SB 38 — 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.

PRINTER'S NO.   341

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 38
                                                 Session of
                                                   2025

     INTRODUCED BY L. WILLIAMS, PHILLIPS-HILL, SAVAL, FONTANA, DUSH,
        COMITTA, COLLETT, TARTAGLIONE, COSTA, FARRY, HUGHES, SCHWANK,
        STEFANO AND MUTH, MARCH 6, 2025

     REFERRED TO HEALTH AND HUMAN SERVICES, MARCH 6, 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.
 8      The General Assembly of the Commonwealth of Pennsylvania
 9   hereby enacts as follows:
10      Section 1.     The act of June 13, 1967 (P.L.31, No.21), known
11   as the Human Services Code, is amended by adding an article to
12   read:
13                               ARTICLE XIV-E
14                         LIABILITY FOR FALSE CLAIMS
15                                SUBARTICLE A
16                           PRELIMINARY PROVISIONS
17   Section 1401-E.    Scope of article.
18      This article relates to Commonwealth fraud prevention.
19   Section 1402-E.    Declaration of policy.
20      The General Assembly declares that this article adopts the
 1   intent of Congress in enacting 31 U.S.C. §§ 3729 (relating to
 2   false claims), 3730 (relating to civil actions for false
 3   claims), 3731 (relating to false claims procedure), 3732
 4   (relating to false claims jurisdiction) and 3733 (relating to
 5   civil investigative demands) on September 13, 1982, including
 6   the amendments enacted October 27, 1986, and all subsequent
 7   amendments.
 8   Section 1403-E.       Definitions.
 9      The following words and phrases when used in this article
10   shall have the meanings given to them in this section unless the
11   context clearly indicates otherwise:
12      "Claim."    As follows:
13          (1)    A request or demand for money or property, whether
14      under contract or otherwise and regardless of whether the
15      Commonwealth has title to the money or property, that is
16      presented, submitted or otherwise made to:
17                 (i)    An employee, officer or agent of the
18          Commonwealth.
19                 (ii)    A contractor, grantee or other recipient, and
20          any portion of the money or property that will be spent
21          or used on the Commonwealth's behalf or to advance a
22          program or interest of the Commonwealth, and the
23          Commonwealth:
24                        (A)   provides or has provided any portion of the
25                 money or property requested or demanded; or
26                        (B)   will reimburse the contractor, grantee or
27                 other recipient for any portion of the money or
28                 property which is requested or demanded.
29          (2)    The term does not include requests or demands for
30      money or property that the Commonwealth has paid to an

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 1      individual as compensation for employment or as an income
 2      subsidy with no restrictions on the individual's use of the
 3      money or property.
 4          (3)   To the extent it is not connected to a request or
 5      demand for money or property, a filing with a Commonwealth
 6      agency pursuant to the Commonwealth's insurance laws shall
 7      not constitute a claim.
 8      "Knowingly."      As follows:
 9          (1)   Whenever a person, with respect to information, does
10      any of the following:
11                (i)    Has actual knowledge of the information.
12                (ii)    Acts in deliberate ignorance of the truth or
13          falsity of the information.
14                (iii)    Acts in reckless disregard of the truth or
15          falsity of the information.
16          (2)   Proof of specific intent to defraud is not required.
17      "Legal claim."     A claim for relief at law or equity, whether
18   contemplated or asserted, including any claim, demand, account,
19   note or any other cause of action or liability.
20      "Material."      A natural tendency to influence, or be capable
21   of influencing, the payment or receipt of money or property.
22      "Obligation."     An established duty, whether or not fixed,
23   arising from any of the following:
24          (1)   An express or implied contractual relationship.
25          (2)   An express or implied grantor-grantee relationship.
26          (3)   An express or implied licensor-licensee
27      relationship.
28          (4)   A fee-based or similar relationship.
29          (5)   A statute or regulation.
30          (6)   The retention of an overpayment.

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

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 1      and who has voluntarily provided the information to the
 2      Commonwealth before filing an action under section 1412-E(b).
 3      "Person."     A natural person, corporation, firm, association,
 4   organization, partnership, limited liability company, business,
 5   trust, business trust, estate or foundation.
 6      "Qui tam plaintiff."     A person bringing a civil action under
 7   section 1412-E(b).
 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.

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 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,
 6      a false record or statement material to an obligation to pay
 7      or transmit money or property to the Commonwealth or
 8      knowingly conceals, or knowingly and improperly avoids or
 9      decreases an obligation to pay or transmit money or property
10      to the 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.--Notwithstanding the damages
21   provision of subsection (a), the court may assess not less than
22   two times the amount of damages that the Commonwealth sustains
23   from a violation of subsection (a) if the court finds all of the
24   following:
25            (1)   The person committing the violation furnished the
26      Commonwealth officials who are responsible for investigating
27      false claims violations with all information known to that
28      person about the violation within 30 days after the date on
29      which the person first obtained the information.
30            (2)   The person fully cooperated with an investigation by

