Legislature(2015 - 2016)GRUENBERG 120
04/13/2016 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| SB174 | |
| HB347 | |
| SB121 | |
| SB123 | |
| SJR2 | |
| SB91 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 347 | TELECONFERENCED | |
| + | SB 123 | TELECONFERENCED | |
| + | SJR 2 | TELECONFERENCED | |
| + | SB 121 | TELECONFERENCED | |
| += | SB 91 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 174 | TELECONFERENCED | |
HB 347-RECOVERY OF FALSE CLAIMS FOR STATE FUNDS
1:47:59 PM
CHAIR LEDOUX announced that the next order of business would be
HOUSE BILL NO. 347, "An Act relating to the limitation period to
commence a false claims action; relating to recovery for false
claims for state or municipal funds; and amending Rules 4, 24,
and 46, Alaska Rules of Civil Procedure."
1:48:19 PM
REPRESENTATIVE KELLER moved to adopt CSHB 347, Version 29-
LS1505\H, Wallace, 4/12/16 as the working document. There being
no objection, Version H was before the committee.
REPRESENTATIVE KREISS-TOMKINS deferred to his staff, Reid
Magdanz, to present CSHB 347.
1:49:04 PM
REID MAGDANZ, Staff, Representative Jonathan Kreiss-Tomkins,
Alaska State Legislature, said the substantive changes include
deleting all mention of showings "in-camera" or presenting court
filings in-camera because Alaska's courts rarely have in-camera
filings. The term "qui tam plaintiff" was replaced throughout
the bill with the term "private plaintiff" because it removes
unnecessary Latin from Alaska's statutes. He related that,
perhaps most substantively, the Act no longer applies to any
claim brought under Title 43, Revenue and Taxation, because
currently there are strong compliance measures for most of the
state's tax collections for PFD dividends. He related that the
sponsor "did not believe that this Act needed to apply to those,
the federal Act is not applied to tax claims and most state acts
do not apply to tax claims;" therefore, the committee substitute
exempts tax claims. He noted the "more cosmetic" changes are
where the template act had been transposed incorrectly, those
sections were amended to bring this Act in line with other state
acts, and the Federal Act.
1:51:26 PM
REPRESENTATIVE CLAMAN thanked Mr. Magdanz for his email
describing differences between this and the federal Act. An
area of significant difference, he opined, is that the Statute
of Limitations is at ten years, whereas, the Federal Act,
Statute of Limitations, reads six years. He asked the reason
for Alaska's time length being longer.
MR. MAGDANZ responded that the New York's Act listed ten years,
and noted that multiple people, including a person from
"Taxpayers Against Fraud," had advised that New York is the best
and strongest state for false claims acts.
1:52:38 PM
REPRESENTATIVE CLAMAN asked, in terms of policy analysis, how
many claims were filed in New York during the last four years,
the statistics on when claims are brought in New York, or
brought in other states with such a long Statute of Limitation.
MR. MAGDANZ related that he has not looked at any of those
numbers and is not stuck on the ten year Statute of Limitations.
1:53:16 PM
REPRESENTATIVE KELLER put forth that he is struggling because
this bill is so much, so fast, given that the legislature is
toward the end of session, and it seems to compress time. He
asked whether there are any witnesses to testify on the merits
of this as far as business or anyone other than the witnesses
that previously testified.
CHAIR LEDOUX said that Stacie Kraly, Department of Law is
available.
REPRESENTATIVE KELLER asked whether there had been any
opposition up to this point.
REPRESENTATIVE KREISS-TOMKINS replied he had a conversation with
someone in the oil & gas industry and their concerns were
"positively, mostly resolved" through exempting taxation from
Title 43. He stressed that that wasn't the intent of the bill
because there are systems already in processes; therefore, it
became a non-concern after revisions.
1:54:39 PM
REPRESENTATIVE KELLER advised that depending upon whether the
committee receives other input, he would not stand in the way of
the bill moving, but that does not mean he has made up his mind.
REPRESENTATIVE MILLETT asked whether Representative Kreiss-
Tomkins had seen the False Claims Act in any other legislation
that is going through the legislature. She recalled a portion
of Medicaid reform with a bit of false claims and related a
concern that those two bills do not contradict each other, and
that it is being tracked. She reiterated she does not want two
False Claims Acts going through that do not marry up and make
Alaska's statutes convoluted.
