NCIC Summit of the States: A Tested Solution to Today’s Policy Issues

By Debra Miller

This panel examined the evolution and current use of interstate compacts, discuss the history of interstate compacts and examine the scope of interstate problems states now tackle through compacts, with a focus on occupational licensure compacts. Additionally, the panel explored other forms of multistate cooperation and discussed why compacts are viewed as a superior solution to foster interstate cooperation, protect consumers and guard state sovereignty. As policymakers confront issues from health care delivery to infrastructure revitalization, interstate compacts allow states to work collaboratively across state lines to bring resolution to some of America’s most pressing issues with innovation and a unified voice.

• Jeff Litwak, General Counsel, Columbia River Gorge Compact Click here for slides
• Rick Masters, Special Counsel, National Center for Interstate Compacts
 

BIOGRAPHIES

Jeffrey B. Litwak, Counsel, The Columbia River Gorge Commission

The Columbia River Gorge Commission is the interstate compact agency for the Columbia River Gorge National Scenic Area. Litwak’s practice includes interstate compacts, administrative law, land use, state and local government law, and civil appeals. He is admitted to practice in Oregon, Washington, and the U.S. district courts for Oregon and the Western District of Washington, Ninth Circuit, and U.S. Supreme Court. Litwak is also an adjunct professor of law at Lewis and Clark Law School, where he teaches interstate compact law, Oregon land use law, and administrative law.

Rick Masters, Special Counsel, The National Center for Interstate Compacts

Masters is special counsel to CSG’s National Center for Interstate Compacts (NCIC), providing legal guidance on the law and use of interstate compacts, their application and enforcement and bill drafting guidance in conjunction with the various NCIC compact projects. He has been a primary drafter of many compacts including multistate licensure compacts for the professions of nursing, medicine, physical therapy, emergency medical services and psychology. He also provides legal advice to a variety of compact governing boards and agencies and testifies before state legislatures and Congress about compact legislation. He does extensive research and writing in the field of interstate compacts including co-authoring the largest compilation of laws and commentary on the subject published by the American Bar Association in 2016 entitled The Evolving Law and Use of Interstate Compacts 2nd Edition.

NCIC Summit of the States: The Nuts and Bolts – Administering Interstate Occupational Licensure Compacts

By Debra Miller

The U.S. Bureau of Labor Statistics estimates that the number of licensed occupations has risen from 5 percent of the U.S. workforce in the 1950s to about a quarter of the workforce today. Navigating the various state licensing processes can pose a significant challenge for workers due to different rules, regulations, fee structures and continuing education requirements. This panel looked at the rising use of occupational licensure compacts, particularly in the health care sector, to achieve professional licensure portability and reciprocity and the potential impacts on America’s workforce. 

• Moderator: Dan Manz, REPLICA Click here for slides
• Scott Majors, Kentucky Board of Physical Therapy Click here for slides
• Joey Ridenour, Arizona State Board of Nursing Click here for slides
• Diana Shepard, West Virginia Board of Osteopathic Medicine

BIOGRAPHIES

Scott Majors, Executive Director, Kentucky Board of Physical Therapy

Majors has served as executive director for the Kentucky Board of Physical Therapy since 2012. He currently serves as Kentucky’s delegate to the Physical Therapy Licensure Compact Commission. Earlier this year he was elected to serve as a member of the Compact Commission’s Executive Board, and he has been a member of the Commission’s Rules and Bylaws Committee since its inception. Majors came to the Physical Therapy Board from Kentucky’s Judicial Conduct Commission where he served as its executive secretary. He also previously served as prosecuting attorney for the Kentucky Board of Nursing. He has over 30 years of experience working in state government with administrative boards, agencies and commissions, with a focus placed on licensing and regulation, disciplinary procedures, administrative adjudication, and professional ethics.

W. Daniel Manz

Manz served for 25 years as the Vermont Department of Health’s emergency medical services director and the operations and logistics administrator with Vermont’s Office of Public Health Preparedness and EMS. He went on to serve as the executive director of Essex Rescue for five years. He is currently involved in championing the 2018 update to the National EMS Scope of Practice Model and as of July 1, 2018 has been supporting the implementation of the REPLICA EMS Compact.  He is a commissioner on Vermont Public Safety Broadband Commission and also the vice-president of the Vermont Ambulance Association.

