HB 1697 — An Act amending the act of June 13, 1967 (P.L.31, No.21), known as the Human Services Code, providing for liability for false claims, for adoption of congressional intent of the Federal False Claims Act, for damages, costs and civil penalties, for powers of Attorney General, for qui tam actions and for civil investigative demands; and establishing the Fraud Prevention and Recovery Account.

PRINTER'S NO.   2081

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1697
                                                 Session of
                                                   2025

     INTRODUCED BY BURNS, PASHINSKI AND GIRAL, JULY 2, 2025

     REFERRED TO COMMITTEE ON JUDICIARY, JULY 2, 2025


                                     AN ACT
 1   Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
 2      act to consolidate, editorially revise, and codify the public
 3      welfare laws of the Commonwealth," providing for liability
 4      for false claims, for adoption of congressional intent of the
 5      Federal False Claims Act, for damages, costs and civil
 6      penalties, for powers of Attorney General, for qui tam
 7      actions and for civil investigative demands; and establishing
 8      the Fraud Prevention and Recovery Account.
 9      The General Assembly of the Commonwealth of Pennsylvania
10   hereby enacts as follows:
11      Section 1.     The act of June 13, 1967 (P.L.31, No.21), known
12   as the Human Services Code, is amended by adding an article to
13   read:
14                               ARTICLE XIV-E
15                         LIABILITY FOR FALSE CLAIMS
16                                SUBARTICLE A
17                           PRELIMINARY PROVISIONS
18   Section 1401-E.    Scope of article.
19      This article shall be known and may be cited as the Taxpayer
20   Prevention Against Fraud Act.
21   Section 1402-E.    Declaration of policy.
 1      The General Assembly declares that this article adopts the
 2   intent of Congress in enacting the Federal False Claims Act
 3   (Public Law 97-258, 31 U.S.C. § 3729 et seq.) on September 13,
 4   1982, including the amendments enacted October 27, 1986 (Public
 5   Law 99-562, 100 Stat. 3153).
 6   Section 1403-E.       Definitions.
 7      The following words and phrases when used in this article
 8   shall have the meanings given to them in this section unless the
 9   context clearly indicates otherwise:
10      "Claim."    As follows:
11          (1)    A request or demand for money or property, whether
12      under contract or otherwise and regardless of whether the
13      Commonwealth has title to the money or property, that is
14      presented, submitted or otherwise made to any of the
15      following:
16                 (i)    An employee, officer or agent of the
17          Commonwealth.
18                 (ii)    A contractor, grantee or other recipient, if
19          any portion of the money or property will be spent or
20          used on the Commonwealth's behalf or to advance a program
21          or interest of the Commonwealth, and if the Commonwealth:
22                        (A)   provides or has provided any portion of the
23                 money or property requested or demanded; or
24                        (B)   will reimburse the contractor, grantee or
25                 other recipient for any portion of the money or
26                 property that is requested or demanded.
27          (2)    The term does not include requests or demands for
28      money or property that the Commonwealth has paid to an
29      individual as compensation for employment or as an income
30      subsidy with no restrictions on the individual's use of the

20250HB1697PN2081                         - 2 -
 1      money or property.
 2          (3)   To the extent that it is not connected to a request
 3      or demand for money or property, a filing with a Commonwealth
 4      agency pursuant to the Commonwealth's insurance laws shall
 5      not constitute a claim.
 6      "Knowing" and "knowingly."     As follows:
 7          (1)   Whenever a person, with respect to information, does
 8      any of the following:
 9                (i)    Has actual knowledge of the information.
10                (ii)    Acts in deliberate ignorance of the truth or
11          falsity of the information.
12                (iii)    Acts in reckless disregard of the truth or
13          falsity of the information.
14          (2)   Proof of specific intent to defraud is not required.
15      "Legal claim."     A claim for relief at law or equity, whether
16   contemplated or asserted, including any claim, demand, account,
17   note or any other cause of action or liability.
18      "Obligation."     An established duty, whether or not fixed,
19   arising from any of the following:
20          (1)   An express or implied contractual relationship.
21          (2)   An express or implied grantor-grantee relationship.
22          (3)   An express or implied licensor-licensee
23      relationship.
24          (4)   A fee-based or similar relationship.
25          (5)   A statute or regulation.
26          (6)   The retention of an overpayment.
27      "Official use."     A use that is consistent with the law and
28   the regulations and policies of the Office of Attorney General,
29   including the following:
30          (1)   Use in connection with internal memoranda and

20250HB1697PN2081                     - 3 -
 1      reports.
 2          (2)     Communications between the Office of Attorney
 3      General and a Federal, State or local government agency or a
 4      contractor of a Federal, State or local government agency,
 5      undertaken in furtherance of an investigation or prosecution
 6      of an action or case.
 7          (3)     Interviews of a qui tam plaintiff or other witness.
 8          (4)     Oral examinations.
 9          (5)     Depositions.
10          (6)     Preparation for and response to civil discovery
11      requests.
12          (7)     Introduction into the record of an action, case or
13      proceeding.
14          (8)     Applications, motions, memoranda and briefs
15      submitted to a court or other tribunal.
16          (9)     Communications with investigators, auditors,
17      consultants and experts, the counsel of other parties,
18      arbitrators and mediators, concerning an investigation,
19      action, case or proceeding.
20      "Original source."    An individual who:
21          (1)     prior to a public disclosure under section 1412-E(f)
22      (2), has voluntarily disclosed to the Commonwealth the
23      information on which the allegations or transactions in a
24      claim are based; or
25          (2)     has knowledge that is independent of and materially
26      adds to the publicly disclosed allegations or transactions
27      and who has voluntarily provided the information to the
28      Commonwealth before filing an action under section 1412-E(b).
29      "Person."    A natural person, corporation, firm, association,
30   organization, partnership, limited liability company, business,

