed to the
     7  Commonwealth or political subdivision or directly paid to a
     8  claimant as a result of those damages, the uninsured losses of
     9  the commonwealth or political subdivision shall be paid first
    10  and the insurer, guarantor or surety shall recover its
    11  reimbursement and direct payments to claimants before further
    12  distribution is made under this act.
    13  Section 517.  Expenses.
    14     If the Commonwealth, political subdivision or qui tam
    15  plaintiff prevails in or settles any action under this act, the
    16  qui tam plaintiff shall receive an amount for all reasonable
    17  expenses incurred in the prosecution of the claim, including
    18  expert witness fees plus reasonable litigation costs and
    19  attorney fees. All expenses, costs and attorney fees shall be
    20  awarded against the defendant, and under no circumstances shall
    21  they be the responsibility of the prosecuting authority.
    22                             CHAPTER 7
    23                         GENERAL PROVISIONS
    24  Section 701.  Rules of civil procedure.
    25     Except where this act provides otherwise, actions under this
    26  act shall be governed by the Pennsylvania Rules of Civil
    27  Procedure.
    28  Section 702.  Stay of discovery.
    29     (a)  General rule.--The court may stay discovery for a period
    30  of not more than 90 days if the prosecuting authority OR THE      <--
    19990H0849B1798                 - 21 -

     1  GENERAL COUNSEL shows that discovery would interfere with an
     2  investigation or a prosecution of a criminal or civil matter
     3  arising out of the same or similar facts, regardless of whether
     4  the prosecuting authority proceeds with the action. Such a
     5  showing shall be conducted in camera. The court may extend the
     6  90-day period upon a further showing in camera that the
     7  prosecuting authority OR THE GENERAL COUNSEL has pursued the      <--
     8  criminal or civil investigation or proceedings with reasonable
     9  diligence and that any proposed discovery in the action under
    10  this act would interfere with the ongoing criminal or civil
    11  investigation or proceedings.
    12     (b)  Criminal action.--When a criminal action has commenced
    13  based upon the same or similar facts underlying the pending
    14  action under this act, discovery by the defendant in the pending
    15  action under this act shall be confined to that available to a
    16  criminal defendant under the Rules of Criminal Procedure and the
    17  United States and the Constitution of the Commonwealth of
    18  Pennsylvania. The defendant in the pending action under this act
    19  may petition the court for a stay of proceedings pending the
    20  conclusion of the criminal action. on the ground that             <--
    21  restriction of discovery has substantially impaired the
    22  defendant in presenting a defense in the pending action under
    23  this act.
    24  Section 703.  Limitations on participation.
    25     Upon a showing by the prosecuting authority by a
    26  preponderance of the evidence that unrestricted participation
    27  during the course of the litigation by the person initiating the
    28  action would interfere with or unduly delay the prosecuting
    29  authority's prosecution of the case or would be repetitious,
    30  irrelevant or for purposes of harassment, the court may, in its
    19990H0849B1798                 - 22 -

     1  discretion, impose limitations on the person's participation,
     2  including, but not limited to, the following:
     3         (1)  limiting the number of witnesses the person may
     4     call;
     5         (2)  limiting the length of the testimony of these
     6     witnesses;
     7         (3)  limiting the person's cross-examination of
     8     witnesses; or
     9         (4)  otherwise limiting the participation by the person
    10     in the litigation.
    11  Section 704.  Employee protection.
    12     (a)  Disclosing information.--No employer shall solicit,
    13  attempt or conspire to prevent, make, adopt or enforce any rule,
    14  regulation or policy preventing an employee from disclosing
    15  information to a Federal, State or local law enforcement agency
    16  or from acting in furtherance of the investigation of,
    17  initiation of, testimony in or assistance in filing an action
    18  under this act.
    19     (b)  Discrimination.--No employer shall discharge, demote,
    20  suspend, threaten, harass, deny promotion to or in any other
    21  manner discriminate, or solicit, attempt or conspire to
    22  discriminate against an employee in the terms of and conditions
    23  of employment because of lawful acts done by the employee on
    24  behalf of the employee or others in disclosing information to a
    25  Federal, State or local government or law enforcement agency or
    26  in furthering false claims action, including investigation for,
    27  initiation of, testimony for or assistance in an action filed or
    28  to be filed under this act.
    29     (c)  Penalty.--An employer who violates subsection (a) or (b)
    30  shall be liable for all relief necessary to make the employee
    19990H0849B1798                 - 23 -

