Full Text of HB6202 97th General Assembly
HB6202 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB6202 Introduced , by Rep. Michael J. Zalewski SYNOPSIS AS INTRODUCED: |
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740 ILCS 175/4 | from Ch. 127, par. 4104 |
740 ILCS 175/4.5 new | |
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Amends the Illinois False Claims Act. Provides that no court has jurisdiction over a civil action relating to or involving a false claim regarding a tax Act administered by the Department unless the action is brought by the Attorney General at the request of the Department. Provides that: the Department has the sole authority to initiate an administrative or judicial action resulting from information provided by a person alleging a false claim, statement, or record pertaining to a tax Act administered by the Department; the Department shall establish a procedure for the reporting of those allegations; the Department shall diligently investigate allegations of a false claim, statement, or record and may bring an action for all applicable taxes, penalties, and interest due under the tax Act; if the Department proceeds with an administrative or judicial action based on information brought to its attention by a private person, that person shall receive an award, subject to specified limits, from the action or from a settlement in response to that action, taking into account the significance of the person's information and the role of the person and a legal representative of the person in contributing to the action; an award may not be issued if the information resulting in the initiation of the action was originally provided by the person alleging the false claim; if the Department determines that the claim for award is brought by a person who planned and initiated the actions that led to the false claim and a resulting underpayment of tax for the purpose of bringing an action, the Department may appropriately reduce the award; and a determination of the Department regarding an award may be appealed to the Court of Claims within 30 days of the determination.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning civil law.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois False Claims Act is amended by | 5 | | changing Section 4 and by adding Section 4.5 as follows:
| 6 | | (740 ILCS 175/4) (from Ch. 127, par. 4104)
| 7 | | Sec. 4. Civil actions for false claims.
| 8 | | (a) Responsibilities of the Attorney General and the | 9 | | Department of
State Police. The Attorney General or the | 10 | | Department of State Police shall diligently investigate
a civil | 11 | | violation under Section 3. If the Attorney General finds that a | 12 | | person violated or is violating Section 3, the Attorney General | 13 | | may bring a civil action under this Section
against the person.
| 14 | | The State shall receive an amount for reasonable expenses | 15 | | that the court finds to have been necessarily incurred by the | 16 | | Attorney General, including reasonable attorneys' fees and | 17 | | costs. All such expenses, fees, and costs shall be awarded | 18 | | against the defendant. The court may award amounts from the | 19 | | proceeds of an action or settlement that it considers | 20 | | appropriate to any governmental entity or program that has been | 21 | | adversely affected by a defendant. The Attorney General, if | 22 | | necessary, shall direct the State Treasurer to make a | 23 | | disbursement of funds as provided in court orders or settlement |
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| 1 | | agreements. | 2 | | (b) Actions by private persons.
| 3 | | (1) A person may bring a civil action
for a violation | 4 | | of Section 3 for the person and for the State. The action
| 5 | | shall be brought in the name of the State. The action may | 6 | | be dismissed
only if the court and the Attorney General | 7 | | give written consent to the
dismissal and their reasons for | 8 | | consenting.
| 9 | | (2) A copy of the complaint and written disclosure of | 10 | | substantially all
material evidence and information the | 11 | | person possesses shall be served on
the State. The | 12 | | complaint shall be filed in camera, shall remain under seal
| 13 | | for at least 60 days, and shall not be served on the | 14 | | defendant until the
court so orders. The State may elect to | 15 | | intervene and proceed with the
action within 60 days after | 16 | | it receives both the complaint and the material
evidence | 17 | | and information.
| 18 | | (3) The State may, for good cause shown, move the court | 19 | | for extensions
of the time during which the complaint | 20 | | remains under seal under paragraph
(2). Any such motions | 21 | | may be supported by affidavits or other submissions
in | 22 | | camera. The defendant shall not be required to respond to | 23 | | any complaint
filed under this Section until 20 days after | 24 | | the complaint is unsealed and
served upon the defendant.
