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.

1-17 Sec. 5. (Deleted by amendment.)

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

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

2-3 following listed acts is liable to the state or a political subdivision,

2-4 whichever is affected, for three times the amount of damages sustained

2-5 by the state or political subdivision because of the act of that person, for

2-6 the costs of a civil action brought to recover those damages and for a

2-7 civil penalty of not less than $2,000 or more than $10,000 for each act:

2-8 (a) Knowingly presents or causes to be presented a false claim for

2-9 payment or approval.

2-10 (b) Knowingly makes or uses, or causes to be made or used, a false

2-11 record or statement to obtain payment or approval of a false claim.

2-12 (c) Conspires to defraud by obtaining allowance or payment of a false

2-13 claim.

2-14 (d) Has possession, custody or control of public property or money

2-15 and knowingly delivers or causes to be delivered to the state or a political

2-16 subdivision less money or property than the amount for which he

2-17 receives a receipt.

2-18 (e) Is authorized to prepare or deliver a receipt for money or property

2-19 to be used by the state or a political subdivision and knowingly prepares

2-20 or delivers a receipt that falsely represents the money or property.

2-21 (f) Knowingly buys, or receives as security for an obligation, public

2-22 property from a person who is not authorized to sell or pledge the

2-23 property.

2-24 (g) Knowingly makes or uses, or causes to be made or used, a false

2-25 record or statement to conceal, avoid or decrease an obligation to pay or

2-26 transmit money or property to the state or a political subdivision.

2-27 (h) Is a beneficiary of an inadvertent submission of a false claim and,

2-28 after discovering the falsity of the claim, fails to disclose the falsity to the

2-29 state or political subdivision within a reasonable time.

2-30 2. As used in this section, a person acts "knowingly" with respect to

2-31 information if he:

2-32 (a) Has knowledge of the information;

2-33 (b) Acts in deliberate ignorance of whether the information is true or

2-34 false; or

2-35 (c) Acts in reckless disregard of the truth or falsity of the information.

2-36 Sec. 7. In a civil action pursuant to this chapter, the court may give

2-37 judgment for not less than twice or more than three times the amount of

2-38 damages sustained, and no civil penalty, if it finds that:

2-39 1. The person against who the judgment is entered:

2-40 (a) Furnished all information known to him concerning the act,

2-41 within 30 days after becoming aware of the information, to the attorney

2-42 general; and

3-1 (b) Fully cooperated with any investigation of the act by the state or

3-2 political subdivision; and

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

3-4 prosecution or civil or administrative proceeding had commenced with

3-5 respect to the act and the person had no knowledge of the existence of

3-6 any investigation with respect to the act.

3-7 Sec. 8. Liability pursuant to this chapter is joint and several for an

3-8 act done by two or more persons.

3-9 Sec. 9. The attorney general may investigate any alleged liability

3-10 pursuant to this chapter and may bring a civil action pursuant to this

3-11 chapter against the person liable.

3-12 Sec. 10. (Deleted by amendment.)

3-13 Sec. 11. 1. Except as otherwise provided in sections 26 and 27 of

3-14 this act, a private plaintiff may maintain an action pursuant to this

3-15 chapter on his own account and that of the state if money, property or

3-16 services provided by the state are involved, or on his own account and

3-17 that of a political subdivision if money, property or services provided by

3-18 the political subdivision are involved, or on his own account and that of

3-19 both the state and a political subdivision if both are involved. After such

3-20 an action is commenced, it may be dismissed only with leave of the court,

3-21 taking into account the public purposes of this chapter and the best

3-22 interests of the parties.

3-23 2. A complaint filed pursuant to this section must be placed under

3-24 seal and so remain until the attorney general has elected whether to

3-25 intervene. No service may be made upon the defendant until the

3-26 complaint is unsealed.