     1  whole, including reinstatement with the same seniority status
     2  that the employee would have had but for the discrimination,
     3  three times the amount of back pay, prevailing interest on the
     4  back pay, compensation for any special damage sustained as a
     5  result of the discrimination and, where appropriate, punitive
     6  damages. In addition, the employer shall be required to pay all
     7  litigation costs and reasonable attorney fees. An employee may
     8  bring an action in the Commonwealth Court for the relief
     9  provided in this subsection.
    10     (d)  Limitations.--An employee who is discharged, demoted,
    11  suspended, harassed, denied promotion, threatened with
    12  termination or in any other manner discriminated against in the
    13  terms and conditions of employment by his employer because of
    14  participation in conduct which directly or indirectly resulted
    15  in a false claim being submitted to the Commonwealth or a
    16  political subdivision shall be entitled to the remedies under
    17  subsection (c) if the employee voluntarily discloses information
    18  to a Federal, State or local government or law enforcement
    19  agency or acted in furtherance of a false claims action,
    20  including investigation for, initiation of, testimony for or
    21  assistance in an action filed or to be filed.
    22  Section 705.  Limitations.
    23     (a)  Time of filing.--An action under this act may not be
    24  filed more than six years after the date on which the violation
    25  of this act is completed or more than three years after the date
    26  of discovery by the prosecuting authority, but in any event no
    27  more than ten years after the date on which the violation of
    28  section 301 is completed.
    29     (b)  Prior acts.--An action under this act may be brought
    30  regarding false claims made prior to the effective date of this
    19990H0849B1798                 - 24 -

     1  act if the limitations period set forth in subsection (a) has
     2  not elapsed.
     3     (c)  Proof.--In any action brought under this act, the
     4  Commonwealth, the political subdivision or the qui tam plaintiff
     5  shall be required to prove all essential elements of the cause
     6  of action, including damages, by a preponderance of the
     7  evidence.
     8     (d)  Estoppel.--Notwithstanding any other provision of law, a
     9  guilty verdict, guilty plea or nolo contendere plea rendered in
    10  a criminal proceeding which alleged a scheme to obtain funds
    11  fraudulently from the Commonwealth or a political subdivision
    12  shall estop the defendant from denying the essential elements of
    13  the offense in any action which involves the same transaction as
    14  in the criminal proceeding and which is brought under this act.
    15  Section 706.  Remedies.
    16     (a)  Civil remedies.--
    17         (1)  The Commonwealth Court shall have jurisdiction to
    18     prevent and restrain violations of section 301 by issuing
    19     appropriate orders, including, but not limited to:
    20             (i)  Ordering any person to divest himself of any
    21         interest, direct or indirect, in any business or entity;
    22         imposing reasonable restrictions on the future activities
    23         or investments of any person, including, but not limited
    24         to, prohibiting any person from engaging in the same type
    25         of endeavor or freezing the person's assets.
    26             (ii)  Making due provisions for the rights of
    27         innocent persons, ordering the dissolution of any
    28         business or entity, ordering the denial, suspension or
    29         revocation of charters of domestic corporations,
    30         certificates of authority authorizing foreign
    19990H0849B1798                 - 25 -

