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Is the sun setting on the Texas sunset law?

Texas legislators are of two minds when they ponder the usefulness of sunset reviews of state agencies.

In 1993, while the Texas Performance Review of state agencies was drawing enough attention to inspire the Clinton administration to undertake a National Performance Review, powerful state officials were also trying to do away with the state's sunset law.

That's right. Several of the officials who had rammed through a process to institutionalize a blitzkrieg assault on waste and inefficiency in state agencies had arrived at the same conclusion legislators in several other states had - that the sunset law, originally designed to do something similar, had evolved from being a solution into being the kind of problem it had been created to solve.

Senator O.H. "Ike" Harris, a Dallas Republican who is the Texas Senate's longest-tenured member, introduced legislation that would do away with the Sunset Advisory Commission. "In some respects, it's outlived its usefulness," said Harris, who voted against sunset when it was established in 1977, but who has served twice on the advisory commission since.

Interestingly, Harris was joined in that opinion not just by Lieutenant Governor Bob Bullock and new House Speaker Pete Laney, but also by the reform-minded Governor Ann Richards. A few weeks before the end of May when Texas' regular 140-day biennial legislative session was to end, sunset's days looked numbered.

20 Years of Sunset

Sunset in Texas was set up during the fervor that swept many states in the late 1970s to open up government agencies and have them re-examined every few years to see if they were still performing the functions for which they had been created. Colorado, Florida and Alabama passed the first sunset laws in 1976. Texas and 21 other states followed suit in 1977. Eventually, a total of 36 states passed broad sunset statutes.

The 10-member Texas Sunset Advisory Commission is composed of four senators named by the lieutenant governor, four House members named by the speaker, and two citizen members, one appointed by the lieutenant governor and one by the speaker. The legislators serve overlapping four-year terms, so that two senators and two House members are appointed every two years. The citizen members serve two-year terms. The lieutenant governor and speaker alternate every two years in naming the commission's chair and vice-chair.

Open Season on Agencies

In Texas, it was decreed that every state agency would be up for sunset once every 12 years. The agencies under scrutiny would have to get an affirmative vote from the House and Senate, and the acquiescence of the governor, in order to continue in existence. Without the affirmation by the Legislature and governor, the agency would cease to exist and would be given one fiscal year to terminate its activities.

That reverses the normal flow of the legislative process, since it's much easier to kill something in the Legislature than to pass it. Agencies and the lobby groups that seem to take them over in many cases can stymie efforts to clean them up. But the sunset process gives their enemies and critics open season to discuss any issues that normally could be bottled up in committees.

In Texas, as in most other states, a couple of dozen mostly minor agencies were terminated, many of them in the early years of the process. Nationwide from 1976 to 1989 about 13 percent of all agencies reviewed were terminated, according to NCSL - about the same percentage as in Texas.

In Texas, Richards became perturbed at the process during her efforts to streamline and clean up the state's insurance oversight agency. As it happened, the agency came up for sunset review in 1993. Her appointees to the oversight board, however, complained to her that much of their staff time and energy was taken up providing information to the Sunset Advisory Commission. And lobbyists were busy trying to use sunset to undo some of Richards' efforts to change the insurance board's operation.

She complained that the sunset process had become "a fiasco" and "the lobbyists' full-employment act." Representative Libby Linebarger, a Democrat who co-sponsored the sunset abolition bill in the House, said she "never saw so many alligator shoes and $600 suits as when some agency is up for sunset review."

Senator Harris said the sunset commission had gone beyond simply deciding whether an agency should continue in existence; instead it had become involved in substantive policy issues.

Because a positive vote of the Legislature is needed to continue an agency, sunset bills are often loaded up with substantive issues - like whether telephone companies should be deregulated, which came up during the review of the Public Utility Commission. That battle - between telephone companies and newspapers - helped bring the questions about sunset to a head in Texas. Southwestern Bell Telephone Company used the fact that the Public Utilities Commission was up for sunset review as a lever to try to get a greater rate of return and use the money to build a fiber-optic net-work.

That effort, contested by the newspapers and every other facet of the telecommunications industry, eventually turned into such a donnybrook that the Legislature decided simply to extend the agency for two years and see if something could be worked out before the 1995 legislative session. But the scars of the struggle on legislators, along with those from several other sunset fights, helped induce several influential representatives and senators to join with Richards, Bullock and Laney in wondering whether the review process was worth all the grief.

