Brian Christian Consulting

If you read my last article on what the next session of the Texas Legislature session could look like (and thank you for doing so), I mentioned an oft-repeated maxim that the only bills the Legislature must pass are the various budget-related bills and the redistricting plans.  Well, I realized after some reflection that, strictly speaking, that is not always the case.

There can be, in fact, one more type of bill that must pass.  In our history, Special Sessions (read about those here) have had to be called when such bills did not pass.  And what would those be?  Why, Sunset Bills of course!

This is actually a timely subject for natural resource agencies and policy.  Believe it or not, a little more than a year from now, the review cycle for the 2022-2023 biennium will begin.  Barring any changes to the schedule as currently set out, the following agencies/entities/programs are among those up for review:  the Texas Commission on Environmental Quality; the Texas Low-Level Radioactive Waste Disposal Compact Commission; several river authorities, including the San Antonio River Authority; the Texas State Soil and Water Conservation Board; the Texas Water Development Board; and the  State Water Implementation Fund for Texas.

For followers of these agencies, that is quite a full plate!  Given the speed with which time flies, even during a Pandemic, the 2022-2023 cycle will be here before we know it.  So, I do not think it is too early to put this on your radar.

During my time at TCEQ, I worked on both of its Sunset reviews.  During the first one, conducted for the 2000-2001 cycle, I was a Legislative Liaison assigned to help the staff of the Sunset Commission navigate the agency.  That review was challenging on all levels (back then, the agency had the nickname “train wreck,” a play on its acronym “TNRCC”), and it resulted in a number of significant policy changes and even a new name for the agency.  When the second review rolled around in 2010-2011, I was a Director who picked up some new responsibilities after a comparatively smooth process.

I have seen the process go both ways and been knee-deep into it.  So, I thought I would provide a quick “Sunset 101” and share some observations based on my experience.  I hope it is helpful.

But first, a little history….

What is Sunset?

The basic idea is that a law expires unless expressly “reauthorized” by a legislative body.  The idea dates to antiquity and has been applied to a few United States statutes since the founding of the country.  At the federal level, many tax bills have had sunset dates, including some of the tax cuts passed most recently in 2017.

During the mid-1970s, a backlash against government bureaucracy spawned a “good government” movement that spread across many state capitals.  The concept was that a “sunset” process would be extended to governmental agencies.

In Texas, a newly drafted state constitution contained a provision that limited the life of state agencies to ten years.  The stated purpose was to ensure that those agencies would be responsive to the Legislature and the public, subject to thorough oversight, and abolished if they were no longer needed.

While that constitution was ultimately rejected by voters, the Sunset concept was resurrected during the 1977 Legislative Session.  The result was Senate Bill 54 (Doggett/J. Wilson), which established a maximum 12-year life cycle for 177 state agencies and established a process to review those agencies and specific programs.  Reviews would be performed by an eight-member Sunset Advisory Commission appointed by the Lieutenant Governor (Four Senators) and Speaker (Four Representatives).  The staff of the Legislative Budget Board (LBB) supported the commission.  Interestingly, the vote in the Senate on the final bill was 17-13!

While some of the basic contours established 43 years ago are still in place, there have been significant changes.  Today, 131 entities are subject to periodic reviews and reauthorizations.  Clearly, some state agencies have come off the list (whether by outright abolishment or consolidation of functions under another state agency), and entities such as River Authorities (which can be reviewed but not abolished) have been added.  Additionally, the board has been expanded to 12 members, with the addition of two more Legislators and two members of the public.  Rather than the LBB, the commission is currently supported by a professional staff of approximately 30 individuals overseen by an executive director.

How Does it Work?

The Sunset Commission’s website has an excellent summary of how the process works, which you can read at your leisure.  I think an important takeaway is that a Sunset Review includes robust public participation.  Agencies under review provide the Sunset Commission staff with information on stakeholders with an interest in that agency’s operations.  Interested persons can also sign up through their website for regular email updates on either specific agencies or all that are under review.  Each review also allows for comments on the agency to be submitted.  This process frequently yields issues that require further review and consideration by the staff and commission, so it presents a good opportunity to be heard.

