89R15304 JCG-F

By: Patterson H.B. No. 5083

A BILL TO BE ENTITLED

AN ACT

relating to the adoption and review of rules by state agencies.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 28.002(m), Education Code, is amended to read as follows:

(m) Section 2001.0395 [2001.039], Government Code, [as added by Chapter 1499, Acts of the 76th Legislature, Regular Session, 1999,] does not apply to a rule adopted by the State Board of Education under Subsection (c) or (d).

SECTION 2. Subchapter A, Chapter 2001, Government Code, is amended by adding Section 2001.008 to read as follows:

Sec. 2001.008. EXPRESS STATUTORY AUTHORITY FOR RULE OR GUIDANCE DOCUMENT REQUIRED. (a) In this section, "guidance document" means any letter, opinion, compliance manual, or other statement issued by a state agency that explains or interprets one or more of the state agency's rules.

(b) A state agency may not adopt a rule or issue a guidance document unless the agency has been granted an express statutory delegation of authority to adopt the rule or issue the guidance document.

(c) For purposes of Subsection (b), a state agency does not have an express statutory delegation of authority to adopt a rule or issue a guidance document solely because the rule or guidance document is reasonably related to the purpose of the state agency's enabling legislation or to a general statutory power or duty of the state agency.

SECTION 3. Subchapter B, Chapter 2001, Government Code, is amended by adding Section 2001.0227 to read as follows:

Sec. 2001.0227. CERTAIN RULES PROHIBITED BASED ON COSTS OF COMPLIANCE; COST-BENEFIT ANALYSES REQUIRED. (a) A state agency shall prepare a cost-benefit analysis for each proposed rule as provided by this section.

(b) The cost-benefit analysis must include:

(1) a cost-benefit analysis estimating for each year of the first six years that the rule will be in effect:

(A) the public benefits expected as a result of adoption of the rule; and

(B) the expected economic costs to persons required to comply with the rule;

(2) an explanation of all assumptions, methods, supporting data, and, if any, discount rates used in preparing the cost-benefit analysis; and

(3) a clear statement of the total expected economic costs to persons required to comply with the rule and the total public benefits expected as a result of the adoption of the rule.

(c) A state agency may not adopt a proposed rule:

(1) for which the cost-benefit analysis under Subsection (b) states that the total expected economic costs to comply with the rule exceed the total public benefits expected as a result of the adoption of the proposed rule; or

(2) if there are alternative methods of regulation that could accomplish the legislature's intent in authorizing the rule and any statutory purposes provided by the legislature at a lower economic cost to persons required to comply with the rule.

(d) If the proposed rule takes effect and remains in effect at least six years, the state agency shall:

(1) solicit from interested stakeholders data regarding the stakeholders' experience and actual economic costs of compliance with the rule; and

(2) conduct a retrospective cost-benefit analysis that compares:

(A) estimates made under Subsection (b)(1) regarding the economic costs of compliance; and

(B) the actual economic costs of compliance based on the data provided under Subdivision (1) and any other readily available data relevant to this purpose.

(e) If a state agency uses a discount rate in preparing an analysis under Subsection (b) or (d), the state agency shall provide:

(1) a reasoned justification for the use of the discount rate; and

(2) another cost-benefit analysis for the same rule that does not include the use of the discount rate.

(f) A state agency that prepares an analysis under Subsection (b) or (d) shall publish on the agency's publicly accessible Internet website all documentation and other materials used to prepare the analysis in a machine-readable format.

(g) A reference to an existing rule under this section includes any amendments to the rule, and, to the extent feasible, the state agency shall prepare the analysis required under Subsection (b) based on the terms of the rule as amended.