20250HB1697PN2081                    - 4 -
 1   trust, business trust, estate or foundation.
 2      "Qui tam plaintiff."     A person bringing a civil action under
 3   section 1412-E(b).
 4      "State."     In reference to a jurisdiction, the term includes
 5   the District of Columbia, the Commonwealth of Puerto Rico, the
 6   Virgin Islands and all permanently inhabited territories of the
 7   United States.
 8                                SUBARTICLE B
 9                                FALSE CLAIMS
10   Section 1411-E.     Acts subjecting persons to liability and
11                  damages.
12      (a)   Liability.--Except as provided in subsection (b), a
13   person shall be liable to the Commonwealth for three times the
14   amount of damages that the Commonwealth sustains, plus a civil
15   penalty in an amount determined under subsection (d), for each
16   violation, if the person commits any of the following acts:
17            (1)   Knowingly presents or causes to be presented a false
18      or fraudulent claim for payment or approval.
19            (2)   Knowingly makes, uses or causes to be made or used,
20      a false record or statement material to a false or fraudulent
21      claim.
22            (3)   Has possession, custody or control of property or
23      money used or to be used by the Commonwealth and knowingly
24      delivers or causes to be delivered less than all of the money
25      or property.
26            (4)   Is authorized to make or deliver a document
27      certifying receipt of property used or to be used by the
28      Commonwealth and, intending to defraud the Commonwealth,
29      makes or delivers a receipt without completely knowing that
30      the information on the receipt is true.

20250HB1697PN2081                    - 5 -
 1            (5)   Knowingly buys or receives, as a pledge of an
 2      obligation or debt, public property from an officer or
 3      employee of the Commonwealth who lawfully may not sell or
 4      pledge the property.
 5            (6)   Knowingly makes, uses or causes to be made or used a
 6      false record or statement material to an obligation to pay or
 7      transmit money or property to the Commonwealth or knowingly
 8      conceals, or knowingly and improperly avoids or decreases an
 9      obligation to pay or transmit money or property to the
10      Commonwealth.
11            (7)   Knowingly fails to disclose a fact, event or
12      occurrence material to an obligation to pay or transmit money
13      or property to the Commonwealth.
14            (8)   Is a beneficiary of an inadvertent submission of a
15      false claim, subsequently discovers the falsity of the claim
16      and fails to disclose the false claim to the Commonwealth
17      within a reasonable time after discovery of the false claim.
18            (9)   Conspires to commit a violation of paragraph (1),
19      (2), (3), (4), (5), (6), (7) or (8).
20      (b)   Damages limitation.--A court may assess not less than
21   two times the amount of damages that the Commonwealth sustains
22   from a violation of subsection (a) if the court finds all of the
23   following:
24            (1)   The person committing the violation furnished the
25      Commonwealth officials who are responsible for investigating
26      false claims violations with all information known to that
27      person about the violation within 30 days after the date on
28      which the person first obtained the information.
29            (2)   The person fully cooperated with an investigation by
30      the Commonwealth.

20250HB1697PN2081                    - 6 -
 1            (3)   At the time the person furnished the Commonwealth
 2      with information about the violation, no criminal
 3      prosecution, civil action or administrative action had
 4      commenced with respect to the violation, and the person did
 5      not have actual knowledge of the existence of an
 6      investigation into the violation.
 7      (c)   Commonwealth costs.--A person who is liable for damages
 8   or penalties under subsection (a) shall also be liable to the
 9   Commonwealth for the reasonable costs of investigating and
10   prosecuting violations of subsection (a), including reasonable
11   costs to the Office of Attorney General.
12      (d)   Civil penalties and adjustments.--The civil penalties
13   payable under subsection (a) shall be equal to the civil penalty
14   limits provided under 31 U.S.C. § 3729(a)(1) (relating to false
15   claims), as adjusted by the Federal Civil Penalties Inflation
16   Act of 1990 (Public Law 101-410, 28 U.S.C. § 2461 note).
17      (e)   Exemption from disclosure.--The Office of Attorney
18   General shall be exempt from disclosing under the act of
19   February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law,
20   information that is furnished under subsection (b) or accessed
21   or shared under section 1414-E(a).
22      (f)   Definition.--For purposes of this section, the term
23   "material" means a natural tendency to influence, or be capable
24   of influencing, the payment or receipt of money or property.
25   Section 1412-E.     Attorney General investigations and
26                  prosecutions and civil actions.
27      (a)   Responsibilities.--The Attorney General shall represent
28   the Commonwealth with respect to all matters arising under this
29   article and is authorized to investigate violations of section
30   1411-E. If the Attorney General finds that a person has violated

20250HB1697PN2081                     - 7 -
 1   or is violating section 1411-E, the Attorney General may bring a
 2   civil action under this section against that person for
 3   violating section 1411-E.
 4      (b)   Action by qui tam plaintiff.--
 5            (1)   A qui tam plaintiff may bring a civil action for a
 6      violation of section 1411-E for the qui tam plaintiff and for
 7      the Commonwealth in the name of the Commonwealth. Once filed,
 8      the action may be dismissed only if the court and the
 9      Attorney General give written consent to the dismissal and
10      their reasons for consenting.
11            (2)   A copy of the complaint and written disclosure of
12      substantially all material evidence and information that the
13      qui tam plaintiff possesses shall be served promptly on the
14      Attorney General as provided for in the Pennsylvania Rules of
15      Civil Procedure or applicable court rule. The complaint shall
16      be filed in camera and shall remain under seal for at least
17      60 days and shall not be served on the defendant until the
18      court orders the service. The Commonwealth may elect to
19      intervene and proceed with the action within 60 days after it
20      receives the complaint and the material evidence and
21      information.
22            (3)   Upon motion of the Commonwealth, the court, for good
23      cause shown, shall extend the time during which the complaint
24      remains sealed under paragraph (2). The motion may be
25      supported by affidavits or other submissions in camera. The
26      defendant shall not be required to respond to a complaint
27      filed under this section until the complaint is unsealed and
28      served upon the defendant under the Pennsylvania Rules of
29      Civil Procedure or other applicable court rule.
30            (4)   Before the expiration of the 60-day period or any

