Sunset provision

In public policy, a sunset provision or clause is a measure within a statute, regulation or other law that provides that the law shall cease to have effect after a specific date, unless further legislative action is taken to extend the law. Most laws do not have sunset clauses and therefore remain in force indefinitely, except under systems in which desuetude applies.

Origin

The roots of sunset provisions are laid in Roman law of the mandate. At the time of the Roman Republic, the empowerment of the Roman Senate to collect special taxes and to activate troops was limited in time and extent. Those empowerments ended before the expiration of an electoral office, such as the Proconsul. The rule Ad tempus concessa post tempus censetur denegata is translated as "what is admitted for a period will be refused after the period". The same rules were applied in the Roman emergency legislation. The fundamental principle appeared in several areas of legislation and later codified in the Codex Iustinianus (10, 61, 1). The principle was broken when Julius Caesar became dictator for life.

Examples

Sunset provisions have been used extensively throughout legal history. The idea of general sunset provisions was discussed extensively in the late 1970s.[1]

United States

Federal level

In American federal law parlance, legislation that renews an expired mandate is a reauthorization act or extension act. Extensive political wrangling often precedes reauthorizations of controversial laws or agencies. High-profile examples in American law include:

Sedition Act of 1798

Part of the Alien and Sedition Acts, the Sedition Act was a political tool used by John Adams and the Federalist Party to suppress opposition. The authors ensured the act would terminate at the end of Adams' term so that it could not be used by Democratic-Republicans against his own party.

USA PATRIOT Act

Under §224 of the USA PATRIOT Act, several of the surveillance portions originally expired on December 31, 2005.[2] These were later renewed, but expired again on March 10, 2006, and were renewed once more in 2010.[3] The USA PATRIOT Act is set to sunset the following provisions:

Assault Weapons Ban

In 2004 the sunset provision of the Federal Assault Weapons Ban terminated the law.

Budget Act and the Byrd Rule

The Congressional Budget Act governs the role of Congress in the budget process. Among other provisions, it affects Senate rules of debate during the budget reconciliation, not least by preventing the use of the filibuster against the budget resolutions. The Byrd rule, named after its principal sponsor, Senator Robert C. Byrd, was adopted in 1985 and amended in 1990 to modify the Budget Act and is contained in section 313.[4] The rule allows Senators to raise a point of order against any provision that is extraneous, where extraneous is defined according to one of several criteria.[5] The definition of extraneous includes provisions that are outside the jurisdiction of the committee or that do not affect revenues nor outlays.

Importantly for sunset provisions, the Byrd Rule also defines as extraneous provisions that "...would increase the deficit for a fiscal year beyond those covered by the reconciliation measure." Since the Budget Act says the budget resolution covers at least the four years following the budget year, which is typically the year following the year it was adopted, that is the usual period of time. However, budget resolutions have covered periods as long as ten years, so a reconciliation measure may cover the ten years. This rule has the effect of allowing congress members to raise a point of order against any spending increase or tax cut that does not contain a sunset provision that ends it after five or ten years (conceivably longer). (Otherwise, the provision increases the deficit in a fiscal year after the period covered by the budget resolution.) Overcoming a point of order requires cloture, and thus a three-fifths majority of 60 in the Senate. In short, a net effect of the Byrd Rule is to require that any spending increase or tax cut be approved by a majority of 60 if it does not contain a sunset provision. This is intended to assure there is no increase in the deficit after the budget resolution period (though there is an exception if the total effect on the deficit in a particular title is to not increase the deficit, the point of order is not triggered). With the sunset provision, only a simple majority is necessary in the budget reconciliation process.

Estate tax and other tax cuts of 2001

In the Economic Growth and Tax Relief Reconciliation Act of 2001 the US Congress enacted a phaseout of the federal estate tax over the following 10 years, so that the tax would be completely repealed in 2010. However, while a majority of the Senate favored the repeal, there was not a three-fifths supermajority in favor. Therefore, a sunset provision in the Act reinstates the tax to its original levels (and indeed, all tax cuts contained in the Act) on January 1, 2011 in order to comply with the Byrd Rule.[6] As of April 2011, Republicans in Congress have tried to repeal the sunset provision, but their efforts have been unsuccessful. Uncertainty over the prolonged existence of the sunset provision has made estate planning more complicated. However, certain provisions of the Act have had their sunset provision repealed. For example, the education savings 529 plans, also introduced in the Act, were permanently extended by the Pension Protection Act of 2006.[7]

State level

According to the National Conference of State Legislatures, "Colorado, Florida and Alabama passed the first sunset laws in 1976. Texas and 21 other states followed suit in 1977. Eventually, a total of 36 states passed broad sunset statutes"; however, dissatisfaction with the sunset process left only 22 states still using it by 1992.[8]

Texas

The Texas Sunset provision was established in 1977. Under Texas law, all agencies – except universities, courts, and agencies established by the Texas Constitution – will be abolished on a specific date, generally 12 years after creation or renewal, unless the Texas Legislature passes specific legislation to continue its functions.

