EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. Title 31 of NRS is hereby amended by adding thereto a

1-3 inclusive, of this act.

1-4 Sec. 2. As used in this chapter, unless the context otherwise requires,

1-5 the words and terms defined in sections 3, 4 and 5 of this act have the

1-6 meanings ascribed to them in those sections.

1-7 Sec. 3. "Claim" means a request or demand for money, property or

1-8 services made to:

1-9 1. An officer, employee or agent of this state or of a political

1-10 subdivision of this state; or

1-11 2. A contractor, grantee or other recipient of money from the state or

1-12 a political subdivision of this state if any part of the money, property or

1-13 services requested or demanded was provided by the state or political

1-14 subdivision.

1-15 Sec. 4. "Political subdivision" means a county, city, assessment

1-16 district or any other local government as defined in NRS 354.474.

2-1 Sec. 5. "Prosecuting authority" means the district attorney, city

2-2 attorney or other attorney responsible for civil proceedings on behalf of a

2-3 political subdivision, and includes the general counsel of the University

2-4 and Community College System of Nevada.

2-5 Sec. 6. 1. Except as otherwise provided in section 7 of this act, a

2-6 person who, with or without specific intent to defraud, does any of the

2-7 following listed acts is liable to the state or a political subdivision,

2-8 whichever is affected, for three times the amount of damages sustained

2-9 by the state or political subdivision because of the act of that person, for

2-10 the costs of a civil action brought to recover those damages and for a

2-11 civil penalty of not less than $2,000 or more than $10,000 for each act:

2-12 (a) Knowingly presents or causes to be presented a false claim for

2-13 payment or approval.

2-14 (b) Knowingly makes or uses, or causes to be made or used, a false

2-15 record or statement to obtain payment or approval of a false claim.

2-16 (c) Conspires to defraud by obtaining allowance or payment of a false

2-17 claim.

2-18 (d) Has possession, custody or control of public property or money

2-19 and knowingly delivers or causes to be delivered to the state or a political

2-20 subdivision less money or property than the amount for which he

2-21 receives a receipt.

2-22 (e) Is authorized to prepare or deliver a receipt for money or property

2-23 to be used by the state or a political subdivision and knowingly prepares

2-24 or delivers a receipt that falsely represents the money or property.

2-25 (f) Knowingly buys, or receives as security for an obligation, public

2-26 property from a person who is not authorized to sell or pledge the

2-27 property.

2-28 (g) Knowingly makes or uses, or causes to be made or used, a false

2-29 record or statement to conceal, avoid or decrease an obligation to pay or

2-30 transmit money or property to the state or a political subdivision.

2-31 (h) Is a beneficiary of an inadvertent submission of a false claim and,

2-32 after discovering the falsity of the claim, fails to disclose the falsity to the

2-33 state or political subdivision within a reasonable time.

2-34 2. As used in this section, a person acts "knowingly" with respect to

2-35 information if he:

2-36 (a) Has knowledge of the information;

2-37 (b) Acts in deliberate ignorance of whether the information is true or

2-38 false; or

2-39 (c) Acts in reckless disregard of the truth or falsity of the information.

2-40 Sec. 7. In a civil action pursuant to this chapter, the court may give

2-41 judgment for not less than twice or more than three times the amount of

2-42 damages sustained, and no civil penalty, if it finds that:

2-43 1. The person against who the judgment is entered:

3-1 (a) Furnished all information known to him concerning the act,

3-2 within 30 days after becoming aware of the information, to the attorney

3-3 general or a prosecuting authority; and

3-4 (b) Fully cooperated with any investigation of the act by the state or

3-5 political subdivision; and

3-6 2. At the time the information was furnished, no criminal

3-7 prosecution or civil or administrative proceeding had commenced with

3-8 respect to the act and the person had no knowledge of the existence of

3-9 any investigation with respect to the act.

3-10 Sec. 8. Liability pursuant to this chapter is joint and several for an

3-11 act done by two or more persons.

3-12 Sec. 9. 1. The attorney general shall investigate any alleged

3-13 liability pursuant to this chapter if money, property or services provided

3-14 by the state are involved, and may bring a civil action pursuant to this

3-15 chapter against a person liable.