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 1      the Commonwealth.
 2            (3)   At the time the person furnished the Commonwealth
 3      with information about the violation, no criminal
 4      prosecution, civil action or administrative action had
 5      commenced with respect to the violation, and the person did
 6      not have actual knowledge of the existence of an
 7      investigation into the violation.
 8      (c)   Commonwealth costs.--A person who is liable for damages
 9   or penalties under subsection (a) shall also be liable to the
10   Commonwealth for the reasonable costs of investigating and
11   prosecuting violations of subsection (a), including reasonable
12   costs to the Office of Attorney General and, if applicable, a
13   district attorney designated under section 1412-E(a)(2).
14      (d)   Adjustment of penalties.--The upper and lower limits on
15   civil penalties imposed under subsection (a) shall be equal to
16   and shall adjust consistently with the civil penalty limits
17   imposed under 31 U.S.C. § 3729(a)(1) (relating to false claims),
18   as such limits are periodically adjusted by 28 U.S.C. § 2461
19   note (relating to mode of recovery).
20      (e)   Exemption from disclosure.--The Office of Attorney
21   General shall be exempt from disclosing information under the
22   act of February 14, 2008 (P.L.6, No.3), known as the Right-to-
23   Know Law, that is furnished under subsection (b) or accessed or
24   shared under section 1413.1-E(a).
25   Section 1412-E.     Attorney General investigations and
26                  prosecutions and civil actions.
27      (a)   Responsibilities.--
28            (1)   The Attorney General shall have authority to
29      investigate a violation of section 1411-E. If the Attorney
30      General finds that a person has violated or is violating

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 1    section 1411-E, the Attorney General may bring a civil action
 2    under this section against that person.
 3          (2)   The Attorney General may enter into an agreement
 4    with a district attorney to designate the district attorney
 5    to serve as the Attorney General's designee, investigate a
 6    violation of section 1411-E and bring a civil action under
 7    this section against a person that has violated or is
 8    violating section 1411-E. The Attorney General at any time
 9    may rescind the designation made under this paragraph.
10          (3)   Nothing in section 1407 shall be construed to limit
11    the Attorney General's authority to investigate or prosecute
12    violations of section 1411-E.
13    (b)   Actions by qui tam plaintiffs.--
14          (1)   A qui tam plaintiff may bring a civil action for a
15    violation of section 1411-E for the qui tam plaintiff and for
16    the Commonwealth in the name of the Commonwealth. Once filed,
17    the action may be dismissed only if the court and the
18    Attorney General give written consent to the dismissal and
19    reasons for consenting.
20          (2)   A copy of the complaint and written disclosure of
21    substantially all material evidence and information the qui
22    tam plaintiff possesses shall be served promptly on the
23    Attorney General as provided for in the Pennsylvania Rules of
24    Civil Procedure or applicable court rule. The complaint shall
25    be filed in camera and shall remain under seal for at least
26    120 days and shall not be served on the defendant until the
27    court orders the service. The Commonwealth may elect to
28    intervene and proceed with the action within 120 days after
29    the Commonwealth receives the complaint and the material
30    evidence and information.

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 1            (3)   Upon motion of the Commonwealth, the court, for good
 2      cause shown, shall extend the time during which the complaint
 3      remains sealed under paragraph (2). The motion may be
 4      supported by affidavits or other submissions in camera. The
 5      defendant shall not be required to respond to a complaint
 6      filed under this section until the complaint is unsealed and
 7      served upon the defendant under the Pennsylvania Rules of
 8      Civil Procedure or applicable court rule.
 9            (4)   Before the expiration of the 120-day period or any
10      extensions obtained under paragraph (3), the Commonwealth
11      shall:
12                  (i)    proceed with the action; or
13                  (ii)    notify the court that the Commonwealth declines
14            to take over the action, in which case the qui tam
15            plaintiff shall have the right to conduct the action.
16      (c)   Intervention.--When a qui tam plaintiff brings an action
17   under subsection (b), no person other than the Commonwealth may
18   intervene or bring a related action based on the facts
19   underlying the pending action.
20      (d)   Rights of the parties to qui tam actions.--
21            (1)   If the Commonwealth proceeds with the action, the
22      Commonwealth shall have the primary responsibility for
23      prosecuting the action and shall not be bound by an act of
24      the qui tam plaintiff. The qui tam plaintiff shall have the
25      right to continue as a party to the action, subject to the
26      limitations set forth in paragraph (2).
27            (2)   The following shall apply:
28                  (i)    Upon notice to the qui tam plaintiff, the
29            Commonwealth may move to dismiss the action despite the
30            qui tam plaintiff's objections. The court shall dismiss

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 1        the action for good cause shown if the court has provided
 2        the qui tam plaintiff with an opportunity to oppose the
 3        motion and present evidence at a hearing.
 4             (ii)    The Commonwealth may settle the action with the
 5        defendant despite the qui tam plaintiff's objections if
 6        the court determines, after a hearing providing the qui
 7        tam plaintiff an opportunity to present evidence, that
 8        the proposed settlement is fair, adequate and reasonable
 9        under the circumstances. Upon a showing of good cause,
10        the hearing may be held in camera. Upon motion of the
11        Commonwealth, the court, for good cause shown, shall
12        order a partial lifting of the seal to facilitate the
13        investigative process or settlement.
14             (iii)    Upon the Commonwealth's showing that the qui
15        tam plaintiff's unrestricted participation during the
16        course of the action would interfere with or unduly delay
17        the Commonwealth's prosecution of the case or would be
18        repetitious, irrelevant or for purposes of harassment,
19        the court may, in its discretion, impose limitations on
20        the qui tam plaintiff's participation by:
21                    (A)   limiting the number of witnesses the qui tam
22             plaintiff may call;
23                    (B)   limiting the length of witness testimony;
24                    (C)   limiting the qui tam plaintiff's cross-
25             examination of witnesses; or
26                    (D)   otherwise limiting the qui tam plaintiff's
27             participation in the action.
28             (iv)    Upon the defendant's showing that the qui tam
29        plaintiff's unrestricted participation in the action
30        would be for purposes of harassment or would cause the

