By: King, et al.  S.B. No. 14          (In the Senate - Filed March 6, 2025; March 6, 2025, read   first time and referred to Committee on Economic Development;   March 11, 2025, reported favorably by the following vote:  Yeas 3,   Nays 0, two present not voting; March 11, 2025, sent to printer.)Click here to see the committee vote     A BILL TO BE ENTITLED   AN ACT     relating to reforming the procedure by which state agencies adopt   rules and impose regulatory requirements and the deference given to   the interpretation of laws and rules by state agencies in certain   judicial proceedings.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  This Act may be cited as the Regulatory Reform   and Efficiency Act.          SECTION 2.  Subtitle E, Title 4, Government Code, is amended   by adding Chapter 465 to read as follows:   CHAPTER 465. REGULATORY AND RULEMAKING EFFICIENCY   SUBCHAPTER A. GENERAL PROVISIONS          Sec. 465.0001.  DEFINITIONS. (a) The definitions in   Chapter 2001 apply to this chapter.          (b)  In this chapter:                (1)  "Institution of higher education" has the meaning   assigned by Section 61.003, Education Code.                (2)  "Office" means the Texas Regulatory Efficiency   Office.                (3)  "Panel" means the Texas Regulatory Efficiency   Advisory Panel.          Sec. 465.0002.  APPLICATION OF SUNSET ACT TO OFFICE AND   PANEL. (a)  The Texas Regulatory Efficiency Office and the Texas   Regulatory Efficiency Advisory Panel are subject to Chapter 325   (Texas Sunset Act).          (b)  Unless continued in existence as provided by Chapter 325   (Texas Sunset Act), the office and panel are abolished September 1,   2037.   SUBCHAPTER B. TEXAS REGULATORY EFFICIENCY OFFICE          Sec. 465.0051.  ESTABLISHMENT OF OFFICE. The Texas   Regulatory Efficiency Office is established as an office within the   office of the governor.          Sec. 465.0052.  PURPOSES OF OFFICE. (a) The office is   established to:                (1)  identify and expand opportunities for   implementing efficiencies in:                      (A)  the process by which state agencies adopt   rules;                      (B)  the regulatory review process; and                      (C)  the manner in which contested cases are   conducted;                (2)  assist state agencies in identifying:                      (A)  unnecessary and ineffective rules;                      (B)  the effect and cost to this state and   regulated persons of the agencies' rules and proposed rules; and                      (C)  opportunities to repeal or amend rules to   provide effective protection to the public with the least cost and   inconvenience to regulated persons;                (3)  coordinate with the secretary of state, the   Department of Information Resources, and other state agencies in   the secretary of state's efforts under Section 2001.007 to:                      (A)  improve public access to information   regarding state agency rules, forms, and filings; and                      (B)  create an interactive Internet website for   use by the public to search and obtain information regarding rules,   forms, and filings applicable to specific regulated occupations,   industries, professions, and activities;                (4)  establish a goal for each state agency to reduce   rules or other regulatory requirements, including by:                      (A)  eliminating unnecessary or ineffective rules   or other regulatory requirements; and                      (B)  reducing the inefficiencies resulting from   rules or other regulatory requirements adopted by the agency by:                            (i)  reducing required training hours;                            (ii)  reducing the number of forms a   regulated person is required to complete;                            (iii)  reducing the amount of information   required by forms that a regulated person is required to complete;                            (iv)  reducing the amount of or eliminating   fees imposed by the rules;                            (v)  reducing the number of activities   covered by the rules; or                            (vi)  creating waivers for or exemptions   from the rules under certain circumstances; and                (5)  prepare and publish written manuals, guides, or   other publications as required by this chapter.          (b)  The office shall coordinate with the panel, state   agencies, and the governor's office to accomplish the purposes of   the office.          Sec. 465.0053.  REGULATORY ECONOMIC ANALYSIS MANUAL. (a)   The office shall prepare and publish a regulatory economic analysis   manual.          (b)  The manual required by Subsection (a) must identify and   describe best practices for state agencies related to:                (1)  preparing a local employment impact statement   under Section 2001.022;                (2)  conducting a regulatory analysis under Section   2001.0225;                (3)  preparing a fiscal note under Section 2001.024;   and                (4)  preparing a note regarding public benefits and   costs under Section 2001.024.          (c)  The office shall ensure that the manual required by   Subsection (a) is written in plain language that may be easily   understood by the public.          Sec. 465.0054.  REGULATORY REDUCTION GUIDE. (a)  The office   shall prepare and publish a regulatory reduction guide.          (b)  The purpose of the guide required by Subsection (a) is   to assist each state agency to:                (1)  meet the goal established by the agency under   Section 465.0052(a)(4); and                (2)  document that the agency met the goal described by   Subdivision (1).          (c)  The office shall ensure that the guide required by   Subsection (a) is written in plain language that may be easily   understood by the public.          Sec. 465.0055.  RULEMAKING AND REGULATORY EFFICIENCY FORUM.   