1:55:34 PM
REPRESENTATIVE KREISS-TOMKINS said he had conversations with
staff in the other body that are (indisc.) at legislation and
the two bills are substantially similar. He noted that one bill
applies to a narrower scope ... just Medicaid or (indisc.)
spoken with the drafters at Legislative Legal and Research
Services, and he is looking to attach an amendment to the
committee substitute. He explained that the amendment basically
speaks to both pieces of legislation, and in the event they both
become law they can gracefully integrate into each other as
possible.
REPRESENTATIVE MILLETT reiterated that her only concern is that
Title 43 marry up with Medicaid false claims report.
REPRESENTATIVE CLAMAN asked whether Representative Kreiss-
Tomkins's expectation is to get this bill on the floor of the
House of Representative before gaveling out, or to get the bill
through the committee with the idea of refiling next year.
REPRESENTATIVE KREISS-TOMKINS answered that next year is a
possibility, but there is a companion bill in the other body
that the chair expressed the intention of hearing and moving it
out, and it has no other committee of referral. Although, there
is another committee of referral in this body with the House
Finance Committee being the next stop. He said he sees a
possibility that it could pass this session given there hasn't
been any opposition. In the event legitimate concerns arise
that have not been worked through, he would slow the bill down
to be sure there is a good product.
1:57:35 PM
REPRESENTATIVE CLAMAN noted he shares some of Representative
Keller's concerns, and questions the fairly significant change
to prosecutorial powers in creating the right for private rights
of action. His concern is that with the significant change to
prosecutorial powers to put more out into the public, because he
is worried groups may ask, "how did you get there, how did this
happen, and how did we not know about it." He acknowledged that
the Federal False Claims Act cases are incredibly complex with
interesting features and he was unsure the public "is even aware
this is going on."
CHAIR LEDOUX pointed out that this bill was noticed and heard
approximately a week ago. She noted that SB 174 just came over
the other day, and there were many people in the public here to
testify, and online. She stated that the information is put
online, they get the word out, and that's the best they can do.
REPRESENTATIVE CLAMAN said he understands.
1:59:17 PM
REPRESENTATIVE KREISS-TOMKINS stated he finds comfort that
precedence language is in state law, and in other instances.
Also, the Medicaid reform bill, false claims act provision, has
not attracted any opposition or concern, to the best of his
knowledge. He described it as almost secondary companion
legislation that has been vetted to an extent that that gives
him a little more assurance, but it is a point very well taken.
CHAIR LEDOUX asked Representative Kreiss-Tomkins whether he has
an amendment he would like to bring to this committee.
2:00:24 PM
The committee took an at-ease from 2:00 p.m. to 2:03 p.m.
2:03:11 PM
REPRESENTATIVE KREISS-TOMKINS moved to adopt Amendment 1,
Version 29-LS1505\H.1, Wallace, 4/13/16, which read:
Page 2, following line 26:
Insert a new subsection to read:
"(c) This section does not apply to, and a claim
may not be brought under this section for, a claim
relating to the medical assistance program if a
separate false claims procedure for medical assistance
claims under AS 47.05 and AS 47.07 is provided by
law."
Reletter the following subsection accordingly.
Page 2, line 31:
Delete "AS 37.10.110(c)"
Insert "AS 37.10.110(d)"
Page 3, line 5:
Delete "AS 37.10.110(c)"
Insert "AS 37.10.110(d)"
Page 3, line 16:
Delete "(a)"
Page 3, lines 24 - 26:
Delete all material.
Page 4, line 3:
Delete "The"
Insert "Except as provided in (c) of this
section, the"
Page 4, following line 6:
Insert a new subsection to read:
"(c) If a separate false claims procedure for
medical assistance claims under AS 47.05 and AS 47.07
is provided by law, a complaint under this section
shall be filed with the court and remain confidential
for at least 60 days, and may not be served on the
defendant until the court so orders. The state may
elect to intervene or proceed with the action within
60 days after the state receives both the complaint
and the material evidence and information."
Reletter the following subsections accordingly.
Page 4, line 14, following "section":
Insert "or confidential under (c) of this
section"
Page 4, line 15:
Delete "under seal"
Insert "and may be filed under seal or remain
confidential, as provided under (b) or (c) of this
section"
Page 4, line 17:
Delete "(d)"
Insert "(e)"
Page 10, line 30, through page 11, line 15:
Delete all material and insert:
"* Sec. 8. The uncodified law of the State of
Alaska is amended by adding a new section to read:
INDIRECT COURT RULE AMENDMENT. (a) AS 37.10.125,
added by sec. 2 of this Act, has the effect of
amending Rule 4, Alaska Rules of Civil Procedure, by
changing the procedure for initiating an action and
for the timing of service.