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 1        defendant undue burden or unnecessary expense, the court
 2        may limit the qui tam plaintiff's participation in the
 3        action.
 4        (3)   If the Commonwealth elects not to proceed with the
 5    action, the qui tam plaintiff shall have the right to conduct
 6    the action. If the Commonwealth requests, the Commonwealth
 7    shall be served with copies of all pleadings filed in the
 8    action and shall be supplied, at the Commonwealth's expense,
 9    with copies of all deposition transcripts and other discovery
10    produced in the action. Without limiting the qui tam
11    plaintiff's status and rights, the court shall permit the
12    Commonwealth to intervene at a later date upon a showing of
13    good cause.
14        (4)   Whether or not the Commonwealth proceeds with the
15    action, upon the Commonwealth's showing, in camera, that
16    certain actions of discovery by the qui tam plaintiff would
17    interfere with the Commonwealth's investigation or
18    prosecution of a criminal or civil matter arising out of the
19    same facts, the court may stay the discovery for a period of
20    not more than 60 days. The court may extend the 60-day period
21    upon the Commonwealth's further showing, in camera, that the
22    Commonwealth has pursued the criminal or civil investigation
23    or proceedings with reasonable diligence and that the
24    discovery proposed in the civil action will interfere with
25    the ongoing criminal or civil investigations or proceedings.
26        (5)   Notwithstanding subsection (b), the Commonwealth may
27    elect to pursue legal claims through an alternate remedy
28    available to the Commonwealth, including an administrative
29    proceeding to determine a civil money penalty. If the
30    alternate remedy is pursued in another proceeding, the qui

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 1    tam plaintiff shall have the same rights in the proceeding as
 2    if the action had continued under this section. A finding of
 3    fact or conclusion of law made in the other proceeding that
 4    has become final shall be conclusive on all parties to an
 5    action under this section. A finding or conclusion is final
 6    if it has been finally determined on appeal to the
 7    appropriate court of the Commonwealth, if the time for filing
 8    the appeal regarding the finding or conclusion has expired
 9    without an appeal having been filed or if the finding or
10    conclusion is not subject to judicial review.
11    (e)   Award to qui tam plaintiff.--
12          (1)   The following shall apply:
13                (i)    If the Commonwealth proceeds with an action
14          brought by a qui tam plaintiff, the qui tam plaintiff
15          shall, subject to the provisions of this subsection,
16          receive at least 15% but not more than 25% of the
17          proceeds of the action or settlement of the legal claim,
18          depending upon the extent to which either or both the qui
19          tam plaintiff and the qui tam plaintiff's counsel
20          substantially contributed to the prosecution of the
21          action.
22                (ii)    If the court finds that the action is based
23          primarily on disclosures of specific information, other
24          than information provided by the qui tam plaintiff,
25          relating to allegations or transactions in a criminal,
26          civil or administrative hearing to which the Commonwealth
27          is a party, or in a Federal, State or local legislative
28          or other governmental hearing, audit or investigation or
29          from the news media, the court may award a sum it
30          considers appropriate, but in no case more than 10% of

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 1        the proceeds of the action or settlement, taking into
 2        account the information's significance and the qui tam
 3        plaintiff's role in advancing the action.
 4        (2)   If the Commonwealth does not proceed with an action
 5    under this section, the qui tam plaintiff shall receive at
 6    least 25% but not more than 30% of the proceeds of the action
 7    or settlement of the legal claim, as the court deems
 8    reasonable.
 9        (3)   Whether or not the Commonwealth proceeds with the
10    action, if the court finds that the qui tam plaintiff planned
11    and initiated the violation of section 1411-E upon which the
12    action was filed, the following shall apply:
13              (i)    Subject to subparagraph (ii), the court may, to
14        the extent the court considers appropriate, reduce the
15        share of the proceeds of the action or settlement of the
16        legal claim which the qui tam plaintiff would otherwise
17        receive under paragraph (1) or (2), taking into account
18        the qui tam plaintiff's role in advancing the action and
19        any relevant circumstances pertaining to the violation.
20              (ii)   If the qui tam plaintiff is convicted of
21        criminal conduct arising from the qui tam plaintiff's
22        role in the violation, the qui tam plaintiff shall be
23        dismissed from the civil action and shall not receive a
24        share of the proceeds of the action. The dismissal shall
25        not prejudice the Commonwealth's right to continue the
26        action.
27        (4)   An award to a qui tam plaintiff shall be made from
28    the proceeds of the action or settlement of the legal claim.
29    The qui tam plaintiff also shall receive an amount for
30    reasonable expenses which the court finds were necessarily

