The Texas Sunset Review Process

By Lauren Mulverhill Published July 2017

Changes proposed for key state agencies

Mention government spending to Texans, and you’ll likely get a torrent of opinions on the subject — not all of them complimentary. One state agency, however, has saved Texas about $980 million since its inception, operating quietly in the background for 40 years.

The Texas Sunset Commission has done this, in part, by abolishing 38 and consolidating 46 state agencies and programs — but also by improving the operations of many others. (Sunset and its mission are particularly significant to the Comptroller’s office, as current Comptroller Glenn Hegar served as chair of the Sunset Advisory Commission during his term as a state senator.)

Sunset is at the forefront of lawmakers’ minds this summer, because legislation enabling several state agencies to continue operations didn’t pass in the just-ended regular session. It’s one of the reasons why Governor Abbott called a special session to begin in mid-July, and it’s at the top of his agenda.

During the upcoming special session, the Legislature must take action for the Texas Medical Board and four mental health professional licensing boards, and the regulations they enforce, if they’re to continue operations. A similar situation occurred in 2009, when the failure of the Sunset bill for the Texas Department of Transportation required a short special session to ensure the agency’s continuation.

The Basics

The Legislature established the Sunset Advisory Commission in 1977, making Texas only the second state to create such a body. Sunset laws, typically passed in response to rising government budgets, exist to provide regular reviews of state agency operations and spending — and to automatically end those operations, unless the Legislature specifically reauthorizes the agency.

Under the Texas Sunset Act, an agency under review can be abolished or have some of its functions transferred to another agency if the Legislature deems that doing so will improve efficiency or effectiveness.

Texas’ Sunset Advisory Commission is an agency governed by legislative appointees. The lieutenant governor appoints five senators and one public member to serve as commissioners; the speaker of the House appoints five representatives and another public member. A staff of about 30, including a director, policy analysts and administrative staff, report to the commission.

Although Sunset may appear to be an “insider” process, “Outside input is critical — it’s how Sunset staff gets the broad perspective it needs to understand the issues surrounding the agencies under review, and how the Sunset Commission gets feedback on the recommendations offered in the Sunset staff report,” says Jennifer Jones, deputy director of the agency.  

“More often than not, the feedback received from stakeholders helps focus the commission’s attention on key problem areas and develop workable solutions, including changes to law and management directives,” she says.

Every state entity other than universities, courts and agencies established by the state constitution is subject to periodic review by the Sunset Commission — about 130 in all. Some constitutionally created agencies are subject to review but not abolishment. Additionally, the Legislature may place entities that are not state agencies under Sunset review.

Agencies generally undergo a Sunset review about once every 12 years, but again, the Legislature can change that timing. An agency’s Sunset date is specified in its enabling statute.

Steps along the way

Because Sunset reviews can address a wide range of issues, “Sunset is by design a lengthy and deliberative process,” Jones says.

The agency under review must complete a self-evaluation identifying problems and opportunities it faces. Then Sunset staff conducts interviews, field visits, focus groups, surveys and extensive analysis to determine whether an agency needs any structural changes — or is needed at all. Sunset also gathers input from the public, interest groups and professional organizations. Performance and operational data are collected as well. Finally, the Sunset staff releases its recommendations in a report to the commission.

After the staff report is published, the Sunset Commission holds a public hearing on the agency under review. At the hearing, Sunset staff members present their recommendations and the agency then formally responds. The public can submit written or oral testimony during the hearing on these recommendations or any other issues regarding the agency under review.

Finally, the commission votes on the staff recommendations, including its decision as to whether the agency should continue. The approved recommendations then are drafted into the agency’s Sunset bill. The Legislature must pass each Sunset bill or the agency in question will cease operations after a one-year wind-down period.

During the legislative phase of a Sunset review, the public and other stakeholders can participate by providing input on each Sunset bill. “It takes almost two years from the time agencies prepare their initial self-evaluation reports to when the full Legislature considers the resulting bills,” says Jones. In recent years, she says, the Legislature has enacted about 80 percent of the Sunset Commission’s recommendations. When you consider the overall passage rate of most bills in the Legislature is closer to 20 percent, that’s a pretty good outcome.

The threat of abolishment is typically sufficient incentive to pass Sunset bills; in a few cases, however, an agency’s Sunset bill isn’t passed during the regular session, and the agency must be considered again during a special session for the agency to continue.

Getting involved

Over the years, Sunset has carefully analyzed the need for and effectiveness of many state regulatory programs, with the goal of protecting public health and safety while minimizing the regulatory burden on business. The commission has recommended numerous ways to improve how agencies issue licenses, conduct inspections and respond to complaints.

“Almost all state agencies with duties affecting the lives of Texans undergo a vigorous Sunset review,” Jones notes. “That alone is a good reason to care about Sunset. Another is the opportunity for the public and other stakeholders and interest groups to take part in the process and support changes they feel are needed. Sunset is a very open process; anyone can and is encouraged to participate.”

And many do. For example, during the 2014-2015 review of the Department of State Health Services, Sunset received about 2,500 public comments in response to recommendations to deregulate or transfer a number of health-related occupational licensing programs.

“Sunset recommendations often directly affect license-holding individuals and businesses across numerous industries and as such garner significant interest,” Jones says. For the agencies under review in the upcoming Sunset review cycle, the public and other interested stakeholders can begin providing input for the Sunset process in fall 2017.

2017 session results

During the 2016-17 review cycle, Sunset reviewed 24 state entities. Preliminary results show Sunset had a very successful session, with the 2017 legislative session enacting 17 Sunset bills containing 80 percent of the Sunset Commission’s statutory recommendations. During the special session starting in July 2017, those numbers could increase.

According to Jones, Sunset’s review of certain health licensing agencies, such as the Texas Medical Board, Texas Board of Nursing and Texas State Board of Pharmacy, garnered significant attention this session. Provisions adopted in these agencies’ Sunset bills require the boards and practitioners to use the State Board of Pharmacy’s Prescription Monitoring Program database to promote more responsible use of controlled substances to help curb the abuse of prescription drugs in Texas. The Legislature also adopted Sunset bills that transfer the Texas State Board of Podiatric Medical Examiners to the Texas Department of Licensing and Regulation; improve the governance of both the veterinary and dental boards; and implement standard licensing practices across several regulatory agencies.

Aside from licensing agencies, Sunset legislation made changes and improvements to the Railroad Commission of Texas, State Bar of Texas, Texas Department of Transportation, Employees Retirement System and four small river authorities, among others. These changes aim to improve agency operations, use available funds more efficiently and better serve Texans.

A function, not a faceoff

To some, the Sunset process may seem adversarial, as the Sunset Commission must consider whether an agency continues to exist, but Jones says this is only one part of Sunset’s comprehensive review. In the end, the Legislature continues most agencies, making the commission’s recommendations for program improvements all the more important.

“Sunset’s work is not focused on a ‘gotcha’ audit process,” Jones says. “Instead, it reflects an open collaboration with all interested stakeholders — lawmakers, the public, the agency and others — to identify and address areas needing improvement. Some of these areas may have already been identified by the agency, but couldn’t be addressed without the time and attention given to an agency under Sunset review.”

“In many respects, Sunset’s independent, top-to-bottom review of an agency results in numerous internal changes that provide as much benefit to improving Texas government as the more headline-grabbing changes to law that usually become the ultimate focus.”

Read more about the agencies reviewed during this cycle and the Sunset Commission’s Report to the 85th Legislature.

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