(b) AS 37.10.125(f) and 37.10.130, added by sec.
2 of this Act, have the effect of amending Rule 24,
Alaska Rules of Civil Procedure, by limiting
intervention and by changing the procedure for
intervention by allowing the state or a municipality
to intervene at various times and for various reasons
in a false claims action brought by a private party.
(c) AS 37.10.130(d), added by sec. 2 of this Act,
has the effect of amending Rule 46, Alaska Rules of
Civil Procedure, by limiting the participation of a
private party in a false claims action in certain
circumstances."
Renumber the following bill sections accordingly.
Page 11, line 23:
Delete "secs. 8 - 10 of this Act receive"
Insert "sec. 8 of this Act receives"
CHAIR LEDOUX objected for purposes of discussion.
REPRESENTATIVE KREISS-TOMKINS advised that this language was
conceived by the drafters of Legislative Legal and Research
Services, and conversations with staff within the building to
create a graceful reconciliation between this legislation and
the false claims act contained within the Medicaid reform bill.
CHAIR LEDOUX asked, "So what does it do?"
REPRESENTATIVE KREISS-TOMKINS deferred to Mr. Magdanz.
2:03:46 PM
MR. MAGDAN said the amendment provides that this bill and the
False Claims Act in SB 74, can live harmoniously in statute, and
provides that if there is a false claims act in law that applies
to Medicaid claims, that this act does not cover Medicaid
claims. Another change contains feedback from the court system,
in the case there is a separate Medicaid false claims act, the
standard for filing cases in this act goes from "under seal" to
"confidential." The reason "under seal" was included, he
explained to the best of his knowledge, it is necessary to
include "under seal" to meet federal guidelines for the Medical
False Claims Act. If this act does not apply to Medicaid
claims, there is no need for the higher standard of "under
seal;" therefore, it was changed to "confidential."
2:05:11 PM
REPRESENTATIVE KELLER asked for clarification as to whether Mr.
Magdanz testified that this amendment does change it to
"confidential," or is that something additional yet to be done.
MR. MAGDANZ answered that this amendment does change it to
"confidential," in the event SB 74 passes.
2:05:53 PM
NANCY MEADE, General Counsel, Administrative Staff, Office of
the Administrative Director, Alaska Court System, advised that
she was just handed the amendment and judging from Mr. Magdanz
testimony it would be good for the court system. She explained
that it is more difficult for the court system to handle
documents "under seal" than "confidential" as they have
different meanings. She then stated she would look closely at
the amendment to determine exactly what it says.
CHAIR LEDOUX noted that the court system had concerns about the
bill in its original form and asked whether those problems have
been resolved to her satisfaction.
MS. MEADE responded that the sponsor and staff have
satisfactorily addressed the issues the court system had with
the original version of the bill.
CHAIR LEDOUX, in response to Representative Keller, asked
whether anyone was available from the Department of Law. There
was no response.
2:07:10 PM
REPRESENTATIVE CLAMAN advised he is not offering an amendment at
this time but he will if this bill makes it to the floor of the
House of Representatives. He suggested possibly making the
Statute of Limitations track with the Federal Statute of
Limitation's time period. In terms of potential parties that
may be liable under false claims acts, if the legislature is
going down this road it appears the expectation should be
consistent with where they would be under the federal law.
REPRESENTATIVE CLAMAN, in response to Chair LeDoux, stated that
under federal law, the limit is six years and businesses that
may be subject to a false claims act should be aware of the
additional four years. He said he likes the idea that the two
acts are pretty consistent.
CHAIR LEDOUX pointed out that this bill has another stop on its
way to the floor of the House of Representatives, and
Representative Claman may want to discuss that issue with the
sponsor.
2:08:07 PM
CHAIR LEDOUX removed her objection to Amendment 1. There being
no objection, Amendment 1 was adopted.
CHAIR LEDOUX opened public testimony. After ascertaining no one
wished to testify, closed public testimony.
2:09:07 PM
REPRESENTATIVE KELLER moved to report CSHB 347, Version 29-
LS1505\H, Wallace, 4/13/16, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 347(JUD) passed out of the House
Judiciary Standing Committee.