Honorable Dustin Burrows, Speaker of the House, House of Representatives
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB12 by Bell, Keith (Relating to the review and audit of certain state agency operations.), As Passed 2nd House
Estimated Two-year Net Impact to General Revenue Related Funds for HB12, As Passed 2nd House: a negative impact of ($623,388) through the biennium ending August 31, 2027.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
($316,694)
2027
($306,694)
2028
($306,694)
2029
($306,694)
2030
($306,694)
All Funds, Five-Year Impact:
Fiscal Year
Probable (Cost) from General Revenue Fund 1
Change in Number of State Employees from FY 2025
2026
($316,694)
2.0
2027
($306,694)
2.0
2028
($306,694)
2.0
2029
($306,694)
2.0
2030
($306,694)
2.0
Fiscal Analysis
Among other provisions, the bill would require Sunset reports related to regulatory agencies to include an analysis of the agency's performance over at least a ten year timespan based on the agency's performance measures and related targets, including those listed in the General Appropriations Act, and an evaluation of the agency's performance measures and related targets. The bill would require the Sunset Advisory Commission to make recommendations, after consulting the Legislative Budget Board, to improve to each reviewed agency's key performance measures through the addition, amendment, or removal of the performance measures and related targets.
The bill would authorize the commission, under its recommendations to the Legislature in a report related to regulatory agencies, to recommend that a limited review of a regulatory agency be conducted prior to the regulatory agency's next Sunset review. The bill would require the commission to make such a recommendation if its recommendations to the Legislature include any identified deficiencies or recommendations for improvement in the regulatory agency's rulemaking process. These limited reviews would focus on public participation in the rulemaking process, adoption and enforcement of conflict of interest provisions, the agency's efforts to identify rules that are unnecessary, ineffective, or inefficient, and any commission recommendations that the Legislature adopted in the legislation to continue the regulatory agency. Additionally, unless specified in legislation to continue the agency, the bill would require a regulatory agency to report to the commission at a date specified by the agency's Sunset bill its progress on addressing the commission's recommendations that the Legislature adopted in its most recent legislation to continue the agency.
The bill would require the State Auditor, subject to Legislative Audit Committee approval, to adopt a schedule for conducting efficiency audits of all entities subject to Sunset review. The bill would exempt a state agency required by law to perform an internal efficiency audit from performing such an audit in any year in which the agency is audited under the bill. The bill would require a state agency to pay the costs incurred by the State Auditor relating to an efficiency audit as would be required by the bill.
Methodology
Based on information provided by the Sunset Advisory Commission, this analysis assumes two additional staff would be required to implement the provisions of the bill at a cost to General Revenue of $316,694 in fiscal year 2026 and $306,694 in subsequent years. This staff includes one attorney to determine the necessity and effectiveness of the rules regulatory agencies adopt and one data analyst to facilitate the review of agency rulemaking and analyze performance measure data.
It is assumed that administrative costs to the State Auditor's Office and audited agencies could be absorbed using existing resources.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
116 Sunset Advisory Commission, 308 State Auditor's Office, 452 Department of Licensing and Regulation, 503 Texas Medical Board, 507 Texas Board of Nursing, 529 Health and Human Services Commission