20250HB1697PN2081                    - 8 -
 1      extensions obtained under paragraph (3), the Commonwealth
 2      shall do either of the following:
 3                  (i)    proceed with the action, in which case the
 4            action shall be conducted by the Commonwealth; or
 5                  (ii)    notify the court that the Commonwealth declines
 6            to take over the action, in which case the qui tam
 7            plaintiff shall have the right to conduct the action.
 8      (c)   Intervention restricted to Commonwealth.--When a qui tam
 9   plaintiff brings an action under subsection (b), only the
10   Commonwealth may intervene or bring a related action based on
11   the facts underlying the pending action.
12      (d)   Rights of the parties to qui tam actions.--
13            (1)   If the Commonwealth proceeds with an action under
14      subsection (b), it shall have the primary responsibility for
15      prosecuting the action and shall not be bound by an act of
16      the qui tam plaintiff. The qui tam plaintiff shall have the
17      right to continue as a party to the action, subject to the
18      limitations specified in paragraph (2).
19            (2)   The following shall apply:
20                  (i)    The Commonwealth may move to dismiss the action
21            despite the qui tam plaintiff's objections, if the
22            Commonwealth notifies the qui tam plaintiff of the
23            filing. The court may dismiss the action if the court has
24            provided the qui tam plaintiff with an opportunity to
25            oppose the motion at a hearing.
26                  (ii)    The Commonwealth may settle the action with the
27            defendant despite the qui tam plaintiff's objections if
28            the court determines, after a hearing, that the proposed
29            settlement is fair, adequate and reasonable under all the
30            circumstances. Upon a showing of good cause, the hearing

20250HB1697PN2081                       - 9 -
 1        may be held in camera. Upon the Commonwealth's motion,
 2        the court, for good cause shown, shall order a partial
 3        lifting of the seal to facilitate the investigative
 4        process or settlement.
 5              (iii)    Upon the Commonwealth's showing that the qui
 6        tam plaintiff's unrestricted participation during the
 7        course of the action would interfere with or unduly delay
 8        the Commonwealth's prosecution of the case or would be
 9        repetitious, irrelevant or for purposes of harassment,
10        the court may, in its discretion, impose limitations on
11        the qui tam plaintiff's participation by:
12                     (A)   limiting the number of witnesses the qui tam
13              plaintiff may call;
14                     (B)   limiting the length of witness testimony;
15                     (C)   limiting the qui tam plaintiff's cross-
16              examination of witnesses; or
17                     (D)   otherwise limiting the qui tam plaintiff's
18              participation in the action.
19              (iv)    Upon the defendant's showing that the qui tam
20        plaintiff's unrestricted participation in the action
21        would be for purposes of harassment or would cause the
22        defendant undue burden or unnecessary expense, the court
23        may limit the qui tam plaintiff's participation in the
24        action.
25        (3)   If the Commonwealth elects not to proceed with the
26    action, the qui tam plaintiff shall have the right to conduct
27    the action. If the Commonwealth requests, the Commonwealth
28    shall be served with copies of all pleadings filed in the
29    action and shall be supplied with copies of all deposition
30    transcripts and other discovery produced in the action.

20250HB1697PN2081                    - 10 -
 1    Without limiting the qui tam plaintiff's status and rights,
 2    the court shall permit the Commonwealth to intervene at a
 3    later date upon a showing of good cause.
 4        (4)   Whether or not the Commonwealth proceeds with the
 5    action, upon the Commonwealth's showing, in camera, that
 6    certain actions of discovery by the qui tam plaintiff would
 7    interfere with the Commonwealth's investigation or
 8    prosecution of a criminal or civil matter arising out of the
 9    same facts, the court may stay the discovery for a period of
10    not more than 60 days. The court may extend the 60-day period
11    upon the Commonwealth's further showing, in camera, that the
12    Commonwealth has pursued the criminal or civil investigation
13    or proceedings with reasonable diligence and that the
14    discovery proposed in the civil action will interfere with
15    the ongoing criminal or civil investigations or proceedings.
16        (5)   Notwithstanding subsection (b), the Commonwealth may
17    elect to pursue legal claims through an alternate remedy
18    available to the Commonwealth, including an administrative
19    proceeding to determine a civil money penalty. If the
20    alternate remedy is pursued in another proceeding, the qui
21    tam plaintiff shall have the same rights in the proceeding as
22    if the action had continued under this section. A finding of
23    fact or conclusion of law made in the other proceeding that
24    has become final shall be conclusive on all parties to an
25    action under this section. A finding or conclusion is final
26    if it has been finally determined on appeal to the
27    appropriate court of the Commonwealth, if the time for filing
28    the appeal regarding the finding or conclusion has expired
29    without an appeal having been filed or if the finding or
30    conclusion is not subject to judicial review.