Joey Ridenour, Executive Director, Arizona State Board of Nursing

Ridenour’s prior experience includes over ten years as chief nursing officer at a large public hospital, Maricopa Health System. She found her greatest passion to be nursing regulation and served as past president of the Arizona State Board of Nursing ten years prior to being appointed as executive director in 1995. She has also served on the NCSBN Board of Directors and as president for four years. She has served as chair on five NCSBN committees and is the current chair of the NLC Rules Committee. She had been a member of the original NLC since 2002 and served on the NLC Executive Committee for seven years and as chair for four years. 

Diana Shepard , Executive Director, Board of Osteopathic Medicine

Shepard comes from a background in hospital administration. She serves on the Board of Directors of Administrators in Medicine (AIM). She is the AIM Southern representative, which includes Alabama, Florida (MD & DO boards), Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Puerto Rico, South Carolina, Tennessee (MD & DO boards), Virgin Islands, Virginia, and West Virginia (MD & DO boards).

Veterans’ Employment Service Unveils Resource for Military Spouses

By Jay Phillips

On June 28, 2018, the U.S. Department of Labor’s Veterans’ Employment and Training Services, or VETS, announced a professional license and credential finder portal for military spouses. The webpage comes after President Trump’s Executive Order Enhancing Noncompetitive Civil Service Appointments of Military Spouses. The webpage provides a comprehensive one-stop destination for occupational licensing portability, pulls resources from across the federal government, and highlights states with licensing rights for military spouses.

“Military spouses serve alongside our nation’s servicemen and women,” U.S. Secretary of Labor Alexander Acosta said in a press release announcing the webpage. “States should act to remove excessive regulatory barriers to work so that our military spouses can help support their families. This new site highlights states’ efforts to help military spouses secure good, family-sustaining jobs.”

Military spouses can use the portal to search for state laws, regulations and guidelines on occupational licensing. The website also includes information on how occupational licenses can be recognized from one state to another. Many states have specific standards for military spouses to encourage the obtainment of a license in their state. Methodologies range from endorsement, expediting, temporary licenses or a variety of combinations.

The new tool provides spouses with information they need to continue their careers following relocation to another state. Finding solutions for veterans and military families to barriers related to occupational licensing is a priority of CSG. A current CSG project funded by the Department of Labor, Occupational Licensing: Assessing State Policy and Practice, prioritizes veterans and military spouses as a target population for licensure reform.

CSG’s National Center for Interstate Compacts is also a vital resource for military families looking for reciprocity of licensure. Compacts vary in authority and structure based on the occupation but are a proven best-practice for enhancing reciprocity among states in occupational licensing.

Utah Legislation to Reduce Occupational Licensing Barriers

By Ray Williams

Utah’s Department of Commerce issued a 2018 legislative brief that includes a comprehensive and proactive approach to reducing occupational licensing constraints and barriers. Utah is part of CSG’s occupational licensing project, which includes an 11-state consortium that includes Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Nevada, Utah and Wisconsin.

CSG started the occupational licensure project in partnership with the National Conference of State Legislatures and the National Governors Association. Project funding is supported through a $7.5 million grant from the U.S. Department of Labor, or DOL. The DOL project scope focuses on target populations of military spouses and children, immigrants with work authorization, people with criminal records, and unemployed and dislocated workers.

Each state selected their choice of occupational licensure focus from the DOL’s list of 34 target occupations and drafted an action plan detailing their overall strategies in achieving project performance goals. The DOL’s projects goals are:

  • To improve their understanding of occupational licensure issues and best practices
  • To examine existing licensing policies in their state
  • To identify current policies that create unnecessary barriers to labor market entry
  • To create an action plan that focuses on removing barriers to labor market entry and improves portability and reciprocity for select occupations

The Utah Division of Occupational and Professional Licensing, or DOPL, is in a continuous effort to minimize unnecessary regulation while promoting public safety and commerce. The 2018 general session passed several laws detailing their accomplishment of both DOL project goals and their own mission.

Military Families

H.B. 170 Licensing Fee Waiver Amendments

License fee waivers for full-time active duty service members of the U.S. Armed Forces, National Guard and Reserve.

