Overall Vote Recommendation

Yes

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

HB 2788 seeks to amend the Texas Labor Code by adding Section 301.087, which exempts certain information related to fraud detection from public disclosure under the Texas Public Information Act (Chapter 552, Government Code). Specifically, the bill defines “fraud detection information” to include any materials that could reveal how the Texas Workforce Commission (TWC) detects, prevents, or investigates fraud in the administration of the state’s unemployment compensation system (Subtitle A). Examples include risk assessments, internal protocols, data, investigative reports, manuals, and communication records that could expose fraud-prevention tactics.

The bill stipulates that this category of information is not considered public information and is therefore not subject to release under standard open records requests. The intent is to protect the operational integrity of the TWC’s anti-fraud efforts by preventing the disclosure of strategies that could be exploited by bad actors or fraudulent claimants.

Overall, the bill aims to enhance the security and effectiveness of the state's unemployment insurance program by safeguarding the tools and methods used to detect and respond to fraud.

The originally filed version of HB 2788 proposed to amend Section 301.085 of the Labor Code by explicitly including “fraud detection information” alongside “unemployment compensation information” and “job matching services information” as exempt from public disclosure under the Texas Public Information Act. It defined “fraud detection information” comprehensively, covering materials such as protocols, crossmatches, mental impressions, and communications related to fraud prevention, detection, and investigation within the Texas Workforce Commission’s (TWC) unemployment compensation system.

By contrast, the Committee Substitute version introduces this exemption in a newly created section—Section 301.087—rather than amending the existing Section 301.085. This structural change isolates the treatment of fraud detection information from the broader categories of unemployment and job matching information, making the legislation more focused and specific in scope.

Another notable difference is that the committee substitute narrows the scope of application to the administration of Subtitle A (relating specifically to unemployment compensation), whereas the original version referred more broadly to the administration of unemployment compensation benefits and the tax programs. This change could be interpreted as a clarification or refinement of scope, potentially reducing ambiguity about the covered functions and documents.

In summary, the Committee Substitute restructures and narrows the bill to create a standalone section dealing with fraud detection information. This approach enhances clarity and potentially avoids unintended overlap with other non-fraud-related confidentiality provisions in Section 301.085, reflecting feedback or concerns raised during the committee process.

Author (5)

Angie Chen Button

Keith Bell

Oscar Longoria

Denise Villalobos

Keresa Richardson

Sponsor (1)

Nathan Johnson

Contact the Author

Rep. Angie Chen Button

Capitol Phone:

(512) 463-0486

Capitol Office:

CAP GW.7

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), HB 2788 would have no significant fiscal implications for the State of Texas. The Texas Workforce Commission and Office of the Attorney General, the two state agencies likely involved in implementing the provisions of this bill, are expected to manage any administrative responsibilities using their existing resources without requiring new appropriations.

This outcome reflects the nature of the bill, which primarily involves the classification of information rather than the creation of a new program or the expansion of government duties. The task of withholding “fraud detection information” from public disclosure under the Public Information Act likely aligns with processes already in place for other protected data categories.

Similarly, the fiscal impact on local governments is also projected to be minimal or nonexistent. Since unemployment compensation programs are administered at the state level, there is no anticipated requirement for local agencies to adjust practices or incur costs as a result of this bill.

In sum, HB 2788 achieves its policy goal—protecting fraud prevention materials—without imposing new fiscal burdens on the state or local governments. This likely contributes to its viability and ease of implementation.

Vote Recommendation Notes

The bill addresses a critical vulnerability in the Texas Workforce Commission’s (TWC) fraud prevention efforts by exempting “fraud detection information” from disclosure under the Texas Public Information Act. As explained in the bill analysis, the current legal framework allows individuals to request detailed information about fraud detection protocols, which could then be exploited to bypass these very safeguards.

The Committee Substitute improves upon the originally filed version by focusing the exemption more precisely. It creates a new standalone section in the Labor Code and ties the definition of “fraud detection information” specifically to the administration of the Texas Unemployment Compensation Act. This distinction refines the scope of protection and strengthens the bill’s legal clarity without significantly expanding government power or reducing transparency in unrelated areas of TWC operations.

Importantly, the Legislative Budget Board notes that the bill has no significant fiscal impact on the state or local governments, and any costs can be absorbed with existing resources. Additionally, the bill does not create new criminal penalties or grant rulemaking authority, which reflects a restrained approach to statutory change. Overall, this legislation is a targeted, fiscally responsible measure that upholds the integrity of vital public programs while maintaining respect for open government principles. As such, Texas Policy Research recommends that lawmakers vote YES on HB 2788.

Individual Liberty: This bill does not restrict the rights or freedoms of individuals. It focuses solely on protecting internal fraud detection tools used by the Texas Workforce Commission (TWC). The public still has access to most government records under the Texas Public Information Act, but this bill creates a narrow exception for sensitive materials that, if disclosed, could compromise the system. So, individual rights to transparency are preserved while protecting the integrity of a vital public program.
Personal Responsibility: By safeguarding TWC's methods of fraud detection, the bill encourages personal responsibility. It helps ensure that only those who are eligible for unemployment benefits receive them. Preventing fraud upholds a fair system where everyone is expected to follow the rules, and violators are held accountable.
Free Enterprise: The bill has no direct effect on private businesses or markets. However, reducing fraud in the unemployment system could reduce strain on the Unemployment Insurance Trust Fund, which is financed in part by taxes on businesses. In that sense, it may provide indirect relief to honest employers who might otherwise bear the cost of fraudulent claims.
Private Property Rights: This legislation does not involve or alter laws related to ownership, use, or transfer of private property. It is focused strictly on access to government-held information.
Limited Government: The bill strengthens the effectiveness of an existing government function (fraud prevention) without expanding the size, scope, or power of government. It does not create new programs or grant rulemaking authority, and it prevents potential abuse of open records laws that could undermine government operations. By narrowly targeting only the most sensitive information, it maintains transparency elsewhere while protecting the tools needed to enforce the law.

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