20250HB1697PN2081                - 11 -
 1    (e)   Award to qui tam plaintiff.--
 2          (1)   The following shall apply:
 3                (i)    If the Commonwealth proceeds with an action
 4          brought by a qui tam plaintiff, the qui tam plaintiff
 5          shall, subject to the provisions of this subsection,
 6          receive at least 15% but not more than 25% of the
 7          proceeds of the action or settlement of the legal claim,
 8          depending upon the extent to which either or both the qui
 9          tam plaintiff and the qui tam plaintiff's counsel
10          substantially contributed to the prosecution of the
11          action.
12                (ii)    If the court finds that the action is based
13          primarily on disclosures of specific information, other
14          than information provided by the qui tam plaintiff,
15          relating to allegations or transactions in a criminal,
16          civil or administrative hearing to which the Commonwealth
17          is a party, or in a Federal, State or local legislative
18          or other governmental hearing, report, audit or
19          investigation or from the news media, the court may award
20          a sum it considers appropriate, but not more than 10% of
21          the proceeds of the action or settlement, taking into
22          account the significance of the information and the qui
23          tam plaintiff's role in advancing the action.
24          (2)   If the Commonwealth does not proceed with an action
25    under this section, the qui tam plaintiff shall receive at
26    least 25% but not more than 30% of the proceeds of the action
27    or settlement of the legal claim, as the court deems
28    reasonable.
29          (3)   Whether or not the Commonwealth proceeds with an
30    action, if the court finds that the qui tam plaintiff planned

20250HB1697PN2081                     - 12 -
 1    and initiated the violation of section 1411-E upon which the
 2    action was brought, the following shall apply:
 3              (i)    Subject to subparagraph (ii), the court may, to
 4        the extent that it considers appropriate, reduce the
 5        share of the proceeds of the action or settlement of the
 6        legal claim that the qui tam plaintiff would otherwise
 7        receive under paragraph (1) or (2), taking into account
 8        the qui tam plaintiff's role in advancing the action and
 9        any relevant circumstances pertaining to the violation.
10              (ii)   If the qui tam plaintiff is convicted of
11        criminal conduct arising from the qui tam plaintiff's
12        role in the violation, the qui tam plaintiff shall be
13        dismissed from the civil action and shall not receive a
14        share of the proceeds of the action. The dismissal shall
15        not prejudice the Commonwealth's right to continue the
16        action.
17        (4)   An award to a qui tam plaintiff shall be made from
18    the proceeds of the action or settlement of the legal claim.
19    The qui tam plaintiff also shall receive an amount for
20    reasonable expenses that the court finds were necessarily
21    incurred, plus reasonable attorney fees and costs. The
22    expenses, fees and costs shall be awarded against the
23    defendant.
24        (5)   If the Commonwealth does not proceed with the action
25    and the qui tam plaintiff conducts the action, the court may
26    award to the defendant reasonable attorney fees and expenses
27    if the defendant prevails in the action and the court finds
28    that the qui tam plaintiff's legal claim was clearly
29    frivolous, clearly vexatious or brought primarily for
30    purposes of harassment.

20250HB1697PN2081                   - 13 -
 1    (f)   Certain actions barred.--
 2          (1)   A court shall not have jurisdiction over an action
 3    filed under subsection (b) against the Governor, the
 4    Lieutenant Governor, the Attorney General, the Auditor
 5    General, the Treasurer, a cabinet member, a deputy secretary,
 6    a member of the General Assembly or a member of the judiciary
 7    if the action is based on evidence or information known to
 8    the Commonwealth when the action was brought.
 9          (2)   The following shall apply:
10                (i)    Subject to subparagraph (ii), the court shall
11          dismiss an action or legal claim brought under subsection
12          (b) if substantially the same allegations or transactions
13          alleged in the action or legal claim were publicly
14          disclosed in:
15                       (A)   the news media;
16                       (B)   a criminal, civil or administrative hearing
17                in which the Commonwealth is or was a party; or
18                       (C)   a Federal, State or local legislative or
19                other governmental hearing, report, audit or
20                investigation.
21                (ii)    The court may not dismiss an action under
22          subparagraph (i) if:
23                       (A)   the Attorney General opposes dismissal; or
24                       (B)   the qui tam plaintiff is an original source
25                of the information that is publicly disclosed.
26          (3)   A qui tam plaintiff may not bring an action under
27    this section that is based upon allegations or transactions
28    that are the subject of a civil suit or an administrative
29    civil money penalty proceeding in which the Commonwealth is
30    already a party.

20250HB1697PN2081                      - 14 -
 1      (g)   Commonwealth not liable for certain expenses.--The
 2   Commonwealth is not liable for expenses that a qui tam plaintiff
 3   incurs in bringing an action under this section.
 4      (h)   Cooperation by agencies.--Commonwealth agencies shall
 5   cooperate in the investigation and prosecution of false claims
 6   under this section, whether the investigation is conducted or
 7   suit is brought by the Attorney General or by a qui tam
 8   plaintiff.
 9      (i)   Nature of action.--An action under this section is an
10   action brought by the Commonwealth, as provided in section
11   204(c) of the act of October 15, 1980 (P.L.950, No.164), known
12   as the Commonwealth Attorneys Act.
13   Section 1413-E.        Civil investigative demands.
14      (a)   Issuance and service.--
15            (1)   If the Attorney General has reason to believe that a
16      person may be in possession, custody or control of
17      documentary material or information relevant to a false
18      claims investigation under this article, the Attorney General
19      or a designee may issue in writing and cause to be served
20      upon the person a civil investigative demand requiring the
21      person to:
22                  (i)    produce documentary material for inspection and
23            copying;
24                  (ii)    answer in writing written interrogatories with
25            respect to documentary material or information;
26                  (iii)    give oral testimony concerning documentary
27            material or information; or
28                  (iv)    furnish any combination of materials, answers
29            or testimony.
30            (2)   If a civil investigative demand is an express demand

20250HB1697PN2081                       - 15 -
 1    for a product of discovery, the Attorney General or a
 2    designee shall:
 3                (i)    cause to be served in any manner authorized by
 4          this subsection a copy of the demand upon the person from
 5          whom or which the discovery was obtained; and
 6                (ii)    notify the demand issuee of the date on which
 7          the copy was served.
 8    (b)   Contents and deadlines.--
 9          (1)   A civil investigative demand shall state the nature
10    of the conduct constituting the alleged violation of this
11    article that is under investigation and the applicable
12    provisions of this article alleged to be violated.
13          (2)   If the civil investigative demand is for the
14    production of documentary material, the demand shall:
15                (i)    describe each class of documentary material to
16          be produced with definiteness and certainty as to permit
17          the material to be fairly identified;
18                (ii)    prescribe a return date for each class that
19          will provide a reasonable time period within which the
20          material so demanded may be assembled and made available
21          for inspection and copying; and
22                (iii)    identify the false claims investigator to whom
23          the material shall be available.
24          (3)   If the civil investigative demand is for answers to
25    written interrogatories, the demand shall:
26                (i)    set forth with specificity the written
27          interrogatories to be answered;
28                (ii)    prescribe dates on which the answers to the
29          written interrogatories shall be submitted; and
30                (iii)    identify the false claims investigator to whom

