Bill Text: NY A10514 | 2023-2024 | General Assembly | Introduced
Bill Title: Provides that the materiality test shall focus on the potential effect of the false record or statement when it is made, not on the actual effect of the false record or statement when it is discovered; provides that unless the attorney general has provided the court with written approval that the qui tam plaintiff may continue the action, the court shall dismiss the action without prejudice to any state or local government; makes related provisions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed) 2024-06-04 - REFERRED TO RULES [A10514 Detail]
Download: New_York-2023-A10514-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 10514 IN ASSEMBLY May 30, 2024 ___________ Introduced by COMMITTEE ON RULES -- (at request of M. of A. Weinstein) -- (at request of the Attorney General) -- read once and referred to the Committee on Ways and Means AN ACT to amend the state finance law, the executive law and the tax law, in relation to certain false claims The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph (b) of subdivision 11 of section 4 of the state 2 finance law, as amended by chapter 171 of the laws of 2022, is amended 3 to read as follows: 4 (b) Paragraph (a) of this subdivision shall not apply to (1) moneys to 5 be distributed to the federal government, to a local government, or to 6 any holder of a bond or other debt instrument issued by the state, any 7 public authority, or any public benefit corporation; (2) moneys to be 8 distributed solely or exclusively as a payment of damages or restitution 9 to individuals or entities that were specifically injured or harmed by 10 the defendant's or settling party's conduct and that are identified in, 11 or can be identified by the terms of, the relevant judgment, agreement 12 to settle, assurance of discontinuance, or relevant instrument resolving 13 the claim or cause of action; (3) moneys recovered or obtained by a 14 state agency or a state official or employee acting in their official 15 capacity where application of paragraph (a) of this subdivision is 16 prohibited by federal law, rule, or regulation, or would result in the 17 reduction or loss of federal funds or eligibility for federal benefits 18 pursuant to federal law, rule, or regulation; (4) moneys recovered or 19 obtained by or on behalf of a public authority, a public benefit corpo- 20 ration, the department of taxation and finance, the workers' compen- 21 sation board, the New York state higher education services corporation, 22 the tobacco settlement financing corporation, a state or local retire- 23 ment system, an employee health benefit program administered by the New 24 York state department of civil service, the Title IV-D child support 25 fund, the lottery prize fund, the abandoned property fund, or an endow- 26 ment of the state university of New York or any unit thereof or any 27 state agency, provided that all of the moneys received or recovered are EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10004-09-4A. 10514 2 1 immediately transferred to the relevant public authority, public benefit 2 corporation, department, fund, program, or endowment; (5) moneys to be 3 refunded to an individual or entity as (i) an overpayment of a tax, 4 fine, penalty, fee, insurance premium, loan payment, charge or 5 surcharge; (ii) a return of seized assets, or (iii) a payment made in 6 error; (6) moneys to be used to prevent, abate, restore, mitigate, or 7 control any identifiable instance of prior or ongoing water, land or air 8 pollution; [and] (7) moneys deposited to the opioid settlement fund 9 established in section ninety-nine-nn of this chapter; and (8) moneys to 10 be distributed pursuant to subdivision five or six of section one 11 hundred ninety of this chapter. 12 § 2. Subdivision 5 of section 188 of the state finance law, as added 13 by chapter 379 of the laws of 2010, is amended to read as follows: 14 5. "Material" means having a natural tendency to influence, or be 15 capable of influencing the payment or receipt of money or property. A 16 claim, record, or statement is material if it has a natural tendency to 17 influence, or is capable of influencing, the payment or receipt of money 18 or property at the time it is presented, made, or used, or caused to be 19 presented, made, or used, regardless of whether it actually influences 20 the payment or receipt of money or property. 