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States’ occupational licensing reform efforts gathering steam

by Jon Davis ~ September 2017 ~ Stateline Midwest »
If there is an issue left that can unite all colors of our political rainbow, it might be occupational licensing reform. Think tanks from the Brookings Institution to the Institute for Justice support state-level reforms to reduce the licensure barriers for those seeking to open their own businesses or work across state lines.
The current push for occupational licensing reform got a boost from the Obama Administration’s 77-page report, “Occupational Licensing: A Framework for Policymakers,” released in July 2015 (see sidebar, this page). That report was “a call to action,” says Elizabeth Whitehouse, director of education and workforce policy for The Council of State Governments.
In the Midwest, Michigan in 2015 enacted SB 372, which established reciprocity for firefighters from other states, so long as their training meets or exceeds Michigan’s training requirements. In 2016, Nebraska enacted LB 898, exempting people who engage in natural hair braiding from having to get a cosmetology license. South Dakota (HB 1048) and Indiana (HB 1243) enacted similar legislation this year.
Indiana Gov. Eric Holcomb also signed HB 1394 into law on April 27, requiring local governments to waive their occupational license fees/taxes for veterans, military personnel on active duty, or the indigent.
Nebraska’s Unicameral Legislature this year approved six bills, all signed by Gov. Pete Ricketts, streamlining some occupational and licensure requirements (LB 16 and LB 88), adopting the Interstate Medical Licensure and Nurse Licensure compacts (also LB 88), making licensing optional for executive bank officers at state-chartered banks and loan officers at credit unions (LB 140), and eliminating license requirements for motor vehicle salespeople (LB 346). In Wisconsin, pending AB 369 would create an “Occupational License Review Council” to review current licenses and make recommendations for modification or elimination of licenses, while AB 370, also pending, would create a “self-certification” registry that would let people certified by state-approved support organizations use the title “state certified” in their practices.
Compacts to the rescue?
The Council of State Governments is working with the National Conference of State Legislatures and the National Governors Association’s Center for Best Practices on a three-year project titled “Occupational Licensing: Assessing State Policy and Practice,” with the goal of enhancing the portability of occupational licenses via an interstate compact.
The project, which began this summer, will identify licensing criteria to ensure that existing and new licensing requirements are not overly broad, burdensome or restrictive, and that they do not create unnecessary barriers to labor market entry, and improve the portability and reciprocity provisions for selected occupations across state lines.
The project will identify and evaluate the licensing requirements for 34 occupations across all 55 states and territories. A comparison report will look at the criteria — including work experience requirements, fees and applications, personal background documentation, licensure portability and other requirements — for each of the 34 occupations.
This research will result in the “National Occupational Licensing Report,” due in December. Reports on special populations such as military spouses and veterans, unemployed or dislocated workers, immigrants with work authorization and individuals with criminal records, are scheduled for delivery in July 2018.
A final report and a process to establish an interstate compact are due in December 2019. According to CSG’s National Center for Interstate Compacts, active licensure compacts include:
The Enhanced Nurse Licensure Compact which allows RNs and licensed practical/vocational nurses with a license in a participating state to practice in any other participating state, with 26 member states including Iowa, Nebraska, North Dakota and South Dakota.
REPLICA (the Recognition of EMS Personnel Licensure Interstate CompAct), with 11 states including Kansas. Enabling legislation was introduced in Minnesota (HF 324) but stalled in committee.
The Physical Therapist Licensure Compact, with 14 states including North Dakota.
The Interstate Medical Licensure Compact, which allows qualified physicians to practice medicine in a participating state, with 22 states and 29 medical and osteopathic boards in those states. Participating Midwestern states include Illinois, Iowa, Kansas, Minnesota, Nebraska and Wisconsin.
Legislation to join the IMLC has been introduced in Michigan (HB 4066). Enacting legislation was signed into law in South Dakota in 2015, but the state’s implementation is delayed pending discussions between the compact group and the FBI over criminal background checks required by the compact.
The issue of occupational license portability has been simmering for a while, but has become more prominent as new practitioners enter their professions, says Daniel Logsdon, manager of the NCIC.
“States are taking a methodical, thoughtful approach to this, and that’s the nature of interstate compacts,” Logsdon says. “I think states are coming to realize that if they want the full effect of law and enforceability, interstate compacts have a distinct advantage over model legislation or reciprocity agreements.


2015 White House report offers states a road map to licensure reform

Two years ago, the Obama Administration released a comprehensive overview of occupational licensing, tracing its development and making recommendations for reform. For example, the report noted that more than 25 percent of U.S. workers need a license, up from less than 5 percent in the early 1950s. That’s partly a result of employment gains in jobs that require licenses, like education and health, but more so due to an increase in the number of occupations requiring licensure.
And while licenses create higher-quality services and/or improve public health and safety — when designed and implemented carefully — the report noted that others actually reduce employment opportunities, lower wages and increase consumer costs. Moreover, it said occupational licensing falls disproportionately on military families, immigrants and those with criminal convictions, often preventing them from fully contributing to their communities and economies. Recommended best practices include:
That last point is becoming more relevant with the rise of “telework” — the ability to conduct business over the internet — and distance learning. “It’s really driven by societal change,” says Daniel Logsdon, manager of The Council of State Governments’ National Center for Interstate Compacts. “We’re a much more mobile society now and people don’t see why state borders should be a barrier to doing business.”