20250HB1697PN2081                     - 16 -
 1        the answers shall be submitted.
 2        (4)     If the civil investigative demand is for oral
 3    testimony, the demand shall:
 4              (i)    prescribe a date, time and place at which the
 5        oral testimony shall be given;
 6              (ii)    identify a false claims investigator who shall
 7        conduct the examination and the custodian to whom the
 8        transcript of the examination shall be submitted;
 9              (iii)    specify that attendance and testimony are
10        necessary to the conduct of the false claims
11        investigation; and
12              (iv)    describe the general purpose for which the
13        demand is being issued and general nature of the
14        testimony, including the primary areas of inquiry, that
15        will be taken under the demand.
16        (5)     A civil investigative demand shall contain the
17    following statement printed at the beginning of the demand:
18              "You have the right to seek the assistance of an
19              attorney, who may represent you in all phases of the
20              investigation of which this civil investigative
21              demand is a part."
22        (6)     A civil investigative demand that is an express
23    demand for a product of discovery shall not be returned or
24    returnable until 20 days after a copy of the demand has been
25    served upon the person from whom or which the discovery was
26    obtained.
27        (7)     The date prescribed for commencement of oral
28    testimony under a civil investigative demand shall not be
29    less than seven days after the date on which the demand is
30    served, unless the Attorney General or a designee determines

20250HB1697PN2081                    - 17 -
 1    that exceptional circumstances exist and warrant commencing
 2    testimony within a lesser time period.
 3          (8)   The Attorney General or a designee may not authorize
 4    the issuance of more than one civil investigative demand for
 5    the same person's oral testimony unless:
 6                (i)    the person requests otherwise; or
 7                (ii)    the Attorney General or a designee notifies the
 8          person in writing that an additional demand for oral
 9          testimony is necessary.
10    (c)   Protected material or information.--
11          (1)   A civil investigative demand may not require the
12    production of documentary material, the submission of answers
13    to written interrogatories or the giving of oral testimony if
14    the material, answers or testimony would be protected from
15    disclosure under the standards applicable to:
16                (i)    subpoenas or subpoenas duces tecum issued by a
17          court of this Commonwealth to aid in a grand jury
18          investigation; or
19                (ii)    discovery under the Pennsylvania Rules of Civil
20          Procedure or other applicable court rule, to the extent
21          that the application of the standards to a demand is
22          appropriate and consistent with the provisions and
23          purposes of this section.
24          (2)   The following shall apply:
25                (i)    Except where a statute explicitly precludes the
26          superseding effect imposed by this paragraph, a civil
27          investigative demand that is an express demand for a
28          product of discovery supersedes an inconsistent order,
29          rule or provision of law, other than in this section,
30          that prevents or restrains disclosure of the product of

20250HB1697PN2081                     - 18 -
 1            discovery to any person.
 2                  (ii)   A person's disclosure of a product of discovery
 3            under an express demand does not constitute a waiver of
 4            any right or privilege to resist discovery of trial
 5            preparation materials that the person may be entitled to
 6            invoke.
 7      (d)   Service and jurisdiction.--Except as otherwise provided,
 8   the following applies to civil investigative demands issued
 9   under this section and petitions filed under subsection (j):
10            (1)   A civil investigative demand may be served by a
11      false claims investigator, a law enforcement officer or
12      another individual authorized by law to serve process in the
13      jurisdiction where the demand is served. A petition may be
14      served by any person authorized to serve process under the
15      Pennsylvania Rules of Civil Procedure or other applicable
16      court rule.
17            (2)   A civil investigative demand or petition may be
18      served upon a person consistent with and in the manner
19      prescribed by 42 Pa.C.S. Ch. 53 (relating to bases of
20      jurisdiction and interstate and international procedure) and
21      the Pennsylvania Rules of Civil Procedure or other applicable
22      court rule, for personal service inside or outside this
23      Commonwealth. To the extent that the courts of the
24      Commonwealth can assert jurisdiction over a person outside
25      this Commonwealth, a court with jurisdiction over an action
26      filed under this article shall have the same jurisdiction to
27      take action respecting the person's compliance with this
28      section that it would have if the person resided within the
29      court's jurisdiction.
30            (3)   The following shall apply:

20250HB1697PN2081                      - 19 -
 1             (i)    A civil investigative demand or petition may be
 2        served upon a legal entity by:
 3                    (A)   delivering an executed copy of the demand or
 4             petition to a partner, executive officer, managing
 5             agent or general agent of the legal entity, or to an
 6             employee designated or agent authorized by
 7             appointment or law to receive service of process on
 8             behalf of the legal entity;
 9                    (B)   delivering an executed copy of the demand or
10             petition to the legal entity's principal office or
11             place of business;
12                    (C)   depositing an executed copy of the demand or
13             petition in the United States mail by registered or
14             certified mail with a return receipt requested,
15             addressed to the legal entity at its principal office
16             or place of business; or
17                    (D)   any other method provided by the
18             Pennsylvania Rules of Civil Procedure or other
19             applicable court rule.
20             (ii)    A civil investigative demand or petition may be
21        served upon a natural person by:
22                    (A)   delivering an executed copy of the demand or
23             petition to the person;
24                    (B)   depositing an executed copy of the demand or
25             petition in the United States mail by registered or
26             certified mail with a return receipt requested,
27             addressed to the person at the person's residence or
28             principal office or place of business; or
29                    (C)   any other method provided by the
30             Pennsylvania Rules of Civil Procedure or other

