Under current law, if a contractor or vendor does business with this state or a
local government, the terms of the contract or order govern the performance of, and
the price to be paid to, the contractor or vendor. If the contractor or vendor claims
payment for materials, supplies, equipment, or services that are not provided in
accordance with the contract or order, or at a price that is different from the price
specified in the contract or order, the state or a local government has a remedy
against the contractor or vendor for breach of contract. If the contractor or vendor
is asked to swear to the truth of a claim for payment and the claim is false, the
contractor or vendor may be prosecuted for false swearing. Currently, except with
regard to medical assistance, a private person has no means to recover, on behalf of
the state, damages sustained by the state as a result of a fraud committed against
the state.
This bill provides that whoever knowingly presents a false claim under any
contract or order for materials, supplies, equipment, or services to be provided to a
state agency is subject to a forfeiture (civil penalty) of not less than $5,000 nor more
than $10,000, plus three times the amount of the damages that were sustained by
the state or would have been sustained by the state, whichever is greater, as a result
of the false claim. The bill permits the attorney general to bring an action to recover
any forfeiture for which a contractor or vendor is liable as a result of a false claim
submitted to a state agency. The bill contains similar provisions that apply to local
governmental units. The bill creates separate prohibitions against state contractors,
grantees, vendors, and other recipients of state resources who knowingly commit
certain fraudulent acts against the state. The bill makes these persons liable for
three times the amount of damages sustained by the state resulting from such acts
and imposes additional forfeitures of not less than $5,000 nor more than $10,000 for
each violation. The bill permits the attorney general to pursue an alternate remedy,
such as an administrative remedy, against an alleged offender in lieu of an action in
court. With certain exceptions, the bill provides that a person who brings an action
on behalf of the state is entitled to receive his or her reasonable expenses of bringing
the action, including his or her costs and reasonable, actual attorney fees, which are
assessed against the defendant. The bill entitles an employee to all relief to make
the employee whole if the employee is discriminated against by an employer as a
result of lawful actions the employee took to further the investigation of any act of
fraud, as defined in the bill, the employer committed against the state. Under the
bill, the relief may include reinstatement and double back pay with interest from the
time of any discharge to the time of reinstatement. The bill also permits the employee
to recover any costs, including reasonable, actual attorney fees, from his or her
employer.
The provisions of the bill do not apply to certain contracts of the Department
of Transportation, including engineering and highway construction contracts, or to
certain contracts of the Investment Board, including investment-related contracts.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB572, s. 1
1Section
1. 16.771 of the statutes is created to read:
SB572,2,3
216.771 False claims. (1) In this section, "contract" means any of the
3following:
SB572,2,44
(a) Contracts or orders that are subject to s. 16.705.
SB572,3,3
1(b) Contracts or orders entered into for projects that are subject to s. 103.49 or
2103.50 if the party presenting the false claim is alleged to have failed to comply with
3s. 103.49 or 103.50.
SB572,3,10
4(2) Whoever knowingly presents or causes to be presented a false claim for
5payment under a contract for materials, supplies, equipment, or services to be
6provided to an agency shall forfeit not less than $5,000 nor more than $10,000, plus
73 times the amount of the damages that were sustained by the state or would have
8been sustained by the state, whichever is greater, as a result of the false claim. The
9attorney general may bring an action on behalf of the state to recover any forfeiture
10incurred under this section.
SB572, s. 2
11Section
2. 16.871 of the statutes is created to read:
SB572,3,12
1216.871 False claims. (1) In this section:
SB572,3,1313
(a) "Agency" has the meaning given in s. 16.70 (1e).
SB572,3,1414
(b) "Construction work" has the meaning given in s. 16.87 (1) (a).
SB572,3,1515
(bm) "Contract" has the meaning given in s. 16.771 (1).
SB572,3,1616
(c) "Limited trades work" has the meaning given in s. 16.70 (7).