3-27 3. On the date the private plaintiff files his complaint, he shall send a

3-28 copy of the complaint to the attorney general by mail with return receipt

3-29 requested. He shall send with each copy of the complaint a written

3-30 disclosure of substantially all material evidence and information he

3-31 possesses.

3-32 Sec. 12. 1. Within 120 days after receiving a complaint and

3-33 disclosure, the attorney general may intervene and proceed with the

3-34 action or he may, for good cause shown, move the court to extend the

3-35 time for his election whether to proceed. The motion may be supported by

3-36 affidavits or other submissions in chambers.

3-37 2. If the attorney general elects to intervene, the complaint must be

3-38 unsealed. If the attorney general elects not to intervene, the private

3-39 plaintiff may proceed and the complaint must be unsealed.

3-40 Secs. 13 and 14. (Deleted by amendment.)

4-1 Sec. 15. 1. If the attorney general intervenes, the private plaintiff

4-2 remains a party to an action pursuant to section 11 of this act.

4-3 2. The attorney general may move to dismiss the action for good

4-4 cause. The private plaintiff must be notified of the filing of the motion

4-5 and is entitled to oppose it and present evidence at the hearing.

4-6 3. Except as otherwise provided in this subsection, the attorney

4-7 general may settle the action. If the attorney general intends to settle the

4-8 action, he shall notify the private plaintiff of that fact. Upon the request

4-9 of the private plaintiff, the court shall determine whether settlement of

4-10 the action is consistent with the public purposes of this chapter and shall

4-11 not approve the settlement of the action unless it determines that such

4-12 settlement is consistent with the public purposes of this chapter.

4-13 Sec. 16. 1. The defendant is entitled to 30 days in which to respond

4-14 after a complaint filed pursuant to section 11 of this act is unsealed and

4-15 served upon him.

4-16 2. If a private plaintiff brings an action pursuant to this chapter, no

4-17 other person may bring another action pursuant to this chapter based on

4-18 the same facts.

4-19 3. An action may not be maintained by a private plaintiff pursuant to

4-20 this chapter:

4-21 (a) Against a member of the legislature or the judiciary, an elected

4-22 officer of the executive department of the state government, or a member

4-23 of the governing body of a political subdivision, if the action is based

4-24 upon evidence or information known to the state or political subdivision

4-25 at the time the action was brought.

4-26 (b) If the action is based upon allegations or transactions that are the

4-27 subject of a civil action or an administrative proceeding for a monetary

4-28 penalty to which the state or political subdivision is already a party.

4-29 Sec. 17. 1. If the attorney general elects not to intervene in an

4-30 action pursuant to section 11 of this act, the private plaintiff has the

4-31 same rights in conducting the action as the attorney general would have

4-32 had. A copy of each pleading or other paper filed in the action, and a

4-33 copy of the transcript of each deposition taken, must be mailed to the

4-34 attorney general if the attorney general so requests and pays the cost

4-35 thereof.

4-36 2. Upon timely application, the attorney general may intervene in an

4-37 action in which he has previously declined to intervene, if the interest of

4-38 the state or a political subdivision in recovery of the money or property

4-39 involved is not being adequately represented by the private plaintiff.

4-40 3. If the attorney general so intervenes, the private plaintiff retains

4-41 primary responsibility for conducting the action and any recovery must

4-42 be apportioned as if the attorney general had not intervened.

5-1 Sec. 18. As used in sections 19 to 22, inclusive, of this act,

5-2 "recovery" includes civil penalties and does not include any allowance of

5-3 expenses or attorney’s fees.

5-4 Sec. 19. If the attorney general initiates an action pursuant to this

5-5 chapter, 33 percent of any recovery must be paid into the state general

5-6 fund to the credit of a special account, for use by the attorney general as

5-7 appropriated or authorized by the legislature in the investigation and

5-8 prosecution of false claims.

