A sunset review occurs after enacting legislation to create a state board, commission, agency or new regulation. Usually, at the behest of a sunset committee in the legislature or an office conducting sunset reviews in the executive branch, policy analysts will review the ongoing costs, benefits and impacts of a given occupational licensing regulation or related government body. Legislators then have the chance to review a prepared report and reevaluate any related government functions to ensure continued relevancy. The final step of the process requires legislators to vote on whether to continue, amend or end the functions and activities of a state regulatory or licensing board or agency. If the legislature votes to end those functions, it is “sunsetting” that provision of state statute.
States began implementing sunset reviews and entities to manage the reviews in the 1970s. According to the Texas Sunset Advisory Commission, state lawmakers were motivated to implement sunset processes due to concerns about the growth of federal and state governments and a desire for legislators to have another method of review to ensure state agencies and programs were relevant, necessary and effective. Among the first states to adopt sunset reviews were Colorado, Texas and Alabama.
By the 1980s, 36 states had passed legislation creating a sunset review process. However, by 1990, six states had repealed their laws, and many more turned away from formal sunset reviews toward more individualized “program evaluation” processes. Program evaluation, according to the U.S. Office of Personnel Management, is the systematic assessment of the operation or outcomes of a program or policy. This approach became more popular with states interested in evaluating the successes and challenges of specific programs. Today, several states still operate robust sunset processes, and other states are reexamining this tool to give legislators more transparency and authority on state occupational licensing regulations.
Historic Timeline of Sunset Reviews
- 1970s – States began implementing sunset reviews
- 1980s – 36 states passed legislation creating a sunset review process
- 1990s – Six states repealed their laws, and many more turned away from formal sunset reviews
- 2000s and onwards – More individualized "program evaluation" processes become more popular with states interested in evaluating the successes and challenges of specific programs
When planning for the implementation of a sunrise process, lawmakers must contemplate several key components:
- Where will the process be housed?
- What will the review criteria be?
- What is the timeline?
- What will the report look like?
- What will the reporting process and voting look like?
Part One: Where Is It Housed?
A sunset review can be housed in the legislative or executive branch or in an independent state office. Regardless of which branch the supporting staff work in, all sunset processes require presenting the review to the legislature for consideration and voting to continue, modify or retire a given regulation or government entity. When deciding what will work best in their state, legislators consider budgetary restrictions, the relationship between the branches of state government, and the amount of dedicated staff time that may be necessary to conduct a robust sunset review.
If the process sits within the legislative branch, a committee or auditing office maintains responsibility. In Arkansas, statute requires the state legislature to review occupational licensing regulations and boards. Arkansas’ law simultaneously makes the legislature responsible for the systemic review of new and existing occupational licensing laws. The Arkansas Legislative Council is responsible for the process, while staff from the Bureau of Legislative Research gather the necessary information and draft reports. In Nevada, four staff from the Nevada Legislative Council Bureau staff the Sunset Subcommittee, part of the Legislative Commission, and share responsibilities.
Alternatively, the executive branch can house the sunset process. In Colorado, the Office of Policy, Research and Regulatory Reform in the state’s Department of Regulatory Agencies conducts reviews and reports its recommendations to the legislature, which ultimately votes on them. The office has a small staff who work on the reviews throughout the year.
Finally, sunset processes also exist in independent state offices, such as the Texas Sunset Advisory Commission. The commission employs about 30 nonappointed staff. The commission’s board comprises 12 appointed members; five senators and one public member whom the lieutenant governor and six representatives appoint, and one public member appointed by the speaker of the House. Each legislator serves a four-year term, and each public member serves a two-year term.
Part Two: What Is the Review Criteria?
When deciding to implement a sunset review process, state legislators must consider the criteria they will use to evaluate occupations, professions, regulatory agencies and boards. These criteria will then reside in statute and serve as the basis for future reviews. Criteria vary by state (as seen below), but there are several common areas most states cover, all meant to help inform legislators’ decision-making.
First, regulatory mechanisms like occupational licensing exist to protect public health and safety, so questions regarding how and the extent to which regulations protect the public are central to sunset reviews. For example, Illinois’ criteria include "whether the absence of regulation would significantly harm or endanger the public health, safety or welfare."
Many states also require the occupational regulation under review to be evaluated for its potential impact on consumer choice in the marketplace. For example, Hawaii’s criteria include, "Professional and vocational regulations which artificially increase the costs of goods and services to the consumer shall be avoided except in those cases where the legislature determines that the potential danger to the consumer exceeds this cost." Most states incorporate some form of cost-benefit analysis into their criteria to better understand what kind of financial impact the regulation may have on workers, businesses and the state.
Several states require evaluations to demonstrate that the current form of regulation offers the least restrictive regulatory option. The “least restrictive method of regulation” language (as seen in the Colorado example below) directs the legislature to pursue the minimum level of regulation necessary to protect public health and safety. Alternative regulation methods to licensure include civil remedies, criminal sanctions, regulation of the business rather than its employee practitioners, registration and certification. Finally, given that sunset processes evaluate existing statutes, states often include criteria to examine how market conditions have changed since the last review and whether those changes affect the existing licensing law's usefulness. Vermont's sunset criteria, for example, include "the extent to which the profession's historical performance, including the actual history of complaints and disciplinary actions in Vermont, indicates that the realized benefits to the public justify the costs of regulation."