     1         corporations to do business in this Commonwealth,
     2         licenses, permits or prior approval granted to any
     3         business or entity by any department or agency of the
     4         Commonwealth or any of its political subdivisions; or
     5         prohibiting any business or entity from engaging in any
     6         business.
     7         (2)  Injunctions against false claims:
     8             (i)  If a person violates or is about to violate this
     9         act, the prosecuting authority may commence an action in
    10         Commonwealth Court to enjoin such violation.
    11             (ii)  If a person alienates or disposes of property,
    12         or intends to alienate or dispose of property obtained as
    13         a result of a violation of this act or property which is
    14         traceable to such violation, the prosecuting authority
    15         may commence an action in Commonwealth Court to enjoin
    16         such alienation or disposition of property, or for a
    17         restraining order to prohibit any person from
    18         withdrawing, transferring, removing, dissipating or
    19         disposing of any such property or property of equivalent
    20         value and appoint a temporary receiver to administer such
    21         restraining order.
    22         (3)  In any proceeding under this section, the court
    23     shall proceed as soon as practicable to the hearing and
    24     determination thereof. Pending final determination, the court
    25     may enter preliminary or special injunctions or take such
    26     other actions, including the acceptance of satisfactory
    27     performance bonds, as it may deem proper.
    28     (b)  Remedies cumulative.--The provisions of this act are not
    29  exclusive, and the remedies provided for in this act shall be in
    30  addition to any other remedies provided for in any other law or
    19990H0849B1798                 - 26 -

     1  available under common law.
     2  Section 707.  Enforcement.
     3     (a)  Prosecuting authority.--The prosecuting authority shall
     4  have the power and duty to enforce this act, including the
     5  authority to issue civil investigative demands pursuant to this
     6  act, to institute proceedings under this act and to take such
     7  actions as may be necessary to ascertain and investigate alleged
     8  violations of this act. The prosecuting authority may delegate
     9  its powers to investigate and prosecute actions under this act
    10  to appropriate Deputy Attorneys General or deputy or assistant
    11  district attorneys.
    12     (b)  Construction.--Nothing contained in this act shall be
    13  construed to limit the regulatory or investigative authority of
    14  any department or agency of the Commonwealth or political
    15  subdivision whose functions might relate to persons, enterprises
    16  or matters falling within the scope of this act.
    17  Section 708.  Civil investigative demand.
    18     (a)  General rule.--Whenever the prosecuting authority has
    19  reason to believe that any person may be in possession, custody
    20  or control of any documentary material or information relevant
    21  to a false claim investigation, the prosecuting authority may
    22  issue in writing and cause to be served upon the person a civil
    23  investigative demand requiring such person to:
    24         (1)  produce such documentary material for inspection and
    25     copying;
    26         (2)  answer in written interrogatories with respect to
    27     such documentary material or information;
    28         (3)  give oral testimony concerning such documentary
    29     material or information; or
    30         (4)  furnish any combination of such material, answers
    19990H0849B1798                 - 27 -

     1     and testimony.
     2     (b)  Content.--Each demand under this section shall:
     3         (1)  State the nature of the conduct constituting the
     4     alleged false claim violation which is under investigation
     5     and the provision of law applicable thereto.
     6         (2)  If the demand is for the production of documentary
     7     material:
     8             (i)  describe the class or classes of documentary
     9         material to be produced thereunder with such definiteness
    10         and certainty as to permit the material to be fairly
    11         identified;
    12             (ii)  state that the demand is returnable forthwith
    13         or prescribe a return date which will provide a
    14         reasonable period of time within which the material so
    15         demanded may be assembled and made available for
    16         inspection and copying or reproduction; and
    17             (iii)  identify an investigator to whom the material
    18         shall be made available.
    19         (3)  If the demand is for written interrogatories:
    20             (i)  set forth with specificity the written
    21         interrogatories to be answered;
    22             (ii)  prescribe dates at which time answers to
    23         written interrogatories shall be submitted; and
    24             (iii)  identify the investigator to whom such answers
    25         shall be submitted.
    26         (4)  If such demand is for the giving of oral testimony:
    27             (i)  prescribe a date, time and place at which oral
    28         testimony should be commenced;
    29             (ii)  identify the investigator who shall conduct the
    30         examination and the person to whom the transcript of such
    19990H0849B1798                 - 28 -

