A new bill aimed at streamlining state agency rules and regulations has received approval from both chambers and is headed to the governor’s desk for signing.
Among other things, Senate Bill 14 will create the Texas Regulatory Efficiency Office (TREO) “to provide critical assistance and direction in identifying rules that are no longer necessary or useful, propose improvements to rules that can reduce their cost or improve their effectiveness, assist agencies in implementing best practices for cost-benefit and impact analyses during rulemaking, and increase accessibility of regulatory information to the public.” The office’s overarching goal is to help state agencies reduce red tape, cut costs, increase effectiveness, and improve transparency.
While TREO is expected to cost $7.6 million to staff and operate for the 2026-27 biennium, the potential economic benefit could be substantial. A recent Mercatus Center study estimated that a 10 percent reduction in state regulations could add $52 billion to Texas’ economy by the year 2037. A more aggressive approach—i.e., a 40 percent reduction in regulations—could mean adding more than a half trillion dollars to the economy by 2037.
Additionally, the bill will require that “rules are written in plain language and that agencies comply with requirements to prepare local-employment-impact statements and government-growth-impact statements.” According to the bill’s House sponsor, Chairman Gio Capriglione, the move toward rule simplification was needed, saying:
“It requires all of this to be written in simple, plain language. Not only should people know what those rules are, we should make it easier for them to understand them without having to hire an attorney or a compliance person.”
A third notable change under the bill is to limit the deference courts give to agency interpretations of laws and rules. The courts can still consider the agency’s position, but they are “not required to defer to agencies’ legal determinations.”
These changes and others are expected to help significantly streamline state agency rulemaking and cut red tape throughout Texas government, which has quietly grown into an enormous challenge. Right now, Texas has “more than 274,000 restrictive regulations contained in over 44,000 adopted rules in the Texas Administrative Code.” To get a sense of how this compares nationally, the Mercatus Center notes that: “Despite its reputation for fostering a probusiness environment, Texas is the fifth-most regulated state in the nation.”
With SB 14’s final passage and, hopefully, its signing in the near future, Texans gain a powerful new set of tools and controls to begin rightsizing the state’s regulatory framework. Once fully implemented, these systems will help ensure that Texas’ economy remains the envy of the nation.
With this victory (mostly) secure, it may be time to start thinking about where to take it next—aka Texas’ local regulatory environment.