20250HB1697PN2081                   - 20 -
 1                applicable court rule.
 2          (4)   A verified return by the individual serving a civil
 3    investigative demand or a petition, setting forth the manner
 4    of service, shall be proof of service. In the case of service
 5    by registered or certified mail, the return post office
 6    receipt of the demand or petition's delivery shall accompany
 7    the verified return.
 8    (e)   Documentary material.--
 9          (1)   The following shall apply regarding a verified
10    certificate:
11                (i)    The production of documentary material shall be
12          made under a written and verified certificate, in the
13          form a civil investigative demand designates, by the
14          following individuals:
15                       (A)   if the demand issuee is a natural person, by
16                the demand issuee; and
17                       (B)   if the demand issuee is not a natural
18                person, by an individual who has knowledge of facts
19                and circumstances relating to the production and is
20                authorized to act on the demand issuee's behalf.
21                (ii)    The certificate shall state that all the
22          documentary material required by the demand and in the
23          demand issuee's possession, custody or control has been
24          produced and made available to the false claims
25          investigator identified in the demand.
26          (2)   The following shall apply to production:
27                (i)    A demand issuee shall make demanded material
28          available for inspection and copying to the false claims
29          investigator identified in the demand:
30                       (A)   at the demand issuee's principal place of

20250HB1697PN2081                      - 21 -
 1                business;
 2                       (B)   at another place as the false claims
 3                investigator and the demand issuee thereafter may
 4                agree and prescribe in writing; or
 5                       (C)   as the court may direct under this section.
 6                (ii)    The documentary material shall be made
 7          available on the return date specified in the demand or
 8          on a later date as the false claims investigator may
 9          prescribe in writing. The demand issuee may, upon written
10          agreement with the false claims investigator, substitute
11          copies for originals of all or any part of the material.
12          (3)   If the demand issuee objects to the production of
13    any portion of the required documentary material or otherwise
14    withholds any portion of the material, the demand issuee
15    shall with particularity state the reasons for the objection
16    or withholding and identify all withheld material.
17    (f)   Interrogatories.--
18          (1)   Each interrogatory in a civil investigative demand
19    shall be answered separately and fully in writing under oath
20    and shall be submitted under a verified certificate, in the
21    form the demand designates, stating that all information
22    required by the demand and in the demand issuee's possession,
23    custody, control or knowledge has been submitted by the
24    following persons:
25                (i)    if the demand issuee is a natural person, by the
26          demand issuee; and
27                (ii)    if the demand issuee is not a natural person,
28          by the individuals responsible for answering each
29          interrogatory.
30          (2)   If the demand issuee objects to an interrogatory or

20250HB1697PN2081                      - 22 -
 1    any portion thereof, or otherwise withholds information, the
 2    demand issuee shall state with particularity the reasons for
 3    the objection or withholding and identify all withheld
 4    information.
 5    (g)   Oral examinations.--
 6          (1)   The following shall apply:
 7                (i)    The examination of a person under a civil
 8          investigative demand for oral testimony shall be taken
 9          before an officer authorized to administer oaths and
10          affirmations by the laws of this Commonwealth or of the
11          place where the examination is held.
12                (ii)    The officer shall put the witness on oath or
13          affirmation and, personally or by someone acting under
14          the officer's direction and in the officer's presence,
15          shall record the witness's testimony.
16                (iii)    The testimony shall be stenographically
17          transcribed.
18                (iv)    When the transcribing is complete, the officer
19          shall promptly transmit a copy of the transcript to the
20          custodian.
21                (v)    This subsection shall not preclude the taking of
22          testimony by any means authorized by, and in a manner
23          consistent with, the Pennsylvania Rules of Civil
24          Procedure or other applicable court rule.
25          (2)   The false claims investigator conducting the
26    examination shall exclude from the place where the
27    examination is held all persons except the following:
28                (i)    the person giving the testimony;
29                (ii)    the attorney for the person giving the
30          testimony;

20250HB1697PN2081                     - 23 -
 1              (iii)    an attorney for the Commonwealth;
 2              (iv)    the officer before whom the testimony is to be
 3        taken;
 4              (v)    the court reporter taking the testimony;
 5              (vi)    the custodian, if identified in the demand as
 6        attending; and
 7              (vii)    any other person upon which the person giving
 8        the testimony and the attorney for the Commonwealth
 9        agree.
10        (3)   A person's oral testimony taken under a civil
11    investigative demand shall be taken in the county or city
12    within which the person resides, is found, or transacts
13    business, or in a place to which the false claims
14    investigator and the person otherwise agree.
15        (4)   The following shall apply:
16              (i)    When the transcript of testimony is completed,
17        the false claims investigator or the officer before whom
18        the testimony is taken shall afford the witness, who may
19        be accompanied by counsel, a reasonable opportunity to
20        examine and read the transcript, unless the witness
21        waives the reading and examination.
22              (ii)    The officer or false claims investigator shall
23        enter and identify on the transcript any changes in form
24        or substance that the witness desires to make with a
25        statement of the reasons the witness gives for making the
26        changes.
27              (iii)    The witness shall sign the transcript after
28        the changes, if any, are made, unless the witness waives
29        the signing in writing, is ill, cannot be found or
30        refuses to sign. If the witness does not sign the

