Texas DOGE Unveiled: A New Era in State Regulatory Practices

Transcript

Speaker 1: 0:01

This podcast is for educational purposes only, does not constitute legal advice and does not create an attorney-client relationship. If you need legal assistance about a legal problem, contact an attorney.

Speaker 3: 0:13

Welcome back to Know your Regulator, the podcast that inspires you to engage. I am your host, simone Murphree, and today we’re digging into Senate Bill 14, also known as the Texas Doge Bill, a newly signed law that will fundamentally shift how regulatory agencies in Texas operate. If you hold a professional license from health care to trades to financial services you’ll want to hear how this law can affect the rules that govern your license, and even how disputes and enforcement actions are handled in the future, and how disputes and enforcement actions are handled in the future. I’m joined today by attorneys from the Bertolino Law Firm, all experts in administrative law and professional license defense. So we’ll get into it. Let’s start at the beginning. Sb 14, or the Texas Doge Bill, was just signed into law. Can you walk us through the goal of this legislation, what sparked it and what exactly it creates?

Speaker 4: 1:07

Sure, I can jump in first. I think most people are probably familiar with the federal version of this. That’s been kind of in the news in the last few months and so a lot of states, it seemed, have been starting to either create legislation like this or committees like this based on the federal conduct that was going on. And so at this point it looks like you know, this is supposed to streamline efficiency, kind of like the federal version I read. You know Governor Abbott said it’s supposed to check the growth on the administrative state, really trying to continue to like, safeguard and promote the idea that Texas is this business forward state. So I think the main goal, at least from what we’ve been seeing from those that were like proponents of it and then from the governor, is that like this is what’s going to protect Texas businesses and prevent, you know, this unnecessarily unneeded regulation surrounding that.

Speaker 2: 2:14

It’s. It’s certainly got a lot of connection to all of the federal DOJ efforts you see in the news, but it’s also a long-standing political theme. I mean it’s not something new that state legislators and the governor’s office have only recently started talking about. I mean you can go back in time and look at things like the Tea Party movement. You can see the governor’s office created several years ago a division in their office to address regulatory rules. There’s been periodic Sunset Commission reviews of things, so a lot of these. This is just maybe the more recent version of addressing some of these issues, you know, because it’s current in the news, but it’s certainly got a history that goes back many, many years because it’s current in the news, but it’s certainly got a history that goes back many, many years.

Speaker 3: 3:11

Yeah, are there any other laws or policies that are in?

Speaker 2: 3:13

place that can kind of relate to this bill. I think one that the viewers may be familiar with is the Sunset Review Process. Remember, this bill is focused on the governor’s office and it’s creating this efficiency office within the governor’s office. But remember that we’ve got three co-equal branches and the legislature has a sunset advisory commission made up of legislators and public members and they review state agencies every 12 years, including their rulemaking authority and the rules that they have in place. So that’s at least one way, from a more legislative centric perspective, that efficiency is looked at and changes are proposed.

Speaker 3: 3:59

Interesting, good to know. Do you know how those two, how this Doge bill and Sunset, might interact with each other in the future? Well, at this point.

Speaker 2: 4:09

I think they are kind of separate focuses. The Doge bill is focused more on what the governor’s office can do. It has some provisions that talk about the court’s role, but I think it’s kind of housed in the governor’s office, and so I think that that’s very different from the sunset review process, which is kind of a legislatively oriented process. But you never know what may happen down the road as things progress. I think it will be very interesting to see how this public policy pronouncement manifests itself and as we move forward.

Speaker 3: 4:49

Yeah, absolutely Well. This new office is not just reviewing rules, it’s potentially reshaping how entire agencies function. What kind of impact might that have for state agencies that regulate license holders?

Speaker 1: 5:06

Of course, I think a reshaping is occurring and a plethora of things may happen. And a plethora of things may happen, One with the consolidation of government, and this is what Texas DOJ will do. It will essentially shrink the government in the regulatory landscape. Therefore, if you have a license, if you have anything pending before any of these boards, it may slow down the process. Also, too, we do have the Code Construction Act. If you have any rights that are afforded to you under any previous rules, and with the changing of the rules, then that also may further slow down the process, because it has to be evaluated which rules may apply to a particular process for a particular license holder.

Speaker 3: 5:54

So, moving forward to a particular process for a particular license holder, so moving forward, we will definitely see a slowdown in the process with various boards. Yeah, interesting, interesting. And what could this mean for an agency’s ability to respond to, like an emerging situation like the teacher scandal? You know, how could that affect TEA’s ability to respond to something like?