S.B. 227 Licensing Standards for Military Spouses

Expands exemption from licensure for military spouses to include all licensed professions within the state.

S.B. 60 License Hold for Military Service

Authorizes fee waivers associated with renewal of an inactive license for members of the U.S. Armed Forces, National Guard and Reserve.

Reducing Regulation

H.B. 37 Occupational and Professional Licensing Amendments

Modifies and reduces required training, exams, experience and hours of training for various occupations with minimal impact on public safety; removes nonviolent felony restriction for nursing professionals to a case by case basis.

H.B. 310 Professional Licensing Amendments

Reduces licensing fees for contractors and repeals the Lien Recovery Fund leaving the State Construction Registry Program as a single point for oversight of lien law.

H.B. 63 Cosmetology an Associated Professions Amendment

Allows required exams to be administered in applicant’s native language.

S.B. 15 Environmental Health Scientists Act Amendments

Allows nonaccredited programs to qualify for education requirements when both programs are substantially equivalent.

S.B. 197 Private Security Amendments

Significantly reduces required training and education for licensing.

H.B. 200 Dentists Licensing Amendments

Removes artificial barriers and expands the list of regional dental clinical license exams accepted.

Facilitating Worker Mobility

H.B. 37 Occupational and Professional Licensing Amendments

Modifies language to allow for expanded implementation of multistate licensure compacts.

H.B. 173 Occupational Licensing Requirement Amendments

Expands licensure endorsement requirements to create a pathway for work experience minimums and competency requirements.

Transparency and Public Accountability

S.B. 223 Utah Health Care Malpractice Act Amendments

Requires DOPL to compile and study information related to medical liability to ensure intent of act for both patients and providers.

H.B. 37 Occupational and Professional Licensing Amendments

Reduces required licenses for membership of the Hunting Guides and Outfitters Licensing Board.

States Address Barriers to Occupational Licensure for Individuals with Criminal Records

By Ray Williams

The Council of State Governments Justice Center is providing in-depth analysis to help 11 states achieve their occupational licensure goals. CSG launched the occupational licensure project in partnership with the Department of Labor, or DOL, the National Conference of State Legislatures and the National Governors Association. The DOL scope includes assessing potential barriers to obtaining specific occupational licenses for target populations in 11 consortium states, including military spouses and children, immigrants with work authorizations, people with criminal records, and unemployed and displaced workers.

The initial data included occupational licensing requirements for all 50 states relative to education and training requirements, exam requirements, renewal processes, associated fees, reciprocity agreements and ex-offender restrictions. The consortium states are now requesting more information so they can analyze underlying cause and effect relationships within their current regulations and statues, as well as conduct comparative analysis of other states. CSG Justice Center is providing enhanced reports to the consortium, with additional information on background check requirements and restrictions, through the National Inventory of Collateral Consequences of Conviction project.

The National Inventory of Collateral Consequences, or NICCC, is supported by a grant from the Department of Justice, or DOJ, Office of Justice Programs, and currently catalogs over 45,000 statutory and regulatory provisions that limit the rights, benefits and opportunities available to individuals with criminal records. Among those, 15,000 provisions limit an individual’s ability to obtain occupational licensure or impair licenses already held through suspension, revocation or other means. That data is used to analyze and distinguish the collateral consequences affecting current and prospective licensees, particularly relationships between types of offenses, and the scope and duration of license ineligibility or impairment. Broad restrictions that offer little chance for employment after conviction can often discourage rehabilitation and increase recidivism.

“Of those 15,000 licensing consequences, over 6,000 are mandatory, meaning boards have no discretion to grant a license or forgo suspension, revocation or other impairments when an individual has a disqualifying conviction,” Josh Gaines, a CSG Justice Center senior policy analyst said.

The enhanced reports provided through the NICCC include data on background checks for occupational licenses, linking all 50 states to their applicable laws, statutes and regulations. The database provides enhanced search features for collateral consequence and offense type, allowing the consortium states to examine specific statutes and their collateral consequence on occupational licensing. This data allows states to compare current provisions of law and their potential outcome on licensing barriers.