The office shall establish a forum for interested persons described   by Section 2001.021(d) to assist the office and the panel to   accomplish the purposes of the office and panel.   SUBCHAPTER C. TEXAS REGULATORY EFFICIENCY ADVISORY PANEL          Sec. 465.0101.  ESTABLISHMENT OF PANEL. The Texas   Regulatory Efficiency Advisory Panel is established as an advisory   panel to the governor's office, including the office established   under this chapter.          Sec. 465.0102.  ADMINISTRATIVE ATTACHMENT AND SUPPORT. (a)   The panel is administratively attached to the office of the   governor.          (b)  The office established under this chapter shall provide   staff, facilities, and other administrative support necessary to   assist the panel in performing the panel's duties under this   chapter.          Sec. 465.0103.  COMPOSITION OF PANEL. (a) The panel is   composed of the following seven members:                (1)  two members appointed by the governor from a list   provided by the speaker of the house of representatives, including:                      (A)  one member who represents regulated small   businesses; and                      (B)  one member of the public;                 (2)  two members appointed by the lieutenant governor,   including:                      (A)  one member who represents regulated large   businesses; and                      (B)  one member of the public; and                (3)  three members appointed by the governor,   including:                      (A)  one member who holds an occupational license   issued by a state agency;                      (B)  one member employed by an institution of   higher education who conducts research at the institution and has   experience addressing issues related to state agency rules; and                      (C)  one member who represents state agencies that   adopt rules.          (b)  The governor may reject one or more of the nominees on a   list submitted by the speaker of the house of representatives under   Subsection (a)(1) and request a new list of different nominees.          (c)  In making appointments under Subsection (a), priority   shall be given to individuals with expertise in state agency rules   and the rulemaking process, including expertise in regulatory   research, compliance, cost, and impact analysis, and related law   and procedure.          Sec. 465.0104.  TERMS; VACANCY. (a) Members of the panel   serve two-year terms.          (b)  A vacancy on the panel shall be filled in the same manner   and is subject to the same qualifications as the original   appointment.  A panel member appointed to fill a vacancy on the   panel shall serve the remainder of the unexpired term.          Sec. 465.0105.  REIMBURSEMENT FOR EXPENSES.  Members of the   panel serve without compensation but are entitled to reimbursement   for actual and necessary expenses incurred in performing official   duties under this chapter.          Sec. 465.0106.  PRESIDING OFFICER.  The governor shall   appoint one member of the panel to serve as the panel's presiding   officer.          Sec. 465.0107.  MEETINGS.  The panel shall meet at the call   of the panel's presiding officer.          Sec. 465.0108.  PURPOSES OF PANEL. The panel is established   to:                (1)  use the knowledge and expertise of regulated   persons, small and large businesses, institutions of higher   education, and state agencies to identify and expand opportunities   for implementing efficiencies in:                      (A)  the process by which state agencies adopt   rules;                      (B)  the regulatory review process; and                      (C)  the manner in which contested cases are   conducted; and                (2)  assist the office and state agencies in   identifying:                      (A)  unnecessary and ineffective rules;                      (B)  the effect and cost to this state and   regulated persons of the agencies' rules and proposed rules; and                      (C)  opportunities to repeal or amend rules to   provide effective protection to the public with the least cost and   inconvenience to regulated persons.          Sec. 465.0109.  APPLICATION OF OTHER LAW. Chapter 2110 does   not apply to the panel.   SUBCHAPTER D. REPORTING REQUIREMENT          Sec. 465.0151.  BIENNIAL REPORT. (a) Not later than   December 1 of each even-numbered year, the office shall prepare and   submit to the governor and the Legislative Budget Board a written   report that describes:                (1)  the activities undertaken by the office during the   two-year period preceding the date of the report to accomplish the   purposes of the office;                (2)  any findings and recommendations of the office   related to the office's purposes under this chapter; and                (3)  any legislative recommendations of the office to   accomplish and further the findings and recommendations described   by Subdivision (2).          (b)  The panel may assist the office in preparing the report   required by Subsection (a).          SECTION 3.  Section 2001.007, Government Code, is amended by   adding Subsection (e) to read as follows:          (e)  The secretary of state, Department of Information   Resources, and Texas Regulatory Efficiency Office shall jointly   coordinate with each other state agency to establish an Internet   website that allows a person to search the rules and related   information made available by state agencies under Subsection (a)   by:                (1)  the general topic of the rule;                (2)  the type of activity or business regulated by the   rule; and                (3)  if applicable, the North American Industry   Classification System (NAICS) sector code for the type of activity   or business regulated by the rule.          SECTION 4.  