SB572,3,23
17(2) Whoever knowingly presents or causes to be presented a false claim under
18any contract for construction work or limited trades work, or for engineering or
19architectural services, to be provided to any agency shall forfeit not less than $5,000
20nor more than $10,000, plus 3 times the amount of the damages that were sustained
21by the state or would have been sustained by the state, whichever is greater, as a
22result of the false claim. The attorney general may bring an action on behalf of the
23state to recover any forfeiture incurred under this subsection.
SB572, s. 3
24Section
3. 20.932 of the statutes is created to read:
SB572,3,25
2520.932 False claims; actions by or on behalf of state. (1) In this section:
SB572,4,1
1(a) "Authority" has the meaning given in s. 16.70 (2).
SB572,4,92
(b) "Claim" includes any request or demand for money, property, or services
3made to any officer, employee, or agent of this state, or to any contractor, grantee, or
4other recipient, whether or not under contract, if any portion of the money, property,
5or services that are requested or demanded is derived from state resources, or if the
6state is obligated to reimburse the contractor, grantee, or other recipient for any
7portion of the money, property, or services that are requested or demanded. "Claim"
8does not include any request or demand for medical assistance described under s.
920.931 (1) (b).
SB572,4,1010
(c) "Employer" includes all agencies and authorities.
SB572,4,1111
(d) "Knowingly" has the meaning given in s. 20.931 (1) (d).
SB572,4,1212
(e) "Proceeds" has the meaning given in s. 20.931 (1) (e).
SB572,4,1313
(f) "State public official" has the meaning given in s. 19.42 (14).
SB572,4,16
14(2) Except as provided in subs. (3m) and (4), any person who does any of the
15following is liable to this state as provided under sub. (3) and shall forfeit not less
16than $5,000 nor more than $10,000 for each violation:
SB572,4,1917
(a) Knowingly presents or causes to be presented to any officer, employee, or
18agent of this state, or to any contractor, grantee, or other recipient of state resources,
19a false claim for payment or approval.
SB572,4,2120
(b) Knowingly makes, uses, or causes to be made or used a false record or
21statement to obtain approval or payment of a false claim.
SB572,4,2522
(c) Conspires to defraud this state by obtaining allowance or payment of a false
23claim, or by knowingly making or using, or causing to be made or used, a false record
24or statement to conceal, avoid, or decrease an obligation to pay or transmit money
25or property to this state.
SB572,5,3
1(d) Has possession, custody, or control of property used or to be used by this
2state and knowingly delivers or causes to be delivered less property than the amount
3for which the person receives a certificate or receipt.
SB572,5,64
(e) Being authorized to make or deliver a document certifying receipt of
5property that is used or to be used by this state, knowingly makes or delivers a receipt
6that falsely represents the property that is used or to be used.
SB572,5,97
(f) Knowingly buys or receives as a pledge for payment of an obligation or debt
8for this state property from any person who lawfully may not sell or pledge the
9property.
SB572,5,1210
(g) Knowingly makes, uses, or causes to be made or used a false record or
11statement to conceal, avoid, or decrease any obligation to pay or transmit money or
12property to this state.
SB572,5,1613
(h) Is a beneficiary of the submission of a false claim to any officer, employee,
14or agent of this state, or to any contractor, grantee, or other recipient of state
15resources, knows that the claim is false, and fails to disclose the false claim to this
16state within a reasonable time after the person becomes aware that the claim is false.
SB572,5,19
17(3) Except as provided in subs. (3m) and (4), the court may assess against a
18person who violates sub. (2) not less than 2 nor more than 3 times the amount of the
19damages sustained by the state because of the acts of the person.
SB572,5,21
20(3m) The court may not assess any forfeiture under sub. (2) if the court finds
21all of the following:
SB572,5,2422
(a) The person who commits the acts furnished the attorney general with all
23information known to the person about the acts within 30 days after the date on
24which the person obtained the information.