     1         investigation shall be submitted;
     2             (iii)  specify that such attendance and testimony are
     3         necessary to the conduct of the investigation; and
     4             (iv)  describe the general purpose for which the
     5         demand is being issued and the general nature of the
     6         testimony, including the primary areas of inquiry, which
     7         will be taken pursuant to the demand.
     8         (5)  Contain the following statement printed
     9     conspicuously at the top of the demand:
    10             You have the right to seek the assistance of any
    11             attorney, and he may represent you in all phases of
    12             the false claim investigation of which this civil
    13             investigative demand is a part.
    14     (c)  Limitation.--No demand under this section shall:
    15         (1)  contain any requirement which would be held to be
    16     unreasonable if contained in a subpoena duces tecum issued by
    17     any court in connection with a grand jury investigation of
    18     the alleged fraud violation; or
    19         (2)  require the production of any documentary evidence
    20     which would be privileged from disclosure if demanded by a
    21     subpoena duces tecum issued by any court in connection with a
    22     grand jury investigation of the alleged false claim
    23     violation.
    24     (d)  Service.--Service of any demand or any petition filed
    25  under this section shall be made in the manner prescribed by the
    26  Pennsylvania Rules of Civil Procedure for service of writs and
    27  complaints unless otherwise agreed to by the prosecuting
    28  authority and the person.
    29     (e)  Return.--A verified return by the individual serving any
    30  demand or petition under this section setting forth the manner
    19990H0849B1798                 - 29 -

     1  of service shall be prima facie proof of such service. In the
     2  case of service by registered or certified mail, the return
     3  shall be accompanied by the return post office receipt of
     4  delivery of the demand.
     5     (f)  Procedure.--
     6         (1)  A person upon whom a demand issued under this
     7     section has been duly served shall make the demanded material
     8     available for inspection and copying or reproduction to an
     9     investigator designated in the demand at the principal place
    10     of business of the person or at such other place as the
    11     investigator and the person thereafter may agree or as the
    12     court may direct pursuant to this section on the return date
    13     specified in the demand. The person may, upon agreement of
    14     the investigator, substitute copies of all or any part of the
    15     demanded material for the originals of the demanded material.
    16         (2)  The investigator to whom any documentary material is
    17     so delivered shall take physical possession of the material
    18     and shall be responsible for the use made of the material and
    19     for its return pursuant to this section. The investigator may
    20     cause the preparation of the copies of the documentary
    21     material as may be required for official use. While in the
    22     possession of the investigator, no material so produced shall
    23     be available for examination by any individual other than the
    24     prosecuting authority or any investigator without the consent
    25     of the person who produced the material. Under such
    26     reasonable terms and conditions as the prosecuting authority
    27     shall prescribe, documentary material while in the possession
    28     of the investigator shall be available for examination by the
    29     person who produced the material or any duly authorized
    30     representatives of that person.
    19990H0849B1798                 - 30 -

     1         (3)  The production of documentary material in response
     2     to a civil investigative demand served under this section
     3     shall be made under a sworn certificate, in such form as the
     4     demand designates, by:
     5             (i)  in the case of a natural person, the person to
     6         whom the demand is directed; or
     7             (ii)  in the case of a person other than a natural
     8         person, a person having knowledge of the facts and
     9         circumstances relating to such production and authorized
    10         to act on behalf of such person.
    11     The certificate shall state that all of the documentary
    12     material required by the demand and in the possession,
    13     custody or control of the person to whom the demand is
    14     directed has been produced and made available to the
    15     investigator identified in the demand.
    16         (4)  Each interrogatory in a civil demand served under
    17     this section shall be answered separately and fully in
    18     writing under oath and shall be submitted under a sworn
    19     certificate, in such form as the demand designates, by:
    20             (i)  in the case of a natural person, the person to
    21         whom the demand is directed; or
    22             (ii)  in the case of a person other than a natural
    23         person, a person or persons responsible for answering
    24         each interrogatory. If any interrogatory is objected to,
    25         the reasons for the objection shall be stated in the
    26         certificate instead of an answer. The certificate shall
    27         state that all information required by the demand and in
    28         the possession, custody, control or knowledge of the
    29         person to whom the demand is directed has been submitted.
    30         To the extent that any information is not furnished, the
    19990H0849B1798                 - 31 -