21 § 3. Paragraph (h) of subdivision 1 and paragraph (a) of subdivision 4 22 of section 189 of the state finance law, paragraph (h) of subdivision 1 23 as amended by section 1 of part J of chapter 57 of the laws of 2018 and 24 paragraph (a) of subdivision 4 as amended by section 1 of part DD of 25 chapter 59 of the laws of 2023, are amended to read as follows: 26 (h) knowingly conceals or knowingly and improperly avoids or decreases 27 an obligation to pay or transmit money or property to the state or a 28 local government, or conspires to do the same; shall be liable to the 29 state or a local government, as applicable, for a civil penalty of not 30 less than six thousand dollars and not more than twelve thousand 31 dollars, as adjusted to be equal to the civil penalty allowed under the 32 federal False Claims Act, 31 U.S.C. sec. 3729, et seq., as amended, as 33 adjusted for inflation by the Federal Civil Penalties Inflation Adjust- 34 ment Act of 1990, as amended (28 U.S.C. 2461 note; Pub. L. No. 35 101-410), plus three times the amount of all damages, including conse- 36 quential damages, which the state or local government sustains because 37 of the act of that person. Damages under this section shall be calcu- 38 lated and multiplied before any subtractions are made for compensatory 39 payments or credits received by the government from any source, includ- 40 ing but not limited to the defendant. 41 (a) This section shall apply to tax law violations only if: (i) the 42 revenue, net income, or sales of [the] at least one person against whom 43 the action is brought equals or exceeds one million dollars for any 44 taxable year subject to any action brought pursuant to this article, or 45 the value of the assets of at least one person against whom the action 46 is brought equals or exceeds five million dollars during any taxable 47 year subject to any action brought pursuant to this article; and (ii) 48 the aggregate damages to the state and local governments pleaded in such 49 action exceed [three hundred and fifty thousand] one million dollars; 50 provided that for purposes of applying paragraph (h) of subdivision one 51 of this section to a tax law violation, the person is alleged to have 52 knowingly concealed or knowingly and improperly avoided an obligation to 53 pay taxes to the state or a local government. 54 § 4. Section 190 of the state finance law, as added by section 39 of 55 part C of chapter 58 of the laws of 2007, subdivision 1, paragraphs (a) 56 and (b) of subdivision 2 and subdivision 9 as amended and the closingA. 10514 3 1 paragraphs of paragraphs (a) and (f) of subdivision 2 as added by chap- 2 ter 379 of the laws of 2010, paragraphs (d) and (e) of subdivision 2 as 3 amended by section 9, subdivision 4 as amended by section 9-a and subdi- 4 visions 6 and 7 as amended by section 9-b of part A of chapter 56 of the 5 laws of 2013, and paragraphs (a) and (b) of subdivision 6 as amended by 6 chapter 791 of the laws of 2022, is amended to read as follows: 7 § 190. Civil actions for false claims. 1. Civil enforcement actions. 8 (a) The attorney general shall have the authority to investigate 9 violations under section one hundred eighty-nine of this article. If the 10 attorney general believes that a person has violated or is violating 11 such section, then the attorney general may bring a civil action on 12 behalf of the people of the state of New York or on behalf of a local 13 government against such person. A local government also shall have the 14 authority to investigate violations that may have resulted in damages to 15 such local government under section one hundred eighty-nine of this 16 article, and may bring a civil action on its own behalf, or on behalf of 17 any subdivision of such local government, to recover damages sustained 18 by such local government as a result of such violations. No action may 19 be filed pursuant to this subdivision against the federal government, 20 the state or a local government, or any officer or employee thereof 21 acting in [his or her] their official capacity. The attorney general 22 shall consult with the office of medicaid inspector general prior to 23 filing any action related to the medicaid program. 24 (b) The attorney general is empowered to subpoena witnesses, compel 25 their attendance, examine them under oath before the attorney general or 26 a magistrate, a court of record or a judge or justice thereof and 27 require the production of any books or papers which the attorney general 28 deems relevant or material to the inquiry. If the attorney general 29 believes it to be in the public interest that an investigation be made, 30 the attorney general may either require or permit any person to file 31 with the attorney general a statement in writing under oath or otherwise 32 as to all the facts and circumstances concerning the subject matter 33 which the attorney general believes it is in the public interest to 34 investigate, and for that purpose may prescribe forms upon which such 35 statements shall be made. The attorney general may also require such 36 other data and information as the attorney general may deem relevant and 37 may make such special and independent investigations as the attorney 38 general may deem necessary in connection with the matter. The attorney 39 general's investigative powers shall not abate or terminate by reason of 40 any action or proceeding brought by the attorney general, a local 41 government, or a qui tam plaintiff under this article. 