Sunset clause is a legal provision which provides for automatic disposition of any law or agency or government programme unless extended. It is considered as an important part of temporary legislation. It delineates the expiration of any law or provision on a fixed date when no extension or renewal of that law is executed. Sunset provision determines the destiny of legislative provisions and acts as a mirror for the evolution of society, economic and political conditions. Sunset clauses permit the coordination of the provisions for changing social and political circumstances and determining the expiration date of unnecessary acts.

There are some elements which need to be fulfilled to include sunset clause in any statute. At first, a determined reason should be considered for attaching this clause into the statute. Secondly, it is necessary to consider that the statute might not be perpetual. Finally, the effects of the sunset provision should be evaluated by legislators with a view to verifying the purposes for containing this clause.

However, in case of renewal or extension of the sunset clause, the burden of proof is shifted to the legislators claiming that sunset clause should be extended and this extension is compulsory. However, before that, an evaluation process is essential for analysing the effects of the sunset clause and its dispositions. The objects of this evaluation process are to justify whether the aim for which this clause was included has been achieved or whether the clause should be extended for a specified period or this extension is obligatory for legal purposes.

As sunset provision is a specific clause for automatic termination of statute or provision, this clause can be useful as a precautionary instrument to access new statutes for appropriate generation and society. Since this provision is the indication of temporary legislation, this clause may be required in case of war, economic crisis, or other extraordinary emergency circumstances. In the United States, the USA Patriot Act enacted a number of sunset clauses in the emergency situation of the 9/11 terrorist attack in 2001. Even in Germany and in Netherlands, sunset clauses were used to prevent excessive bureaucracy and regulatory burdens. Therefore, it can be seen by the practice that sunset clauses are the means to reduce regulatory problems and prevent uncertainty. 

There are some shortcomings of sunset provision, particularly on investments and tax credits. For example, in United States, once this provision was included in the regulations on production tax credits to fuel investment in renewable energy and innovation. This provision was imposed on these tax credits for three years but it appeared to be insufficient and at least three to seven years were required for that project of energy.

The writers are members of Research Wing at A.S & Associates.