SB572,5,2525
(b) The person fully cooperated with any investigation of the acts by this state.
SB572,6,4
1(c) At the time that the person furnished the attorney general with information
2concerning the acts, no criminal prosecution or civil or administrative enforcement
3action had been commenced with respect to the act, and the person did not have
4actual knowledge of the existence of any investigation into the act.
SB572,6,6
5(4) Subsections (2) and (3) do not apply to any claim, record, statement, or
6return made under chs. 70 to 79.
SB572,6,9
7(5) (a) Except as provided in subs. (10) and (12), any person may bring a civil
8action as a qui tam plaintiff against a person who commits an act in violation of sub.
9(2) for the person and the state in the name of the state.
SB572,6,1710
(b) The plaintiff shall serve upon the attorney general a copy of the complaint
11and documents disclosing substantially all material evidence and information that
12the person possesses. The plaintiff shall file a copy of the complaint with the court
13for inspection in camera. Except as provided in par. (c), the complaint shall remain
14under seal for a period of 60 days from the date of filing, and shall not be served upon
15the defendant until the court so orders. Within 60 days from the date of service upon
16the attorney general of the complaint, evidence, and information under this
17paragraph, the attorney general may intervene in the action.
SB572,6,2018
(c) The attorney general may, for good cause shown, move the court for one or
19more extensions of the period during which a complaint in an action under this
20subsection remains under seal.
SB572,6,2221
(d) Before the expiration of the period during which the complaint remains
22under seal, the attorney general shall do one of the following:
SB572,6,2423
1. Proceed with the action or an alternate remedy under sub. (10), in which case
24the state shall prosecute the action or proceeding under sub. (10).
SB572,7,2
12. Notify the court that he or she declines to proceed with the action, in which
2case the action may not proceed.
SB572,7,53
(e) If a person brings a valid action under this subsection, no person other than
4the state may intervene or bring a related action while the original action is pending
5based upon the same facts underlying the pending action.
SB572,7,86
(f) In any action or other proceeding under sub. (10) brought under this
7subsection, all essential elements of the cause of action or complaint, including
8damages, must be proven by a preponderance of the evidence.
SB572,7,13
9(6) If the state proceeds with an action under sub. (5) or an alternate remedy
10under sub. (10), the state has primary responsibility for prosecuting the action or
11proceeding under sub. (10). The state is not bound by any act of the person bringing
12the action, but that person has the right to continue as a party to the action, subject
13to the limitations under sub. (7).
SB572,7,19
14(7) (a) The state may move to dismiss an action under sub. (5) or an
15administrative proceeding under sub. (10) to which the state is a party for good cause
16shown, notwithstanding objection of the person bringing the action, if that person is
17served with a copy of the state's motion and is provided with an opportunity to oppose
18the motion before the court or the administrative agency before which the proceeding
19is conducted.
SB572,8,220
(b) With the approval of the governor, the attorney general may compromise
21and settle an action under sub. (5) or an administrative proceeding under sub. (10)
22to which the state is a party, notwithstanding objection of the person bringing the
23action, if the court determines, after affording to the person bringing the action the
24right to a hearing at which the person has the opportunity to present evidence in
1opposition to the proposed settlement, that the proposed settlement is fair, adequate,
2and reasonable considering the relevant circumstances pertaining to the violation.
SB572,8,93
(c) Upon a showing by the state that unrestricted participation in the
4prosecution of an action under sub. (5) or an alternate proceeding to which the state
5is a party by the person bringing the action would interfere with or unduly delay the
6prosecution of the action or proceeding, or would result in consideration of
7repetitious or irrelevant evidence or evidence presented for purposes of harassment,
8the court may limit the person's participation in the prosecution in any of the
9following ways:
SB572,8,1010
1. Limiting the number of witnesses that the person may call.
SB572,8,1111
2. Limiting the length of the testimony of the witnesses.
SB572,8,1212
3. Limiting the cross-examination of witnesses by the person.
SB572,8,1413
4. Otherwise limiting the participation by the person in the prosecution of the
14action or proceeding.
