89R919 MLH-F
By: Hinojosa of Hidalgo S.B. No. 440
A BILL TO BE ENTITLED
AN ACT
relating to audits of and reports by self-directed and
semi-independent financial regulatory agencies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 16.004, Finance Code, is amended to read
as follows:
Sec. 16.004. AUDITS. (a) This chapter does not affect the
duty of the state auditor to audit a financial regulatory agency.
The state auditor shall enter into a contract and schedule with each
financial regulatory agency to conduct audits, including a
financial audit, an effectiveness audit, [reports] and a
performance audit at least once every six years, unless the state
auditor determines that the auditor may rely on an independent
audit of the agency conducted during the same period [audits].
(b) The state auditor may conduct a risk-based audit of a
financial regulatory agency at any time.
(c) The financial regulatory agency shall reimburse the
state auditor for all costs incurred in performing the audits and
shall provide to the governor a copy of any audit performed.
SECTION 2. Sections 16.005(b) and (c), Finance Code, are
amended to read as follows:
(b) Before the beginning of each regular session of the
legislature, each financial regulatory agency shall submit to the
legislature and the governor a report describing all of the
agency's activities in the previous biennium. The report must
include:
(1) an audit as required by Section 16.004;
(2) a financial report of the previous fiscal year,
including reports on financial condition and results of operations;
(3) a description of all changes in fees imposed on
regulated entities, broken down by industry [industries];
(4) a report on:
(A) changes in the regulatory jurisdiction of the
agency, including the number of chartered financial institutions,
license holders, and registrants subject to the agency's
jurisdiction and any changes in those figures; and
(B) any enforcement activities by the agency; and
(5) a description [list] of all new rules adopted or
repealed.
(c) In addition to the reporting requirements of Subsection
(b), not later than November 1 of each year, each financial
regulatory agency shall submit to the governor, the committee of
each house of the legislature that has jurisdiction over
appropriations, and the Legislative Budget Board a report that
contains:
(1) the salary for all financial regulatory agency
personnel and the total amount of per diem expenses and travel
expenses paid for all agency employees;
(2) the total amount of per diem expenses and travel
expenses paid for each member of the agency's policy-making body [,
provided that only one report must be submitted regarding the
Finance Commission of Texas];
(2-a) trend performance data relating to Subdivisions
(1) and (2) for the preceding five fiscal years;
(3) the agency's operating plan for a period of two
fiscal years [and annual budget]; [and]
(4) the agency's operating budget that includes:
(A) revenues from all sources; and
(B) an accounting of all expenditures, including
a breakdown of expenditures by program and administrative expenses,
showing:
(i) projected budget data for a period of
two fiscal years; and
(ii) trend budget performance data for the
preceding five fiscal years; and
(5) trend performance data for the preceding five
fiscal years regarding:
(A) the number of full-time equivalent positions
at the agency;
(B) the number of complaints received from the
public and the number of complaints initiated by agency staff;
(C) the number of complaints dismissed and the
number of complaints resolved by enforcement action;
(D) the number of enforcement actions, by
sanction type;
(E) the number of enforcement cases closed
through voluntary compliance;
(F) the amount of each administrative penalty
assessed, broken down by sanction type;
(G) the amount of each administrative penalty
collected, broken down by sanction type;
(H) the total amount of administrative penalties
assessed and the rate of collection of assessed administrative
penalties;
(I) the number of enforcement cases that allege a
threat to public health, safety, or welfare or a violation of
professional standards of care and the disposition of those cases;
(J) the average time to resolve a complaint;
(K) the number of entities regulated by the
agency;
(L) the number of license holders or regulated
persons, broken down by type of license and license status,
including inactive status or retired status;
(M) the fee charged to issue and renew each type
of license, certificate, permit, or other similar authorization
issued by the agency;
(N) any assessments paid to the agency by the
holder of a license, certificate, permit, or other similar
authorization issued by the agency;
(O) the average time to issue a license,
certificate, permit, or other similar authorization issued by the
agency;
(P) litigation costs, broken down by
administrative hearings, judicial proceedings, and outside counsel
costs;
(Q) reserve fund balances; and
(R) the key performance measures approved by the
governing board of the agency during the fiscal year for which the
report is due [a detailed report of all revenue received and all
expenses incurred by the financial regulatory agency in the
previous 12 months].
SECTION 3. Section 16.005, Finance Code, as amended by this
Act, applies only to a report originally due on or after the
effective date of this Act. A report originally due before the
effective date of this Act is governed by the law in effect on the
date the report was originally due, and the former law is continued
in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2025.