Speaker 1: 6:22

that oh well with those types of issues because they’ll be so high on the list, because the boards are there to protect the public, I think they will still have an avenue to do that. But when it comes to everyday processes for license holders submitting applications and other types of things that need to be handled before the board, those processes may definitely experience a slowdown.

Speaker 3: 6:51

Gotcha, okay, okay and like things like being docketed kind of things like that, like throughout, basically, anything kind of touching a license holder you’re saying could be potentially slowed down by this, absolutely Gotcha. Well, when you guys are defending licenses, we know that rules are everything. So how could SB 14 affect those licensees who are currently under investigation or for those who are trying to stay compliant?

Speaker 2: 7:34

this is very typical for legislation that if you already have something that’s happened in the past that’s currently being evaluated, a complaint, some kind of disciplinary thing, that’s going to be covered under the old law, so you’re not going to have to worry about you know, you’re in the middle of a complaint investigation and suddenly they’re changing the rules on you. This is going to apply to rules that get proposed and approved and adopted going forward. It’s kind of looking prospective and not going to be applied retroactively, and that’s generally the rule when legislation gets passed. Unless there’s very specific language, you generally view it as prospective, moving forward.

Speaker 3: 8:13

That’s good. That’s really good for our license holders to know. For those who are trying to stay compliant, could we see a potential gray area where you know people might be caught without proper guidance?

Speaker 2: 8:26

Yeah, Well, I don’t think, simone, that’s too likely.

Speaker 2: 8:32

I mean, the gist of this Doge bill is really trying to go through the regulatory process and find where there’s room for efficiencies, where maybe there’s too much red tape or too many requirements, things that hopefully are not substantive right Because the legislature passes the bills, the actual laws that substantively address consumer protection and license holder obligations.

Speaker 2: 9:02

What this bill is really focused on is hey, how do we do that efficiently If there are things that extra steps that don’t need to be done, if there’s red tape, extra steps that don’t need to be done, if there’s red tape, extra applications or forms that have to be filled out? You know, the goal is to try and make things more efficient and there’s always room for efficiency and growth. I mean, with such a large government and so many wide varieties of processes governing everything you know pretty much under the sun, every type of profession, occupation or even, you know, industries, it’s there’s definitely things I think we’re going to find over time that can be done better, more efficiently and with less red tape. So that’s what I think really the gist of the, the focus of the bill, is.

Speaker 3: 9:52

So we kind of were talking about it a little bit before this episode. One of the biggest pieces of SB 14 is about the courts no longer having to defer to agencies’ interpretations of their own rules. Can one of you break that down for us? What does that really mean?

Speaker 5: 10:10

I’ll take that. Does that really mean I’ll take that? You know? I think that this is probably one of the most significant changes in the law, and what this is called is what’s called judicial deference. And historically, what Texas courts have done is they’ve deferred to the state occupational licensing board’s interpretation of the law, rather than decide the meaning of the laws on their own. And you know the historical or the policy reason behind that was the belief that judges lacked the knowledge to interpret these technical language that’s in the, in the statutes and, and that the agencies are better suited to do that rather than a judge. Agencies are better suited to do that rather than a judge. And again, historically, what it did is it allowed these government agencies that do the interpreting it almost always in a way that favored the agency’s own interests. So what?

Speaker 5: 11:05

it did is really created a systemic bias that favored the government going into, you know, a lot of these cases and now, with this new change in the law, judicial deference is basically no longer current law. You know, now the judges can do the interpretation, and what it does now is it, you know, explains how this affects the judicial review. And what it does is, in many ways, it empowers the licensees and gives them more power, and that’s, you know, a huge change.

Speaker 3: 11:40

Yeah, absolutely. And would you guys say that this maybe we will see more appeals and more challenges in court, and you know what are some of the things that license holders should look out for with this big change? I mean, it absolutely could.

Speaker 5: 11:58

I mean. What it does is it creates the new opportunities for these license holders to challenge these regulations in court. Really, it begins to level the playing field a little bit more. You know you’ve already had these agencies that have advantages going into appeals like you know there’s a. You know you’ve already had these agencies that have advantages going into appeals. Like you know there’s a. You know the standard of review, for instance. You know the. You know the agency’s decisions. In order to overturn them, you often had to challenge the standard review of what’s called substantial evidence and whether it was arbitrary, capricious or an abuse of discretion. And those are kinds of advantages that these agencies have, particularly on appeal. So what this has done is, you know, levels the playing field a little bit more. It allows the you know the license holders to, you know, to pursue their cases and have better defenses and better arguments to be made.

