A Sensible Sunset Review Process for Kansas

Chair Estes, Vice Chair Olson, Ranking Member Faust-Goudeau, and members of the committee:

My name is James Broughel, and I am a senior research fellow at the Mercatus Center at George Mason University. I am also an adjunct professor of law at Antonin Scalia Law School at George Mason University. My research focuses on regulatory procedures, cost-benefit analysis, and economic growth. Thank you for the opportunity to submit this written testimony today on regulatory reform in Kansas.

The US Department of Health and Human Services (HHS) recently finalized a regulation that attaches a sunset provision to most of its rules. My own research helped inform the economic analysis that accompanied that regulation. As part of that effort and my previous research, I learned a number of lessons that could be applicable to reforms being considered before this committee in Kansas.

• Without an enforcement mechanism, such as a sunset provision, periodic review requirements often lack teeth. Although many governments have in place requirements to review existing regulations on the books, reviews are often not taken seriously owing to a lack of an enforcement mechanism. A sunset provision is a reliable way to incentivize regulatory agencies to periodically review their rules and update them to reflect evolving technology and circumstances.
• Many jurisdictions have sunset review procedures in place, and they are orderly affairs. Therefore, there is nothing unusual about a sunset provision. States, the federal government, and numerous countries utilize sunset provisions as a way of spurring periodic reviews not just of regulations, but of laws, and even of entire administrative agencies. These reviews tend to run smoothly, to not be disruptive, and to not raise significant uncertainty for stakeholders.
• It can make sense to exempt certain regulations from sunset review. When HHS finalized its recent sunset regulation, it exempted certain classes of rules, some of which were already being reviewed on an annual basis under separate requirements. States may also find it reasonable to exempt certain classes of rules, including those rules that might have been implemented to prevent the federal government from encroaching on the state’s sovereignty.

To summarize, sunset provisions are a useful enforcement mechanism to spur periodic review of regulations. They are commonly employed by governments all over the world and tend to be uncontroversial in their operation. However, it can also make sense to exempt certain classes of rules from this process.

Attached is a copy of a report I wrote about the benefits of HHS’s recently finalized sunset regulation. In that report, I estimate that the benefits of the regulation are likely to far outweigh the costs. I also attach the Federal Register notice for the HHS sunset regulation, which includes a useful review of the academic literature on periodic review of regulations in general and on sunset provisions in particular. Please feel free to contact me with any questions.

Sincerely,

James Broughel