Sunset Advisory Commission Recommends Eliminating
Code Enforcement Officer Licensing Program
The Texas Sunset Advisory Commission is a state agency led by a group of state representatives and senators. The “sunset” process is simply a periodic review of state agencies to ensure that they are performing efficiently and/or whether they should be changed or eliminated. Sunset staff “performs extensive research and analysis to evaluate the need for, performance of, and improvements to the agency under review.” The review typically results in legislation to implement the recommendations of the commission.
During the current sunset cycle, the Texas Department of State Health Services (DSHS) is under review. One issue has resulted in a recommendation that would affect cities. “Issue 3” in the staff report concludes that “the unmanageable scope of DSHS’s regulatory functions reduces needed focus on protecting public health.”
Why is that recommendation relevant to cities? One component of DSHS’s regulatory functions is the “Code Enforcement Officer Licensing Program.” The program is a voluntary licensing scheme that allows an applicant with a GED or high school diploma and at least one year or more of experience in the field of code enforcement who successfully completes training and passes an exam to use the title of “Code Enforcement Officer.” (No other person, even if performing the same job with a city, can use the title.) There are currently 2,201 licensed code enforcement officers in the state.
According to the Sunset staff report:
[T]he state establishes qualifications to determine who can perform these jobs and the standards by which they must be performed, and then enforces these standards. Such significant intrusions into the workplace must be justified by a clear threat to the health, safety, or welfare of the public.
Even with such detailed analysis, any attempt to scale back or streamline state regulation is difficult due to an array of factors that seem to favor the creation and perpetuation of regulatory programs…[t]hese factors include the active interest of the regulated community to be regulated and to exert control once regulation has been established…
Sunset staff found that “continued regulatory expansion combined with shrinking resources has created an unmanageable undertaking and ineffective structure at DSHS.” They believe that fulfilling multiple responsibilities with limited resources means high-risk programs are stretched thin and low-risk programs are forced to the margins. Because of the magnitude of any potential decision to deregulate an activity or occupation, Sunset staff concluded that only programs meeting a number of criteria would be considered for “deregulation” (i.e. elimination). The following chart shows the criteria related to code enforcement officer licensing:
According to the report, “[s]ome programs merely prohibit the use of a title, making regulation optional.” That is what the current code enforcement officer licensing scheme does. Pursuant to that logic, the staff recommended eliminating the program.
Interestingly, DSHS is essentially self-funded. This means that it pays for itself by imposing fees on those it regulates. As with other state agencies, the recent state budget trend has been to impose a “hidden tax” on those being regulated. (For example, the Texas Commission on Fire Protection generates – from fees on firefighters that are typically paid by cities – an additional $3 million that goes to fund general state operations.) The staff recommendation to eliminate the programs would actually cost the state’s general fund $1.6 million per year. That’s because DSHS would “no longer [be] collecting excess fees from the deregulated programs that are currently deposited in the general revenue fund.” In plain English, this all means that code enforcement officers (cities) have been voluntarily paying a “hidden state tax” through higher than necessary certification fees.
The Sunset Commission has sent the code enforcement officer issue to a subcommittee for further review. The League will seek input from its General Government Legislative Policy Committee on August 15 to determine the recommended position on the issue.