K.S.A. Chapter 60

Article ___ False Claims Act

Current Through End of 2009 Legislative Session

Sections 1 through 11, and amendments thereto,

shall be known and may be cited as the "Kansas false claims act."

History: L. 2009, ch. ___, § ___ (SB 44); April 30.

New Sec. 2. For purposes of this act:

(a) "Act" means the Kansas false claims act.

(b) "Claim" includes any request or demand, whether under contract

or otherwise, for money, property or services made to any employee,

officer or agent of the state or any political subdivision thereof or made

to any contractor, grantee or other recipient if the state or any political

subdivision thereof provides any portion of the money, property or serv-

ices which is requested or demanded, or if the state will reimburse such

contractor, grantee or other recipient for any portion of the money or

property which is requested or demanded.

the state, including municipal and quasi-municipal corporations, boards,

commissions, authorities, councils, committees, subcommittees and other

subordinate groups or administrative units thereof, receiving or expend-

ing and supported, in whole or in part, by public funds and any munici-

pality as defined in K.S.A. 75-1117, and amendments thereto.

(d) "Person" includes any natural person, corporation, firm, associa-

tion, organization, partnership, business or trust.

(e) "Knowing" and "knowingly" mean that a person, with respect to

information, does any of the following:

(1) Has actual knowledge of the information;

(2) acts in deliberate ignorance of the truth or falsity of the infor-

mation; or

(3) acts in reckless disregard of the truth or falsity of the information.

New Sec. 3. (a) A person who commits any of the following acts shall

be liable to the state or any affected political subdivision thereof, for three

times the amount of damages which the state or such political subdivision

sustains because of the act of that person and shall be liable to the state

for a civil penalty of not less than $1,000 and not more than $11,000 for

each violation. A person found to have committed any of the following

acts shall be liable to the state or such affected political subdivision for

all reasonable costs and attorney fees incurred in a civil action brought to

recover any of those penalties or damages. The following acts constitute

violations for which civil penalties, costs and attorney fees may be recov-

ered by a civil action under this act:

(1) Knowingly presents or causes to be presented to any employee,

officer or agent of the state or political subdivision thereof or to any

contractor, grantee or other recipient of state funds or funds of any po-

litical subdivision thereof, a false or fraudulent claim for payment or ap-

proval;

(2) knowingly makes, uses or causes to be made or used, a false record

or statement to get a false or fraudulent claim paid or approved;

(3) defrauds the state or any political subdivision thereof by getting

a false claim allowed or paid or by knowingly making, using or causing to

be made or used, a false record or statement to conceal, avoid or decrease

an obligation to pay or transmit money or property to the state or to any

political subdivision thereof;

(4) has possession, custody or control of public property or money

used or to be used by the state or any political subdivision thereof and

knowingly delivers or causes to be delivered less property or money than

the amount for which the person receives a certificate or receipt;

(5) is authorized to make or deliver a document certifying receipt of

property used or to be used by the state or any political subdivision

thereof and knowingly makes or delivers a receipt that falsely represents

the property received;

(6) knowingly buys or receives as a pledge of an obligation or debt,

public property from any person who lawfully may not sell or pledge the

property;

(7) is a beneficiary of an inadvertent submission of a false claim to

any employee, officer or agent of the state or political subdivision thereof,

SENATE BILL No. 44—page 2

or to any contractor, grantee or other recipient of state funds or funds of

any political subdivision thereof, who subsequently discovers the falsity

of the claim and fails to disclose the false claim and make satisfactory

arrangements for repayment to the state or affected political subdivision

thereof within a reasonable time after discovery of the false claim;

(8) conspires to commit any violation set forth in paragraphs (1)

through (7), above.

(b) Notwithstanding the provisions of subsection (a), the court may

assess not more than two times the amount of damages which the state

or any political subdivision thereof sustains because of the act of the

person in violation of paragraphs (1) through (8) of subsection (a) and no

civil penalty shall be imposed, if the court finds all of the following:

(1) The person committing the violation furnished officials of the

state who are responsible for investigating false claims violations with all

information known to that person about the violation within 30 days after

the date on which the person first obtained the information;

(2) the person fully cooperated with any investigation by the state;

and

(3) at the time the person furnished the state with information about

the violation, no criminal prosecution, civil action or administrative action

had commenced with respect to the violation and the person did not have

actual knowledge of the existence of an investigation into the violation.

cific intent to defraud is not required. An innocent mistake shall be a

defense to an action under this act.

(d) This section does not apply to claims, records or statements re-

lated to state taxation law made pursuant to chapter 79 of the Kansas

Statutes Annotated, and amendments thereto.