42 2. Qui tam civil actions. (a) Any person may bring a qui tam civil 43 action for a violation of section one hundred eighty-nine of this arti- 44 cle on behalf of the person and the people of the state of New York or a 45 local government. No action may be filed pursuant to this subdivision 46 against the federal government, the state or a local government, or any 47 officer or employee thereof acting in [his or her] their official capac- 48 ity. 49 For purposes of subparagraphs (i) and (iv) of paragraph (a) of subdi- 50 vision eight of section seventy-three of the public officers law, any 51 activity by a former government employee in connection with the securing 52 of rights, protections or benefits related to preparing or filing an 53 action under this article shall not be deemed to be an appearance or 54 practice before any agency. 55 (b) A copy of the complaint and written disclosure of substantially 56 all material evidence and information the person possesses shall beA. 10514 4 1 served on the state pursuant to subdivision one of section three hundred 2 seven of the civil practice law and rules. Any complaint filed in a 3 court of the state of New York shall be filed in supreme court in 4 camera, shall remain under seal for at least sixty days, and shall not 5 be served on the defendant until the court so orders. The seal shall not 6 preclude the attorney general, a local government, or the qui tam plain- 7 tiff from serving the complaint, any other pleadings, or the written 8 disclosure of substantially all material evidence and information 9 possessed by the person bringing the action, on relevant federal, state, 10 or local government agencies, or on law enforcement authorities of the 11 state, a local government, the federal government, or other jurisdic- 12 tions, so that the actions may be investigated or prosecuted, except 13 that such seal applies to the agencies or authorities so served to the 14 same extent as the seal applies to other parties in the action. 15 If the allegations in the complaint allege a violation of section one 16 hundred eighty-nine of this article involving damages to a local govern- 17 ment, then the attorney general may at any time provide a copy of such 18 complaint and written disclosure to the attorney for such local govern- 19 ment; provided, however, that if the allegations in the complaint 20 involve damages only to a city with a population of one million or more, 21 or only to the state and such a city, then the attorney general shall 22 provide such complaint and written disclosure to the corporation counsel 23 of such city within thirty days. 24 The state may elect to supersede or intervene and proceed with the 25 action, or to authorize a local government that may have sustained 26 damages to supersede or intervene, within sixty days after it receives 27 both the complaint and the material evidence and information; provided, 28 however, that if the allegations in the complaint involve damages only 29 to a city with a population of one million or more, then the attorney 30 general may not supersede or intervene in such action without the 31 consent of the corporation counsel of such city. The attorney general 32 shall consult with the office of the medicaid inspector general prior to 33 superseding or intervening in any action related to the medicaid 34 program. The attorney general may, for good cause shown, move the court 35 for extensions of the time during which the complaint remains under seal 36 under this subdivision. Any such motions may be supported by affidavits 37 or other submissions in camera. 38 (c) Prior to the expiration of the sixty day period or any extensions 39 obtained under paragraph (b) of this subdivision, the attorney general 40 shall notify the court that [he or she] they: 41 (i) [intends] intend to file a complaint against the defendant on 42 behalf of the people of the state of New York or a local government, and 43 thereby be substituted as the plaintiff in the action and convert the 44 action in all respects from a qui tam civil action brought by a private 45 person into a civil enforcement action by the attorney general under 46 subdivision one of this section; 47 (ii) [intends] intend to intervene in such action, as of right, so as 48 to aid and assist the plaintiff in the action; or 49 (iii) if the action involves damages sustained by a local government, 50 [intends] intend to grant the local government permission to: (A) file 51 and serve a complaint against the defendant, and thereby be substituted 52 as the plaintiff in the action and convert the action in all respects 53 from a qui tam civil action brought by a private person into a civil 54 enforcement action by the local government under subdivision one of this 55 section; or (B) intervene in such action, as of right, so as to aid and 56 assist the plaintiff in the action.A. 10514 5 1 The attorney general shall provide the local government with a copy of 2 any such notification at the same time the court is notified. 