Additionally, the DOJ and DOL have partnered with CSG Justice Center to fund the Clean Slate Clearinghouse, or CSC. The CSC links individuals with criminal records to legal resources and support services for record clearance, and provides states with record clearing policies for comparative best practice methods. Criminal record clearance is a process in which individuals can have their records expunged, sealed, restricted or closed, aiding in both employment and housing opportunities.  

Most occupational licensing restrictions are in place to protect public safety and provide a legitimate regulatory function. The NICCC further examines these restrictions that apply to any crime without regard to the type of crime, the lapse of time after conviction, or the rehabilitation efforts. The NICCC project provides data for legislatures and licensing boards.

The NICCC data is focused on one of the DOL’s target populations and is a vital tool for consortium states as they continue to examine occupational licensing barriers.

Connecticut Collaborating on Best Practices for Occupational Licensing

By Ray Williams

Connecticut held a meeting on March 2, 2018 on occupational licensure with assistance from The Council of State Governments, or CSG, the National Conference of State Legislatures, or NCSL and the National Governor’s Association, or NGA.

CSG launched an occupation licensing technical assistance project in August 2017 in partnership NCSL and NGA, through a $7.5 million grant from the U.S. Department of Labor, or DOL. The 11 state consortium includes Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Nevada, Utah and Wisconsin. Each state focused on specific occupations and target populations in an attempt to identify known and unknown barriers of occupational licensing.

The DOL project scope identified the key populations for each state as military spouses and children, immigrants with work authorization, people with criminal records and unemployed and dislocated workers. The DOL identified 34 occupations for evaluation, allowing each state to select specific occupations based on their individual needs. The overall objective of the project is to examine occupational licensing requirements, identifying potential barriers and to improve portability across state lines.

The consortium met last November in Tucson Arizona, giving state leaders an opportunity to work on action planning with licensing stakeholders, while collaboratively collecting data. Since the November meeting, 7 states have held in state meetings including Arkansas, Colorado, Connecticut, Delaware, Illinois, Maryland and Nevada. The remaining 4 states, including Indiana, Kentucky, Utah and Wisconsin have in state meetings planned in the coming weeks.

Throughout these meetings, reciprocity is one of the emerging themes and states are looking to neighboring states, as well as consortium states, to ease occupational licensing portability between state lines.

Connecticut’s Department of Public Health Section Chief Christian Anderson said during the 2017 consortium meeting, “We have always assumed that Connecticut’s reciprocity agreements have been a selling point for the state but we really didn’t know until we met with consortium states.” 

During Connecticut’s in-state meeting, April 2018, Director of Policy Bill Wlez said, “it is imperative that Connecticut review and expand reciprocity agreenents with consortium states, as well as neighboring states, to stay competitive and continuing to protect public safety.”

Over the course of the project, consortium states are relying on current and active interstate compacts as a means to solve problems that span state boundaries. CSG’s National Center for Interstate Compacts, or NCIC, is a policy program developed by CSG to assist states in developing interstate compacts, which are contracts between states. Currently, the NCIC manages more than 200 active interstate compacts helping states facilitate consensus on national issues.

CSG, NCSL and NGA provided a throughout review of state requirements and reciprocity agreements on occupational licenses. The collected data will allow all states to ensure consistency throughout testing procedures, education requirements and any necessary training requirements across all 50 states and 5 territories.   

In addition to reciprocity agreements, consortium states are also using shared data to examine best practice methods for background check requirements, apprenticeship programs, transferability of military skills, overcoming legislative obstacles and lessons learned approaches to occupational licensing barriers.”It is an opportunity for all states to learn from one another, as well as hopefully ease barriers in portability, all while advancing economic development,” Connecticut’s DOL Executive Director Kathleen Marioni said during a status meeting.

For the remainder of 2018, CSG, NGA and NCSL will visit each consortium state, providing technical assistance and best practice methodologies from other states. All 11 consortium states will meet in November of 2018 to review and share their progress with stakeholders.

CSG Launches National Occupational Licensing Database

By Kathryn Price

CSG, in partnership with the National Conference of State Legislatures and the National Governor’s Association, released the National Occupational Licensing Database to help state leaders better understand the national licensing landscape. This database contains information on the criteria required to attain a license in 34 occupations with 18 requirements being assessed. Some of the data points include initial and continuing education requirements, training, experience, exams and fees. Additionally, if a certain occupation is selected, a map of the states that require licensure will be produced (See top image below for map produced when searching the database for information on electricians). The database also allows for the user to make comparisons between states and occupations (See bottom image below for an excerpt of search results from the database when selecting to show information on cosmetologists).