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 1    incurred, plus reasonable attorney fees and costs. The
 2    expenses, fees and costs shall be awarded against the
 3    defendant.
 4          (5)   If the Commonwealth does not proceed with the action
 5    and the qui tam plaintiff conducts the action, the court may
 6    award to the defendant reasonable attorney fees and expenses
 7    if the defendant prevails in the action and the court finds
 8    that the qui tam plaintiff's legal claim was clearly
 9    frivolous, clearly vexatious or brought primarily for
10    purposes of harassment.
11    (f)   Certain actions barred.--
12          (1)   A court does not have jurisdiction over an action
13    filed under this section against the Governor, the Lieutenant
14    Governor, the Attorney General, the Auditor General, the
15    State Treasurer, a cabinet member, a deputy secretary, a
16    member of the General Assembly or a member of the judiciary
17    if the action is based on evidence or information known to
18    the Commonwealth when the action was brought.
19          (2)   The following shall apply:
20                (i)   Subject to subparagraph (ii), the court shall
21          dismiss an action or legal claim brought under subsection
22          (b) if substantially the same allegations or transactions
23          alleged in the action or legal claim were publicly
24          disclosed in:
25                      (A)   the news media;
26                      (B)   a criminal, civil or administrative hearing
27                in which the Commonwealth is or was a party; or
28                      (C)   a Federal, State or local legislative or
29                other governmental report, hearing, audit or
30                investigation.

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 1                  (ii)    The court may not dismiss an action under
 2            subparagraph (i) if:
 3                         (A)   the action was brought by the Attorney
 4                  General;
 5                         (B)   the Attorney General opposes dismissal; or
 6                         (C)   the qui tam plaintiff is an original source
 7                  of the information publicly disclosed.
 8            (3)   A person may not bring an action under this section
 9      which is based upon allegations or transactions that are the
10      subject of a civil suit or an administrative civil money
11      penalty proceeding in which the Commonwealth is already a
12      party.
13      (g)   Commonwealth not liable for certain expenses.--The
14   Commonwealth is not liable for expenses which a qui tam
15   plaintiff incurs in bringing an action under this section.
16      (h)   Cooperation by agencies.--Commonwealth agencies shall
17   cooperate in the investigation and prosecution of false claims
18   under this section, whether the claims are brought by the
19   Attorney General or a qui tam plaintiff.
20   Section 1413-E.        Civil investigative demands.
21      (a)   Issuance and service.--
22            (1)   If the Attorney General or, for purposes of this
23      subsection, the Attorney General's designee, has reason to
24      believe that a person may be in possession, custody or
25      control of documentary material or information relevant to a
26      false claims investigation under this article, the Attorney
27      General or designee may, before commencing a civil proceeding
28      under section 1412-E(a) or making an election under section
29      1412-E(b), issue in writing and cause to be served upon the
30      person a civil investigative demand requiring the person to:

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

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 1              (iii)    identify the false claims investigator to whom
 2        the material shall be available.
 3        (3)   If the civil investigative demand is for answers to
 4    written interrogatories, the demand shall:
 5              (i)    set forth with specificity the written
 6        interrogatories to be answered;
 7              (ii)    prescribe dates on which the answers to the
 8        written interrogatories shall be submitted; and
 9              (iii)    identify the false claims investigator to whom
10        the answers shall be submitted.
11        (4)   If the civil investigative demand is for oral
12    testimony, the demand shall:
13              (i)    prescribe a date, time and place at which the
14        oral testimony shall be given;
15              (ii)    identify a false claims investigator who shall
16        conduct the examination and the custodian to whom the
17        transcript of the examination shall be submitted;
18              (iii)    specify that attendance and testimony are
19        necessary to the conduct of the false claims
20        investigation; and
21              (iv)    describe the general purpose for which the
22        demand is being issued and general nature of the
23        testimony, including the primary areas of inquiry, which
24        will be taken under the demand.
25        (5)   A civil investigative demand shall contain the
26    following statement printed at the beginning of the demand:
27    "You have the right to seek the assistance of an attorney,
28    who may represent you in all phases of the investigation of
29    which this civil investigative demand is a part."
30        (6)   A civil investigative demand that is an express

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 1    demand for a product of discovery shall not be returned or
 2    returnable until 20 days after a copy of the demand has been
 3    served upon the person from whom or which the discovery was
 4    obtained.
 5          (7)   The date prescribed for commencement of oral
 6    testimony under a civil investigative demand shall not be
 7    less than seven days after the date on which the demand is
 8    served, unless the Attorney General or a designee determines
 9    that exceptional circumstances exist and warrant commencing
10    testimony within a lesser time period.
11          (8)   The Attorney General, or a designee, may not
12    authorize the issuance of more than one civil investigative
13    demand for the same person's oral testimony unless:
14                (i)    the person requests otherwise; or
15                (ii)    the Attorney General or designee notifies the
16          person in writing that an additional demand for oral
17          testimony is necessary.
18    (c)   Protected material or information.--
19          (1)   A civil investigative demand may not require the
20    production of documentary material, the submission of answers
21    to written interrogatories or the giving of oral testimony if
22    the material, answers or testimony would be protected from
23    disclosure under the standards applicable to:
24                (i)    subpoenas or subpoenas duces tecum issued by a
25          court of this Commonwealth to aid in a grand jury
26          investigation; or
27                (ii)    discovery under the Pennsylvania Rules of Civil
28          Procedure or other applicable court rule, to the extent
29          that the application of the standards to a demand is
30          appropriate and consistent with the provisions and