20250HB1697PN2081                   - 24 -
 1        transcript within 30 days after being afforded a
 2        reasonable opportunity to sign it, the officer or false
 3        claims investigator shall sign it and state on the record
 4        the fact of the witness's waiver, illness, absence or
 5        refusal to sign, together with the reasons, if any, given
 6        for why the witness did not sign the transcript.
 7              (iv)    The officer before whom the testimony is taken
 8        shall certify on the transcript that the witness was
 9        sworn by the officer and the transcript is a true record
10        of the witness's testimony, and the officer shall
11        promptly deliver the transcript or send the transcript by
12        registered or certified mail to the custodian.
13              (v)    Upon receiving payment of reasonable charges,
14        the false claims investigator shall furnish a copy of the
15        transcript to the witness only, except that the Attorney
16        General or a designee may, for good cause, limit the
17        witnesses to inspecting the official transcript.
18        (5)   The following shall apply:
19              (i)    A person compelled to appear for oral testimony
20        may be accompanied, represented and advised by counsel.
21        Counsel may advise the person in confidence with respect
22        to any question asked of the person.
23              (ii)    The person or the person's counsel may object
24        on the record to any question, in whole or in part, and
25        shall briefly state for the record the reason for the
26        objection. An objection may be made, received and entered
27        upon the record when it is asserted that the person is
28        entitled to refuse to answer on the grounds of a
29        constitutional or legal right or privilege, including the
30        privilege against self-incrimination. The person may not

20250HB1697PN2081                   - 25 -
 1            otherwise object to or refuse to answer any question and
 2            may not directly or through counsel otherwise interrupt
 3            the oral examination. If the person refuses to answer a
 4            question, a petition may be filed with the court under
 5            this section for an order compelling the person to answer
 6            the question.
 7            (6)   A person appearing for oral testimony under a civil
 8      investigative demand shall be entitled to the same fees and
 9      allowances that are paid to witnesses in the Courts of Common
10      Pleas.
11      (h)   Refusal to comply on self-incrimination privilege
12   grounds.--The Attorney General may invoke the provisions of 42
13   Pa.C.S. § 5947 (relating to immunity of witnesses) if a person,
14   on the grounds of privilege against self-incrimination, refuses
15   to do one or more of the following:
16            (1)   Furnish documentary material in response to a civil
17      investigative demand.
18            (2)   Answer an interrogatory in response to a civil
19      investigative demand.
20            (3)   Answer a question asked during oral examination made
21      under a civil investigative demand.
22            (4)   Otherwise comply with a civil investigative demand.
23      (i)   Custody of documents, answers and transcripts.--
24            (1)   Unless the Attorney General designates another
25      person, the false claims investigator identified on a civil
26      investigative demand shall serve as custodian of documentary
27      material, interrogatory answers and oral testimony
28      transcripts received under this section. The Attorney General
29      may designate additional persons as the Attorney General
30      determines to be necessary to serve as deputy, alternative or

20250HB1697PN2081                    - 26 -
 1    successor custodians.
 2        (2)   A false claims investigator who receives documentary
 3    material, interrogatory answers or oral testimony transcripts
 4    under this section shall:
 5              (i)    if serving as custodian, take possession of the
 6        material, answers or transcripts and be responsible for
 7        their usage and for the return of documentary material;
 8        or
 9              (ii)   if not serving as custodian, transmit the
10        materials, answers or transcripts to the custodian, who
11        shall take possession and responsibility for the
12        materials, answers or transcripts.
13        (3)   The custodian may cause the preparation of copies of
14    documentary material, interrogatory answers or oral testimony
15    transcripts as may be required for official use by a false
16    claims investigator or another officer or employee of the
17    Office of Attorney General authorized to use the materials,
18    answers or transcripts in connection with the taking of oral
19    testimony under this section.
20        (4)   Under reasonable terms and conditions as the
21    Attorney General prescribes, a custodian possessing
22    documentary material, interrogatory answers or oral testimony
23    transcripts shall make the material, answers and transcripts
24    available for examination by the person that produced them or
25    by the person's representative.
26        (5)   The following shall apply:
27              (i)    Notwithstanding 18 Pa.C.S. Ch. 91 (relating to
28        criminal history record information), a designee who is
29        designated or called to appear before a court, grand jury
30        or Commonwealth agency in a case or proceeding may, in

20250HB1697PN2081                   - 27 -
 1        connection with the case or proceeding, obtain from the
 2        custodian and use any documentary material, interrogatory
 3        answers or oral testimony transcripts that the designee
 4        determines is required.
 5              (ii)    Upon the case or proceeding's completion, an
 6        attorney under subparagraph (i) shall return to the
 7        custodian documentary material, interrogatory answers or
 8        oral testimony transcripts that have not passed into the
 9        court's, grand jury's or agency's control through
10        introduction into the case or proceeding's record.
11        (6)   The following shall apply:
12              (i)    Subject to subparagraphs (ii) and (iii), upon
13        the written request of a person that produced documentary
14        material in connection with a false claims investigation,
15        the custodian shall return the material.
16              (ii)    The custodian shall return the material only
17        if:
18                     (A)   all cases or proceedings arising out of the
19              false claims investigation have been completed; or
20                     (B)   no case or proceeding in which the material
21              may be used has been commenced within a reasonable
22              time after completion of the examination and analysis
23              of all documentary material and other information
24              assembled in the course of the false claims
25              investigation.
26              (iii)    The custodian shall not be required to return
27        either of the following:
28                     (A)   material that has passed into a court, grand
29              jury or Commonwealth agency's control through
30              introduction into a case or proceeding's record; and

20250HB1697PN2081                    - 28 -
 1                       (B)   copies furnished to the false claims
 2                investigator or made in accordance with this
 3                subsection for the Attorney General or a designee.
 4    (j)   Judicial proceedings.--
 5          (1)   The Commonwealth may file and serve upon a person a
 6    petition for a court order enforcing a civil investigative
 7    demand if:
 8                (i)    the person fails to comply with a demand served
 9          upon the person; or
10                (ii)    satisfactory copying or reproduction of the
11          material requested in the demand cannot be done and the
12          person refuses to surrender the material.
13          (2)   The following shall apply:
14                (i)    A demand issuee who has received a civil
15          investigative demand may file and serve upon the false
16          claims investigator identified in the demand a petition
17          for a court order modifying or setting aside the demand.
18                (ii)    If a demand is an express demand for a product
19          of discovery, the person from whom discovery was obtained
20          may, upon receipt of the demand, file and serve upon the
21          false claims investigator identified in the demand a
22          petition for a court order modifying or setting aside
23          those portions of the demand requiring production of the
24          product of discovery.
25                (iii)    A petition under this paragraph must be filed
26          within:
27                       (A)   the earlier of 20 days after the civil
28                investigative demand is served on the person or any
29                time before the return date specified in the demand;
30                or