| 25 | | (4) Before the expiration of the 60-day period or any | 26 | | extensions
obtained under paragraph (3), the State shall:
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| 1 | | (A) proceed with the action, in which case the | 2 | | action shall be
conducted by the State; or
| 3 | | (B) notify the court that it declines to take over | 4 | | the action, in which
case the person bringing the | 5 | | action shall have the right to conduct the action.
| 6 | | (5) When a person brings an action under this | 7 | | subsection (b), no person
other than the State may | 8 | | intervene or bring a related action based on the
facts | 9 | | underlying the pending action.
| 10 | | (c) Rights of the parties to Qui Tam actions.
| 11 | | (1) If the State proceeds
with the action, it shall | 12 | | have the primary responsibility for prosecuting
the | 13 | | action, and shall not be bound by an act of the person | 14 | | bringing the
action. Such person shall have the right to | 15 | | continue as a party to the
action, subject to the | 16 | | limitations set forth in paragraph (2).
| 17 | | (2)(A) The State may dismiss the action | 18 | | notwithstanding the objections
of the person initiating | 19 | | the action if the person has been notified by the
State of | 20 | | the filing of the motion and the court has provided the | 21 | | person
with an opportunity for a hearing on the motion.
| 22 | | (B) The State may settle the action with the defendant | 23 | | notwithstanding
the objections of the person initiating | 24 | | the action if the court determines,
after a hearing, that | 25 | | the proposed settlement is fair, adequate, and reasonable
| 26 | | under all the circumstances. Upon a showing of good cause, |
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| 1 | | such hearing
may be held in camera.
| 2 | | (C) Upon a showing by the State that unrestricted | 3 | | participation during
the course of the litigation by the | 4 | | person initiating the action would
interfere with or unduly | 5 | | delay the State's prosecution of the case, or
would be | 6 | | repetitious, irrelevant, or for purposes of harassment, | 7 | | the court
may, in its discretion, impose limitations on the | 8 | | person's participation,
such as:
| 9 | | (i) limiting the number of witnesses the person may | 10 | | call:
| 11 | | (ii) limiting the length of the testimony of such | 12 | | witnesses;
| 13 | | (iii) limiting the person's cross-examination of | 14 | | witnesses; or
| 15 | | (iv) otherwise limiting the participation by the | 16 | | person in the
litigation.
| 17 | | (D) Upon a showing by the defendant that unrestricted | 18 | | participation
during
the course of the litigation by the | 19 | | person initiating the action would be
for purposes of | 20 | | harassment or would cause the defendant undue burden or
| 21 | | unnecessary expense, the court may limit the participation | 22 | | by the person in
the litigation.
| 23 | | (3) If the State elects not to proceed with the action, | 24 | | the person who
initiated the action shall have the right to | 25 | | conduct the action. If the
State so requests, it shall be | 26 | | served with copies of all pleadings filed in
the action and |
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| 1 | | shall be supplied with copies of all deposition transcripts
| 2 | | (at the State's expense). When a person proceeds with the | 3 | | action, the
court, without limiting the status and rights | 4 | | of the person initiating the
action, may nevertheless | 5 | | permit the State to intervene at a later date upon
a | 6 | | showing of good cause.
| 7 | | (4) Whether or not the State proceeds with the action, | 8 | | upon a showing by
the State that certain actions of | 9 | | discovery by the person initiating the
action would | 10 | | interfere with the State's investigation or prosecution of | 11 | | a
criminal or civil matter arising out of the same facts, | 12 | | the court may stay
such discovery for a period of not more | 13 | | than 60 days. Such a showing shall
be conducted in camera. | 14 | | The court may extend the 60-day period upon a
further | 15 | | showing in camera that the State has pursued the criminal | 16 | | or civil
investigation or proceedings with reasonable | 17 | | diligence and any proposed
discovery in the civil action | 18 | | will interfere with the ongoing criminal or
civil | 19 | | investigation or proceedings.