A 12-member Sunset Advisory Commission oversees the provisions of the Texas Sunset Act. The commission consisting of five members of the Texas Senate and one member from the general public appointed by the Lieutenant Governor of Texas, and five members of the House and one member from the general public appointed by the Speaker of the Texas House of Representatives. Legislative members are appointed for four-year terms, with half of the commission reappointed on or before September 1 of odd-numbered years, while public members serve two-year terms. The chairman and vice-chairman are appointed by the lieutenant governor and speaker, and the chairmanship alternates between the Senate and House every two years. The Commission is assisted by an executive director and staff, who review each agency subject to sunset provisions.

Under the process, each agency must perform for the commission a self-review of its roles and responsibilities, including areas where its duties may overlap those of other agencies and the effect of the agency's abolition on loss of federal funding. The self-review must be completed by September 1 of the odd-numbered year before the year when the agency would be otherwise abolished. The commission must then complete its own review by the following January 1 and hold public hearings by the following February 1.

About 20 to 30 agencies go through the sunset process each legislative session. Constitutionally established agencies are subject to review, but they cannot be abolished under the sunset provisions.

The commission may recommend that an agency be continued in its present form (nearly always with recommendations to the legislature for improvement), consolidated with another agency, or abolished, with its duties either eliminated or transferred to other agencies.

Other states

Alabama has a similar review process with a more limited number of agencies and a review cycle of every four years.[9]

United Kingdom

A sunset clause was introduced by the House of Lords to some parts of the Prevention of Terrorism Act 2005, the act was eventually passed without it.[10]

Canada

In Canada all legislation enacted under Section Thirty-three of the Canadian Charter of Rights and Freedoms (subsection three of the notwithstanding clause) has an implied sunset clause of five years, this being the maximum length of a Parliament or legislature before it must be dissolved for a general election.

The Canadian Anti-Terrorism Act contains a sunset clause that went into effect in February 2007.[11]

Special laws enacted to deal with emergency situations often contain sunset clauses; one of the most infamous special laws, Bill 78, had a sunset clause.

Australia

In 2005, the Australian Government decided to legislate new Anti-Terrorism laws. These laws have a sunset clause of ten years.

In 2007, the Liberal Democratic Party proposed a constitutional amendment to make sunset clauses compulsory in all legislation that lacks the support of a 75% parliamentary supermajority.[12]

The Legislative Instruments Act 2003 legislates the automatic expiry of most legislative instruments (delegated legislation). Starting in 2015 these legislative instruments must be renewed or they expire automatically.[13]

Germany

In the German legislation sunset provisions are applied on several federal levels. The German constitution rules a general sunset provision of six months for emergency legislation. Some federal states, e.g., Hesse and North Rhine-Westphalia sporadically add sunset provisions to bills.

South Korea

A sunset provision can be found in the Corporate Restructuring Promotion Act,[14] which is to facilitate out-of-court workout of insolvent companies. This Act was effective during the period:

i) from January 2001 to December 2005 for the first time; and again
ii) from January 2007 to December 2010.

Now the Act came into force for the third time on May 19, 2011 and will be effective to December 2013. The main content of the Act has been kept intact for the purpose of constant corporate debt restructuring through market functions and promotion of speedy and smooth corporate restructuring, while some minor provisions were modified from time to time.

New Zealand

The Electoral Integrity Act was passed in 1999 to discourage "waka-jumping" in a mixed member proportional parliamentary system. The amendment expired as scheduled in 2005.

References

  1. ↑ Steve Charnovitz, "Evaluating Sunset: What Would It Mean?", in Contemporary Public Budgeting (edited by Thomas Lynch), Washington DC: Transaction Books, 1981.
  2. ↑ USA PATRIOT Act Sunset: Provisions that Expire on December 31, 2005
  3. ↑ Farrell, Michael B. (March 1, 2010). "Obama signs Patriot Act extension without reforms". The Christian Science Monitor.
  4. ↑ The Budget Reconciliation Process: The Senate's "Byrd Rule"
  5. ↑ Summary Of The Byrd Rule
  6. ↑ SSRN-The Budget Process and the 'Sunset' Provision of the 2001 Tax Law by Michael Evans
  7. ↑ Vanguard − Chairman's Corner: A look at the year's sleeper hit
  8. ↑ McNeely, Dave. "Is the sun setting on the Texas sunset law?" The Free Library, 1 May 1994, accessed 19 October 2013.
  9. ↑ Sunset Committee
  10. ↑ Department of the Official Report (Hansard), House of Commons, Westminster (2005-11-09). "House of Commons Hansard Debates for 9 Nov 2005 (pt 3)". Publications.parliament.uk. Retrieved 2011-06-26.
  11. ↑ "Anti-Terrorism Act". CBC. 2007-02-27. Retrieved 2008-03-22.
  12. ↑ "Free Trade". Ldp.org.au. Retrieved 2011-06-26.
  13. ↑ "Legislative Instruments Act 2003". ag.gov.au.
  14. ↑ The English translation of this Act as of May 17, 2010 is available here.

External links

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