3 (d) If the state notifies the court that it intends to file a 4 complaint against the defendant and thereby be substituted as the plain- 5 tiff in the action, or to permit a local government to do so, such 6 complaint, whether filed separately or as an amendment to the qui tam 7 plaintiff's complaint, must be filed within thirty days after the 8 notification to the court. For statute of limitations purposes, any such 9 complaint filed by the state or a local government shall relate back to 10 the filing date of the complaint of the qui tam plaintiff, to the extent 11 that the cause of action of the state or local government arises out of 12 the conduct, transactions, or occurrences set forth, or attempted to be 13 set forth, in the complaint of the qui tam plaintiff. 14 (e) If the state notifies the court that it intends to intervene in 15 the action, or to permit a local government to do so, then such motion 16 to intervene, whether filed separately or as an amendment to the qui tam 17 plaintiff's complaint, shall be filed within thirty days after the 18 notification to the court. For statute of limitations purposes, any 19 complaint filed by the state or a local government, whether filed sepa- 20 rately or as an amendment to the qui tam plaintiff's complaint, shall 21 relate back to the filing date of the complaint of the qui tam plain- 22 tiff, to the extent that the cause of action of the state or local 23 government arises out of the conduct, transactions, or occurrences set 24 forth, or attempted to be set forth, in the complaint of the qui tam 25 plaintiff. 26 (f) If the state declines to participate in the action or to authorize 27 participation by a local government, the qui tam action may proceed 28 subject to judicial review under this section, the civil practice law 29 and rules, and other applicable law. Once thirty days have passed 30 following the date on which the state was required to or in fact did 31 inform the court pursuant to paragraph (c) of this subdivision whether 32 it intends to supersede or intervene, or authorize a local government to 33 do so, (i) a qui tam claim alleging a violation of section one hundred 34 eighty-nine of this article on behalf of the state shall be discontinued 35 only with the consent of the attorney general or a court order; (ii) a 36 qui tam claim alleging a violation of section one hundred eighty-nine of 37 this article on behalf of the state and a local government shall be 38 discontinued only with the consent of the attorney general or a court 39 order; and (iii) a qui tam claim alleging a violation of section one 40 hundred eighty-nine of this article solely on behalf of a local govern- 41 ment shall be discontinued only with the consent of the attorney gener- 42 al, such local government, or a court order. 43 The qui tam plaintiff shall provide the state or any applicable local 44 government with a copy of any document filed with the court on or about 45 the date it is filed, or any order issued by the court on or about the 46 date it is issued. A qui tam plaintiff shall notify the state or any 47 applicable local government within five business days of any decision, 48 order or verdict resulting in judgment in favor of the state or local 49 government. The qui tam plaintiff shall provide the state or local 50 government a draft of any proposed settlement agreement affecting the 51 qui tam action at least five business days before executing any settle- 52 ment agreement. 53 3. Time to answer. If the state decides to participate in a qui tam 54 action or to authorize the participation of a local government, the 55 court shall order that the qui tam complaint be unsealed and served at 56 the time of the filing of the complaint or intervention motion by theA. 10514 6 1 state or local government. After the complaint is unsealed, or if a 2 complaint is filed by the state or a local government pursuant to subdi- 3 vision one of this section, the defendant shall be served with the 4 complaint and summons pursuant to article three of the civil practice 5 law and rules. A copy of any complaint which alleges that damages were 6 sustained by a local government shall also be served on such local 7 government. The defendant shall be required to respond to the summons 8 and complaint within the time allotted under rule three hundred twenty 9 of the civil practice law and rules. 10 4. Related actions. When a person brings a qui tam action under this 11 section, no person other than the attorney general, or a local govern- 12 ment attorney acting pursuant to subdivision one of this section or 13 paragraph (b) of subdivision two of this section, may intervene or bring 14 a related civil action based upon the facts underlying the pending 15 action; provided, however, that nothing in this subdivision shall be 16 deemed to deny persons the right, upon leave of court, to file briefs 17 amicus curiae. 