| 20 | | (5) Notwithstanding subsection (b), the State may | 21 | | elect to pursue its
claim through any alternate remedy | 22 | | available to the State, including any
administrative | 23 | | proceeding to determine a civil money penalty. If any such
| 24 | | alternate remedy is pursued in another proceeding, the | 25 | | person initiating
the action shall have the same rights in | 26 | | such proceeding as such person
would have had if the action |
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| 1 | | had continued under this Section. Any finding
of fact or | 2 | | conclusion of law made in such other proceeding that has | 3 | | become
final shall be conclusive on all parties to an | 4 | | action under this Section.
For purposes of the preceding | 5 | | sentence, a finding or conclusion is final if
it has been | 6 | | finally determined on appeal to the appropriate court, if | 7 | | all
time for filing such an appeal with respect to the | 8 | | finding or conclusion
has expired, or if the finding or | 9 | | conclusion is not subject to judicial review.
| 10 | | (d) Award to Qui Tam plaintiff.
| 11 | | (1) If the State proceeds with an
action brought by a | 12 | | person under subsection (b), such person shall, subject
to | 13 | | the second sentence of this paragraph, receive at least 15% | 14 | | but not more
than 25% of the proceeds of the action or | 15 | | settlement of the claim,
depending upon the extent to which | 16 | | the person substantially contributed to
the prosecution of | 17 | | the action. Where the action is one which the court
finds | 18 | | to be based primarily on disclosures of specific | 19 | | information (other
than information provided by the person | 20 | | bringing the action) relating to
allegations or | 21 | | transactions in a criminal, civil, or administrative
| 22 | | hearing, in a legislative, administrative, or Auditor | 23 | | General's report,
hearing, audit, or investigation, or | 24 | | from the news media, the court may award
such sums as it | 25 | | considers appropriate, but in no case more than 10% of the
| 26 | | proceeds, taking into account the significance of the |
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| 1 | | information and the
role of the person bringing the action | 2 | | in advancing the case to litigation.
Any payment to a | 3 | | person under the first or second sentence of this
paragraph | 4 | | (1) shall be made from the proceeds. Any such person shall | 5 | | also
receive an amount for reasonable expenses which the | 6 | | court finds to have
been necessarily incurred, plus | 7 | | reasonable attorneys' fees and costs.
The State shall also | 8 | | receive an amount for reasonable expenses which the
court | 9 | | finds to have been necessarily incurred by the Attorney | 10 | | General,
including reasonable attorneys' fees and costs. | 11 | | All such expenses, fees, and costs shall be awarded
against | 12 | | the defendant. The court may award amounts from the | 13 | | proceeds of an action or settlement that it considers | 14 | | appropriate to any governmental entity or program that has | 15 | | been adversely affected by a defendant. The Attorney | 16 | | General, if necessary, shall direct the State Treasurer to | 17 | | make a disbursement of funds as provided in court orders or | 18 | | settlement agreements.
| 19 | | (2) If the State does not proceed with an action under | 20 | | this Section, the
person bringing the action or settling | 21 | | the claim shall receive an amount
which the court decides | 22 | | is reasonable for collecting the civil penalty and
damages. | 23 | | The amount shall be not less than 25% and not more than 30% | 24 | | of
the proceeds of the action or settlement and shall be | 25 | | paid out of such
proceeds. Such person shall also receive | 26 | | an amount for reasonable expenses
which the court finds to |
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| 1 | | have been necessarily incurred, plus reasonable
attorneys' | 2 | | fees and costs. All such expenses, fees, and costs shall be
| 3 | | awarded against the defendant. The court may award amounts | 4 | | from the proceeds of an action or settlement that it | 5 | | considers appropriate to any governmental entity or | 6 | | program that has been adversely affected by a defendant. | 7 | | The Attorney General, if necessary, shall direct the State | 8 | | Treasurer to make a disbursement of funds as provided in | 9 | | court orders or settlement agreements.
