Overall Vote Recommendation

Yes

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

HB 3770 strengthens and formalizes the Legislative Budget Board’s (LBB) role in conducting efficiency and fiscal reviews of Texas state agencies and their programs. Under current law, the LBB has the option to review state agencies, but this bill would make such reviews mandatory on a set schedule. Specifically, the LBB must review at least 25 state agencies and 40 programs each biennium, ensuring coverage across the full range of government operations, including institutions of higher education.

The bill requires that by June 30 of each odd-numbered year, board members must submit a list of programs to be evaluated. Then, by September 1 of each even-numbered year, the LBB must deliver detailed reports to the governor and the legislature. These reports must not only recommend improvements for agency and program effectiveness and service to taxpayers but must also include a five-year cost analysis of proposed changes, examining both fiscal impacts and non-fiscal benefits to taxpayers.

Additionally, the bill amends the LBB’s authority to perform strategic fiscal reviews independently of the Sunset Advisory Commission process. These reviews must now include a breakdown of an agency’s activities, a justification based on statutory authority, cost analyses at a minimum and current service levels, an evaluation of risks if the activities were discontinued, and a ranking of the importance of each activity. Finally, HB 3770 authorizes the LBB director to employ additional staff as necessary to support this expanded review mandate.

The originally filed version of HB 3770 focused primarily on requiring the LBB to regularly conduct efficiency reviews of state agencies. It set a new mandatory standard that at least 25 agencies and 40 programs must be reviewed each biennium, with a lighter requirement for the first cycle (12 agencies and 20 programs). The original bill also required detailed reporting, including a five-year analysis of fiscal impacts from recommended efficiency improvements. Additionally, it repealed several outdated statutory sections related to past LBB review practices.

The Committee Substitute version builds upon the original structure but significantly expands the scope and depth of the reviews. Beyond efficiency reviews, it redefines and strengthens the "strategic fiscal review" process under existing law, allowing the LBB to independently evaluate state agencies even outside the Sunset review cycle. The substitute adds requirements for a more granular breakdown of agency activities, cost assessments at different service levels, risk analyses if programs were discontinued, and priority rankings of agency functions.

Overall, the substitute version transforms the bill from simply scheduling efficiency audits into a much more comprehensive fiscal oversight framework. It gives legislators greater information to make appropriations decisions and empowers the LBB with broader tools to drive government efficiency. These additions make the substitute version a more robust approach to achieving fiscal responsibility compared to the originally filed bill.

Author

Giovanni Capriglione

Pat Curry

Co-Author

Salman Bhojani

Penny Morales Shaw

Contact the Author

Rep. Giovanni Capriglione

Capitol Phone:

(512) 463-0690

Capitol Office:

EXT E1.506

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), HB 3770 is estimated to have no significant fiscal implication on the State. While the bill expands the Legislative Budget Board’s duties by requiring regular and detailed efficiency and strategic fiscal reviews of at least 25 state agencies and 40 programs each biennium, the analysis assumes that the LBB will be able to absorb any additional costs within its existing resources without the need for new appropriations or budget increases.

Additionally, the fiscal note makes clear that there is no significant fiscal implication for units of local government. Since the bill targets state-level agencies and programs only, there are no mandates, duties, or costs shifted onto cities, counties, school districts, or other local entities.

In practical terms, this suggests that the Legislature intends for the LBB to prioritize and allocate its current staffing and operational budget to meet the new workload, rather than expanding its budget. However, depending on the scope, complexity, and intensity of the reviews, it is possible that resource strain could occur in future biennia if workload demands increase beyond expectations.

Vote Recommendation Notes

Texas Policy Research recommends that lawmakers vote YES on HB 3770. This bill establishes a meaningful and systematic process to regularly review the efficiency and fiscal responsibility of state agencies and their programs. It requires the Legislative Budget Board (LBB) to review at least 25 agencies and 40 programs every biennium, ensuring more frequent scrutiny than current practices allow. HB 3770 strengthens state oversight without simply creating a paper exercise; it mandates cost-benefit analysis, identifies potential savings, evaluates rthe isk of program elimination, and requires public reporting, providing lawmakers with actionable information to eliminate waste and improve government operations.

Importantly, this bill does not duplicate the work of the Texas Sunset Advisory Commission. Whereas Sunset reviews agencies approximately every 12 years to assess whether an agency should continue to exist, HB 3770 focuses on operational efficiency and fiscal performance on a biennial basis, independent of Sunset’s structural mission reviews. This decoupling closes a long-standing accountability gap and ensures that emerging inefficiencies can be addressed sooner, not just during the rare Sunset cycle.

HB 3770 also carefully respects principles of limited government and taxpayer protection. It does not significantly grow the size or scope of government: while it expands the LBB’s duties, the Legislative Budget Board fiscal note confirms that any additional costs will be absorbed with existing resources, and no expansion of regulatory power occurs. The bill imposes no new taxes, no new fees, and no new compliance obligations on individuals, businesses, or local governments. It purely targets internal state government operations for greater efficiency.

Because HB 3770 enhances legislative oversight, promotes transparency, improves fiscal stewardship without expanding government power, and is designed for real results rather than symbolic action, it fully aligns with the core liberty principles of individual liberty, personal responsibility, free enterprise, private property rights, and limited government.

Individual Liberty: By forcing state agencies to operate more efficiently and responsibly, the bill helps limit unnecessary government interference in the lives of Texans. Wasteful or inefficient agencies often lead to more programs, more intrusion, and more barriers to freedom.
Personal Responsibility: The bill promotes accountability among state officials and agencies, holding them responsible for the effective use of taxpayer funds. It encourages a culture where public servants must justify their spending and operations regularly.
Free Enterprise: By potentially identifying and eliminating inefficient or duplicative government programs, C.S.H.B. 3770 reduces the state's footprint in the economy, helping private businesses operate in a freer, less distorted market.
Private Property Rights: While not directly affecting property rights, responsible government spending can reduce future pressures for excessive taxation or eminent domain abuses, thereby indirectly protecting property owners.
Limited Government: This is the core strength of the bill: it institutionalizes recurring oversight to control the growth and inefficiency of government programs. It also decouples efficiency reviews from the Sunset cycle, making oversight more frequent and independent. It adds no new regulations on citizens or businesses and does not create new agencies or authorities.

View Bill Text and Status