The database gives the user the ability to see all the requirements across 50 states and shows the disparities between each state. These differences can create barriers for those moving across state lines as well as those attempting to gain initial licensure.

The licensing process is designed to ensure the safety of workers and the public by requiring a certain level of competency to practice a profession. However, some licenses can have excessive requirements and fees, which may be insurmountable for some. For example, home inspectors in New Jersey face an initial licensure fee of $850 along with a $500 fee every two years to renew. Whereas, those in Pennsylvania pay $225 initially and the license doesn’t expire. Four groups who are particularly vulnerable when it comes to gaining licensure are immigrants with work authorization, those with criminal records, military families, and unemployed and dislocated workers.

This database is the first step in a project aimed at understanding and reducing these barriers to licensure as well as learn best practices for licensing certain occupations. The three-year project, entitled Occupational Licensing: Assessing State Policy and Practice, is a joint effort by The Council of State Governments, the National Conference of State Legislatures, and the National Governors Association Center for Best Practices, and is funded by a grant from the U.S. Department of Labor.

The project also selected a consortium of 11 states that will meet with licensure experts to discuss each state’s current licensure practices, and develop and implement action plans that aim to remove excessive barriers created by some licenses. The states in the consortium are Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Nevada, Utah, and Wisconsin.

The first consortium meeting was held in December of last year in Tucson, Arizona, with two more meetings slated for fall 2018 and summer 2019. In addition to these meetings, the project will produce continuing resources, namely a webinar series, blogs, newsletters and magazine article on occupational licensure policy.

The map produced when searching the database for information on electricians shows that 19 states do not require licensure.

U.S. Licensing System

By Heather Perkins

The current economic cost of professional and occupational regulation directly impacts one quarter1 of the working population in the U.S. The number of professions or occupations requiring a government license is nearly one quarter2 of the current working population. The majority3 of this increase has been the result of the increasing number of professions or occupations requiring a license. Recent domestic evidence also shows that states vary dramatically in their rates of licensure, ranging from 12 percent to 33 percent.

  Download the Article in PDF / E-Reader Compatible Format



About the Author
Adam Parfitt 
is executive director of the Council on Licensure, Enforcement and Regulation (CLEAR), a position he has held for the last ten years. Previously he served as the organization’s Director of International Relations. Prior to his time with CLEAR. Adam worked with several associations of state government officials.


Professional and occupational regulation is predominantly a state function, undertaken and protected under Article X of the U.S. Constitution. Article X grants states the authority to regulate activities affecting the health, safety and welfare of their citizens. Practitioner disciplinary matters follow each state’s administrative procedures act. Exceptions to this state oversight are the growing numbers of municipal-level licensing and professionals employed by the federal government to work within state borders.

Recent Scrutiny
Research suggests that nearly one quarter4 of the working population in the U.S. requires a government license for their profession or occupation, a number that has risen from 5 percent in the 1950s. The vast majority5of this increase has been the result of the increasing number of professions or occupations requiring a license. Meanwhile, economists suggest that the wage effect of professional and occupational licensing can be as high as 15 percent.6 Little wonder, then, that close attention is being paid to this policy lever, its implications and implementation.

Indicative of the higher profile enjoyed by professional and occupational regulation, a recent White House press release7 called for reforms to the existing system, stating:

“While licensing can offer important health and safety protections to consumers, as well as benefits to workers, the current system often requires unnecessary training, lengthy delays, or high fees. This can in turn artificially create higher costs for consumers and prohibit skilled American workers like florists or hairdressers from entering jobs in which they could otherwise excel.”

Recent developments have focused upon the following perceived shortcomings within the system:

  • The scale and growth in the number of professions and occupations affected by professional or occupational regulation, in addition to the disparity in approaches across the states;
  • Perceived attendant restrictions on professional mobility, affecting both civilian populations and military families (the latter disproportionately affected by deployments to military bases in different jurisdictions);
  • Applicability related to new working patterns (including telework and telepractice);
  • Issues of fairness, related particularly to those with qualifications from foreign institutions, as well as those with a criminal record;
  • The availability of consumer information about providers and practitioners; and
  • Issues related to oversight and broader governance.

