Overall Vote Recommendation

Yes

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

HB 5573 amends the Texas Whistleblower Act (Chapter 554, Government Code) to expand protections for public employees who report governmental misconduct. Under current law, whistleblower protections apply to employees who, in good faith, report violations of law to an appropriate law enforcement authority. The committee substitute extends those protections to employees who report wasteful spending by their employing governmental entity to the State Auditor's Office. It also clarifies that protected reports may involve misconduct by the employing governmental entity, another public employee, or an elected officer of the employing governmental entity.

The bill further amends the evidentiary standards governing whistleblower retaliation claims. If a public employee experiences suspension, termination, or another adverse personnel action within 90 days after making a protected report of either a violation of law or wasteful spending, the adverse action is presumed, subject to rebuttal, to have resulted from the protected report. The bill also updates the existing affirmative defense to specify that a governmental entity may avoid liability by demonstrating it would have taken the same employment action based solely on information or evidence unrelated to the employee's protected report.

Overall, the Committee Substitute broadens the scope of whistleblower protections by encouraging public employees to report wasteful government spending while maintaining existing legal safeguards for governmental employers.

The Committee Substitute for HB 5573 makes several significant changes to the originally filed bill. Most notably, it narrows the bill's focus by removing references to fraudulent spending and instead limits the expanded whistleblower protections to reports of wasteful spending. While the introduced version required reports of wasteful or fraudulent spending to be made to an appropriate law enforcement authority, the Committee Substitute instead directs reports of wasteful spending to the State Auditor's Office, while continuing to require reports of violations of law to be made to an appropriate law enforcement authority. This change distinguishes between allegations of illegal conduct and concerns involving inefficient or wasteful use of public funds.

The Committee Substitute also substantially expands the bill beyond the originally filed version by making conforming amendments throughout Chapter 554, Government Code. It changes the chapter heading to reflect that the whistleblower statute now covers both violations of law and wasteful spending, updates statutory language throughout the chapter to incorporate wasteful spending as a protected category of reporting, and amends the burden-of-proof provisions governing whistleblower lawsuits. Specifically, the substitute extends the existing rebuttable presumption of retaliation to employees who report wasteful spending and revises the affirmative defense available to governmental employers to expressly apply to both reports of violations of law and reports of wasteful spending. These litigation-related provisions were not included in the introduced bill.

Overall, the Committee Substitute transforms the bill from a relatively narrow expansion of existing whistleblower protections into a more comprehensive revision of the Texas Whistleblower Act. Rather than simply adding wasteful and fraudulent spending to the types of reports protected under current law, the substitute establishes a distinct reporting pathway for wasteful spending through the State Auditor's Office and updates multiple statutory provisions to fully integrate those protections into the existing whistleblower framework.

Author (5)

Salman Bhojani

Giovanni Capriglione

Dade Phelan

Senfronia Thompson

Chris Turner

Co-Author (2)

Charlie Geren

Penny Morales Shaw

Contact the Author

Rep. Salman Bhojani

Capitol Phone:

(512) 463-0522

Capitol Office:

EXT E2.906

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), HB 5573 is not expected to have a significant fiscal impact on state government. The LBB concludes that any additional workload associated with expanding whistleblower protections to cover reports of wasteful spending and directing those reports to the State Auditor's Office can be absorbed using existing agency resources. As a result, the bill is not expected to require additional appropriations or create a meaningful increase in state expenditures.

The fiscal analysis assumes that state agencies, including the State Auditor's Office, can implement the bill's requirements within their current operating budgets. Although the bill may result in additional reports of wasteful spending and could increase the number of whistleblower complaints, the LBB does not anticipate that these activities will create costs significant enough to require additional personnel or funding.

The LBB likewise projects no significant fiscal implication for units of local government. While local governmental entities will also be subject to the bill's expanded whistleblower protections, any administrative or legal costs associated with implementation are expected to be minimal and manageable within existing resources.

Vote Recommendation Notes

While the bill modestly expands the scope of the Texas Whistleblower Act by extending statutory protections to reports of wasteful spending, it does not create a new government program, agency, or regulatory regime, nor does it materially increase taxpayer costs or private-sector regulatory burdens. The bill primarily enhances accountability for the use of public funds by protecting government employees who report waste, while relying on existing institutions to administer and enforce those protections. Although the expansion may result in some additional litigation against governmental entities, those concerns are mitigated by the bill's preservation of existing affirmative defenses and the LBB's finding that implementation can be absorbed within existing resources. Accordingly, the accountability benefits outweigh the modest expansion of government liability, and as such, Texas Policy Research recommends that lawmakers vote YES on HB 5573.

Individual Liberty: The bill expands protections for public employees who report wasteful government spending or misconduct, reducing the risk of retaliation for speaking out. While it does expand statutory employment protections, it ultimately strengthens individuals' ability to expose government waste without coercion or fear of losing their livelihood.
Personal Responsibility: The bill encourages public employees to take personal responsibility for safeguarding taxpayer dollars by reporting wasteful spending. Rather than creating a government program to detect waste, it relies on individuals to come forward when they observe misuse of public resources.
Free Enterprise: The bill applies exclusively to state and local governmental entities as employers. It does not regulate private businesses, create barriers to market entry, alter competition, or impose compliance obligations on the private sector. As a result, its effect on free enterprise is essentially neutral.
Private Property Rights: The bill does not affect ownership, use, or control of private property. It creates employment protections for public employees but does not authorize takings, impose land-use restrictions, or otherwise impact private property rights. Accordingly, its impact on this principle is neutral.
Limited Government: The bill modestly expands the scope of the Texas Whistleblower Act by creating additional protected activity and potentially increasing governmental liability in employment disputes. However, it does not create a new agency, program, funding stream, or rulemaking authority, and the Legislative Budget Board found no significant fiscal impact because implementation can be absorbed within existing resources.

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