3-16 2. If money, property or services provided by a political subdivision

3-17 are also involved, the attorney general shall, on the date the state

3-18 commences a civil action, send a copy of the complaint to the appropriate

3-19 prosecuting authority by mail with return receipt requested.

3-20 3. The prosecuting authority may intervene in the action

3-21 unconditionally within 60 days after receiving the copy of the complaint.

3-22 The court may permit the prosecuting authority to intervene later if the

3-23 prosecuting authority shows cause for permissive intervention pursuant

3-24 to the Nevada Rules of Civil Procedure.

3-25 Sec. 10. 1. The prosecuting authority of a political subdivision

3-26 shall investigate any alleged liability pursuant to this chapter if money,

3-27 property or services provided by the political subdivision are involved,

3-28 and may bring a civil action pursuant to this chapter against a person

3-29 liable.

3-30 2. If money, property or services provided by the state are also

3-31 involved, the prosecuting authority shall, on the date he commences a

3-32 civil action, send a copy of the complaint to the attorney general by mail

3-33 with return receipt requested.

3-34 3. Within 60 days after receiving the copy of the complaint, the

3-35 attorney general shall notify the court:

3-36 (a) That he will assume primary responsibility for the action, and the

3-37 prosecuting authority may remain as a party; or

3-38 (b) That he declines to proceed with the action, and the prosecuting

3-39 authority may conduct the action.

3-40 Sec. 11. 1. Except as otherwise provided in sections 26 and 27 of

3-41 this act, a private plaintiff may maintain an action pursuant to this

3-42 chapter on his own account and that of the state if money, property or

3-43 services provided by the state are involved, or on his own account and

4-1 that of a political subdivision if money, property or services provided by

4-2 the political subdivision are involved, or on his own account and that of

4-3 both the state and a political subdivision if both are involved. After such

4-4 an action is commenced, it may be dismissed only with leave of the court,

4-5 taking into account the public purposes of this chapter and the best

4-6 interests of the parties.

4-7 2. A complaint filed pursuant to this section must be placed under

4-8 seal and so remain until the attorney general, or in a proper case the

4-9 prosecuting authority, has elected whether to intervene. No service may

4-10 be made upon the defendant until the complaint is unsealed.

4-11 3. On the date the private plaintiff files his complaint, he shall send a

4-12 copy of the complaint to the attorney general by mail with return receipt

4-13 requested, and to the appropriate prosecuting authority if one is involved.

4-14 He shall send with each copy of the complaint a written disclosure of

4-15 substantially all material evidence and information he possesses.

4-16 Sec. 12. 1. Within 60 days after receiving a complaint and

4-17 disclosure that involve only money, property or services provided by the

4-18 state, the attorney general may intervene and proceed with the action or

4-19 he may, for good cause shown, move the court to extend the time for his

4-20 election whether to proceed. The motion may be supported by affidavits

4-21 or other submissions in chambers.

4-22 2. Within 15 days after receiving a complaint and disclosure that

4-23 involve only money, property or services provided by a political

4-24 subdivision, the attorney general shall elect whether to take primary

4-25 responsibility for the action or defer to the prosecuting authority, and

4-26 shall notify the private plaintiff and prosecuting authority of his decision.

4-27 3. If the attorney general elects to intervene or take primary

4-28 responsibility, the complaint must be unsealed. If the attorney general

4-29 elects not to intervene, the private plaintiff may proceed and the

4-30 complaint must be unsealed.

4-31 Sec. 13. 1. If the attorney general elects to defer to a prosecuting

4-32 authority in an action brought by a private plaintiff, the prosecuting

4-33 authority may within 45 days elect to intervene or he may, for good cause

4-34 shown, move the court to extend the time for his election. The motion

4-35 may be supported by affidavits or other submissions in chambers.

4-36 2. If the prosecuting authority elects to intervene, the complaint must

4-37 be unsealed. If the prosecuting authority elects not to intervene, the

4-38 private plaintiff may proceed and the complaint must be unsealed.

4-39 Sec. 14. 1. If an action brought by a private plaintiff involves

4-40 money, property or services provided by both the state and a political

4-41 subdivision, the attorney general and the prosecuting authority shall

4-42 coordinate their review and investigation. Within 60 days after receiving

4-43 the complaint and disclosure, either may elect to intervene and proceed

5-1 with the action or he may, for good cause shown, move the court to

5-2 extend the time for his election. The motion may be supported by

5-3 affidavits or other submissions in chambers.

