As Texas strengthens its position as a national leader in economic and business growth, Senate Bill 14 (SB 14)—signed into law on April 23, 2025, and effective September 1—marks a significant shift in the state’s regulatory framework. At its core, SB 14 establishes the Texas Regulatory Efficiency Office (TREO) within the Governor’s Office, tasked with reducing regulatory burdens, streamlining agency rulemaking, and improving transparency for individuals and businesses. TREO’s broad mandate—to identify inefficiencies, analyze regulatory costs, and expand public access to rulemaking information—could reduce friction in the regulatory process while allowing stakeholders to drive reforms.

TREO’s Statutory Mandate and Operational Scope

SB 14 assigns TREO a broad oversight role over the state agency rulemaking process. Its key responsibilities include:

• Identifying Inefficiencies: TREO will help agencies pinpoint ineffective or redundant rules and streamline processes related to rulemaking, regulatory review, and contested case proceedings.[1]
• Analyzing Regulatory Costs: TREO will assist agencies in evaluating the economic and practical impacts of rules on both the state and regulated entities. This includes identifying opportunities to revise or repeal rules to reduce unnecessary costs.[2]
• Reducing Regulatory Burdens: TREO may recommend reducing training hours, minimizing form or data requirements, eliminating or reducing fees, narrowing the scope of regulated activities, or granting waivers and exemptions—provided that public health and safety are not compromised.[3]
• Enhancing Public Access: In partnership with the Texas Secretary of State, Department of Information Resources, and other agencies, TREO will develop a searchable public website, allowing users to access rules by topic, business type, or North American Industry Classification System (NAICS) sector code.[4]
• Publishing Guidance: TREO will issue two primary resources:
  • A Regulatory Economic Analysis Manual, offering best practices for cost-benefit assessments, including employment impact statements and fiscal notes.
  • A Regulatory Reduction Guide, providing plain-language tools to help agencies document and justify reductions in regulatory burdens.[5]
• Stakeholder Engagement: TREO may convene a Rulemaking and Regulatory Efficiency Forum to solicit feedback from businesses, regulated entities, academic institutions, and other stakeholders.[6]
• Biennial Reporting: TREO must submit a public report by December 1 of each even-numbered year to state leadership, detailing its activities and proposing legislative recommendations.[7]

TREO will also coordinate with a newly-created Texas Regulatory Efficiency Advisory Panel, composed of subject-matter experts serving in a non-compensated capacity.[8] Notably, TREO is prohibited from recommending the repeal of rules that ensure public participation in the rulemaking process.[9]

Limitations on TREO’s Authority

While TREO wields broad authority over state-initiated regulations, its power is statutorily limited when addressing rules that originate from federal mandates. For example, regulations adopted by the Texas Commission on Environmental Quality (TCEQ) under federally delegated programs—such as the State Implementation Plan (SIP) required by the federal Clean Air Act—must comply with federal standards and remain subject to EPA approval. In such cases, TREO’s role may be narrowly confined to procedural improvements, such as simplifying forms or clarifying guidance materials, rather than initiating substantive regulatory changes.

Key Questions Ahead

TREO’s integration into the regulatory process raises several open questions that businesses should monitor:

1. What will be the scope of TREO’s involvement in agency rulemaking?
   SB 14 does not specify whether TREO will serve in an advisory capacity or conduct a direct review of draft rules. If TREO engages at early stages—especially for high-impact regulations—its input could alter rule content or extend timelines for finalization.
2. Will TREO improve the rigor of regulatory cost-benefit analyses?
   While the Texas Administrative Procedure Act requires agencies to produce economic impact statements, the standards are vague, and agencies have broad discretion. TREO’s forthcoming Regulatory Economic Analysis Manual could bring needed consistency and elevate the quality of these analyses, particularly regarding indirect costs.
3. What effect will TREO have on rulemaking timelines?
   Although TREO’s goal is greater efficiency, its additional layer of review and documentation may initially lead to delays—especially for complex or controversial rules.

Business Implications

The creation of TREO offers both immediate and long-term potential benefits for regulated entities:

• Improved Access to Regulatory Information: The centralized online portal promises to simplify the navigation of rules, forms, and filing requirements by business type or industry classification.
• Reduced Compliance Costs: TREO’s authority to recommend the repeal or modification of burdensome state rules could yield cost savings across sectors.
• Opportunities for Stakeholder Influence: Through its advisory panel and potential forum, TREO offers a new venue for businesses to help shape regulatory reform.
• Transparency Through Reporting: Biennial public reports will offer insight into the agency’s progress and signal where additional legislative changes may be needed.

Conclusion

Senate Bill 14 marks a significant shift in Texas’s approach to regulatory policy, emphasizing simplification, cost reduction, and greater transparency. While TREO’s full impact will unfold over time, businesses should stay informed, review TREO’s forthcoming guidance and reports, and engage in rulemaking discussions where possible. Active participation can help shape a regulatory environment that reduces compliance burdens and supports long-term investment and innovation in the state.

[1] Id. § 465.0052(a)(1)-(2).

[2] Id. § 465.0052(a)(2).

[3] Id. § 465.0052(a)(4).

[4] Id. § 465.0052(a)(3); § 2001.007(e).

[5] Id. §§ 465.0053, 465.0054.

[6] Id. § 465.0055.

[7] Id. § 465.0151.

[8] Id. §§ 465.0101, 465.0103, 465.0104.

[9] Id. § 465.0052(c).