5-9 Sec. 20. 1. If the attorney general intervenes at the outset in an

5-10 action pursuant to section 11 of this act, the private plaintiff is entitled,

5-11 except as otherwise provided in section 21 of this act, to receive not less

5-12 than 15 percent or more than 33 percent of any recovery, according to

5-13 the extent of his contribution to the conduct of the action.

5-14 2. If the attorney general does not intervene in the action at the

5-15 outset, the private plaintiff is entitled, except as otherwise provided in

5-16 section 21 of this act, to receive not less than 25 percent or more than 50

5-17 percent of any recovery, as the court determines to be reasonable.

5-18 Sec. 21. 1. If the action is one described in section 26 of this act,

5-19 the present or former employee of the state or political subdivision is not

5-20 entitled to any minimum percentage of any recovery, but the court may

5-21 award him no more than 33 percent of the recovery if the attorney

5-22 general intervenes in the action at the outset, or no more than 50 percent

5-23 if the attorney general does not intervene, according to the significance

5-24 of his information, the extent of his contribution to the conduct of the

5-25 action and the response to his efforts to report the false claim and gain

5-26 recovery through other official channels.

5-27 2. If the private plaintiff is a present or former employee of the state

5-28 or a political subdivision and benefited financially from the fraudulent

5-29 activity, he is not entitled to any minimum percentage of any recovery,

5-30 but the court may award him no more than 33 percent of the recovery if

5-31 the attorney general intervenes in the action at the outset, or no more

5-32 than 50 percent if the attorney general does not intervene, according to

5-33 the significance of his information, the extent of his contribution to the

5-34 conduct of the action, the extent of his involvement in the fraudulent

5-35 activity, his attempts to avoid or resist the activity and the other

5-36 circumstances of the activity.

5-37 Sec. 22. The portion of any recovery not apportioned pursuant to

5-38 sections 19, 20 and 21 of this act must be paid into the state general fund

5-39 if the money, property or services were provided only by the state, or into

5-40 the general fund of the political subdivision if they were provided only by

5-41 a political subdivision. If the action involved both the state and a political

6-1 subdivision, the court shall apportion the remaining portion of any

6-2 recovery between them according to the respective values of the money,

6-3 property or services provided by each.

6-4 Sec. 23. 1. If the attorney general or a private plaintiff prevails in

6-5 or settles an action pursuant to section 11 of this act, the private plaintiff

6-6 is entitled to a reasonable amount for expenses that the court finds were

6-7 necessarily incurred, including reasonable costs, attorney’s fees and the

6-8 fees of expert consultants and expert witnesses. Those expenses must be

6-9 awarded against the defendant, and may not be allowed against the state

6-10 or a political subdivision.

6-11 2. If the defendant prevails in the action, the court may award him

6-12 reasonable expenses and attorney’s fees against the party or parties who

6-13 participated in the action if it finds that the action was clearly frivolous

6-14 or vexatious or brought solely for harassment.

6-15 Sec. 24. 1. The court may stay discovery by a private plaintiff for

6-16 not more than 60 days if the attorney general shows that the proposed

6-17 discovery would interfere with the investigation or prosecution of a civil

6-18 or criminal matter arising out of the same facts, whether or not the

6-19 attorney general participates in the action.

6-20 2. The court may extend the stay upon a further showing that the

6-21 attorney general has pursued the civil or criminal investigation or

6-22 proceeding with reasonable diligence and the proposed discovery would

6-23 interfere with its continuation. Discovery may not be stayed for a total of

6-24 more than 6 months over the objection of the private plaintiff, except for

6-25 good cause shown by the attorney general.

6-26 3. A showing made pursuant to this section must be made in

6-27 chambers.

6-28 Sec. 25. Upon a showing by the attorney general that unrestricted

6-29 participation by a private plaintiff would interfere with or unduly delay

6-30 the conduct of an action, or would be repetitious, irrelevant or solely for

6-31 harassment, the court may limit his participation by, among other

6-32 measures, limiting:

6-33 1. The number of witnesses he may call;

6-34 2. The length of the testimony of the witnesses; or

6-35 3. His cross-examination of witnesses.

