89R23179 CS-F     By: Capriglione, Curry, et al. H.B. No. 3770       A BILL TO BE ENTITLED   AN ACT   relating to efficiency and strategic fiscal reviews of state   agencies conducted by the Legislative Budget Board.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 322.017, Government Code, is amended by   amending Subsections (a), (b), and (c) and adding Subsections   (b-1), (b-2), and (f) to read as follows:          (a)  In this section, "state agency" has the meaning assigned   by Section 2056.001, except that the term includes an institution   of higher education, as defined by Section 61.003, Education Code.          (b)  The board shall [periodically may] review and analyze   the effectiveness and efficiency of the policies, programs,   management, fiscal affairs, and operations of state agencies.          (b-1)  The board shall establish a schedule for the review   and analysis conducted under Subsection (b).  Each state fiscal   biennium, the board shall review and analyze at least:                (1)  25 state agencies, which must include at least one   state agency from each article of the General Appropriations Act;   and                (2)  40 programs operated by the state agencies under   review during that biennium, which must include at least one   program operated by each state agency under review.          (b-2)  Not later than June 30 of each odd-numbered year, the   members of the board shall provide to the director a list of   programs to be reviewed under Subsection (b) for that state fiscal   biennium.           (c)  Not later than September 1 of each even-numbered year,   the [The] board shall report the findings of each [the] review and   analysis to the governor and the legislature. A report on a   reviewed program must:                (1)  be published in a format prescribed by the board;   and                (2)  include:                      (A)  recommendations for strategies to improve   effectiveness, efficiency, and service to taxpayers; and                      (B)  a table that:                            (i)  analyzes all costs, savings, cost   avoidance, expected change to state revenue, and any non-fiscal   taxpayer benefit predicted to result from increased program   effectiveness and efficiency if the strategies recommended under   Paragraph (A) were implemented; and                            (ii)  presents the information described by   Subparagraph (i) for a five-year period beginning with the   suggested implementation date for the strategies recommended under   Paragraph (A).          (f)  The director shall employ sufficient personnel to carry   out the provisions of this section.           SECTION 2.  Section 322.0175, Government Code, is amended to   read as follows:          Sec. 322.0175.  STRATEGIC FISCAL REVIEW OF STATE AGENCIES   AND PROGRAMS. (a)  The board may [shall] perform a strategic fiscal   review for a [each] state agency if the board determines a review is   appropriate [currently the subject of Sunset Advisory Commission   review under Chapter 325 (Texas Sunset Act)].  The board may [shall]   not perform a review under this section of state agencies listed in   Section 325.025(b)[, Government Code,] because those [these]   agencies are not subject to the legislative appropriations process.          (b)  If a strategic fiscal review is performed for a state   agency under Subsection (a), the [The] board shall prepare and   submit a report of the findings of the [strategic fiscal] review by   September 1 of the even-numbered year of the biennium during which   the review is conducted to the governor, lieutenant governor, and   speaker of the house of representatives and to the members of the   senate finance and house appropriations committees.          (c)  A [The] strategic fiscal review report must contain:                (1)  a description of the discrete activities the state   agency is charged with conducting or performing together with:                      (A)  a justification for each activity by   reference to a statute or other legal authority; and                      (B)  an evaluation of the effectiveness and   efficiency of the state agency's policies, management, fiscal   affairs, and operations in relation to each activity;                (2)  for each activity identified under Subdivision   (1):                      (A)  a quantitative estimate of any adverse   effects that reasonably may be expected to result if the activity   were discontinued, together with a description of the methods by   which the adverse effects were estimated;                      (B)  an itemized account of expenditures required   to maintain the activity at the minimum level of service or   performance required by the statute or other legal authority,   together with a concise statement of the quantity and quality of   service or performance required at that minimum level; and                      (C)  an itemized account of expenditures required   to maintain the activity at the current level of service or   performance, together with a concise statement of the quantity and   quality of service or performance provided at that current level;                (3)  a ranking of activities identified under   Subdivision (1) that illustrates the relative importance of each   activity to the overall goals and purposes of the state agency at   current service or performance levels; and                (4)  recommendations to the legislature regarding   whether the legislature should continue funding each activity   identified under Subdivision (1) and, if so, at what level.          (d)  The legislature may consider [the] strategic fiscal   review reports in connection with the legislative appropriations   process.          (e)  If the board performs a strategic fiscal review under   Subsection (a) [Until the board has completed a strategic fiscal   review under this section], all information, documentary or   otherwise, prepared or maintained in conducting the strategic   fiscal review or preparing the strategic fiscal review report,   including intra-agency and interagency communications and drafts   of the strategic fiscal review report, or portions of those drafts,   is excepted from required public disclosure as audit working papers   under Section 552.116 until the review is completed. This   subsection does not affect whether information described by this   subsection is confidential or excepted from required public   disclosure under a law other than Section 552.116.          SECTION 3.  Sections 322.011, 322.0165, and 322.0171,   Government Code, are repealed.          SECTION 4.  Notwithstanding Section 322.017(b-1),   Government Code, as added by this Act, for the state fiscal biennium   ending August 31, 2027, the Legislative Budget Board is required to   review and analyze:                (1)  12 state agencies; and                (2)  20 programs operated by the 12 state agencies   reviewed during that state fiscal biennium.          SECTION 5.  This Act takes effect September 1, 2025.