HB2523 would require states to create a State-Level Department/Agency/Commission of Government Efficiency (DOGE) as a condition for receiving discretionary federal funding starting in fiscal year 2026. The DOGE must have 10–20 members and reflect bipartisan representation from the state legislature; it must publish an annual report detailing its oversight of federal funding and proposing efficiency improvements.
The act excludes discretionary appropriations within the security category from this condition. The State, for purposes of this measure, includes the 50 states, the District of Columbia, and U.S. territories.
The annual DOGE report must be posted on the state’s public website and transmitted to the Department of Government Efficiency within the Executive Office of the President. This structure is designed to create an independent mechanism to review federal fund administration and to identify waste, fraud, and abuse at the state level.
At a Glance
What It Does
In fiscal year 2026 and beyond, no discretionary federal funds may be disbursed to a state unless it has established a DOGE. The DOGE is required to publish an annual report detailing its review of federal fund administration and provide recommendations to improve efficiency. An exception applies to discretionary funds within the security category.
Who It Affects
All states, the District of Columbia, and U.S. territories, along with the federal agencies that disburse discretionary funds and the state legislatures and executive offices responsible for implementing the DOGE.
Why It Matters
The bill creates a formal, bipartisan mechanism at the state level to oversee federal funding, aiming to curb waste and improve the efficiency of how taxpayer dollars are spent.
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What This Bill Actually Does
The bill introduces a new requirement for states to establish a government efficiency office, the DOGE, as a prerequisite for receiving discretionary federal funds starting in 2026. The DOGE must be a bipartisan body, comprised of 10 to 20 members, and be aligned with the state’s legislative balance between the major parties.
Its core task is to review how the state administers federal funds and to identify and eliminate waste, fraud, and abuse. Each DOGE must publish an annual report that details its work and offers recommendations to improve efficiency in the expenditure of federal dollars.
This report must also be posted publicly on the state’s website and forwarded to the federal Department of Government Efficiency within the President’s Executive Office. The bill also defines the scope of “State” to include all 50 states, the District of Columbia, and U.S. territories.
The condition on funding is absolute: starting in FY2026, discretionary appropriations can only flow to states that have established a DOGE. The security category discretionary funds are explicitly excluded from this requirement, per the definition in the Balanced Budget and Emergency Deficit Control Act.
The practical effect is a federal lever to compel the creation of a state-level oversight body that can review spending, push for reforms, and report on opportunities to improve the efficiency of federal fund usage. The act thus shifts a portion of accountability from federal agencies to the state level, while creating new reporting duties for state governments and potentially new operating costs to staff and run the DOGE.
The Five Things You Need to Know
The bill conditions FY2026 and later discretionary federal funding on every state establishing a DOGE (10–20 members with bipartisan representation).
Discretionary funding in the security category is exempt from the condition.
The DOGE must publish an annual report detailing its work and recommendations, and post it publicly and submit it to the Department of Government Efficiency (DoGE) within the Executive Office of the President.
The State is defined to include all 50 states, the District of Columbia, and U.S. territories.
The DOGE’s annual report must include both efficacy assessments and practical recommendations to improve federal fund expenditure.
Section-by-Section Breakdown
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Short title
This act may be cited as the State-Level DOGE Establishment Act. It sets the formal name and cross-references for the measure that follows.
Condition on federal funding
In fiscal year 2026 and subsequent years, no discretionary appropriations may be disbursed to any State unless the State has established a DOGE as described in subsection (b). The discretionary funding condition does not apply to funds categorized as security funding under section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985.
State-level DOGE agency requirements
Each State must establish and maintain a department, agency, or commission of government efficiency to review the efficacy of federal funding and to eliminate waste, fraud, and abuse. The DOGE shall comprise 10–20 members, with an equal number from the majority and minority parties in the State Legislature. The agency must publish an annual report on the State’s public website and submit it to the Department of Government Efficiency within the Executive Office of the President, detailing its work and providing legislative and operational recommendations to improve fiscal efficiency.
State defined
For purposes of this section, the term ‘State’ means each of the several States, the District of Columbia, and each U.S. territory.
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Who Benefits
- State executives (governors and budget offices) gain a formal mechanism to review and justify federal fund usage through a dedicated, bipartisan body.
- State legislatures and legislative budget committees gain an official channel for oversight and accountability via a bipartite DOGE composition.
- Federal funding agencies receive consolidated, state-level reports that can inform compliance oversight and reduce administrative ambiguity.
- Taxpayers in states may benefit from reduced waste and more efficient use of federal dollars due to improved oversight.
Who Bears the Cost
- States must allocate funding and administrative resources to establish and operate a 10–20 member DOGE.
- States incur ongoing reporting and monitoring obligations, including creating public-facing websites and annual reports.
- Federal agencies may incur coordination costs to interact with DOGEs when reviewing or disbursing discretionary funds.
- Partisan dynamics could impose additional political costs on state legislatures or governors in maintaining the bipartisan DOGE structure.
Key Issues
The Core Tension
The central dilemma is balancing federal accountability and transparency for federal dollars with respect for state sovereignty and practical capacity. Requiring a new, bipartisan watchdog at the state level could improve efficiency and reduce waste, but it may also create duplicative structures, procedural delays, and partisan misalignment with existing state governance.
The bill introduces a powerful federal lever to influence state administration of funds by tying discretionary federal dollars to the creation of a state-level oversight body. This creates a potentially significant administrative burden for states, particularly smaller or resource-constrained ones, and it raises questions about state sovereignty and the division of fiscal oversight between state and federal authorities.
While the annual reports and public disclosures promise greater transparency, they also create new obligations that may require state-level funding and personnel. The security category exclusion notes a carve-out that preserves some federal discretion over sensitive funding, which could limit the reach of the DOGE mandate in practice.
Implementation questions include how quickly states can stand up a DOGE, how the 10–20 member cap interacts with existing state legislative bodies, and how the bipartisan parity requirement will be achieved in states with different party dynamics.
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