Colorado Sunset Criteria Include:
- Whether regulation by the agency is necessary to protect the public health, safety and welfare.
- Whether the conditions that led to the initial regulation have changed.
- Whether other conditions have arisen that would warrant more, less or the same degree of regulation.
- If regulation is necessary, whether the existing statutes and regulations establish the least restrictive form of regulation consistent with the public interest, considering other available regulatory mechanisms, and whether agency rules enhance the public interest and are within the scope of legislative intent.
Texas Sunset Criteria Include:
- Does the license serve a meaningful public interest and provide the least restrictive form of regulation needed to protect that interest?
- Can the program's regulatory objective be achieved through means other than licensing?
- Does the licensing process impede applicants with moderate or low incomes?
- What is the impact of regulation on market competition, consumer choice and cost of services?
- Do the regulations match industry-specific best practices and nationwide models and standards for licensing and regulatory agencies generally?
Washington Sunset Criteria Include:
- The extent to which the entity has complied with legislative intent.
- The extent to which the entity is operating efficiently and economically which results in optimum performance.
- The extent to which the entity is operating in the public interest by controlling costs.
- The extent to which the entity duplicates the activities of other entities or the private sector.
- The extent to which the entity is meeting the performance measures developed under RCW 43.131.061.
- The possible impact of the termination or modification of the entity.
Part Three: What Is the Timeline?
Timelines for sunset reviews vary by state but generally fall into one of two categories. Some states have a regular review interval baked into statute, while others allow legislators to decide when to trigger the reviews. In Arkansas’ process, all occupations and professions regulated by the state go through a sunset review once every six years. Legislation recently enacted in Idaho will require the state’s Occupational and Professional Licensure Review Committee to implement a sunset process in the state, beginning in 2022, that will review each licensing authority every five years. While Alabama's sunset law requires a review of 77 state regulatory bodies on a four-year, rotating basis.
Other states allow legislators to decide when the regulation will be reviewed next, within a certain period defined in the statute. In Colorado, legislation passed to regulate an occupation or board will include a date by which that regulation will terminate unless the General Assembly votes for its continuation. Under state law, the General Assembly can only allow for a maximum of 15 years between reviews for existing entities and a maximum of 10 years before the first review of a newly created regulation. Washington is another example of a state that allows the legislature to request sunset reviews at their discretion. Washington’s Sunset Act requires that any entity the Legislature deems subject to the sunset process must undergo a review at least once every seven years, but it is up to legislators to trigger a review within that time frame.
States with sunset reviews that occur on a statutorily defined interval have the advantage of working on a set schedule where legislators, regulators and the public can anticipate and prepare for the review. There is also a certain level of removal from partisan politics with reviews that are required by statute. Whereas, in states where the process is triggered by legislative request, sunset reviews may appear to be more tied to political maneuvering than above the partisan fray. That said, states whose sunset reviews operate at legislative request give more leeway to policymakers’ choices in the process. Additionally, they may be able to pivot to more quickly reviewing a regulation or entity that otherwise wouldn’t come up on the review calendar for three to five or more years.
The staff responsible for conducting research and drafting the sunset reports generally have about one calendar year to complete those components of the process before disseminating their findings to the legislature.
Part Four: The Report
Every sunset review results in a written report that is delivered to the legislature. With authority for the process, criteria for the evaluation, and timeline set, legislators must also consider the report itself and the reporting process. Staff for the entity in charge of conducting the reviews must gather enough information to adequately respond to the evaluation criteria discussed above. This is the information included in each sunset report and what gets communicated to legislators. Based on this information, staff are often, though not always, responsible for drafting recommendations. For example, in Texas’ process, the Texas Sunset Advisory Commission staff formulate a report with findings and recommendations that the commission's voting members can accept, modify, or reject, ultimately culminating in a final version of the report. Under Idaho’s law enacted in 2021, staff will present a factual report to the Occupational and Professional Licensure Review Committee. The committee will then draft recommendations for consideration by the committee and ultimately the full legislature.
Part Five: The Reporting Process and Voting
The final details of sunset processes include legislative hearings on the recommendations set forth in the report and legislators voting to continue, modify, or sunset a given regulation or regulatory body. Lawmakers must also consider which committee will review the report and vote on what action to take. In some states, like Alabama, dedicated legislative committees will hold a hearing on it first. In other states, some version of a joint legislative audit committee, comprised of members from both the House and Senate, is responsible for the first review of a sunset report. These committees handle other audits and reviews for the legislature as well, like the Joint Legislative Audit Committee in Arizona. Finally, in other states, the committee of reference responsible for hearing all legislation pertinent to their topic area are assigned sunset reviews. In Colorado, for example, a sunset review covering a health care profession would most likely first be heard in a health committee. As with normal bill hearings, members of the public can testify at these hearings and provide input on the sunset reviews. Finally, the committee responsible for consideration of sunset recommendations will draft a bill in response to the report. The legislation will ultimately contain language for the continuation, modification or sunset of a given regulation or regulatory body.
Once the initial hearings occur on the sunset legislation drafted by the committee, reviews proceed through the full legislative process, much like any other bill would. The process culminates with all members of both chambers of the legislature having a chance to review the recommended actions, weigh in and vote on the ultimate continuation, amending, or "sunsetting" an occupational licensing regulation, board, or agency. Suppose the regulation or entity is continued, with or without amending. In that case, it will reside in state statute until the next review is triggered either through legislative request or statutorily set schedule as previously discussed.