6-36 Sec. 26. No action may be maintained pursuant to section 11 of this

6-37 act that is based upon information discovered by a present or former

6-38 employee of the state or a political subdivision during his employment,

6-39 unless he first in good faith exhausted internal procedures for reporting

6-40 and seeking recovery of the proceeds of the fraudulent activity through

6-41 official channels and the state or political subdivision failed to act on the

6-42 information provided for at least 6 months.

7-1 Sec. 27. 1. No action may be maintained pursuant to this chapter

7-2 that is based upon the public disclosure of allegations or transactions in

7-3 a criminal, civil or administrative hearing, in an investigation, report,

7-4 hearing or audit conducted by or at the request of a house of the

7-5 legislature, an auditor or the governing body of a political subdivision, or

7-6 from the news media, unless the action is brought by the attorney general

7-7 or an original source of the information.

7-8 2. As used in this section, "original source" means a person:

7-9 (a) Who has direct and independent knowledge of the information on

7-10 which the allegations were based;

7-11 (b) Who voluntarily provided the information to the state or political

7-12 subdivision before bringing an action based on the information; and

7-13 (c) Whose information provided the basis or caused the making of the

7-14 investigation, hearing, audit or report that led to the public disclosure.

7-15 Sec. 28. 1. An employer shall not adopt or enforce any rule or

7-16 policy forbidding an employee to disclose information to the state, a

7-17 political subdivision or a law enforcement agency or to act in furtherance

7-18 of an action pursuant to this chapter, including investigation for,

7-19 bringing or testifying in such an action.

7-20 2. An employer shall not discharge, demote, suspend, threaten,

7-21 harass, deny promotion to or otherwise discriminate against an employee

7-22 in the terms or conditions of his employment because of lawful acts done

7-23 by him on his own behalf or on behalf of others in disclosing information

7-24 to the state, a political subdivision or a law enforcement agency in

7-25 furtherance of an action pursuant to this chapter, including investigation

7-26 for, bringing or testifying in such an action.

7-27 Sec. 29. 1. An employer who violates subsection 2 of section 28 of

7-28 this act is liable to the affected employee in a civil action for all relief

7-29 necessary to make him whole, including, without limitation,

7-30 reinstatement with the same seniority as if the discrimination had not

7-31 occurred or damages in lieu of reinstatement if appropriate, twice the

7-32 amount of lost compensation, interest on the lost compensation, any

7-33 special damage sustained as a result of the discrimination and punitive

7-34 damages if appropriate. The employer is also liable for expenses

7-35 recoverable pursuant to section 23 of this act, costs and attorney’s fees.

7-36 2. An employee is entitled to the remedies provided in subsection 1

7-37 only if:

7-38 (a) He voluntarily disclosed information to the state or a political

7-39 subdivision or voluntarily acted in furtherance of an action pursuant to

7-40 this chapter; and

7-41 (b) He was harassed, threatened with termination or demotion, or

7-42 otherwise coerced by his employer into any participation in fraudulent

7-43 activity.

8-1 Sec. 30. 1. An action pursuant to this chapter may not be

8-2 commenced more than 3 years after the date of discovery of the

8-3 fraudulent activity by the attorney general or more than 5 years after the

8-4 fraudulent activity occurred, whichever is earlier. Within those limits, an

8-5 action may be based upon fraudulent activity that occurred before

8-6 October 1, 1999.

8-7 2. In an action pursuant to this chapter, the standard of proof is a

8-8 preponderance of the evidence. A finding of guilt in a criminal

8-9 proceeding charging false statement or fraud, whether upon a verdict of

8-10 guilty or a plea of guilty or nolo contendere, estops the person found

8-11 guilty from denying an essential element of that offense in an action

8-12 pursuant to this chapter based upon the same transaction as the criminal

8-13 proceeding.