Whistleblowers typically collect 15 to 20 percent of any lawsuit settlement or jury award, while state government programs get the rest.
Delegate Tim Manchin, D-Marion, predicted the law would have generated up to $50 million a year for West Virginia -- and helped reduce corporate fraud on state government.
"It works," Manchin said. "It catches people who cheat the government."
Thirty states and the federal government have false-claims acts.
"Who's going to benefit? The taxpayer," Delegate Barbara Fleischauer, D-Monongalia, said. "Who's going to have a problem with this? People committing fraud."
Business leaders said the bill would kill jobs and prompt companies to raise prices for goods and services sold to consumers and state government.
Ten House Democrats joined GOP delegates in voting against the bill Tuesday.
Reach Eric Eyre at erice...@wvgazette.com or 304-348-4869.