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.
HB1697 creates a new Pennsylvania False Claims Act-style framework in the Human Services Code, titled the Taxpayer Prevention Against Fraud Act. It makes persons liable to the Commonwealth for treble damages, civil penalties, and investigation/prosecution costs when they knowingly submit false or fraudulent claims for Commonwealth money or property, make false records or statements, conceal obligations to pay the Commonwealth, retain overpayments, or conspire to do so. The bill also defines key terms such as “claim,” “knowing,” “material,” and “original source,” and it expressly adopts the intent of the federal False Claims Act as a guide for interpretation.
The bill gives the Attorney General broad enforcement authority, including the power to investigate suspected violations, file civil actions, issue civil investigative demands for documents, interrogatories, and testimony, and share certain information for official use. It also authorizes private whistleblowers, known as qui tam plaintiffs, to file actions on behalf of the Commonwealth under seal, with the Commonwealth able to intervene, dismiss, settle, or pursue alternate remedies. The bill includes detailed procedures for sealing, discovery, intervention, awards to whistleblowers, jurisdiction, jury trial rights, retaliation protections, and annual reporting requirements.
HB1697 would also change how recovered funds are handled. The Commonwealth’s share of recoveries would be distributed first to cover a portion of enforcement costs for the Office of Attorney General, then returned to the affected fund or account, with General Fund-related recoveries deposited into a newly created Fraud Prevention and Recovery Account. The account would be a restricted General Fund account usable only as appropriated by the General Assembly. The bill further directs the Attorney General to seek federal approval so Pennsylvania can qualify for an increased share of recoveries involving Medicaid false claims.
The bill’s impact on state law is substantial because it adds an entirely new article to the Human Services Code and creates a parallel state false-claims enforcement regime with civil penalties, whistleblower incentives, anti-retaliation protections, and investigative powers. It also limits confidentiality and disclosure of investigative materials, bars certain actions against top state officials and legislators in specified circumstances, and authorizes temporary regulations to speed implementation. In practical terms, it would expand the Commonwealth’s tools to recover public funds lost to fraud and would affect contractors, grantees, vendors, health care providers, and others who seek or receive Commonwealth funds.
The overall sentiment appears supportive but sharply divided. The bill advanced out of committee and ultimately passed the House on final passage, but several close votes on tabling and postponement show significant resistance and procedural conflict. The main point of contention appears to be the scope of enforcement power and the use of qui tam litigation, including concerns about expanded Attorney General authority, sealed whistleblower suits, and the bill’s fiscal and administrative implications. Supporters likely view it as a fraud-recovery and taxpayer-protection measure, while opponents appear to have questioned whether the bill should move forward in its proposed form.
HB1697 would amend the Human Services Code by adding a new Article XIV-E establishing a Pennsylvania false claims law. It would create civil liability for false claims against the Commonwealth, authorize treble damages and civil penalties, empower the Attorney General to investigate and prosecute violations, permit qui tam actions by private relators, and create civil investigative demand authority. It would also establish the Fraud Prevention and Recovery Account and set out reporting, confidentiality, retaliation, and procedural rules that would affect state agencies, contractors, grantees, health care-related claims, and other recipients of Commonwealth funds.
The bill appears to have generated mixed but ultimately favorable legislative momentum. It was reported from House Judiciary and later passed the House on final passage, indicating meaningful support for the anti-fraud framework. At the same time, repeated close votes on tabling and postponement suggest substantial opposition or at least concern about the bill’s timing, scope, and process. Overall, the debate seems to have centered on whether the bill was an appropriate and necessary anti-fraud tool versus an overly expansive enforcement measure.
The main points of contention appear to be the breadth of the Attorney General’s powers, the use of sealed qui tam litigation, and the bill’s potential fiscal and administrative effects. Opponents likely focused on procedural motions to table or postpone the bill, suggesting concern about moving it too quickly or in its then-current form. Supporters appear to have emphasized fraud prevention, recovery of taxpayer dollars, and alignment with the federal False Claims Act. The close committee and floor votes indicate that the bill was politically contested even though it ultimately advanced.