Additions Make Votes Tough

One well-placed former legislator noted that one of the major objections by lawmakers is that the sunset process forces them to cast a dozen or so tough votes every session that they would otherwise be spared. That is because important agencies, such as the Public Utility Commission and the Department of Human Services, simply must be continued. But when the agency review bill is loaded up with controversial proposals, it can put legislators in a difficult spot.

(That did not stop lawmakers from simply letting the state's board that oversees dentists be "sunsetted" in 1993 after the dentists stubbornly refused to work out a compromise with dental hygienists. Governor Richards also has refused to call a special session to cure the problem, which means that some jury-rigging will be necessary to continue dental regulation between the time the agency ceases to exist on Sept. 1, 1994, and the Legislature reconvenes in regular session to fix things in January 1995.)

A longtime lobbyist said that one reason sunset is particularly disliked by some senators is that it circumvents the Texas Senate's practice that requires a two-thirds vote to bring matters to the floor. That, he said, is what causes a lobby feeding frenzy on some legislative initiatives that otherwise would be killed in the back halls by lack of votes.

Senate Finance Committee Chairman John Montford, a former prosecutor who served on the commission for three years in the 1980s before resigning in disgust, thinks the sunset agency is duplicative, expensive and unnecessary - partly because the state also has the Legislative Budget Board and the state auditor's office looking into agency performance. And that was even before the Texas Performance Review was added to the mix.

Can the Legislature Do It Better?

When he quit the commission in protest of what he considered its overindulgent hand-wringing, "I made the statement that it was nothing but pet food for lobbyists," Montford said during the 1993 battle over whether to continue it. 'I'm not opposed at all to periodic review of an agency. But we're not going to sunset the Department of Human Services or the highway department or Mental Health and Mental Retardation. I think that periodic review is an ongoing responsibility of the Legislature."

He said that agencies are up before the Senate Finance Committee and the House Appropriations Committee every two years anyway, "and that's the best place to sunset an agency." Governor Richards' chief of staff, John Fainter, agreed. Fainter, who was secretary of state under former Democratic

Governor Mark White during the 1980s and who served on the commission that originally recommended the sunset review process in 1975, said the process has turned into a problem.

He said the sunset process "has generated tremendous cost and disruption to the agencies" without a significant amount of benefit. "And I think most agencies are pretty responsive to the Legislature anyway," Fainter added. He also pointed out that with the 1993 session, every major agency has been through a sunset review at least once.

Legislatures in several other states have developed a dim view of the sunset process, and some have abandoned it. An NCSL survey, compiled by Rich Jones and Nancy Rhyme, found several states had repealed sunset - including North Carolina, Nebraska, New Hampshire and Wyoming - and several others had allowed their sunset laws to lapse. The number of states that still had some sunset functions had dropped to 22, NCSL reported in 1992. Speaker Laney, who used to be chairman of the powerful State Affairs Committee, believes that the legislators themselves can evaluate whether agencies should continue to exist by reviewing them in their committees. When he became speaker in 1993, Laney abolished the House Government Organizations Committee through which all sunset bills used to proceed on their way to the House floor. Now the sunset bills go through the committees that normally deal with those agencies - such as the Texas Alcoholic Beverage Commission being reviewed by the Liquor Regulation Committee.

Governor Richards agreed last spring with that approach. "I think those guys out there," Richards said, nodding to the House floor, "can do a better job."

Several observers say that both Laney and Lieutenant Governor Bullock have been perturbed that some lobbyists for whom they have little respect have become millionaires partly because the sunset review process keeps them working even when the Legislature is not in session.

Some observers think that one reason the leadership dislikes the sunset process is that it removes from their hands the decision over when and whether particular agencies will have to undergo scrutiny. Some say that the number of legislative staffers has increased considerably since sunset began, and they believe that much of what sunset has done could be done as well, if not better, by the committee staffs.

And some have thought that Bill Wells, the Sunset Advisory Commission's executive director since the agency's inception, has overseen a process that has shifted too much from merely deciding whether an agency should continue to exist to deciding what some of the agency's decisions should be.

Wells, who had moved from the Legislative Budget Board to the helm of the sunset commission when it was created, denies the charge while acknowledging that when the agency review bill is loaded up with controversial proposals, it can put legislators in a difficult spot. He also said the process had some flaws - some of which were corrected by the Senate, such as not allowing floor amendments on matters unless they have already been discussed and rejected in committee. That keeps legislators from being blindsided by surprise amendments during floor discussion.