Scale and Growth of Professional and Occupational Regulation
A recently published list of licensing best practices8provides a guide to the focus of future reforms in the field:

Ensure that Licensing Restrictions are Closely Targeted to Protecting Public Health and Safety, and are Not Overly Broad or Burdensome

1. In cases where public health and safety concerns are mild, consider using alternative systems that are less restrictive than licensing, such as voluntary state certification (“right-to-title”) or registration (filing basic information with a state registry).

2. Make sure that substantive requirements of licensing (e.g., education and experience requirements) are closely tied to public health and safety concerns.

3. Minimize procedural burdens of acquiring a license, in terms of fees, complexity of requirements, processing time and paperwork.

4. Where licensure is deemed appropriate, allow all licensed professionals to provide services fully of their current competency, even if this means that multiple professions provide overlapping services.

5. Review licensing requirements for the formerly incarcerated, immigrants and veterans to ensure that licensing laws do not prevent qualified individuals from securing employment opportunities, while still providing appropriate protections for consumers.

The desire to ensure that regulation is proportionate and reflective of the risk to the public is echoed elsewhere, notably in a recent report9 from the Professional Standards Authority in the U.K., which developed a “continuum of assurance” as part of efforts to provide “a methodology for assessing and assuring occupational risk of harm.”10

The Professional Standards Authority’s model contains two stages: profiling the risk of harm that results from the practice of a profession; and determining the external risk factors that may exist. The latter includes the numbers of practitioners and potential clients, methods by which the risk can be managed (including through the use of technology), the economic cost (including effects on cost and supply), innovation, perceived risk and unintended consequences.

Having been encouraged to consider alternative policy levers, some states have attempted to deregulate, or de-license, existing professions and occupations. Research suggests11 however, that such initiatives are rarely successful. A recent Bureau of Labor Statistics report commented that “In nearly every instance that we analyzed, de-licensing and de-licensing attempts have been met not only with stiff resistance but also usually (when successful) with a movement to reinstitute licensing. Clearly, these results reflect the lobbying power of the occupations in question and their professional associations.”12 The report goes on to suggest additional reasons for such resistance, including the likelihood that the costs (of delicensing) to members of licensed practitioners is high, at the same time as the benefits to the public are arguably widespread, but limited. Other possibilities include the unwillingness of state legislatures to deny the states a source of revenue, given that most regulatory boards are, at a minimum, self-sustaining. While sunset laws exist in a variety of states, historically many appear reluctant to recommend de-licensure, or find legislatures reluctant to act upon such recommendations.

Concerns about the economic cost of professional and occupational regulation are not confined to domestic governments and think tanks. Recent years have seen the Organization for Economic Cooperation and Development, or OECD, produce significant work related to this topic. Among the initiatives has been the development of a Services Trade Restrictiveness Index,13 which “provides policy makers and negotiators with information and measurement tools to open up international trade in services and negotiate international trade agreements. The STRI indices take the value from 0 to 1, where 0 is completely open and 1 is completely closed.”

State Variations in Regulatory Practice
Recent domestic evidence also shows that states vary dramatically in their rates of licensure, ranging from a low of 12 percent of workers in South Carolina to 33 percent in Iowa. Such significant differences in licensing prevalence are frequently cited by opponents of licensure, who suggest that jurisdictions are not treating occupations equivalently, to the detriment of both market participants and consumers. A Reason Foundation report14 from 2007 tabulated each state’s licensing requirements by occupation. The report found that on average, states require licenses for 92 occupations. A separate report by Institute for Justice compared licensing requirements for low and moderate-income occupations that are licensed in at least one state. This report found that 15 occupations were licensed in 40 states or more, with the average occupation being licensed in only 22 states.15

This variation is further demonstrated in Table A, indicating the percentage of workers licensed in each state. While a large number of states fall within the 20 to 25 percent range, three states license in excess of 30 percent of their workforce, while five states license fewer than 15 percent.

