Overview of Regulatory Reform in Texas
In 1977, the Texas legislature passed the Texas Sunset Act which would forever improve state government.
This act, now codified in the Texas Government Code, mandates that every state agency be abolished by a specific date unless the legislature passes legislation to continue it. But the legislature cannot pass this legislation until it receives a recommendation from the “Sunset Advisory Commission.”
This commission’s 12 members — 10 legislators and two members of the public — review the functions of all agencies through each agency’s self-evaluation report. The commission reviews the evaluation, takes public comments and prepares a recommendation for the state legislature. Before the final recommendation is submitted, an agency-review hearing is held.
The commission then makes a final decision to either continue the agency as is, modify the agency, merge the agency with another or disband the agency altogether. Thus far, the state legislature has approved a large majority of the recommendations by the Sunset Commission.
Results from Texas Regulatory Reform
Through this process, the commission has abolished 78 state agencies and saved $945.4 million in a 29-year period. Since the Sunset Commission’s expenditures over this time period were just $32.8 million, every dollar spent on this program has yielded about $29 in return.
Lessons from Texas
The advantage of a sunset act such as the one in Texas is that it puts pressure on agencies to justify their regulations, expenditures and existence. This encourages agencies to repeal unnecessary and overbearing regulations and perform their functions efficiently.
Sunset review also allows Texans to participate in agency review. This allows citizens to laud effective agencies, highlight abuse or ineffectiveness in their public comments and otherwise hold agencies accountable. These regulatory reforms have likely added to the success of the Texas job market, which has added as many jobs in the last decade as the rest of the nation combined.