18 5. Rights of the parties of qui tam actions. (a) If the attorney 19 general elects to convert the qui tam civil action into an attorney 20 general enforcement action, then the state shall have the primary 21 responsibility for prosecuting the action. If the attorney general 22 elects to intervene in the qui tam civil action then the state and the 23 person who commenced the action, and any local government which 24 sustained damages and intervenes in the action, shall share primary 25 responsibility for prosecuting the action. If the attorney general 26 elects to permit a local government to convert the action into a civil 27 enforcement action, then the local government shall have primary respon- 28 sibility for investigating and prosecuting the action. If the action 29 involves damages to a local government but not the state, and the local 30 government intervenes in the qui tam civil action, then the local 31 government and the person who commenced the action shall share primary 32 responsibility for prosecuting the action. Under no circumstances shall 33 the state or a local government be bound by an act of the person bring- 34 ing the original action. Such person shall have the right to continue as 35 a party to the action, subject to the limitations set forth in paragraph 36 (b) of this subdivision. Under no circumstances shall the state be bound 37 by the act of a local government that intervenes in an action involving 38 damages to the state. If neither the attorney general nor a local 39 government intervenes in the qui tam action then the qui tam plaintiff 40 shall have the responsibility for prosecuting the action, subject to the 41 attorney general's right to intervene at a later date upon a showing of 42 good cause. 43 (b)(i) The state may move to dismiss the action notwithstanding the 44 objections of the person initiating the action if the person has been 45 served with the motion to dismiss and the court has provided the person 46 with an opportunity to be heard on the motion. If the action involves 47 damages to both the state and a local government, then the state shall 48 consult with such local government before moving to dismiss the action. 49 If the action involves damages sustained by a local government but not 50 the state, then the local government may move to dismiss the action 51 notwithstanding the objections of the person initiating the action if 52 the person has been served with the motion to dismiss and the court has 53 provided the person with an opportunity to be heard on the motion. 54 (ii) The state or a local government may settle the action with the 55 defendant notwithstanding the objections of the person initiating the 56 action if the court determines, after an opportunity to be heard, thatA. 10514 7 1 the proposed settlement is fair, adequate, and reasonable with respect 2 to all parties under all the circumstances. Upon a showing of good 3 cause, such opportunity to be heard may be held in camera. 4 (iii) Upon a showing by the attorney general or a local government 5 that the original plaintiff's unrestricted participation during the 6 course of the litigation would interfere with or unduly delay the prose- 7 cution of the case, or would be repetitious or irrelevant, or upon a 8 showing by the defendant that the original qui tam plaintiff's unre- 9 stricted participation during the course of the litigation would be for 10 purposes of harassment or would cause the defendant undue burden, the 11 court may, in its discretion, impose limitations on the original 12 plaintiff's participation in the case, such as: 13 (A) limiting the number of witnesses the person may call; 14 (B) limiting the length of the testimony of such witnesses; 15 (C) limiting the person's cross-examination of witnesses; or 16 (D) otherwise limiting the participation by the person in the liti- 17 gation. 18 (c) Notwithstanding any other provision of law, whether or not the 19 attorney general or a local government elects to supersede or intervene 20 in a qui tam civil action, the attorney general and such local govern- 21 ment may elect to pursue any remedy available with respect to the crimi- 22 nal or civil prosecution of the presentation of false claims, including 23 any administrative proceeding to determine a civil money penalty or to 24 refer the matter to the office of the medicaid inspector general for 25 medicaid related matters. If any such alternate civil remedy is pursued 26 in another proceeding, the person initiating the action shall have the 27 same rights in such proceeding as such person would have had if the 28 action had continued under this section. 