| 10 | | (3) Whether or not the State proceeds with the action, | 11 | | if the court finds
that the action was brought by a person | 12 | | who planned and initiated the violation
of Section 3 upon | 13 | | which the action was brought, then the court may, to the
| 14 | | extent the court considers appropriate, reduce the share of | 15 | | the proceeds of
the action which the person would otherwise | 16 | | receive under paragraph (1) or
(2) of this subsection (d), | 17 | | taking into account the role of that person in
advancing | 18 | | the case to litigation and any relevant circumstances | 19 | | pertaining
to the violation. If the person bringing the | 20 | | action is convicted of
criminal conduct arising from his or | 21 | | her role in the violation of Section
3, that person shall | 22 | | be dismissed from the civil action and shall not
receive | 23 | | any share of the proceeds of the action. Such dismissal | 24 | | shall not
prejudice the right of the State to continue the | 25 | | action, represented by the Attorney General.
| 26 | | (4) If the State does not proceed with the action and |
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| 1 | | the person
bringing the action conducts the action, the | 2 | | court may award to the
defendant its reasonable attorneys' | 3 | | fees and expenses if the defendant
prevails in the action | 4 | | and the court finds that the claim of the person
bringing | 5 | | the action was clearly frivolous, clearly vexatious, or | 6 | | brought
primarily for purposes of harassment.
| 7 | | (e) Certain actions barred.
| 8 | | (1) No court shall have jurisdiction over an
action | 9 | | brought by a former or present member of the Guard under | 10 | | subsection
(b) of this Section against a member of the | 11 | | Guard arising out of such
person's service in the Guard.
| 12 | | (2)(A) No court shall have jurisdiction over an action | 13 | | brought under
subsection (b) against a member of the | 14 | | General Assembly, a member of the
judiciary, or an exempt | 15 | | official if the action is based on evidence or
information | 16 | | known to the State when the action was brought.
| 17 | | (B) For purposes of this paragraph (2), "exempt | 18 | | official" means any of
the following officials in State | 19 | | service: directors of departments
established under the | 20 | | Civil Administrative Code of Illinois, the Adjutant
| 21 | | General, the Assistant Adjutant General, the Director of | 22 | | the State
Emergency Services and Disaster Agency, members | 23 | | of the boards and
commissions, and all other positions | 24 | | appointed by the Governor by and with
the consent of the | 25 | | Senate.
| 26 | | (3) In no event may a person bring an action under |
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| 1 | | subsection (b) which
is based upon allegations or | 2 | | transactions which are the subject of a civil
suit or an | 3 | | administrative civil money penalty proceeding in which the | 4 | | State
is already a party.
| 5 | | (4)(A) No court shall have jurisdiction over an action | 6 | | under this
Section
based upon the public disclosure of | 7 | | allegations or transactions in a
criminal, civil, or | 8 | | administrative hearing, in a legislative,
administrative, | 9 | | or Auditor General's report, hearing, audit, or
| 10 | | investigation, or from the news media, unless the action is | 11 | | brought by the
Attorney General or the person bringing the | 12 | | action is an original source of
the information.
| 13 | | (B) For purposes of this paragraph (4), "original | 14 | | source" means an
individual who has direct and independent | 15 | | knowledge of the information on
which the allegations are | 16 | | based and has voluntarily provided the
information to the | 17 | | State before filing an action under this Section which
is | 18 | | based on the information.
| 19 | | (5) No court shall have jurisdiction over a civil | 20 | | action brought under subsection (b) that relates to or | 21 | | involves a false claim regarding a tax Act administered by | 22 | | the Department of Revenue unless the action is brought by | 23 | | the Attorney General at the request of the Department of | 24 | | Revenue pursuant to Section 4.5 of this Act. | 25 | | (f) State not liable for certain expenses. The State is not | 26 | | liable for
expenses which a person incurs in bringing an action |
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| 1 | | under this Section.