SB572,8,1915
(d) Upon showing by a defendant that unrestricted participation in the
16prosecution of an action under sub. (5) or alternate proceeding under sub. (10) to
17which the state is a party by the person bringing the action would result in
18harassment or would cause the defendant undue burden or unnecessary expense, the
19court may limit the person's participation in the prosecution.
SB572,9,3
20(9) Upon showing in camera by the attorney general that discovery by the
21person bringing the action would interfere with the state's ongoing investigation or
22prosecution of a criminal or civil matter arising out of the same facts as the facts upon
23which the action is based, the court may stay the discovery in whole or in part for not
24more than 60 days. The court may extend the stay upon further showing in camera
25by the attorney general that the state has pursued the criminal or civil investigation
1of the matter with reasonable diligence and the proposed discovery in the action
2brought under sub. (5) will interfere with the ongoing criminal or civil investigation
3or prosecution.
SB572,9,15
4(10) The attorney general may pursue a claim relating to an alleged violation
5of sub. (2) through an alternate remedy available to the state or any state agency,
6including an administrative proceeding to assess a civil forfeiture. If the attorney
7general elects an alternate remedy, the attorney general shall serve timely notice of
8his or her election upon the person bringing the action under sub. (5), and that person
9has the same rights in the alternate venue as the person would have had if the action
10had continued under sub. (5). Any finding of fact or conclusion of law made by a court
11or by a state agency in the alternate venue that has become final is conclusive upon
12all parties named in an action under sub. (5). For purposes of this subsection, a
13finding or conclusion is final if it has been finally determined on appeal, if all time
14for filing an appeal or petition for review with respect to the finding or conclusion has
15expired, or if the finding or conclusion is not subject to judicial review.
SB572,9,21
16(11) (a) Except as provided in pars. (b) and (d), if the state proceeds with an
17action brought by a person under sub. (5) or the state pursues an alternate remedy
18relating to the same acts under sub. (10), the person who brings the action shall
19receive at least 15 percent but not more than 25 percent of the proceeds of the action
20or settlement of the claim, depending upon the extent to which the person
21contributed to the prosecution of the action or claim.
SB572,9,2522
(b) Except as provided in par. (d), if an action or claim is one in which the court
23or other adjudicator finds to be based primarily upon disclosures of specific
24information not provided by the person who brings an action under sub. (5) relating
25to allegations or transactions specifically in a criminal, civil, or administrative
1hearing; in a legislative or administrative report, hearing, audit, or investigation; or
2in a report made by the news media, the court or other adjudicator may award an
3amount that it considers appropriate but that is not more than 10 percent of the
4proceeds of the action or settlement of the claim, depending upon the significance of
5the information and the role of the person bringing the action in advancing the
6prosecution of the action or claim.
SB572,10,117
(c) Except as provided in par. (d), in addition to any amount received under par.
8(a) or (b), a person bringing an action under sub. (5) shall be awarded his or her
9reasonable expenses necessarily incurred in bringing the action together with the
10person's costs and reasonable actual attorney fees. The court or other adjudicator
11shall assess any award under this paragraph against the defendant.
SB572,10,2312
(d) Whether the state proceeds with the action or an alternate proceeding under
13sub. (10), if the court or other adjudicator finds that the person who brought an action
14under sub. (5) also planned or initiated the violation upon which the action or
15proceeding is based, then the court may, to the extent that the court considers
16appropriate, reduce the share of the proceeds of the action that the person would
17otherwise receive under par. (a) or (b), taking into account the role of that person in
18advancing the prosecution of the action or claim and any other relevant circumstance
19pertaining to the violation, except that if the person bringing the action is convicted
20of criminal conduct arising from his or her role in a violation of sub. (2), the court or
21other adjudicator shall dismiss the person as a party and the person shall not receive
22any share of the proceeds of the action or claim or any expenses, costs, or fees under
23par. (c).