  Download “Table A: Share of Workforce Licensed or Certified, by State”  in PDF / E-Reader Compatible Format

Supreme Court Case: North Carolina State Board of Dental Examiners v. Federal Trade Commission
The implications of a recent Supreme Court case16are slowly becoming evident with occupational regulators considering the potential need to make likely significant changes to their regulatory arrangements, such as:

  • Requiring public member majorities on regulatory boards
  • Multi-party board membership
  • Providing umbrella boards with policy oversight
  • Establishing an independent review board to oversee rulemaking
  • Creating majority public review bodies for scope of practice actions
  • Making boards advisory only
  • Expanding the powers of sunrise/sunset review
  • Giving attorneys general additional oversight powers.17

Former California Attorney General Kamala Harris summarized the Supreme Court case as follows:

The North Carolina Board of Dental Examiners was established under North Carolina law and charged with administering a licensing system for dentists. A majority of the members of the board are themselves practicing dentists. North Carolina statutes delegate authority to the dental board to regulate the practice of dentistry, but did not expressly provide that teeth whitening was within the scope of the practice of dentistry. Following complaints by dentists that non-dentists were performing teeth-whitening services for low prices, the dental board conducted an investigation. The board subsequently issued cease and desist letters to dozens of teeth-whitening outfits, as well as to some owners of shopping malls where teeth-whiteners operated. The effect on the teeth-whitening market in North Carolina was dramatic, and the Federal Trade Commission took action. In defense to antitrust charges, the dental board argues that, as a state agency, it was immune from liability under the federal anti-trust laws. The Supreme Court rejected that argument, holding that a state board on which a controlling number of decision-makers are active market participants must show that it is subject to “active supervision” in order to claim immunity.”18

In response, states have taken a variety of steps:

  • California’s attorney general provided guidance19 about what should be considered “active supervision” for the purposes of the state action immunity doctrine, and identified measures that could be taken to guard against antitrust liability for board members. The opinion identified possible steps, including changing the composition of boards, adding additional supervision by state officials, reducing exposure for damages claims, and ensuring board members receive legal indemnification and antitrust training.
  • In Oklahoma, an executive order was issued20 which required those state boards with a majority of members who are active market participants in the occupation or profession directly or indirectly controlled by the board, to submit each non-rulemaking action to the Office of the Attorney General for review and analysis. Where the attorney general concludes the board action may violate law, the board must defer or reconsider the proposed action.21
  • In North Carolina, the General Assembly’s Program Evaluation Division, or PED, reviewed both structure and operation of the 55 independent occupational licensing boards. The ensuing report22stated that there was insufficient state-level oversight to ensure efficient and effective public protection, recommending a legislative review of several occupational licensing boards’ authority and the consolidation of several others.
  • Massachusetts Gov. Charlie Baker issued an executive order23 directing the review of any acts, rules, regulations or policies (proposed by independent licensing boards) with the potential to limit competition in a relevant market for professional services. The review evaluates whether the proposed act, rules, regulations or policies advance the goal of ensuring the health, safety and welfare of the public sufficiently, so that it should be permitted regardless of any potential anticompetitive impact. Several types of acts warrant particular attention, including scope-of-practice rules, and territorial restrictions.
  • Activity has also been recorded in Iowa, Maine and West Virginia, in addition to other jurisdictions.

The Supreme Court decision has also raised concerns that individual board members may be liable for damages for antitrust liability related to their service. Indeed, some organizations have called for legislation that “indemnifies state boards and members from any damages or litigation fees related to claims against them to which the immunity applies.”24

Some states, such as Massachusetts and Rhode Island, clearly provide immunity and indemnification to at least some of their boards via statutory language. Other states, such as Illinois, Michigan, New Jersey, New York, Oklahoma and Texas, have indemnification statutes that may protect state agencies, but legislation here offers less clarity about whether indemnification extends to professional board members.

Private litigation has followed the Supreme Court ruling, most notably in the cases of Teladoc Inc. v. Texas Medical Board25, and Henry v. North Carolina Acupuncture Licensing Board.26In the former case, Teladoc, a provider of telehealth services, filed suit after the Texas Medical Board enacted a 2015 rule requiring face-to-face contact between an individual and a doctor before a prescription is issued. Teladoc claimed that rules placing limits on video consultations violate the Sherman Act. A district court ruling denied the medical board’s motion to dismiss the complaint, finding that the board was not actively supervised by the state.