20250HB1697PN2081                      - 29 -
 1                     (B)   a longer period if the false claims
 2              investigator so prescribes in writing in the demand.
 3              (iv)    A petition under this paragraph shall specify
 4        each ground the petitioner relies on in seeking relief
 5        and may be based on either of the following:
 6                     (A)   failure of the civil investigative demand,
 7              or any portion thereof, to comply with this section's
 8              provisions; or
 9                     (B)   a constitutional or other legal right or
10              privilege of the petitioner.
11              (v)    During the pendency of a petition under this
12        paragraph, the following shall apply:
13                     (A)   The court may stay, as it deems proper,
14              compliance with all or part of the demand and the
15              running of time allowed for compliance therewith.
16                     (B)   The petitioner must comply with any portion
17              of the demand that is not sought to be modified or
18              set aside, or otherwise subject to a stay issued by
19              the court.
20        (3)   At any time a custodian possesses or is in custody
21    or control of documentary material, interrogatory answers or
22    transcripts of oral testimony given under a civil
23    investigative demand, the following persons may file and
24    serve upon the custodian a petition for a court order
25    requiring the custodian to perform a duty imposed on the
26    custodian by this section:
27              (i)    the demand issuee that furnished the material,
28        answers or testimony; and
29              (ii)    in the case of an express demand for a product
30        of discovery, the person from whom discovery was

20250HB1697PN2081                    - 30 -
 1            obtained.
 2            (4)   The following shall apply:
 3                  (i)    The court shall have jurisdiction to hear and
 4            determine a petition filed under this section and, after
 5            a hearing at which all parties have the opportunity to be
 6            heard, to enter orders as may be required to carry out
 7            the provisions of this section.
 8                  (ii)    A final order entered by Commonwealth Court
 9            under this section shall be subject to appeal to the
10            Supreme Court under 42 Pa.C.S. § 723(a) (relating to
11            appeals from Commonwealth Court).
12      (k)   Exemption from disclosure.--The Office of Attorney
13   General shall be exempt from disclosing under the act of
14   February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law,
15   documentary material, interrogatory answers and oral testimony
16   provided under a civil investigative demand.
17      (l)   Construction.--Nothing in this section shall be
18   construed to limit the regulatory or investigative authority of
19   a department or agency of the Commonwealth whose functions may
20   relate to persons, enterprises or matters falling within the
21   scope of this article.
22      (m)   Definitions.--For purposes of this section, the
23   following words and phrases shall have the meanings given to
24   them in this subsection unless the context clearly indicates
25   otherwise:
26      "Custodian."       The false claims investigator or other
27   custodian or a deputy or alternate custodian designated under
28   subsection (i) by the Attorney General.
29      "Demand issuee."       A person to whom or which a civil
30   investigative demand is issued or directed.

20250HB1697PN2081                       - 31 -
 1      "Designee."    An attorney of the Office of Attorney General
 2   designated by the Attorney General to perform duties vested in
 3   the Attorney General under this section.
 4      "Documentary material."    Includes the original or a copy of a
 5   book, record, report, memorandum, paper, communication,
 6   tabulation, chart or other document or data compilations stored
 7   or accessible through computer or other information retrieval
 8   systems, together with appropriate and succinct instructions and
 9   all other materials necessary to use or interpret the data
10   compilations, and a product of discovery.
11      "False claims investigation."     An inquiry conducted by a
12   false claims investigator for the purposes of ascertaining
13   whether a person is or has been engaged in a violation of this
14   article.
15      "False claims investigator."     An individual charged with the
16   duty of enforcing or carrying out the provisions of this article
17   who is either of the following:
18          (1)     An attorney or investigator employed by the Office
19      of Attorney General.
20          (2)     An officer or employee of the Commonwealth acting
21      under the attorney or investigator's direction and
22      supervision in connection with a false claims investigation.
23      "Legal entity."    A person other than a natural person.
24      "Person."    As defined in 1 Pa.C.S. § 1991 (relating to
25   definitions).
26      "Product of discovery."    The term includes:
27          (1)     The original or duplicate of a deposition,
28      interrogatory, document, thing, result of the inspection of
29      land or other property, examination or admission that is
30      obtained by any method of discovery in a judicial or

20250HB1697PN2081                    - 32 -
 1      administrative proceeding of an adversarial nature.
 2            (2)   A digest, analysis, selection, compilation or
 3      derivation of an item listed in paragraph (1).
 4            (3)   An index or other manner of access to an item listed
 5      in paragraph (1).
 6      "Verified."        Supported by oath or affirmation and averred
 7   subject to the penalties of 18 Pa.C.S. § 4904 (relating to
 8   unsworn falsification to authorities).
 9   Section 1414-E.        Access and sharing of information.
10      (a)   Criminal information.--
11            (1)   Subject to paragraph (2) and as necessary for
12      official use, the provisions of 18 Pa.C.S. Ch. 91 (relating
13      to criminal history record information) shall not impair the
14      Office of Attorney General's ability to access and to share
15      data, records, documents or other information obtained during
16      the course of a criminal investigation or prosecution with
17      the following:
18                  (i)    A section, unit, subunit or individual employee
19            or agent of the Office of Attorney General authorized by
20            the Attorney Genera

…  [truncated — open the source document for the complete text]