SB572,10,25
24(12) (a) No court has jurisdiction over an action brought by a private person
25under sub. (5) if any of the following applies:
SB572,11,2
11. The action is against a state public official and is based upon information
2known to the attorney general at the time that the action is brought.
SB572,11,83
2. The action is based on public disclosure of allegations or transactions in a
4criminal action; in a legislative, administrative, or other governmental report,
5hearing, audit, or investigation; or from news media, unless the private person has
6direct and independent knowledge of the information on which the allegations or
7transactions are based and has voluntarily provided the knowledge to the attorney
8general under sub. (5) (b).
SB572,11,129
(b) No person may bring an action under sub. (5) that is based upon allegations
10or transactions that are the subject of a civil action or an administrative proceeding
11to assess a civil forfeiture in which the state is a party if that action or proceeding
12was commenced prior to the date that the action is filed.
SB572,11,14
13(13) The state is not liable for any expenses incurred by a private person in
14bringing an action under sub. (5).
SB572,12,2
15(14) Any employee who is discharged, demoted, suspended, threatened,
16harassed, or in any other manner discriminated against by his or her employer
17because of lawful actions taken by the employee, on behalf of the employee, or by
18others in furtherance of an action or claim filed under this section, including
19investigation for, initiation of, testimony for, or assistance in an action or claim filed
20or to be filed under sub. (5) is entitled to all necessary relief to make the employee
21whole. The relief shall in each case include reinstatement with the same seniority
22status that the employee would have had but for the discrimination, 2 times the
23amount of back pay, interest on the back pay at the legal rate, and compensation for
24any special damages sustained as a result of the discrimination, including costs and
1reasonable actual attorney fees. An employee may bring an action to obtain the relief
2to which the employee is entitled under this subsection.
SB572,12,5
3(15) A civil action may be brought based upon acts occurring prior to the
4effective date of this subsection .... [LRB inserts date], if the action is brought within
5the period specified in s. 893.981.
SB572,12,9
6(16) A judgment of guilty entered against a defendant in a criminal action in
7which the defendant is charged with fraud or making false statements estops the
8defendant from denying the essential elements of the offense in any action under sub.
9(5) that involves the same elements as in the criminal action.
SB572,12,11
10(17) The remedies provided for under this section are in addition to any other
11remedies provided for under any other law or available under the common law.
SB572,12,14
12(18) This section shall be liberally construed and applied to promote the public
13interest and to effect the congressional intent in enacting
31 USC 3729 to
3733, as
14reflected in the act and the legislative history of the act.
SB572, s. 4
15Section
4. 25.18 (1) (a) of the statutes is amended to read:
SB572,12,2416
25.18
(1) (a) Notwithstanding s. 20.930 and all provisions of subch. IV of ch.
1716, except s. 16.753, employ special legal or investment counsel in any matters
18arising out of the scope of its investment authority.
Section Sections 16.753
does,
1916.771, 16.871, and 20.932 do not apply to the employment of legal or investment
20counsel for the purpose of assisting the board with investments
or arising out of the
21scope of the board's investment authority. The employment of special legal counsel
22shall be with the advice and consent of the attorney general whenever such special
23counsel is to be compensated by the board. Any expense of counsel so employed shall
24be borne by the fund for which the services shall be furnished.
SB572, s. 5
25Section
5. 25.18 (1) (f) of the statutes is amended to read:
SB572,13,10
125.18
(1) (f) Maintain and repair any building or other structure or premises
2which it owns in fee or in which it owns the beneficial interest and, notwithstanding
3all provisions of subch. IV or V of ch. 16, except s. 16.753, it shall have exclusive
4authority to make such agreements and enter into such contracts as it deems
5necessary for such purpose.