Sunset backers say the real problem with leaving agency refinement to the committee process is that many committees become captive to the lobbyists that deal with the agencies those committees regulate. Sunset often provides the only means of getting a fresh look at some practices.

Wells said that sunset is often the only way to be sure that agencies are periodically given a thorough analysis. The alternative is allowing things to basically slide into a crisis situation. Things have to be broke, and then they're acted on. I know that people say that the interim committees can do it, but I've been here 25 years and I don't recall a whole lot of that action."

Wells, who said sunset has saved the state almost $500 million during its existence, has also tried to cut down on the costs to agencies of meeting the commission's requests.

"We were guilty at the start of asking for too much material, but, as we've worked on down, we've pared the material down," Wells said. We've coordinated with other [agencies and committees] that are looking at the agencies.

"I also simply don't know how you get an agency to sit back and examine itself in a long-term sense. I think that you can have these initiatives by the governor's office that last as long as the governor's there. You can have interest by some legislators." But other than that, there is no regular examination, Wells said. "What sunset does is make it an agency priority once every 12 years to examine them. They aren't bothered by us at any time in the intervening 12 years. "

Friends of sunset were able to keep the commission from being abolished. At one point, Senator Steve Carriker, winding up his four-year stint on the commission, suggested the possibility of putting sunset through its own process. But that eventually became unnecessary, as the abolition legislation simply fizzled.

What apparently has happened since is that Lieutenant Governor Bullock and House Speaker Laney decided to take charge of the sunset process through their appointment powers.

The two Senate holdovers on the commission are Carl Parker, an outspoken trial lawyer and staunch defender of sunset from labor-heavy Port Arthur, and Mike Moncrief, a moderate Democrat from Fort Worth. Bullock departed from the tradition of making a sitting sunset member chairman and passed over Parker and Moncrief. He installed one of his new appointees, Democrat Ken Armbrister, as chairman. Armbrister is one of Bullock's most trusted allies in the Senate. The other senator is Republican David Sibley. And Bullock's citizen appointee was his chief of staff for the past several months, Chuck Bailey.

Speaker Laney already had two of his team members on the commission: Layton Black and David Counts, both conservative Democrats. Laney added another team member, Democrat Barry Telford, and Patty Gray, a progressive Democrat. And Laney picked one of his former staffers, Houston lawyer Mike Sims, as his citizen appointee.

Parker reportedly was piqued at not being chosen for the chairmanship. Some speculated that Bullock's choice of Armbrister has to do with the fact that the state's workers' compensation system, overhauled in 1989, is up for sunset review in 1995. This theory holds that Bullock, up for re-election in 1994, wanted to avoid a bloody battle between labor and business interests that having a staunch ally of organized labor like Parker at the agency's helm could provoke. Others, however, said Bullock simply wanted closer control over the commission than from the sometimes unpredictable Parker.

Parker, who said he has plenty to do anyway, said that 'in a way, maybe it's good that I'm not chairman with that issue coming up because I will confess readily that it's a tough issue for me to have much objectivity about. It is an emotional issue with me."

Longtime director Wells, who said he is 55 "going on 90," took early retirement as of Dec. 31. He said that even though the legislation to do away with the commission was downgraded to a study and then killed altogether, he could see that the agency was headed in a different direction. Others say its teeth are being shortened, if not pulled. Wells said he decided it was time for him to exit the stage. The commission named as its new director John Paul Moore, who most recently had been with the University of Texas system as assistant to the executive vice chancellor for business affairs. Before that, the one-time newsman spent 12 years in the comptroller's office before Bullock moved from that job to become lieutenant governor. Although some observers immediately felt that Moore's appointment indicated Bullock had taken over the sunset process, others noted that Moore has a relationship with Speaker Laney spanning two decades. During a considerable amount of the time that Moore dealt with the Legislature for the comptroller, Laney was chairman of the State Affairs Committee, which handled many bills with a fiscal impact.

What about the possibility of changing the commission's role? "That's really up to the leadership," Moore said. "And that's my first order of business - to try to determine what the leadership wants." He said he felt gratified at coming into the post with Bullock and Laney in their posts. "There has never been a time in my lifetime around government that we've had stronger legislative leadership," Moore said.