Section 2001.024, Government Code, is amended by   amending Subsection (a) and adding Subsection (e) 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 and, to the   extent practicable, written in plain language;                (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)  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)  a request for information related to the cost,   benefit, or effect of the proposed rule, including any applicable   data, research, or analysis, from any person required to comply   with the proposed rule or any other interested person; and                (9)  any other statement required by law.          (e)  For purposes of Subsection (a)(2), the text of a   proposed rule is written in plain language if the text is written   using language the general public, including individuals with   limited English proficiency, can readily understand because the   language is concise and well-organized.          SECTION 5.  Sections 2001.035(a) and (b), Government Code,   are amended to read as follows:          (a)  A rule is voidable unless a state agency adopts it in   substantial compliance with Sections 2001.022 [2001.0225] through   2001.034.          (b)  A person must initiate a proceeding to contest a rule on   the ground of noncompliance with the procedural requirements of   Sections 2001.022 [2001.0225] through 2001.034 not later than the   second anniversary of the effective date of the rule.          SECTION 6.  Section 2001.040, Government Code, is amended to   read as follows:          Sec. 2001.040.  SCOPE AND EFFECT OF ORDER INVALIDATING   AGENCY RULE. If a court finds that an agency has not substantially   complied with one or more procedural requirements of Sections   2001.022 [2001.0225] through 2001.034, the court may remand the   rule, or a portion of the rule, to the agency and, if it does so   remand, shall provide a reasonable time for the agency to either   revise or readopt the rule through established procedure. During   the remand period, the rule shall remain effective unless the court   finds good cause to invalidate the rule or a portion of the rule,   effective as of the date of the court's order.          SECTION 7.  Subchapter B, Chapter 2001, Government Code, is   amended by adding Section 2001.042 to read as follows:          Sec. 2001.042.  JUDICIAL REVIEW OF STATE AGENCY LEGAL   DETERMINATION REGARDING LAWS AND RULES.  Notwithstanding any other   law, in a judicial proceeding in this state, including an action   subject to Section 2001.038, a court is not required to give   deference to a state agency's legal determination regarding the   construction, validity, or applicability of the law or a rule   adopted by the state agency responsible for the rule's   administration, implementation, or other enforcement.  This   section does not prohibit a court from giving consideration to a   legal determination made by a state agency that is reasonable and   does not conflict with the plain language of the statute.          SECTION 8.  Subchapter G, Chapter 2001, Government Code, is   amended by adding Section 2001.1721 to read as follows:          Sec. 2001.1721.  JUDICIAL REVIEW OF QUESTION OF LAW.  (a)     Except as provided by Subsection (b), in any matter brought under   this subchapter, the reviewing court shall review all questions of   law de novo, including the interpretation of constitutional or   statutory provisions or rules adopted by a state agency, without   giving deference to any legal determination by a state agency.          (b)  Subsection (a) does not prohibit a reviewing court from   giving consideration to a legal determination made by a state   agency that is reasonable and does not conflict with the plain   language of the statute.          (c)  Notwithstanding any other law, this section applies in   an action for judicial review of a contested case authorized by law   and other court actions authorized by law that involve a state   agency's legal determination of a constitutional or statutory   provision or a rule adopted by the state agency.          (d)  A law may not exempt an action from the application of   this section except by specific reference to this section.          SECTION 9.  Sections 2001.022(c) and 2001.0221(e),   Government Code, are repealed.          SECTION 10.  (a) As soon as practicable after the effective   date of this Act, but not later than January 1, 2026, the governor   and lieutenant governor shall appoint the members of the Texas   Regulatory Efficiency Advisory Panel as required by Section   465.0103, Government Code, as added by this Act.          (b)  Not later than the 60th day after the date the last   appointment is made to the Texas Regulatory Efficiency Advisory   Panel under Subsection (a) of this section, the panel shall hold its   first meeting.          SECTION 11.  Sections 2001.024, 2001.035, and 2001.040,   Government Code, as amended by this Act, and the repeal by this Act   of Sections 2001.022(c) and 2001.0221(e), Government Code, apply   only to a rule proposed by a state agency on or after the effective   date of this Act. A rule proposed before the effective date of this   Act is governed by the law in effect on the date the rule was   proposed, and the former law is continued in effect for that   purpose.          SECTION 12.  Sections 2001.042 and 2001.1721, Government   Code, as added by this Act, apply only to a petition for judicial   review, action for declaratory judgment, contested case, or other   proceeding initiated on or after the effective date of this Act.  A   petition for judicial review, action for declaratory judgment,   contested case, or other proceeding initiated before the effective   date of this Act is governed by the law in effect on the date the   proceeding was initiated, and the former law is continued in effect   for that purpose.          SECTION 13.  This Act takes effect immediately if it   receives a vote of two-thirds of all the members elected to each   house, as provided by Section 39, Article III, Texas Constitution.     If this Act does not receive the vote necessary for immediate   effect, this Act takes effect September 1, 2025.     * * * * *