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 1            purposes of this section.
 2            (2)   The following shall apply:
 3                  (i)    Except where a statute explicitly precludes the
 4            superseding effect imposed by this paragraph, a civil
 5            investigative demand that is an express demand for a
 6            product of discovery supersedes an inconsistent order,
 7            rule or provision of law, other than in this section,
 8            that prevents or restrains disclosure of the product of
 9            discovery to any person.
10                  (ii)   A person's disclosure of a product of discovery
11            under an express demand does not constitute a waiver of
12            any right or privilege to resist discovery of trial
13            preparation materials that the person may be entitled to
14            invoke.
15      (d)   Service and jurisdiction.--Except as otherwise provided,
16   the following apply to civil investigative demands issued under
17   this section and petitions filed under subsection (j):
18            (1)   A civil investigative demand may be served by a
19      false claims investigator, a law enforcement officer or
20      another individual authorized by law to serve process in the
21      jurisdiction where the demand is served. A petition may be
22      served by any person authorized to serve process under the
23      Pennsylvania Rules of Civil Procedure or other applicable
24      court rule.
25            (2)   A civil investigative demand or petition may be
26      served upon a person consistent with and in the manner
27      prescribed by 42 Pa.C.S. Ch. 53 (relating to bases of
28      jurisdiction and interstate and international procedure) and
29      the Pennsylvania Rules of Civil Procedure or other applicable
30      court rule, for personal service inside or outside this

20250SB0038PN0341                       - 19 -
 1    Commonwealth. To the extent the courts of the Commonwealth
 2    can assert jurisdiction over a person outside this
 3    Commonwealth, a court with jurisdiction over an action filed
 4    under this article shall have the same jurisdiction to take
 5    action respecting the person's compliance with this section
 6    that it would have if the person resided within the court's
 7    jurisdiction.
 8        (3)   A civil investigative demand or petition may be
 9    served upon a legal entity by:
10              (i)    delivering an executed copy of the demand or
11        petition to a partner, executive officer, managing agent
12        or general agent of the legal entity, or to an employee
13        designated or agent authorized by appointment or law to
14        receive service of process on behalf of the legal entity;
15              (ii)    delivering an executed copy of the demand or
16        petition to the legal entity's principal office or place
17        of business;
18              (iii)    depositing an executed copy of the demand or
19        petition in the United States mail by registered or
20        certified mail with a return receipt requested, addressed
21        to the legal entity at its principal office or place of
22        business; or
23              (iv)    any other method provided by the Pennsylvania
24        Rules of Civil Procedure or other applicable court rule.
25        (4)   A civil investigative demand or petition may be
26    served upon a natural person by:
27              (i)    delivering an executed copy of the demand or
28        petition to the person;
29              (ii)    depositing an executed copy of the demand or
30        petition in the United States mail by registered or

20250SB0038PN0341                   - 20 -
 1          certified mail with a return receipt requested, addressed
 2          to the person at the person's residence or principal
 3          office or place of business; or
 4                (iii)    any other method provided by the Pennsylvania
 5          Rules of Civil Procedure or other applicable court rule.
 6          (5)   A verified return by the individual serving a civil
 7    investigative demand or a petition, setting forth the manner
 8    of service, shall be proof of service. In the case of service
 9    by registered or certified mail, the return post office
10    receipt of the demand or petition's delivery shall accompany
11    the verified return.
12    (e)   Documentary material.--
13          (1)   The production of documentary material shall be made
14    under a written and verified certificate, shall state that
15    all the documentary material which required by the demand and
16    in the demand issuee's possession, custody or control has
17    been produced and made available to the false claims
18    investigator identified in the demand, in the form the demand
19    designates, by the following individuals:
20                (i)    if the demand issuee is a natural person, by the
21          demand issuee; and
22                (ii)    if the demand issuee is not a natural person,
23          by an individual who has knowledge of facts and
24          circumstances relating to the production and is
25          authorized to act on the demand issuee's behalf.
26          (2)   A demand issuee shall make demanded material
27    available for inspection and copying to the false claims
28    investigator identified in the demand:
29                (i)    at the demand issuee's principal place of
30          business;

20250SB0038PN0341                     - 21 -
 1                (ii)    at another place as the false claims
 2          investigator and the demand issuee thereafter may agree
 3          and prescribe in writing; or
 4                (iii)    as the court may direct under this section.
 5          (3)   The documentary material shall be made available on
 6    the return date specified in the demand or on a later date as
 7    the false claims investigator may prescribe in writing. The
 8    demand issuee may, upon written agreement with the false
 9    claims investigator, substitute copies for originals of all
10    or any part of the material.
11          (4)   If the demand issuee objects to the production of
12    any portion of the required documentary material or otherwise
13    withholds any portion of the material, the demand issuee
14    shall with particularity state the reasons for the objection
15    or withholding and identify all withheld material.
16    (f)   Interrogatories.--
17          (1)   Each interrogatory in a civil investigative demand
18    shall be answered separately and fully in writing under oath
19    and shall be submitted under a verified certificate, in the
20    form the demand designates, stating that all information
21    required by the demand and in the demand issuee's possession,
22    custody, control or knowledge has been submitted by the
23    following persons:
24                (i)    if the demand issuee is a natural person, by the
25          demand issuee; and
26                (ii)    if the demand issuee is not a natural person,
27          by the individuals responsible for answering each
28          interrogatory.
29          (2)   If the demand issuee objects to an interrogatory or
30    any portion thereof, or otherwise withholds information, the