     1         information shall be identified and reasons set forth
     2         with particularity regarding the reasons why the
     3         information was not furnished.
     4         (5)  (i)  The examination of any person pursuant to a
     5         civil investigative demand for oral testimony served
     6         under this section shall be deemed an "official
     7         proceeding" within the meaning of 18 Pa.C.S. § 4902(a)
     8         (relating to perjury). The examination shall be taken
     9         before an officer authorized to administer oaths and
    10         affirmations by the laws of this Commonwealth. The
    11         officer before whom the testimony is to be taken shall
    12         put the witness on oath or affirmation and shall,
    13         personally or by someone acting under the direction of
    14         the officer and in the officer's presence, record the
    15         testimony of the witness. The testimony shall be taken
    16         accurately and shall be transcribed. When the testimony
    17         is fully transcribed, a copy of the transcript shall be
    18         promptly forwarded to the designated person. This
    19         subsection shall not preclude the taking of testimony by
    20         any means authorized by, and in a manner consistent with,
    21         the Pennsylvania Rules of Civil Procedure.
    22             (ii)  The investigator conducting the examination
    23         shall exclude from the place where the examination is
    24         held all persons except the person giving the testimony,
    25         the attorney for and any other representative of the
    26         person giving the testimony, the prosecuting authority,
    27         any person who may be agreed upon by the prosecuting
    28         authority and the person giving the testimony, and any
    29         stenographer taking such testimony.
    30             (iii)  The oral testimony of any person taken
    19990H0849B1798                 - 32 -

     1         pursuant to a civil investigative demand served under
     2         this section shall be taken in the county where the
     3         office of the investigator conducting the examination is
     4         situated, or in such other place as may be agreed upon by
     5         the investigator and such person.
     6             (iv)  When the testimony is fully transcribed, the
     7         investigator shall afford the witness, who may be
     8         accompanied by counsel, a reasonable opportunity to
     9         examine and read the transcript, unless such examination
    10         and reading are waived by the witness. Any changes in
    11         form or substance which the witness desires to make shall
    12         be entered and identified upon the transcript by the
    13         officer or the investigator, with a statement of the
    14         reasons given by the witness for making such changes. The
    15         transcript shall then be signed by the witness, unless
    16         the witness in writing waives the signing, is ill, cannot
    17         be found or refuses to sign. If the transcript is not
    18         signed by the witness within 30 days after being afforded
    19         a reasonable opportunity to examine it, the officer or
    20         the investigator shall sign it and state on the record
    21         the fact of the waiver, illness, absence of the witness
    22         or the refusal to sign, together with the reasons, if
    23         any, given therefor.
    24             (v)  Upon payment of reasonable charges therefor, the
    25         investigator shall furnish a copy of the transcript to
    26         the witness only, except that the prosecuting authority
    27         may, for good cause, limit such witness to inspection of
    28         the official transcript of the witness' testimony.
    29             (vi)  Any person compelled to appear for oral
    30         testimony under a civil investigative demand may be
    19990H0849B1798                 - 33 -

