Explainer: How Does a Texas Sunset Review Work?

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Under Texas' Sunset Review, state agencies sometimes face a choice: reform or be eliminated.

The Sunset Advisory Commission, a state agency dedicated to reviewing how the rest of the state agencies are working and spending money, just released this thing called “The Sunset Report”. Well, they actually released several reports. The reviews look closely at some state agencies, deciding whether or not the institutions should be put on the chopping block.

As we reported earlier this week, the Texas Railroad Commission recently received a Sunset review. Proposed changes include a name change, as well as campaign finance restrictions for commissioners. Before the Sunset legislation is called to a vote next year, we thought we’d take a moment to break down exactly who the Texas Sunset Advisory Commission is and how these Sunset Reports came to be.

What is the Texas Sunset Advisory Commission?

The Sunset Advisory Commission began in 1977 as a way to look closely at the effectiveness of Texas state agencies and determine their utility and worth. The Commission is made of 5 Texas House Members, 5 Senators, and 2 members of the public, appointed by the lieutenant governor and the speaker of the House of Representatives. The Commission’s main function is to propose Sunset review recommendations to the Texas Legislature as a Sunset Bill.

So what is a Sunset review exactly?

A Sunset review looks at the effectiveness of state agencies in Texas. About 130 agencies total are subject to a Sunset review, and 20-30 of them go through the Sunset process each legislative session, according to the Commission. And the stakes are high.

An agency under review is automatically abolished, unless the Legislature decides to pass a Sunset bill of reforms that would continue the agency’s existence or merge them with others. For instance, the Coastal Coordination Council, which managed coastal resources, was eliminated after a Sunset review in 2011.

Along with deciding the destiny of the agency, the review also analyzes the agency’s key functions, its effectiveness in carrying out duties, and lists suggestions for improvement.

What is the primary purpose of Sunset Reviews?

The Sunset review process evaluates whether or not a state agency should be abolished. The idea is to cut excess government spending by holding state agencies accountable. Recommendations by Sunset typically aim to eliminate wasteful programs, or programs that serve similar functions in multiple agencies. Sunset identifies structural and execution issues within the agency and then drafts a series of proposals on how the problems can be remedied. If adopted, the proposals will change how the agency is run according to the recommendations of the Sunset staff.

How are Sunset Reports assembled?

First, the agency under review has to engage in a little introspection. Agency staff, say, at the Railroad Commission, are asked to compile an internal report, looking closely at what’s working and what isn’t working within the agency. Then the report is submitted to the Sunset Advisory Commission and their staff looks at the self-evaluation and makes a game plan on how it will continue reviewing the agency. During a series of meetings the agency then teaches the Sunset staff about operations. Afterwards, the Sunset staff meets with groups related to or affected by the state agency. From a roundup of the Sunset staff findings, recommendations are developed and then published.

What happens after the recommendations are made?

Once recommendations are submitted, the report is released to the public and the state agency will often formulate an official response to the report. The Sunset Commission will look at the Sunset staff report and decide on which recommendations will be included in the Sunset bill that will be proposed to the legislature. During the next legislative session, suggestions outlined in the Sunset Report will be brought to a vote. Either the Sunset legislation will pass, and the agency in question will continue with the agreed upon modifications. Or, the Sunset bill will fail, abolishing the agency.

Has the Sunset Report shut down a state agency before?

Yes, the Sunset process has shut down 78 Texas agencies since 1977 and boasts a return of $29 for every dollar spent on the reviews themselves.

So what’s going on with these new Sunset Reports?

For the first time in state history, the Sunset Advisory Commission has conducted a second consecutive round of reviews, including the aforementioned one on the Texas Railroad Commission and another on Public Utility Commission of Texas. Why is this important?

Well, for an agency to continue its existence, their designated Sunset Bill must be passed by Texas Legislators. And for the first time in Commission history, two Sunset bills were not passed in 2011, but these agencies were not shut down, saved by a vote that postpones their fate until 2013.

Now these two agencies will have to have new Sunset Bills passed during next year’s legislature. Or, perhaps, the lege will punt again and we’ll be in even more unexplored territory.

The Sunset Advisory Commission document detailing the work and purpose of the Commission can be found here and was used for the majority of the reporting in this post.