SB440 - Relating to audits of and reports by self-directed and semi-independent financial regulatory agencies.

  89R919 MLH-F     By: Hinojosa 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 any enforcement activities by the agency; and                (5)  a description [ list ] of all new rules adopted or   repealed.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.