     1         accompanied, represented and advised by counsel. Counsel
     2         may advise the person, in confidence, with respect to any
     3         question asked of that person. The person or counsel may
     4         object on the record to any question, in whole or in
     5         part, and shall briefly state for the record the reason
     6         for the objection. An objection may be made, received and
     7         entered upon the record when it is claimed that such
     8         person is entitled to refuse to answer the question on
     9         the grounds of any constitutional or other legal right or
    10         privilege, including the privilege against self-
    11         incrimination. The person may not otherwise object to or
    12         refuse to answer any question, and may not directly or
    13         through counsel otherwise interrupt the oral examination.
    14         If the person refuses to answer any question, a petition
    15         may be filed in the Commonwealth Court under section
    16         708(g) for an order compelling the person to answer the
    17         question.
    18         (6)  Upon completion of:
    19             (i)  the false claims investigation for which any
    20         documentary material was produced under this section; and
    21             (ii)  any case or proceeding arising from such
    22         investigation;
    23     the investigator shall return to the person who produced the
    24     material all of the material other than copies of the
    25     material made pursuant to this section which have not passed
    26     into the control of any court or grand jury through
    27     introduction into the record of such case or proceeding.
    28         (7)  When documentary material has been produced by a
    29     person under this section for use in a false claims
    30     investigation and no case or proceeding arising from the
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     1     investigation has been instituted within a reasonable time
     2     after completion of the examination and analysis of all
     3     evidence assembled in the course of the investigation, the
     4     person shall be entitled, upon written demand made upon the
     5     prosecuting authority, to the return of all documentary
     6     material, other than copies of the material made pursuant to
     7     this section, so produced by that person.
     8     (g)  Failure to comply.--Whenever a person fails to comply
     9  with a civil investigative demand that is served upon him under
    10  this section or whenever satisfactory copying or reproduction of
    11  any of the material cannot be done and the person refuses to
    12  surrender the material, the prosecuting authority may file in
    13  the Commonwealth Court and serve upon the person a petition for
    14  an order of the court for the enforcement of this section.
    15     (h)  Petition for relief.--
    16         (1)  Within 20 days after the service of any demand under
    17     this section upon any person or at any time before the return
    18     date specified in the demand, whichever period is shorter,
    19     the person may file in the Commonwealth Court and serve upon
    20     the prosecuting authority a petition for an order of the
    21     court modifying or setting aside this demand. The time
    22     allowed for compliance with the demand, in whole or in part,
    23     as deemed proper and ordered by the court shall not run
    24     during the pendency of the petition in the court. The
    25     petition shall specify each ground upon which the petitioner
    26     relies in seeking the relief and may be based on any failure
    27     of the demand to comply with the provisions of this section
    28     or on any constitutional or other legal right or privilege of
    29     the person.
    30         (2)  At any time during which the prosecuting authority
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     1     is in custody or control of documentary material delivered by
     2     a person in compliance with a demand under this section, the
     3     person may file in the Commonwealth Court and serve upon the
     4     prosecuting authority a petition for an order of the court
     5     requiring the performance of any duty imposed by this
     6     section.
     7         (3)  Whenever a petition is filed in the Commonwealth
     8     Court, the court shall have jurisdiction to hear and
     9     determine the matter so presented and, after a hearing at
    10     which all parties are represented, to enter such order or
    11     orders as may be required to carry into effect the provisions
    12     of this section.
    13     (i)  Definition.--As used in this section, the term
    14  "documentary material" includes, but is not limited to, any
    15  book, paper, record, recording, tape, report, memorandum, data,
    16  written or electronic communication or other document relating
    17  to the business affairs of any person, enterprise or matter
    18  falling within the purview of this act.
    19  Section 709.  Immunity.
    20     Whenever any individual refuses on the basis of his privilege
    21  against self-incrimination to comply with a civil investigative
    22  demand issued pursuant to this act or to testify or produce
    23  other information in a proceeding under this act, the
    24  prosecuting authority may invoke the provisions of 42 Pa.C.S. §
    25  5947 (relating to immunity of witnesses).
    26  Section 710.  Regulations.
    27     (a)  General rule.--The Attorney General shall have the power
    28  and authority to promulgate rules and regulations which may be
    29  necessary to carry out the purposes set forth in this act.
    30     (b)  Guidelines.--In order to facilitate the speedy
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     1  implementation of this act, the Attorney General shall have the
     2  power and authority to promulgate, adopt and use guidelines
     3  which shall be published in the Pennsylvania Bulletin. The
     4  guidelines shall not be subject to review pursuant to section
     5  205 of the act of July 31, 1968 (P.L.769, No.240), referred to
     6  as the Commonwealth Documents Law, sections 204(b) and 301(10)
     7  of the act of October 15, 1980 (P.L.950, No.164), known as the
     8  Commonwealth Attorneys Act, the act of June 25, 1982 (P.L.633,
     9  No.181), known as the Regulatory Review Act, and shall be
    10  effective for a period of not more than two years from the
    11  effective date of this act. After the expiration of the two-year
    12  period, the guidelines shall expire and be replaced by
    13  regulations which shall be promulgated, adopted and published as
    14  provided by law.
    15  Section 711.  Effective date.
    16     This act shall take effect in 60 days.










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