Section Sections 16.753
does, 16.771, 16.871, and 20.932
6do not apply to agreements and contracts entered into by the board for the purpose
7of assisting the board with investments
or arising out of the scope of the board's
8investment authority. All noncapital costs under this paragraph shall be charged to
9the current income accounts of the funds having an interest in the building, structure
10or premises.
SB572, s. 6
11Section
6. 25.18 (1) (m) of the statutes is amended to read:
SB572,13,2012
25.18
(1) (m) Notwithstanding all provisions of subchs. IV and V of ch. 16,
13except s. 16.753, employ professionals, contractors or other agents necessary to
14evaluate or operate any property if a fund managed by the board has an interest in,
15or is considering purchasing or lending money based upon the value of, that property.
16Section Sections 16.753
does, 16.771, 16.871, and 20.932 do not apply to the
17employment of any person for the purpose of assisting the board with investments
18or arising out of the scope of the board's investment authority. Costs under this
19paragraph shall be paid by the fund and charged to the appropriate account under
20s. 40.04 (3).
SB572, s. 7
21Section
7. 66.0902 of the statutes is created to read:
SB572,13,22
2266.0902 False claims. (1) Definitions. In this section:
SB572,13,2323
(a) "Local governmental unit" has the meaning given in s. 66.0131 (1) (a).
SB572,14,224
(b) "Public contract" means a contract that is subject to s. 66.0903 and that is
25for the construction, execution, repair, remodeling, or improvement of a public work
1or building or for the furnishing of supplies, equipment, material, or professional or
2contractual services of any kind.
SB572,14,8
3(2) Presentation of false claims. Whoever knowingly presents or causes to
4be presented a false claim for payment under any public contract with a local
5governmental unit shall forfeit not less than $5,000 nor more than $10,000, plus 3
6times the amount of the damages that were sustained by the local governmental unit
7or would have been sustained by the local governmental unit, whichever is greater,
8as a result of the false claim.
SB572, s. 8
9Section
8. 84.01 (13) of the statutes is amended to read:
SB572,14,2210
84.01
(13) Engineering services. The department may engage such
11engineering, consulting, surveying, or other specialized services as it deems
12advisable. Any engagement of services under this subsection is exempt from ss.
1316.70 to 16.75, 16.755 to 16.82, and 16.85 to 16.89, but ss. 16.528, 16.752, 16.753, and
1416.754 apply to such engagement.
Section 20.932 does not apply to any engagement
15of services under this subsection. Any engagement involving an expenditure of
16$3,000 or more shall be by formal contract approved by the governor. The department
17shall conduct a uniform cost-benefit analysis, as defined in s. 16.70 (3g), of each
18proposed engagement under this subsection that involves an estimated expenditure
19of more than $25,000 in accordance with standards prescribed by rule of the
20department. The department shall review periodically, and before any renewal, the
21continued appropriateness of contracting pursuant to each engagement under this
22subsection that involves an estimated expenditure of more than $25,000.
SB572, s. 9
23Section
9. 84.01 (31) of the statutes is amended to read:
SB572,15,1024
84.01
(31) Accommodation of utility facilities within highway rights-of-way. 25Notwithstanding ss. 84.06 (4), 84.063, 84.065, and 84.093, the department may, upon
1finding that it is feasible and advantageous to the state, negotiate and enter into an
2agreement to accept any plant or equipment used for the conveyance, by wire, optics,
3radio signal, or other means, of voice, data, or other information at any frequency
4over any part of the electromagnetic spectrum, or to accept any services associated
5with the collection, storage, forwarding, switching, and delivery incidental to such
6communication, as payment for the accommodation of a utility facility, as defined in
7s. 84.063 (1) (b), within a highway right-of-way. Any agreement under this
8subsection is exempt from ss. 16.70 to 16.75, 16.755 to 16.82, and 16.85 to 16.89, but
9ss. 16.528, 16.752, and 16.754 apply to such agreement.
Section 20.932 does not
10apply to any agreement under this subsection.
