The difference between permanent legislation and temporary legislation is the default rule of termination: permanent legislation governs perpetually, while temporary legislation governs for a limited time. Recent literature on legislative timing rules considers the effect of temporary legislation to stop at the moment of expiration. When the law expires, so does its regulatory effect. This article extends that literature by examining the effect of temporary legislation beyond its expiration. We show that in addition to affecting compliance behavior which depends on statutory enforcement, temporary legislation also affects compliance behavior which does not depend on statutory enforcement, and more generally, organizational behavior after a sunset. When temporary legislation expires therefore, it can continue to administer regulatory and other effects. We specify the conditions for this process and give the optimal legislative response.

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European Journal of Law and Economics
Erasmus School of Economics

Fagan, F. (2013). After the sunset: the residual effect of temporary legislation. European Journal of Law and Economics, 36(1), 209–226. doi:10.1007/s10657-011-9219-x