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 new 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, especially if they are regulatory agencies. 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 also establishes a new chapter for efficiency audits of state agencies, requiring each agency to undergo an efficiency audit to evaluate their operations' economy, efficiency, and effectiveness. The state auditor, with the legislative audit committee's approval, will oversee these audits and determine their scope, allowing for external auditors to be contracted for thoroughness. The state auditor, in collaboration with the Legislative Budget Board and any external auditors, must prepare and submit a comprehensive report of the audit 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, including justifications for any recommendations not implemented. The act 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)