New Sec. 4. (a) The attorney general shall diligently investigate a

violation under section 3, and amendments thereto. If the attorney gen-

eral finds that a person has violated or is violating section 3, and amend-

ments thereto, the attorney general may bring a civil action under this

section against that person. Further, the attorney general may utilize the

assistance of city and county attorneys in cases involving their respective

political subdivisions or may utilize funds available pursuant to section 8,

and amendments thereto, to engage the services of private attorneys to

assist in carrying out the purposes of this act, or both, at times when the

attorney general determines the need exists. All local prosecutors and

private attorneys shall only participate at the request, and under the di-

rection of, the attorney general.

(b) Except as provided in section 6, and amendments thereto, nothing

in this act shall be construed to create a private cause of action.

New Sec. 5. (a) A civil action under section 3, and amendments

thereto, may not be brought: (1) More than 6 years after the date on

which the violation was committed; or

(2) more than 3 years after the date on which the violation was dis-

covered or reasonably should have been discovered, but in no event more

than 10 years after the date on which the violation was committed, which-

ever occurs last.

(b) A civil action under section 3, and amendments thereto, may be

brought for activity prior to the effective date of this act if the limitation

period set in subsection (a) has not lapsed.

the state shall be required to prove all essential elements of the cause of

action, including damages, by a preponderance of the evidence.

(d) Notwithstanding any other provision of law, a guilty verdict ren-

dered in a criminal proceeding charging false statements or fraud,

whether upon a verdict after trial or upon a plea of guilty or nolo con-

tendere, shall estop the defendant from denying the essential elements

of the offense in any action which involves the same transaction as in the

criminal proceeding and which is brought under section 3, and amend-

ments thereto.

New Sec. 6. Any employee who is discharged, demoted, suspended,

threatened, harassed or in any other manner retaliated against in the

terms and conditions of employment by such employee’s employer be-

cause of lawful acts undertaken in good faith by the employee on behalf

of the employee or others, in furtherance of an action under this act,

SENATE BILL No. 44—page 3

including investigation for, initiation of, testimony for, or assistance in an

action filed or to be filed under this act, shall be entitled to all relief

necessary to make the employee whole. An employee may bring an action

in the appropriate district court for the relief provided in this section.

This section shall not be construed to create any private cause of action

for violations of this act and is limited to the remedies expressly created

by this section related to employment retaliation.

New Sec. 7. (a) The provisions of this act are not exclusive and the

remedies provided for in this act shall be in addition to any other remedies

provided for in any other law or available under common law.

(b) This act shall be liberally construed and applied to promote the

public interest.

New Sec. 8. (a) Proceeds recovered as a result of an action filed

pursuant to this act shall be distributed in the following order:

(1) To refund moneys falsely obtained from the federal government,

state government or political subdivision thereof pursuant to subsection

(b); and

(2) to the state treasurer for deposit in the state general fund pursuant

to subsection (c).

(b) A portion of the recovery equal to the amount of moneys falsely

obtained from the federal government, state government, affected polit-

ical subdivision thereof or state agencies, or a combination thereof, shall

be remitted to the appropriate entity shown to be defrauded, subject to

any further requirements established by federal or state law.

suant to subsection (a) shall be remitted to the state treasurer in accord-

ance with the provisions of K.S.A. 75-4215, and amendments thereto.

Upon receipt of such remittance, the state treasurer shall deposit the

entire amount in the state general fund and, subject to any relevant guide-

lines of the federal department of health and human services’ office of

inspector general regarding repayment of fees or recoveries, shall credit

10% of such remittance to the false claims litigation revolving fund, which

is hereby established in the state treasury. Moneys in the false claims

litigation revolving fund may be expended by the attorney general for the

purpose of hiring necessary staff and to defray the costs of investigating

and litigating ongoing false claims cases and may be shared at the direc-

tion of the attorney general with the Kansas medicaid fraud control unit,

Kansas bureau of investigation or any county, city or private attorneys

who may be utilized or contracted with pursuant to section 4, and amend-

ments thereto, in carrying out the purposes of this act and any other

operating expenses incurred in administering the Kansas false claims act.

All expenditures from the false claims litigation revolving fund shall be

made in accordance with appropriation acts upon warrants of the director

of accounts and reports issued pursuant to vouchers approved by the

attorney general or the attorney general’s designee.

New Sec. 9. Liability pursuant to this act is joint and several for any

violation done by two or more persons.

New Sec. 10. Any action under this act may be brought in the district

court of any county in which the defendant or, in the case of multiple

defendants, any one defendant can be found, resides or transacts business

or in which any act prohibited by section 3, and amendments thereto,

occurred.

New Sec. 11. If any provision of this act or the application thereof

to any person or circumstance is held invalid, the invalidity shall not affect

other provisions or applications of the act which can be given effect with-

out the invalid provision or application, and to this end the provisions of

this act are severable.