29 (d) Notwithstanding any other provision of law, whether or not the 30 attorney general elects to supersede or intervene in a qui tam civil 31 action, or to permit a local government to supersede or intervene in the 32 qui tam civil action, upon a showing by the state or local government 33 that certain actions of discovery by the person initiating the action 34 would interfere with the state's or a local government's investigation 35 or prosecution of a criminal or civil matter arising out of the same 36 facts, the court may stay such discovery for a period of not more than 37 sixty days. Such a showing shall be conducted in camera. The court may 38 extend the period of such stay upon a further showing in camera that the 39 state or a local government has pursued the criminal or civil investi- 40 gation or proceedings with reasonable diligence and any proposed discov- 41 ery in the civil action will interfere with the ongoing criminal or 42 civil investigation or proceedings. 43 6. Awards to qui tam plaintiff. (a) If the attorney general elects to 44 convert the qui tam civil action into an attorney general enforcement 45 action, or to permit a local government to convert the action into a 46 civil enforcement action by such local government, or if the attorney 47 general or a local government elects to intervene in the qui tam civil 48 action, then the person or persons who initiated the qui tam civil 49 action collectively shall be entitled to receive between fifteen and 50 twenty-five percent of the proceeds recovered in the action or in 51 settlement of the action. The court shall determine the percentage of 52 the proceeds to which a person commencing [a] any qui tam civil action 53 is entitled, by considering the extent to which the plaintiff substan- 54 tially contributed to the prosecution of the action. Where the court 55 finds that the action was based primarily on disclosures of specific 56 information (other than information provided by the person bringing theA. 10514 8 1 action) relating to allegations or transactions in a criminal, civil or 2 administrative hearing, in a legislative or administrative report, hear- 3 ing, audit or investigation, or from the news media, the court may award 4 such sums as it considers appropriate, but in no case more than ten 5 percent of the proceeds, taking into account the significance of the 6 information and the role of the person or persons bringing the action in 7 advancing the case to litigation. Where the court finds that the action 8 was based on disclosure of specific information related to the use of 9 government funds during a declaration of a state of emergency, the court 10 shall increase the percentage of the proceeds to which the person 11 commencing such qui tam civil action is entitled by up to five percent 12 more than the maximum percentage allowed pursuant to this paragraph. Any 13 such person shall also receive an amount for reasonable expenses that 14 the court finds to have been necessarily incurred, reasonable attorneys' 15 fees, and costs pursuant to article eighty-one of the civil practice law 16 and rules. All such expenses, fees, and costs shall be awarded against 17 the defendant. 18 (b) If the attorney general or a local government does not elect to 19 intervene or convert the action, and the action is successful, then the 20 person or persons who initiated the qui tam action which obtains 21 proceeds shall be entitled to receive between twenty-five and thirty 22 percent of the proceeds recovered in the action or settlement of the 23 action. The court shall determine the percentage of the proceeds to 24 which a person commencing [a] any qui tam civil action is entitled, by 25 considering the extent to which the plaintiff substantially contributed 26 to the prosecution of the action. Where the court finds that the action 27 was based on disclosure of specific information related to the use of 28 government funds during a declaration of a state of emergency, the court 29 shall increase the percentage of the proceeds to which the person 30 commencing such qui tam civil action is entitled by up to ten percent 31 more than the maximum percentage allowed pursuant to this paragraph. 32 Such person shall also receive an amount for reasonable expenses that 33 the court finds to have been necessarily incurred, reasonable attorneys' 34 fees, and costs pursuant to article eighty-one of the civil practice law 35 and rules. All such expenses, fees, and costs shall be awarded against 36 the defendant. 37 (c) With the exception of a court award of costs, expenses or attor- 38 neys' fees, any payment to a person pursuant to this paragraph shall be 39 made from the proceeds. 40 (d) If the attorney general or a local government does not proceed 41 with the action and the person bringing the action conducts the action, 42 the court may award to the defendant its reasonable attorneys' fees and 43 expenses if the defendant prevails in the action and the court finds 44 that the claim of the person bringing the action was clearly frivolous, 45 clearly vexatious, or brought primarily for purposes of harassment. 