| 2 | | (g) Relief from retaliatory actions. | 3 | | (1) In general, any employee, contractor, or agent is | 4 | | entitled to all relief necessary to make that employee, | 5 | | contractor, or agent whole, if that employee, contractor, | 6 | | or agent is discharged, demoted, suspended, threatened,
| 7 | | harassed, or in any other manner discriminated against in | 8 | | the terms and
conditions of employment because of lawful | 9 | | acts done
by the employee, contractor, or agent on behalf | 10 | | of the employee, contractor, or agent or associated others | 11 | | in furtherance of other efforts to stop one or more | 12 | | violations of this Act. | 13 | | (2) Relief under paragraph (1) shall include | 14 | | reinstatement with the seniority status that the employee, | 15 | | contractor, or agent
would have had but for the | 16 | | discrimination, 2 times the amount of back pay,
interest on | 17 | | the back pay, and compensation for any special damages | 18 | | sustained
as a result of the discrimination, including | 19 | | litigation costs and
reasonable attorneys' fees. An action | 20 | | under this subsection (g) may be brought in the
appropriate | 21 | | circuit court for the relief provided in this subsection | 22 | | (g).
| 23 | | (Source: P.A. 96-1304, eff. 7-27-10.)
| 24 | | (740 ILCS 175/4.5 new) | 25 | | Sec. 4.5. Actions for false claims relating to tax Acts |
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| 1 | | administered by the Department of Revenue. | 2 | | (a) The Department of Revenue shall have the sole authority | 3 | | to initiate an administrative or judicial action resulting from | 4 | | information provided by any person alleging a false claim, | 5 | | statement, or record, as set forth in Section 3 of this Act, | 6 | | pertaining to any tax Act administered by the Department of | 7 | | Revenue. | 8 | | (b) The Department of Revenue shall establish, by rule, a | 9 | | procedure for the reporting of any allegation of a false claim, | 10 | | statement, or record to the Department. | 11 | | (c) The Department of Revenue shall diligently investigate | 12 | | all allegations of a false claim, statement, or record and may | 13 | | bring an action under this Act for all applicable taxes, | 14 | | penalties, and interest it determines is due under the | 15 | | appropriate tax Act. | 16 | | (d) If the Department of Revenue proceeds with an | 17 | | administrative or judicial action based on information brought | 18 | | to its attention by a private person, that person shall, | 19 | | subject to subsection (e), receive as an award an amount equal | 20 | | to at least 15% but not more than 30% of the collected proceeds | 21 | | (including any additional penalties and interest that may be | 22 | | assessed on the underlying liability) from the action or from | 23 | | any settlement in response to that action, taking into account | 24 | | the significance of the person's information and the role of | 25 | | the person and any legal representative of the person in | 26 | | contributing to the action. |
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| 1 | | (e) In the event the action is one which the Department of | 2 | | Revenue determines to be based principally on disclosures of | 3 | | specific allegations resulting from a judicial or | 4 | | administrative hearing, from a governmental report, hearing, | 5 | | audit, or investigation, or from the news media, the Department | 6 | | may award such sums as it considers appropriate, but in no case | 7 | | may it award more than 10% of the collected proceeds (including | 8 | | all penalties and interest) resulting from the action or from | 9 | | any settlement in response to the action, taking into account | 10 | | the significance of the person's information and the role of | 11 | | the person and any legal representative of the person in | 12 | | contributing to the action. | 13 | | (f) No award shall be issued if the information resulting | 14 | | in the initiation of the action was originally provided by the | 15 | | person alleging the false claim. | 16 | | (g) If the Department of Revenue determines that the claim | 17 | | for award is brought by a person who planned and initiated the | 18 | | actions that led to the false claim and any resulting | 19 | | underpayment of tax for the purpose of bringing an action under | 20 | | this Act, the Department may appropriately reduce the award. | 21 | | (h) Any determination of the Department of Revenue | 22 | | regarding an award under this Section may be appealed to the | 23 | | Court of Claims within 30 days of the determination.
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