SECTION 4. Section 2001.024(a), Government Code, is amended to read as follows:

(a) The notice of a proposed rule must include:

(1) a brief explanation of the proposed rule;

(2) the text of the proposed rule, except any portion omitted under Section 2002.014, prepared in a manner to indicate any words to be added or deleted from the current text;

(3) a statement of the statutory or other authority under which the rule is proposed to be adopted, including:

(A) a concise explanation of the particular statutory or other provisions under which the rule is proposed;

(B) the section or article of the code affected;

(C) if applicable, the bill number for the legislation that enacted the statutory authority under which the rule is proposed to be adopted if the legislation was enacted during the four-year period preceding the date notice of the proposed rule is given; and

(D) a certification that the proposed rule has been reviewed by legal counsel and found to be within the state agency's authority to adopt;

(4) a fiscal note showing the name and title of the officer or employee responsible for preparing or approving the note and stating for each year of the first five years that the rule will be in effect:

(A) the additional estimated cost to the state and to local governments expected as a result of enforcing or administering the rule;

(B) the estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rule;

(C) the estimated loss or increase in revenue to the state or to local governments as a result of enforcing or administering the rule; and

(D) if applicable, that enforcing or administering the rule does not have foreseeable implications relating to cost or revenues of the state or local governments;

(5) the cost-benefit analysis required under Section 2001.0227 [a note about public benefits and costs showing the name and title of the officer or employee responsible for preparing or approving the note and stating for each year of the first five years that the rule will be in effect:

[(A) the public benefits expected as a result of adoption of the proposed rule; and

[(B) the probable economic cost to persons required to comply with the rule];

(6) the local employment impact statement prepared under Section 2001.022, if required;

(7) a request for comments on the proposed rule from any interested person; and

(8) any other statement required by law.

SECTION 5. Section 2001.033, Government Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a) A state agency order finally adopting a rule must include:

(1) a reasoned justification for the rule as adopted consisting solely of:

(A) a summary of comments received from parties interested in the rule that shows the names of interested groups or associations offering comment on the rule and whether they were for or against its adoption;

(B) a summary of the factual basis for the rule as adopted which demonstrates a rational connection between the factual basis for the rule and the rule as adopted; and

(C) the reasons why the agency disagrees with party submissions and proposals;

(2) a concise restatement of the particular statutory provisions under which the rule is adopted and of how the agency interprets the provisions as authorizing or requiring the rule; [and]

(3) a certification that the rule, as adopted, has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority; and

(4) the cost-benefit analysis required under Section 2001.0227 updated to reflect reasonable public commentary on the state agency's calculations of the costs and benefits of the rule or a reasoned justification for why the agency did not update the cost-benefit analysis based on the public commentary.

(c) A state agency rule may not be arbitrary or capricious.

SECTION 6. Section 2001.038, Government Code, is amended by adding Subsection (g) to read as follows:

(g) A respondent subject to an enforcement action by a state agency for the violation of a rule may request a declaratory judgment from the court finding a rule invalid if the state agency lacks express statutory delegation of authority to adopt the rule on which the enforcement action is based, including if the state agency relies on a guidance document to interpret the rule for purposes of the enforcement action. A court shall award a respondent that prevails on the ground provided by this subsection reasonable attorney's fees and court costs. For purposes of this section, "guidance document" has the meaning assigned by Section 2001.008.

SECTION 7. Subchapter B, Chapter 2001, Government Code, is amended by adding Sections 2001.0395 and 2001.042 to read as follows:

Sec. 2001.0395. EXPIRATION OF RULES. (a) Each state agency rule expires on the 12th anniversary of the rule's effective date unless the state agency that adopted the rule readopts the rule before the rule's expiration date in accordance with this section.

(b) The expiration date for a readopted rule is the 12th anniversary of the readopted rule's effective date.

(c) The adoption of an amendment to an existing rule does not affect the expiration date of the rule under this section unless the amendment is made as part of a readoption of the entire rule or chapter of the Texas Administrative Code containing the amended rule.

(d) The procedures of this subchapter required for the adoption of a rule apply to the readoption of a rule under this section, including:

(1) preparing a cost-benefit analysis under Section 2001.0227(b);

(2) providing opportunity for public comment under Section 2001.029;

(3) responding to substantive public comments, as required under Section 2001.033(a)(1)(C); and

(4) providing an updated cost-benefit analysis under Section 2001.033(a)(4).