The other key component to remember is that once the Sunset Commission makes its recommendations, the review transitions to the legislative process.  Recommendations, even if adopted in some form by the Sunset Commission, can be modified or fall by the wayside.  Additionally, new issues can crop-up during the Session.

If all goes as smoothly, an agency will emerge from the legislative process with some efficiencies and the maximum 12-year extension.  Sometimes, though, the process can go off the rails, and an agency may only get a short extension (maybe two or four years) so that the process can go on.  Finally, agencies that are not reauthorized get a one-year wind-down to close out and ensure the smooth transition of any retained functions and related staff to another state agency.

Another important bill to watch is the “Sunset Safety Net Bill.”  This bill modifies the review schedules for state agencies.  Schedules can either be pushed out in time…or moved up.  Usually, schedules are modified to manage workflow or logically align similar agencies.  Occasionally, though, an agency that falls out of favor during a session can get their review moved up.  It is especially important to monitor this bill all the way through from beginning to conference committee, because agencies can be added anytime, even late in the process!

As noted above, Sunset Bills are in the class of “must pass” bills.  If a Sunset Bill fails to pass during a Regular Session, and no action is taken, then the subject agency will start to wind down the following September 1^st.  A Special Session may thus be required if that agency is particularly important and regulatory chaos could result without it.  I am aware of one exceptional case, however, when the Governor invoked emergency powers to continue, by executive order, a state agency whose Sunset Bill had died, but for the most part the Legislature must act to expressly continue an agency that finds itself in that position.

The View from the Trenches.

In 2000-2001, I served as one of the TCEQ’s liaisons (though it was TNRCC at the time) to the Sunset staff as they conducted their review of the agency.  I escorted them on site visits and facilitated interviews they held with agency management and regulated entities.  In 2010-2011, as a Director, I sat for an extended interview with the Sunset staff and frequently answered questions from them throughout the process.

The 2000-2001 review was intense as the agency was perceived as having a great many challenges.  Those included operational concerns, but also several blue-chip issues were in play, such as the regulation of emissions events, the use of compliance history in regulatory decisions, and air permitting of “grandfathered” facilities.  The Sunset Bill, House Bill 2912 by Bosse/Harris, had one of the longest floor debates in the House that year (I was in a backroom with other staff and management helping to analyze well over 100 floor amendments).  Later, the conference committee report was very nearly sunk on the last day because of ongoing concerns about concrete batch plants and crushing operations.  It was a near-run thing!

The most challenging aspect of the 2010-2011 process was that it was handled against the backdrop of a major budget shortfall. By that time, TCEQ’s operations had significantly matured.  Consequently, House Bill 2694 (W. Smith/Huffman) had a comparatively smooth ride.  Among the big issues were dam safety, improving responsiveness to the public, and, because of the severe drought, the expansion of the agency’s discretion to suspend certain water rights.  That year, the Sunset Bill passed both houses overwhelmingly.

During both reviews, I found the Sunset Commission staff to be very thorough.  They took a deep dive into the most pressing issues and asked penetrating questions.  They also had to drink from a firehose to learn an agency as complex as the TCEQ.  They also heard from a great many stakeholders, across the whole spectrum, with conflicting views and visions.  It was a lot to sort out.

Thus, my general advice to anyone is to stay on top of the process, maximize your participation, and ensure your issues are not lost in the shuffle.  For regulated entities, the Sunset process can be an opportunity to work for further improvements in an agency’s regulatory systems.  I also recommend offering site visits if possible.  They can be a great educational experience for the Sunset staff–they can see for themselves the real-world challenges and opportunities regulated entities face.  Afterall, it is always best to hear from the folks who do the work!

Finally, it is important to remember that this is a long and involved multi-year process.  It does not end with the Sunset Commission’s action on staff recommendations, or even when the Governor (hopefully) signs the final bill.  The next phase—implementation—is equally as important.  Ambiguities get hashed-out, and some come looking for a second bite at the apple.

In closing, this really is not that far off from happening.  Now, it is possible that next session could bring changes to the Sunset Review schedule, particularly if the session is somehow truncated or they clear the decks to deal mainly with the budget and fall-out from the Pandemic.  Whatever the case, the potential for impacts to the 2022-2023 review period will bear close watching.