20250SB0038PN0341                     - 22 -
 1    demand issuee shall state with particularity the reasons for
 2    the objection or withholding and identify all withheld
 3    information.
 4    (g)   Oral examinations.--
 5          (1)   (i)     The examination of a person under a civil
 6          investigative demand for oral testimony shall be taken
 7          before an officer authorized to administer oaths and
 8          affirmations by the laws of this Commonwealth or of the
 9          place where the examination is held.
10                (ii)    The officer shall put the witness on oath or
11          affirmation and, personally or by someone acting under
12          the officer's direction and in the officer's presence,
13          shall record the witness's testimony.
14                (iii)    The testimony shall be stenographically
15          transcribed.
16                (iv)    When the transcribing is complete, the officer
17          shall promptly transmit a copy of the transcript to the
18          custodian.
19                (v)    This subsection shall not preclude the taking of
20          testimony by any means authorized by, and in a manner
21          consistent with, the Pennsylvania Rules of Civil
22          Procedure or other applicable court rule.
23          (2)   The false claims investigator conducting the
24    examination shall exclude from the place where the
25    examination is held all persons except the following:
26                (i)    the witness giving the testimony;
27                (ii)    the attorney for the witness;
28                (iii)    the attorney for the Commonwealth;
29                (iv)    the officer before whom the testimony is to be
30          taken;

20250SB0038PN0341                     - 23 -
 1              (v)    the court reporter taking the testimony; and
 2              (vi)    any other person agreed to by the witness and
 3        the attorney for the Commonwealth.
 4        (3)   Oral testimony taken under a civil investigative
 5    demand shall be taken in the county or city within which the
 6    person resides, is found, or transacts business, or in a
 7    place to which the false claims investigator and the witness
 8    otherwise agree.
 9        (4)   (i)     When the transcript of testimony is completed,
10        the false claims investigator or the officer before whom
11        the testimony is taken shall afford the witness, who may
12        be accompanied by counsel, a reasonable opportunity to
13        examine and read the transcript, unless the witness
14        waives the reading and examination.
15              (ii)    The officer or false claims investigator shall
16        enter and identify on the transcript any changes in form
17        or substance that the witness desires to make with a
18        statement of the reasons the witness gives for making the
19        changes.
20              (iii)    The witness shall sign the transcript after
21        the changes, if any, are made, unless the witness waives
22        the signing in writing, is ill, cannot be found, or
23        refuses to sign. If the witness does not sign the
24        transcript within 30 days after being afforded a
25        reasonable opportunity to sign it, the officer or false
26        claims investigator shall sign it and state on the record
27        the fact of the witness's waiver, illness, absence or
28        refusal to sign, together with the reasons, if any, given
29        for why the witness did not sign the transcript.
30              (iv)    The officer before whom the testimony is taken

20250SB0038PN0341                   - 24 -
 1        shall certify on the transcript that the witness was
 2        sworn by the officer and the transcript is a true record
 3        of the witness's testimony, and the officer shall
 4        promptly deliver the transcript or send the transcript by
 5        registered or certified mail to the custodian.
 6              (v)    Upon receiving payment of reasonable charges,
 7        the false claims investigator shall furnish a copy of the
 8        transcript to the witness only, except that the Attorney
 9        General or the Attorney General's designee may, for good
10        cause, limit the witnesses to inspecting the official
11        transcript.
12        (5)   (i)    A witness compelled to appear for oral
13        testimony may be accompanied, represented and advised by
14        counsel. Counsel may advise the witness in confidence
15        with respect to any question asked of the witness.
16              (ii)    The witness or counsel may object on the record
17        to any question, in whole or in part, and shall briefly
18        state for the record the reason for the objection. An
19        objection may be made, received and entered upon the
20        record when it is claimed that the witness is entitled to
21        refuse to answer on the grounds of any constitutional or
22        legal right or privilege, including the privilege against
23        self-incrimination. The witness may not otherwise object
24        to or refuse to answer any question and may not directly
25        or through counsel otherwise interrupt the oral
26        examination. If a witness refuses to answer a question, a
27        petition may be filed with the court under this section
28        for an order compelling the witness to answer the
29        question.
30        (6)   A witness appearing for oral testimony under a civil