Speaker 2: 12:52

Completely agree with Tony.

Speaker 2: 12:53

I think it does level the playing field we saw in recent years at the federal level.

Speaker 2: 12:58

The US Supreme Court has reversed this same concept in the federal system and said no, we’re not going to defer to an agency’s interpretation of the laws they’re responsible for in their regulatory sphere.

Speaker 2: 13:15

And so what you saw in Texas for many years was a decision from the Texas Supreme Court it’s called Texas Citizens and again it kind of gave that advantage to state agencies. And so as long as the state agency’s interpretation was reasonable and was based, you know, wasn’t contrary to the plain language, then it was difficult for a license holder, when directly competing with the agency making legal arguments, to say no, judge, you ought to follow our interpretation, because there was a whole series of cases, including Texas citizens, that said no Judge, you need to defer to the state agency because there’s the experts on this. So to Tony’s point I really think it is going to revolutionize the landscape in terms of, hey, we’re on a playing field. Both the regulated and the regulatory agency can bring legal arguments to the judge, but at the end of the day they’re on equal footing and the judge is going to make the decision.

Speaker 3: 14:18

Yeah, no, it really sounds like it has the potential to kind of shake things up. Well, to wrap up, guys, I’d love to hear just one piece of advice from each of you what are something that license holders can do today to prepare for these changes coming with the Doge bill?

Speaker 5: 14:37

I think that it’s important that you know, if you are a license holder and you’re listening or watching this podcast is that you really educate yourself very well in this new change. You know and have a good understanding of what this bill does and how it could potentially impact your, your livelihood and your career and your and your work. And you know and, coupled with that, I also advise that you know you, if you are in a place where you know a position in your life where you’ve received a complaint, notice of some sort and you’re facing an investigation and that could ultimately end up in a court, you know make sure that you’re hiring the right lawyer and you know you’re finding attorneys that have experience in this area, that have knowledge in this new change in the law, as we mentioned before. You know this significant change in judicial deference.

Speaker 2: 15:45

You know this significant change in judicial deference. You know these are important parts of this law that an experienced lawyer will be able to use and, in a word, I would say it’s opportunity. There’s two opportunities here this bill presents. One is license holders may have new or aggressive legal arguments because they’re on equal footing with the agency when it comes to interpreting the laws because of this change. The second is the opportunity that we preach every day here in the Know your Regulator podcast is to engage with your regulator. This bill basically gives you a whole other avenue to approach the regulatory world. Talk to the governor’s office, get involved, make suggestions about how your industry could be more efficient, more streamlined. Maybe you have an idea or a suggestion about something that needs to change. This is, in a way, the government, the legislature and Governor Abbott saying hey, we want to hear from you, and so I would say opportunity. Those are the two big opportunities to take away from this bill, I agree.

Speaker 1: 16:49

I agree with Troy. This is a huge opportunity to get involved with your government and be the face of your industry and really effect change when these rules are being made and legislation is being passed.

Speaker 4: 17:04

So definitely use it as an opportunity to get involved yeah, I would echo what everybody says and I would say to like listeners out there, if they, um, you know, maybe had applied for a license in the past or there were certain issues that come up, you know had come up or certain legal um problems, like troy said, this might be your opportunity to try again, you know.

Speaker 4: 17:27

So, if you, you know, had issues before now, like we’ve said, this might actually benefit the people as opposed to the agencies, and so it’s. It is important to kind of stay abreast of what’s going on and what this you know, doge is doing. And then if you think that you, you know, would like to, you know, try again in a different field, or try, you know, to obtain a license, certainly reach out to a lawyer that’s going to be able to like navigate that you know, better than you may be able to, I think that’s a great point Carrie just made, because with these changes, it may open up access to individuals that may want to obtain a license that didn’t have that access before.

Speaker 1: 18:09

So definitely just educate yourself. Like Mr Berlino said, get involved and take advantage of the opportunities that this may present.

Speaker 3: 18:19

Awesome. Yeah Well, there’s definitely still a lot to see about how SB 14 will really play out, but it’s definitely clear that big change is coming in license holders. You do not want to be caught off guard. Thank you to our wonderful attorneys for joining us and thank you to our viewers for tuning in and listening to Know your Regulator. If you found this helpful, be sure to follow, subscribe, share with your colleagues. Until next time, stay inspired and continue engaging with your regulator.

Speaker 4: 18:49

Know your Regulator. The podcast that inspires you to engage.