H.B. No. 3700 aims to enhance the prevention, detection, and investigation of fraud, waste, and abuse in programs administered by the Texas Workforce Commission and its contractors or grantees. The bill introduces a new Subchapter L to Chapter 301 of the Labor Code, which mandates the commission to develop procedures and systems for identifying and addressing fraudulent activities. This includes establishing methods for individuals to report such issues, with options for anonymous reporting and online submissions. Additionally, the commission is authorized to acquire necessary information or technology to fulfill these responsibilities.

The bill also requires the Texas Workforce Commission to submit an annual report to the legislature detailing any reports of fraud, waste, or abuse received, along with findings and actions taken in response. Importantly, it protects employees from retaliation for reporting concerns in good faith. The initial report is due by September 1, 2026, and the act is set to take effect on September 1, 2025.

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