20250SB0038PN0341                   - 25 -
 1      investigative demand shall be entitled to the same fees and
 2      allowances that are paid to witnesses in the courts of common
 3      pleas.
 4      (h)   Refusal to comply on self-incrimination privilege
 5   grounds.--The Attorney General may invoke the provisions of 42
 6   Pa.C.S. § 5947 (relating to immunity of witnesses) if a demand
 7   issuee on the grounds of privilege against self-incrimination,
 8   refuses to:
 9            (1)   furnish documentary material or answer an
10      interrogatory in response to a civil investigative demand;
11            (2)   answer a question asked during oral examination made
12      under a civil investigative demand; or
13            (3)   otherwise comply with a civil investigative demand.
14      (i)   Custody of documents, answers and transcripts.--
15            (1)   Unless the Attorney General designates another
16      person, the false claims investigator identified on a civil
17      investigative demand shall serve as custodian of documentary
18      material, interrogatory answers and oral testimony
19      transcripts received under this section. The Attorney General
20      may designate additional persons as the Attorney General
21      determines to be necessary to serve as deputy, alternative or
22      successor custodians.
23            (2)   A false claims investigator who receives documentary
24      material, interrogatory answers or oral testimony transcripts
25      under this section shall:
26                  (i)    if serving as custodian, take possession of the
27            material, answers or transcripts and be responsible for
28            their usage and for the return of documentary material;
29            or
30                  (ii)   if not serving as custodian, transmit the

20250SB0038PN0341                       - 26 -
 1        materials, answers or transcripts to the custodian, who
 2        shall take possession and responsibility for the
 3        materials, answers or transcripts.
 4        (3)   The custodian may cause the preparation of copies of
 5    documentary material, interrogatory answers or oral testimony
 6    transcripts as may be required for official use by a false
 7    claims investigator or another officer or employee of the
 8    Office of Attorney General authorized to use the materials,
 9    answers or transcripts in connection with the taking of oral
10    testimony under this section.
11        (4)   The following shall apply:
12              (i)    Except as otherwise provided in this section, no
13        documentary material, interrogatory answers or oral
14        testimony transcripts or copies of the foregoing shall be
15        available for examination by any individual other than a
16        false claims investigator or other officer or employee of
17        the Office of Attorney General.
18              (ii)    The prohibition in subparagraph (i) shall not
19        apply if the person who produced material, answers or
20        transcripts, or in the case of a product of discovery
21        produced under an express demand for the material, the
22        person from whom or which the discovery was obtained,
23        consents.
24              (iii)   Nothing in this paragraph shall be construed
25        to prevent disclosure to the General Assembly or to a
26        Commonwealth agency in furtherance of statutory or
27        constitutional obligations, except that disclosure shall
28        be subject to 18 Pa.C.S. Ch. 91 (relating to criminal
29        history record information).
30              (iv)    While in the custodian's possession and under

20250SB0038PN0341                   - 27 -
 1          reasonable terms and conditions as the Attorney General
 2          prescribes, documentary material, interrogatory answers
 3          and oral testimony transcripts shall be made available
 4          for examination by the person that produced them or by
 5          the person's authorized representative.
 6          (5)   Notwithstanding 18 Pa.C.S. Ch. 91, an attorney of
 7    the Office of Attorney General who is designated to appear
 8    before a court, grand jury or Commonwealth agency in a case
 9    or proceeding may, in connection with the case or proceeding,
10    obtain from the custodian and use any documentary material,
11    interrogatory answers or oral testimony transcripts that the
12    attorney determines is required. Upon the case or
13    proceeding's completion, the attorney shall return to the
14    custodian documentary material, interrogatory answers or oral
15    testimony transcripts that have not passed into the court's,
16    grand jury's or agency's control through introduction into
17    the case or proceeding's record.
18          (6)   Upon the written request of a person producing
19    documentary material in connection with a false claims
20    investigation, the custodian shall return the material only
21    if:
22                (i)    all cases or proceedings arising out of the
23          false claims investigation have been completed; or
24                (ii)    no case or proceeding in which the material may
25          be used has been commenced within a reasonable time after
26          completion of the examination and analysis of all
27          documentary material and other information assembled in
28          the course of the false claims investigation.
29          (7)   The custodian shall not be required to return either
30    of the following:

20250SB0038PN0341                     - 28 -
 1                (i)    material that has passed into a court, grand
 2          jury or Commonwealth agency's control through
 3          introduction into a case or proceeding's record; or
 4                (ii)    copies furnished to the false claims
 5          investigator or made for the Attorney General under this
 6          subsection.
 7    (j)   Judicial proceedings.--
 8          (1)   The Attorney General or the Attorney General's
 9    designee may file and serve upon a person a petition for a
10    court order enforcing a civil investigative demand if:
11                (i)    the person fails to comply with a demand served
12          upon the person; or
13                (ii)    satisfactory copying or reproduction of the
14          material requested in the demand cannot be done and the
15          person refuses to surrender the material.
16          (2)   The following shall apply:
17                (i)    A demand issuee who has received a civil
18          investigative demand may file and serve upon the false
19          claims investigator identified in the demand a petition
20          for a court order modifying or setting aside the demand.
21                (ii)    If a demand is an express demand for a product
22          of discovery, the person from whom discovery was obtained
23          may, upon receipt of the demand, file and serve upon the
24          false claims investigator identified in the demand a
25          petition for a court order modifying or setting aside
26          those portions of the demand requiring production of the
27          product of discovery.
28                (iii)    A petition under this paragraph must be filed
29          within:
30                       (A)   the earlier of 20 days after the civil