5-4 2. Before the expiration of the time for those elections, the attorney

5-5 general shall notify the court whether he or the prosecuting authority or

5-6 both have elected to intervene. If the attorney general elects to intervene,

5-7 he shall take primary responsibility for the action. If only the prosecuting

5-8 authority elects to intervene, he shall proceed with the action. If neither

5-9 elects to intervene, the private plaintiff may proceed with the action. In

5-10 any case, the complaint must be unsealed.

5-11 Sec. 15. 1. If the attorney general or prosecuting authority

5-12 intervenes, the private plaintiff remains a party to an action pursuant to

5-13 section 11 of this act.

5-14 2. The attorney general or the prosecuting authority may move to

5-15 dismiss the action for good cause. The private plaintiff must be notified

5-16 of the filing of the motion and is entitled to oppose it and present

5-17 evidence at the hearing.

5-18 3. Except as otherwise provided in this subsection, the attorney

5-19 general or the prosecuting authority may settle the action. If the attorney

5-20 general or the prosecuting authority intends to settle the action, he shall

5-21 notify the private plaintiff of that fact. Upon the request of the private

5-22 plaintiff, the court shall determine whether settlement of the action is

5-23 consistent with the public purposes of this chapter and shall not approve

5-24 the settlement of the action unless it determines that such settlement is

5-25 consistent with the public purposes of this chapter.

5-26 Sec. 16. 1. The defendant is entitled to 30 days in which to respond

5-27 after a complaint filed pursuant to section 11 of this act is unsealed and

5-28 served upon him.

5-29 2. If a private plaintiff brings an action pursuant to this chapter, no

5-30 other person may bring another action pursuant to this chapter based on

5-31 the same facts.

5-32 3. An action may not be maintained by a private plaintiff pursuant to

5-33 this chapter:

5-34 (a) Against a member of the legislature or the judiciary, an elected

5-35 officer of the executive department of the state government, or a member

5-36 of the governing body of a political subdivision, if the action is based

5-37 upon evidence or information known to the state or political subdivision

5-38 at the time the action was brought.

5-39 (b) If the action is based upon allegations or transactions that are the

5-40 subject of a civil action or an administrative proceeding for a monetary

5-41 penalty to which the state or political subdivision is already a party.

6-1 Sec. 17. 1. If the state or a political subdivision, or both if both are

6-2 involved, elect not to intervene in an action pursuant to section 11 of this

6-3 act, the private plaintiff has the same rights in conducting the action as

6-4 the attorney general would have had. A copy of each pleading or other

6-5 paper filed in the action, and a copy of the transcript of each deposition

6-6 taken, must be mailed to the state or a political subdivision thereof if the

6-7 state or political subdivision so requests and pays the cost thereof.

6-8 2. Upon timely application, the state or a political subdivision may

6-9 intervene in an action in which it has previously declined to intervene, if

6-10 the interest of the state or political subdivision in recovery of the money

6-11 or property involved is not being adequately represented by the private

6-12 plaintiff.

6-13 3. If the state or a political subdivision so intervenes, the private

6-14 plaintiff retains primary responsibility for conducting the action and any

6-15 recovery must be apportioned as if the state or political subdivision had

6-16 not intervened.

6-17 Sec. 18. As used in sections 19 to 22, inclusive, of this act,

6-18 "recovery" includes civil penalties and does not include any allowance of

6-19 expenses or attorney’s fees.

6-20 Sec. 19. 1. If the attorney general initiates an action or assumes

6-21 primary responsibility for conducting an action initiated by a prosecuting

6-22 authority, 33 percent of any recovery must be paid into the state general

6-23 fund to the credit of a special account, for use by the attorney general as

6-24 appropriated or authorized by the legislature in the investigation and

6-25 prosecution of false claims.

6-26 2. If a prosecuting authority initiates and conducts an action, 33

6-27 percent of any recovery must be paid into the general fund of the political

6-28 subdivision, for use by the prosecuting authority as appropriated or

6-29 authorized by the governing body in the investigation and prosecution of

6-30 false claims.