(e) In readopting a rule under this section, a state agency must also:

(1) provide an assessment of whether the reasons for initially adopting the rule continue to exist;

(2) provide an assessment of whether the rule is obsolete, unnecessary, or duplicative or conflicts with other rules;

(3) consider public comments that provide data and information on the actual economic costs to persons required to comply with the rule;

(4) to the fullest extent practicable, base estimates on expected economic costs to persons required to comply with the rule on data and information described by Section 2001.0227(d)(1); and

(5) publish all notices, analyses, and responses to public comments on the state agency's publicly accessible Internet website.

(f) Each state agency shall with respect to the state agency's rules:

(1) publish on the state agency's publicly accessible Internet website the expiration date for each rule; and

(2) make the expiration date of each rule available through an application programming interface that allows automated access and monitoring of the rules' expiration dates.

(g) The secretary of state shall include a rule's expiration date in the online publication of the Texas Administrative Code in a standardized metadata field that accompanies each section of the code.

(h) Notwithstanding any other provision of this section, a rule does not expire under this section if the governor in writing exempts a rule from the application of this section. On the written request from a state agency, the governor shall exempt a rule that:

(1) is necessary:

(A) to comply with federal law; or

(B) because federal funding is conditioned on the rule remaining in effect; or

(2) is authorized or required by the constitution.

(i) A state agency that administers a rule exempted under Subsection (h) shall every 12 years after the date of the exemption consider less burdensome alternatives to the rule, solicit public commentary on those potential alternatives, and in determining whether to adopt less burdensome alternatives, calculate the expected economic costs to persons required to comply with the rule based on data and information provided by persons subject to the rule and bearing those costs.

(j) On written request by a state agency, the governor may extend a rule's expiration date under this section for a period not to exceed one year following the date on which the extension is granted. A written request under this subsection to extend a rule's expiration date must:

(1) explain the reason the state agency cannot complete the readoption of the rule under this section before the rule's expiration date; and

(2) describe the harm to the public's health, safety, or welfare that would result if the rule expired.

(k) Any extension granted under Subsection (j) must be accompanied by findings affirming the conditions described by Subsections (j)(1) and (2).

Sec. 2001.042. CERTAIN ENFORCEMENT ACTIONS INVALID REGARDLESS OF COMMENCEMENT DATE. An enforcement action brought by a state agency shall be dismissed if the enforcement action is based on the violation of a rule that expired, regardless of whether the enforcement action commenced before the date the rule expired.

SECTION 8. Section 801.022(e), Occupations Code, is amended to read as follows:

(e) Not later than December 31, 2026, the department shall conduct a review under former Section 2001.039, Government Code, of each rule under 22 T.A.C. Part 24. In conducting the review under this subsection, the department shall ensure that license holders and the public have a meaningful opportunity to provide input and recommend changes to the rules.

SECTION 9. Section 2001.039, Government Code, is repealed.

SECTION 10. (a) Notwithstanding Section 2001.0395, Government Code, as added by this Act, a state agency shall assign the state agency's rules that exist on the effective date of this section eight different expiration dates for the purpose of staggering the expiration dates of the rules and implementing that section.

(b) An expiration date assigned to a rule under this section may not be later than January 1, 2040.

(c) Not later than December 1, 2025, each state agency shall report to the governor the expiration dates assigned under this section.

(d) The governor shall publish on the office's publicly accessible Internet website a schedule of all the expiration dates assigned under this section.

(e) This section takes effect September 1, 2025.

SECTION 11. The changes in law made by this Act to Subchapter B, Chapter 2001, Government Code, apply only to a proposed state agency rule for which notice is filed with the secretary of state under Section 2001.023, Government Code, on or after the effective date of this Act.

SECTION 12. Except as otherwise provided by this Act, this Act takes effect January 1, 2026.