20250SB0038PN0341                      - 29 -
 1              investigative demand is served on the person or any
 2              time before the return date specified in the demand;
 3              or
 4                     (B)   a longer period if the false claims
 5              investigator so prescribes in writing in the demand.
 6              (iv)    A petition under this paragraph shall specify
 7        each ground the petitioner relies on in seeking relief
 8        and may be based on either of the following:
 9                     (A)   failure of the civil investigative demand,
10              or any portion thereof, to comply with this section's
11              provisions; or
12                     (B)   any constitutional or other legal right or
13              privilege of the petitioner.
14              (v)    During the pendency of a petition under this
15        paragraph, the following shall apply:
16                     (A)   The court may stay, as it deems proper,
17              compliance with all or part of the demand and the
18              running of time allowed for compliance with the
19              demand.
20                     (B)   The petitioner must comply with any portion
21              of the demand that is not sought to be modified or
22              set aside, or otherwise subject to a stay issued by
23              the court.
24        (3)   At any time a custodian possesses or is in custody
25    or control of documentary material, interrogatory answers or
26    transcripts of oral testimony given under a civil
27    investigative demand, the following persons may file and
28    serve upon the custodian a petition for a court order
29    requiring the custodian to perform a duty imposed on the
30    custodian by this section:

20250SB0038PN0341                    - 30 -
 1                  (i)    the demand issuee that furnished the material,
 2            answers or testimony; and
 3                  (ii)   in the case of an express demand for a product
 4            of discovery, the person from whom discovery was
 5            obtained.
 6            (4)   The court shall have jurisdiction to hear and
 7      determine a petition filed under this section and, after a
 8      hearing at which all parties have the opportunity to be
 9      heard, to enter orders as may be required to carry out the
10      provisions of this section. A final order entered by
11      Commonwealth Court under this section shall be subject to
12      appeal to the Supreme Court under 42 Pa.C.S. § 723 (relating
13      to appeals from Commonwealth Court).
14      (k)   Exemption from disclosure.--The Office of Attorney
15   General shall be exempt from disclosing under the act of
16   February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law,
17   documentary material, interrogatory answers and oral testimony
18   provided under a civil investigative demand.
19      (l)   Definitions.--For purposes of this section, the
20   following words and phrases shall have the meanings given to
21   them in this subsection unless the context clearly indicates
22   otherwise:
23      "Custodian."       The false claims investigator or other
24   custodian or a deputy or alternate custodian designated by the
25   Attorney General under subsection (i).
26      "Demand issuee."       A person to whom or which a civil
27   investigative demand is issued or directed.
28      "Documentary material."       Includes the original or a copy of a
29   book, record, report, memorandum, paper, communication,
30   tabulation, chart or other document or data compilations stored

20250SB0038PN0341                       - 31 -
 1   or accessible through computer or other information retrieval
 2   systems, together with appropriate and succinct instructions and
 3   all other materials necessary to use or interpret the data
 4   compilations, and a product of discovery.
 5      "False claims investigation."     An inquiry conducted by a
 6   false claims investigator for the purposes of ascertaining
 7   whether a person is or has been engaged in a violation of this
 8   article.
 9      "False claims investigator."     An attorney or investigator
10   employed by the Office of Attorney General, or by a district
11   attorney designated under section 1412-E(a)(2), who is charged
12   with the duty of enforcing or carrying out the provisions of
13   this article, or an officer or employee of the Commonwealth
14   acting under the attorney or investigator's direction and
15   supervision in connection with a false claims investigation.
16      "Legal entity."    A person other than a natural person.
17      "Person."    As defined in 1 Pa.C.S. § 1991 (relating to
18   definitions).
19      "Product of discovery."    The term includes:
20          (1)     the original or duplicate of a deposition
21      interrogatory, document, thing, result of the inspection of
22      land or other property, examination or admission that is
23      obtained by any method of discovery in a judicial or
24      administrative proceeding of an adversarial nature;
25          (2)     a digest, analysis, selection, compilation or
26      derivation of an item listed in paragraph (1); and
27          (3)     an index or other manner of access to an item listed
28      in paragraph (1).
29      "Verified."    Supported by oath or affirmation and averred
30   subject to the penalties of 18 Pa.C.S. § 4904 (relating to

20250SB0038PN0341                    - 32 -
 1   unsworn falsification to authorities).
 2   Section 1413.1-E.       Access and sharing of information.
 3      (a)   Criminal investigation or prosecution information.--
 4            (1)   Notwithstanding the provisions of 18 Pa.C.S. Ch. 91
 5      (relating to criminal history record information) or any
 6      other law, and as necessary to advance an investigation or
 7      prosecution of a potential or actual violation of section
 8      1411-E, the Attorney General may access and share data,
 9      records, documents or other information obtained during the
10      course of a criminal investigation or prosecution with the
11      following:
12                  (i)    A section, unit or individual employee or agent
13            of the Office of Attorney General authorized and
14            designated by the Attorney General to investigate or
15            prosecute a potential or actual violation of section
16            1411-E, including a district attorney designated under
17            section 1412-E(a)(2).
18                  (ii)    The United States Department of Justice.
19 

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