H.B. No. 12 amends the Government Code to enhance the review and audit processes of state agency operations, particularly focusing on regulatory agencies. The bill introduces a definition for "regulatory agency" and mandates that the Sunset Advisory Commission provide information on public participation in agency reviews. It requires state agencies under review to notify the public and solicit input regarding their performance. Additionally, the commission's reports must include an analysis of a regulatory agency's performance over the past ten years and recommendations for improving performance measures.

The bill establishes a new chapter for efficiency audits of state agencies, requiring each agency to undergo an audit to evaluate its economy, efficiency, and effectiveness. The state auditor, with legislative approval, will set a schedule for these audits, and agencies will bear the costs. It also mandates that the state auditor, in collaboration with the Legislative Budget Board and any external auditors, prepare and submit a comprehensive report of the audit, including recommendations, to key legislative figures and the audited agency by November 1 of the audit year. Furthermore, the administrative head of the audited agency must deliver an implementation plan within 90 days of receiving the audit, justifying any recommendations not implemented. The state auditor is tasked with adopting a schedule for conducting these audits by January 1, 2026, and the bill is set to take effect on September 1, 2025.

Statutes affected:
Introduced: Government Code 325.002, Government Code 325.009, Government Code 325.010, Government Code 325.012, Government Code 322.017 (Government Code 325, Government Code 322)
House Committee Report: Government Code 325.002, Government Code 325.009, Government Code 325.010, Government Code 325.012, Government Code 322.017 (Government Code 325, Government Code 322)
Engrossed: Government Code 325.002, Government Code 325.009, Government Code 325.010, Government Code 325.012, Government Code 322.017 (Government Code 325, Government Code 322)
Senate Committee Report: Government Code 325.002, Government Code 325.008, Government Code 325.010, Government Code 325.012 (Government Code 325, Government Code 322)
Enrolled: Government Code 325.002, Government Code 325.008, Government Code 325.010, Government Code 325.012 (Government Code 325, Government Code 322)