46 7. Costs, expenses, disbursements and attorneys' fees. In any action 47 brought pursuant to this article, the court may award any local govern- 48 ment that participates as a party in the action an amount for reasonable 49 expenses which the court finds to have been necessarily incurred, plus 50 reasonable attorneys' fees, plus costs pursuant to article eighty-one of 51 the civil practice law and rules. All such expenses, fees and costs 52 shall be awarded directly against the defendant and shall not be charged 53 from the proceeds, but shall only be awarded if a local government 54 prevails in the action. 55 8. Exclusion from recovery. If the court finds that the qui tam civil 56 action was brought by a person who planned or initiated the violation ofA. 10514 9 1 section one hundred eighty-nine of this article upon which the action 2 was brought, then the court may, to the extent the court considers 3 appropriate, reduce the share of the proceeds of the action which the 4 person would otherwise be entitled to receive under subdivision six of 5 this section, taking into account the role of such person in advancing 6 the case to litigation and any relevant circumstances pertaining to the 7 violation. If the person bringing the qui tam civil action is convicted 8 of criminal conduct arising from [his or her] their role in the 9 violation of section one hundred eighty-nine of this article, that 10 person shall be dismissed from the qui tam civil action and shall not 11 receive any share of the proceeds of the action. Such dismissal shall 12 not prejudice the right of the attorney general to supersede or inter- 13 vene in such action and to civilly prosecute the same on behalf of the 14 state or a local government. 15 9. Certain actions barred. (a) The court shall dismiss a qui tam 16 action under this article if: 17 (i) it is based on allegations or transactions which are the subject 18 of a pending civil action or an administrative action in which the state 19 or a local government is already a party; 20 (ii) the state or local government has reached a binding settlement or 21 other agreement with the person who violated section one hundred eight- 22 y-nine of this article resolving the matter and such agreement has been 23 approved in writing by the attorney general, or by the applicable local 24 government attorney; or 25 (iii) against a member of the legislature, a member of the judiciary, 26 or a senior executive branch official if the action is based on evidence 27 or information known to the state when the action was brought. 28 (b) The court shall dismiss a qui tam action under this article, 29 unless opposed by the state or an applicable local government, or unless 30 the qui tam plaintiff is an original source of the information, if 31 substantially the same allegations or transactions as alleged in the 32 action were publicly disclosed: 33 (i) in a state or local government criminal, civil, or administrative 34 hearing in which the state or a local government or its agent is a 35 party; 36 (ii) in a federal, New York state or New York local government report, 37 hearing, audit, or investigation that is made on the public record or 38 disseminated broadly to the general public; provided that such informa- 39 tion shall not be deemed "publicly disclosed" in a report or investi- 40 gation because it was disclosed or provided pursuant to article six of 41 the public officers law, or under any other federal, state or local law, 42 rule or program enabling the public to request, receive or view docu- 43 ments or information in the possession of public officials or public 44 agencies; 45 (iii) in the news media, provided that such allegations or trans- 46 actions are not "publicly disclosed" in the "news media" merely because 47 information of allegations or transactions have been posted on the 48 internet or on a computer network. 49 (c) This subdivision is not jurisdictional. 50 10. Liability. Neither the state nor any local government shall be 51 liable for any expenses which any person incurs in bringing a qui tam 52 civil action under this article. 53 § 5. Paragraph (b) of subdivision 16 of section 63 of the executive 54 law, as amended by chapter 171 of the laws of 2022, is amended to read 55 as follows:A. 10514 10 1 (b) Paragraph (a) of this subdivision shall not apply to any provision 2 in the resolution of a claim or cause of action providing (1) moneys to 3 be distributed to the federal government, to a local government, or to 4 any holder of a bond or other debt instrument issued by the state, any 5 public authority, or any public benefit corporation; (2) moneys to be 6 distributed solely or exclusively as a payment of damages or restitution 7 to individuals or entities that were specifically injured or harmed by 8 the defendant's or settling party's conduct and that are identified in, 9 or can be identified by the terms of, the relevant judgment, stipu- 10 lation, decree, agreement to settle, assurance of discontinuance, or 11 relevant instrument resolving the claim or cause of action; (3) moneys 12 recovered or obtained by the attorney general where application of para- 13 