How can the Texas Legislature lift the burden that occupational licensing puts on both the state’s economy and individual liberty? North Texas lawmakers focused on that question at a conservative public policy summit last week.
The panel discussion was part of the 2018 Economic Freedom Summit hosted by the Texas Conservative Coalition Research Institute (TCCRI), a state-based public policy think tank run primarily by and for state legislators.
TCCRI invited some of the most conservative Republican lawmakers in the DFW area to participate on the panel, held April 25 in Hurst.
State Sens. Konni Burton of Colleyville and Kelly Hancock of Fort Worth, along with State Reps. Matt Krause and Craig Goldman of Fort Worth and Matt Rinaldi of Irving, were joined by Arif Panju, Managing Attorney with the Institute of Justice, Texas Chapter to talk about the state’s occupational licensing regulations.
Panju opened by noting that when Texas became a state, it regulated only two professions: doctors and dentists. Now, in 2018, Texas regulates over 500 occupations – “which means there are 500 occupations which are inaccessible to Texans without the government’s permission in the form of a license,” Panju said.
Occupational licensing regulations affect one in three Texans, Panju added. The hardest hit are people trying to climb up the occupational ladder and innovative entrepreneurs.
Hancock, who chairs the Senate Committee on Business and Commerce, pointed to last session’s deregulation omnibus Senate Bill 2065 that eliminated over 15,000 unnecessary licensing requirements as a “step in the right direction.” He said the Texas Department of Licensing and Regulation (TDLR) has done a good job of consolidating requirements and recommending areas to eliminate or streamline.
Hancock said his committee is also looking at establishing a legislative process similar to sunset for occupational licensing, so the regulations are reviewed on a regular basis.
Goldman, who’s a member of the House Licensing and Administrative Procedures Committee, agreed with Hancock that the legislature removed a significant number of licensing regulations off the books last session with the help of TDLR. “We’ve had great success,” he said, “and look forward to doing more.”
As a believer in the free market, Burton said she finds it frustrating when government gets more involved in the process of people opening and running a business. “The market is the determiner, not the government,” she said.
Burton, who serves on the Senate’s Criminal Justice Committee, added that from a criminal justice perspective, when someone has paid their debt to society they generally don’t have a lot of funds, so asking them to pay for a license in order to work doesn’t make sense.
Rinaldi said that his view of occupational licensing is that “unless it’s a health and safety issue, it shouldn’t even be considered.” The focus should be on disclosure, he said. If consumers know a person is unlicensed and choose to enter into a transaction, then they should be able to do so.
TCCRI presented the panel with a draft of its model legislation for reforming the state’s regulatory regime that dovetails with Rinaldi’s views.
The Occupational Licensing Consumer Choice Act is a transparency measure that allows workers in an occupation that is otherwise legal to provide a written disclosure to prospective customers that they aren’t licensed and practice without a state-issued occupational license.
The regulatory reform frees workers from unnecessary and burdensome licensing regulations, and empowers consumers to choose workers who best serve their needs whether or not they are licensed by the state.
The legislation also empowers industry groups, trade organizations, and private associations to self-regulate without the participation of government. It has the added benefit of making regulators more efficient by shifting resources away from enforcing occupational licensure and focusing on protecting health and safety, according to TCCRI.
Rinaldi said that providing disclosure rather than licensing improves competition, especially in occupations where consumers don’t care if workers are licensed. For example, he said people choose attorneys — his profession — by reputation, not certification.
“Competition gets rid of licensure when people have a choice,” Rinaldi said.
Hancock believes the legislation would be good for consumers, but “consumers don’t generally come down to the legislature and lobby.” He predicted that objections to the reform will come from people who already have a license.
Burton agreed, adding that conservative reformers need to get the public to understand the benefits of eliminating unneeded licensing regulations.
Panju said that when it comes to occupational licensing, it shouldn’t be a binary question: license or no license. “There is a slew of less restrictive alternatives,” he said. Policymakers should consider what actual harms are being addressed, and whether they are substantiated or speculative.
Hancock noted that Texas is a state known for freedom, but “we don’t look very good” with so many licensing requirements.
“If we’re going to keep Texas growing,” Rinaldi added, “we need new and innovative ways to foster competition.”
Occupational licensing reform based on TCCRI’s model legislation may be one way to boost the state’s economy — and individual liberty — that the Texas Legislature considers during its 2019 session.