6-31 3. If a prosecuting authority intervenes in an action initiated by the

6-32 attorney general or participates in an action for the conduct of which the

6-33 attorney general has assumed primary responsibility, the court may

6-34 award a portion of the 33 percent otherwise apportioned pursuant to

6-35 subsection 1 to be apportioned in the manner provided in subsection 2,

6-36 according to the extent of the prosecuting authority’s contribution to the

6-37 investigation and conduct of the action.

6-38 Sec. 20. 1. If the attorney general or a prosecuting authority

6-39 intervenes at the outset in an action pursuant to section 11 of this act, the

6-40 private plaintiff is entitled, except as otherwise provided in section 21 of

6-41 this act, to receive not less than 15 percent or more than 33 percent of

6-42 any recovery, according to the extent of his contribution to the conduct of

6-43 the action. If the attorney general or a prosecuting authority assumes

7-1 primary responsibility for conducting the action, or if both participate, 33

7-2 percent of any recovery must be apportioned as provided in section 19 of

7-3 this act.

7-4 2. If neither the state or a prosecuting authority intervenes in the

7-5 action at the outset, the private plaintiff is entitled, except as otherwise

7-6 provided in section 21 of this act, to receive not less than 25 percent or

7-7 more than 50 percent of any recovery, as the court determines to be

7-8 reasonable.

7-9 Sec. 21. 1. If the action is one described in section 26 of this act,

7-10 the present or former employee of the state or political subdivision is not

7-11 entitled to any minimum percentage of any recovery, but the court may

7-12 award him no more than 33 percent of the recovery if the state or

7-13 political subdivision intervenes in the action at the outset, or no more

7-14 than 50 percent if neither the state nor the political subdivision so

7-15 intervenes, according to the significance of his information, the extent of

7-16 his contribution to the conduct of the action and the response to his

7-17 efforts to report the false claim and gain recovery through other official

7-18 channels.

7-19 2. If the private plaintiff is a present or former employee of the state

7-20 or a political subdivision and benefited financially from the fraudulent

7-21 activity, he is not entitled to any minimum percentage of any recovery,

7-22 but the court may award him no more than 33 percent of the recovery if

7-23 the state or political subdivision intervenes in the action at the outset, or

7-24 no more than 50 percent if neither the state nor the political subdivision

7-25 so intervenes, according to the significance of his information, the extent

7-26 of his contribution to the conduct of the action, the extent of his

7-27 involvement in the fraudulent activity, his attempts to avoid or resist the

7-28 activity and the other circumstances of the activity.

7-29 Sec. 22. The portion of any recovery not apportioned pursuant to

7-30 sections 19, 20 and 21 of this act must be paid into the state general fund

7-31 if the money, property or services were provided only by the state, or into

7-32 the general fund of the political subdivision if they were provided only by

7-33 a political subdivision. If the action involved both the state and a political

7-34 subdivision, the court shall apportion the remaining portion of any

7-35 recovery between them according to the respective values of the money,

7-36 property or services provided by each.

7-37 Sec. 23. 1. If the state, a political subdivision or a private plaintiff

7-38 prevails in or settles an action pursuant to section 11 of this act, the

7-39 private plaintiff is entitled to a reasonable amount for expenses that the

7-40 court finds were necessarily incurred, including reasonable costs,

7-41 attorney’s fees and the fees of expert consultants and expert witnesses.

7-42 Those expenses must be awarded against the defendant, and may not be

7-43 allowed against the state or a political subdivision.

8-1 2. If the defendant prevails in the action, the court may award him

8-2 reasonable expenses and attorney’s fees against the party or parties who

8-3 participated in the action if it finds that the action was clearly frivolous

8-4 or vexatious or brought solely for harassment.

8-5 Sec. 24. 1. The court may stay discovery by a private plaintiff for

8-6 not more than 60 days if the attorney general or a prosecuting authority

8-7 shows that the proposed discovery would interfere with the investigation

8-8 or prosecution of a civil or criminal matter arising out of the same facts,

8-9 whether or not the attorney general or prosecuting authority participates

8-10 in the action.

8-11 2. The court may extend the stay upon a further showing that the

8-12 attorney general or prosecuting authority has pursued the civil or

8-13 criminal investigation or proceeding with reasonable diligence and the

8-14 proposed discovery would interfere with its continuation. Discovery may

8-15 not be stayed for a total of more than 6 months over the objection of the

8-16 private plaintiff.

8-17 3. A showing made pursuant to this section must be made in

8-18 chambers.