graph (a) of this subdivision is prohibited by federal law, rule, or 14 regulation, or would result in the reduction or loss of federal funds or 15 eligibility for federal benefits pursuant to federal law, rule, or regu- 16 lation; (4) moneys recovered or obtained by or on behalf of a public 17 authority, a public benefit corporation, the department of taxation and 18 finance, the workers' compensation board, the New York state higher 19 education services corporation, the tobacco settlement financing corpo- 20 ration, a state or local retirement system, an employee health benefit 21 program administered by the New York state department of civil service, 22 the Title IV-D child support fund, the lottery prize fund, the abandoned 23 property fund, or an endowment of the state university of New York or 24 any unit thereof or any state agency, provided that all of the moneys 25 received or recovered are immediately transferred to the relevant public 26 authority, public benefit corporation, department, fund, program, or 27 endowment; (5) moneys to be refunded to an individual or entity as (i) 28 an overpayment of a tax, fine, penalty, fee, insurance premium, loan 29 payment, charge or surcharge; (ii) a return of seized assets; or (iii) a 30 payment made in error; (6) moneys to be used to prevent, abate, restore, 31 mitigate or control any identifiable instance of prior or ongoing water, 32 land or air pollution; [and/or] (7) state moneys received as part of any 33 statewide opioid settlement agreements as defined in section 25.18 of 34 the mental hygiene law, to be spent on eligible expenditures as defined 35 in section 25.18 of the mental hygiene law; and/or (8) moneys to be 36 distributed pursuant to subdivision five or six of section one hundred 37 ninety of the state finance law. 38 § 6. Section 171 of the tax law is amended by adding a new subdivision 39 twenty-ninth to read as follows: 40 Twenty-ninth. Notwithstanding any provision of law to the contrary, 41 have authority to divulge or make known to the attorney general and the 42 attorney general's specifically-identified assistants any particulars 43 set forth in any return or report required to be made under the tax law 44 so that potential violations of the New York false claims act may be 45 investigated or prosecuted. Any information provided to the attorney 46 general pursuant to this authority (i) shall be specially marked and 47 shall be kept by the attorney general in a segregated file, access to 48 which shall be limited to the attorney general and the specifically-i- 49 dentified assistants, (ii) shall not be divulged or made known to anyone 50 else except as provided below, and (iii) shall be exempt from disclosure 51 under the freedom of information law. Notwithstanding any provision of 52 law to the contrary, the commissioner may authorize the attorney general 53 and the attorney general's specifically-identified assistants to divulge 54 or make known any particulars in any such report as necessary to inves- 55 tigate or prosecute potential violations of article thirteen of the 56 state finance law.A. 10514 11 1 § 7. Section 190-b of the state finance law, as added by section 2 of 2 part J of chapter 57 of the laws of 2018, is amended to read as follows: 3 § 190-b. [Medicaid fraud] False claims act recovery reporting. The 4 attorney general shall make an annual report to the temporary president 5 of the senate, speaker of the assembly, chair of the senate finance 6 committee, chair of the assembly ways and means committee, chair of the 7 senate health committee, and chair of the assembly health committee by 8 April fifteenth of each year. Such report shall include the amount of 9 monies recovered by the [medicaid fraud control unit] attorney general 10 pursuant to the false claims act for the preceding calendar year, delin- 11 eated by three separate categories: (1) money recovered by the medicaid 12 fraud control unit; (2) money recovered in cases involving frauds unre- 13 lated to medicaid fraud or violations of the tax law; and (3) money 14 recovered in cases involving violations of the tax law. 15 § 8. Severability. If any clause, sentence, paragraph, section or part 16 of this act shall be adjudged by any court of competent jurisdiction to 17 be invalid and after exhaustion of all further judicial review, the 18 judgment shall not affect, impair or invalidate the remainder thereof, 19 but shall be confined in its operation to the clause, sentence, para- 20 graph, section or part of this act directly involved in the controversy 21 in which the judgment shall have been rendered. 22 § 9. This act shall take effect immediately and shall apply to any 23 pending cause of action brought pursuant to article 13 of the state 24 finance law; provided however, that no pending cause of action shall be 25 dismissed for failure to plead one million dollars in damages if that 26 action pleads damages in excess of three hundred fifty thousand dollars.