Senator Parker, among others, thinks the attack on sunset is misplaced.

"It would be a terrible tragedy, it would be a giant step backward from openness in government, to do away with the sunset process," Parker said. "I keep hearing rumors they want to limit the sunset process to only procedural and structural matters. But the whole philosophy behind sunset is that for once you get around the committee process. You get around the leadership being able to kill any inquiry or public debate about a big act or a big agency.

"And it is required to be brought to the floor of the House and Senate where it is open season on every aspect of that agency and that law. And that's what democracy is about. It's about open and full and free debate, adequately reported, so everybody can see where everybody stands on public utility regulation or alcoholic beverage regulation or any of the other sacred cows in the process."

Catching a Bureaucratic Ear

Parker said that a legislator has little chance of getting answers to questions about an agency's operation unless your vote is essential to their continued operation. A freshman representative has about as much chance getting the attention of the head of the insurance department as I do of getting the ear of the president of Russia."

But with the specter of sunset even the lowliest legislator can have an impact, Parker said.

"I guess if I were king I would not want a sunset process because I could manipulate and do in the back rooms and under the table and everywhere else, at my will, without it ever being questioned publicly," Parker said. "But most of us are not ever going to be king, so we probably ought to stick with open democracy."

Gonzalo Barrientos, the senator who represents Austin and the area of the state Capitol, also is a sunset defender. He readily acknowledged that the process isn't perfect and doesn't deep-six many agencies any more. He says while its role has changed, it is absolutely needed to allow "realigning, correcting, streamlining, eliminating. That can always be done by an individual legislator. However, to get it done with more detail and more focus, you need staff like the sunset staff. Otherwise, it can be a very difficult process for one or two members to try to do that."

That, in fact, has been the pattern in most other states. They have modified the sunset process over the years, but the specter of death has made agencies more receptive to things like adding public members to regulatory boards, changing regulations and working for greater efficiency.

John Sharp is the state's comptroller and the driving force behind the Texas Performance Review, which used 100 auditors from several state agencies including the sunset commission, to carry out the whirlwind agency analysis. Sharp spent eight years in the House and Senate - including a stint as a Senate appointee to the sunset commission - and four on the Texas Railroad Commission that regulates transportation and oil and gas, before taking his current position. He is a strong defender of sunset - including its approach to policy as well as simply deciding whether an agency should continue to exist.

"The healthiest part about sunset is you can be sure that before 12 years are out if somebody wants to deregulate trucking, they're going to get a shot at it," Sharp said. "If somebody wants to look at liquor laws, they're going to get a shot at it. I'm a big supporter of the sunset process. I think their staff is really good. But their staff angers people. And if they didn't, they wouldn't be very good. The staff members that we have borrowed from the Sunset Commission for the Texas Performance Review were some of the best that we had."

Sharp said that the main point, whether there is a sunset commission as such or not, is that agencies must justify their existence every dozen years to the Legislature. "You force the issue on so many things that never see the light of day without it," Sharp said. "If they're talking about Hey, let's spread it around to other committees' - then it suits me."

The critical ingredient, he said, is the threat of death.

"I think it gives legislators more power in the form of making agencies more responsive to them," Sharp said. "If you've got an agency that knows it's never going to go under sunset, they pay a heck of a lot less attention than agencies that know they've got to go through that process just to even survive."

The Unintended Consequences of Sunset

The popularity of sunset has faded since its glory days in the mid-1970s, but there remains a serendipitous effect to the government reform that was designed to cut state bureaucracies.

Largely because of the unintended effect of sunset, Colorado has expanded its legislative oversight function. Lawmakers there realized that getting rid of state agencies was not the only way to measure sunset's effectiveness. Sunset reviews are often a useful tool for increasing the efficiency of agency operation.

Arizona, Kansas and Utah all use sunset as the primary mechanism for conducting program evaluation.

States that report success with sunset have adapted the process in several ways. They now:

* Shift the emphasis away from occupational licensing and regulatory boards to major state agencies.

* Use sunset to conduct program evaluation.

* Commit sufficient staff resources to conduct thorough reviews of agency operations.

Sunset clearly, for some states, has provided a successful tool for reviewing the effectiveness and efficiency of state programs.
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Title Annotation:includes related article
Author:McNeely, Dave
Publication:State Legislatures
Date:May 1, 1994
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