8-19 Sec. 25. Upon a showing by the attorney general or a prosecuting

8-20 authority that unrestricted participation by a private plaintiff would

8-21 interfere with or unduly delay the conduct of an action, or would be

8-22 repetitious, irrelevant or solely for harassment, the court may limit his

8-23 participation by, among other measures, limiting:

8-24 1. The number of witnesses he may call;

8-25 2. The length of the testimony of the witnesses; or

8-26 3. His cross-examination of witnesses.

8-27 Sec. 26. No action may be maintained pursuant to section 11 of this

8-28 act that is based upon information discovered by a present or former

8-29 employee of the state or a political subdivision during his employment,

8-30 unless he first in good faith exhausted internal procedures for reporting

8-31 and seeking recovery of the proceeds of the fraudulent activity through

8-32 official channels and the state or political subdivision failed to act on the

8-33 information provided for at least 6 months.

8-34 Sec. 27. 1. No action may be maintained pursuant to this chapter

8-35 that is based upon the public disclosure of allegations or transactions in

8-36 a criminal, civil or administrative hearing, in an investigation, report,

8-37 hearing or audit conducted by or at the request of a house of the

8-38 legislature, an auditor or the governing body of a political subdivision, or

8-39 from the news media, unless the action is brought by the attorney

8-40 general, a prosecuting authority or an original source of the information.

8-41 2. As used in this section, "original source" means a person:

8-42 (a) Who has direct and independent knowledge of the information on

8-43 which the allegations were based;

9-1 (b) Who voluntarily provided the information to the state or political

9-2 subdivision before bringing an action based on the information; and

9-3 (c) Whose information provided the basis or caused the making of the

9-4 investigation, hearing, audit or report that led to the public disclosure.

9-5 Sec. 28. 1. An employer shall not adopt or enforce any rule or

9-6 policy forbidding an employee to disclose information to the state, a

9-7 political subdivision or a law enforcement agency or to act in furtherance

9-8 of an action pursuant to this chapter, including investigation for,

9-9 bringing or testifying in such an action.

9-10 2. An employer shall not discharge, demote, suspend, threaten,

9-11 harass, deny promotion to or otherwise discriminate against an employee

9-12 in the terms or conditions of his employment because of lawful acts done

9-13 by him on his own behalf or on behalf of others in disclosing information

9-14 to the state, a political subdivision or a law enforcement agency in

9-15 furtherance of an action pursuant to this chapter, including investigation

9-16 for, bringing or testifying in such an action.

9-17 Sec. 29. 1. An employer who violates subsection 2 of section 28 of

9-18 this act is liable to the affected employee in a civil action for all relief

9-19 necessary to make him whole, including, without limitation,

9-20 reinstatement with the same seniority as if the discrimination had not

9-21 occurred or damages in lieu of reinstatement if appropriate, twice the

9-22 amount of lost compensation, interest on the lost compensation, any

9-23 special damage sustained as a result of the discrimination and punitive

9-24 damages if appropriate. The employer is also liable for expenses

9-25 recoverable pursuant to section 23 of this act, costs and attorney’s fees.

9-26 2. An employee is entitled to the remedies provided in subsection 1

9-27 only if:

9-28 (a) He voluntarily disclosed information to the state or a political

9-29 subdivision or voluntarily acted in furtherance of an action pursuant to

9-30 this chapter; and

9-31 (b) He was harassed, threatened with termination or demotion, or

9-32 otherwise coerced by his employer into any participation in fraudulent

9-33 activity.

9-34 Sec. 30. 1. An action pursuant to this chapter may not be

9-35 commenced more than 3 years after the date of discovery of the

9-36 fraudulent activity by the attorney general or prosecuting authority or

9-37 more than 10 years after the fraudulent activity occurred, whichever is

9-38 earlier. Within those limits, an action may be based upon fraudulent

9-39 activity that occurred before October 1, 1999.

9-40 2. In an action pursuant to this chapter, the standard of proof is a

9-41 preponderance of the evidence. A finding of guilt in a criminal

9-42 proceeding charging false statement or fraud, whether upon a verdict of

9-43 guilty or a plea of guilty or nolo contendere, estops the person found

10-1 guilty from denying an essential element of that offense in an action

10-2 pursuant to this chapter based upon the same transaction as the criminal

10-3 proceeding.