The latter case saw several licensed physical therapists and patients sue the North Carolina Acupuncture Licensing Board for sending cease-and-desist letters to physical therapists who offered “dry needling” services. The physical therapists in receipt of the letter were accused of engaging in the illegal practice of acupuncture. The plaintiffs maintain that the board’s efforts violate federal antitrust law and a bid to dismiss the lawsuit against the board has been unsuccessful to date.

Conclusion
The recent award of a substantial U.S. Department of Labor grant27 to “Identify licensing criteria to ensure that existing and new licensing requirements are not overly broad or burdensome and don’t create unnecessary barriers to labor market entry; and improve portability for selected occupational licenses across state lines,” should ensure that interesting developments follow in this fascinating, and often under-reported field.


Notes

1 Occupational Licensing: A Framework for Policymakers, Department of the Treasury, Office of Economic Policy, the Council of Economic Advisers, and the Department of Labor (2015), p.3.
2 Ibid.
3 Ibid.
4 Occupational Licensing: A Framework for Policymakers, Department of the Treasury, Office of Economic Policy, the Council of Economic Advisers, and the Department of Labor (2015), p.3.
5 Ibid.
6 Ibid, p.4.
https://obamawhitehouse.archives.gov/the-press-office/2016/06/17/fact-sheet-new-steps-reduce-unnecessary-occupation-licenses-are-limiting.
https://obamawhitehouse.archives.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf   (p.42).
9 Right-touch assurance: a methodology for assessing and assuring occupational risk of harm (http://www.professionalstandards.org.uk/docs/default-source/publications/right-touch-assurance—a-methodology-for-assessingand-assuring-occupational-risk-of-harm.pdf?sfvrsn=0).
10 Right-touch assurance: a methodology for assessing and assuring occupational risk of harm, p.1.
11 https://www.bls.gov/opub/mlr/2015/article/the-delicensing-of-occupations-in-the-united-states.htm.
12 Ibid.
13 http://www.oecd.org/tad/services-trade/services-traderestrictiveness-index.htm.
14 Summers, A. (2007). Occupational licensing: Ranking the states and exploring alternatives. Los Angeles: Reason Foundation.
15 Carpenter D., Knepper L., Erickson A. and Ross J. (2012), License to Work, A National Study of Burdens from Occupational Licensing. Institute for Justice, p.5.
16 North Carolina State Board of Dental Examiners v. Federal Trade Commission (https://www.supremecourt.gov/opinions/14pdf/13-534_19m2.pdf).
17 Citizen Advocacy Center, Addressing the Supreme Court’s North Carolina Decision: Options for the States.
18 California Attorney General Opinion 15-402, issued 9/10/15.
19 Opinion of Kamala D. Harris, Attorney General, and Susan Duncan Lee, Deputy Attorney General, No. 15-402 (Sept. 10, 2016), 98 Ops.Cal.Atty.Gen. available at https://oag.ca.gov/system/files/opinions/pdfs/15-402_0.pdf.
20 State of Oklahoma Executive Department, Executive Order 2015-33 (July 17, 2016).
21 Ibid.
22 North Carolina General Assembly Program Evaluation Division, “Occupational Licensing Agencies Should Not be Centralized, but Stronger Oversight is Needed,” Final Report to the Joint Legislative Program Evaluation Oversight Committee, Report No. 2014-15 (Dec. 17, 2014), available at http://www.ncleg.net/PED/Reports/documents/OccLic/OccLic_Report.pdf.
23 Office of the Governor of the Commonwealth of Massachusetts, “To Ensure Proper Review of the Regulation of Professional Licensing by Independent Boards,” Executive Order No. 567 (March 28, 2016), available at http://www.mass.gov/governor/legislationexecorder/execorders/executive-order-no-567.html.
24 AICPA – https://www.aicpa.org/Advocacy/State/DownloadableDocuments/Memo-NC-Dental-Supreme-Court-Decision-August-2016.pdf.
25 Teladoc, Inc., et al. v. Texas Medical Board, et al., No. 1:15-cv-00343 (W.D.Texas, Apr. 29, 2015).
26 Henry, et al. v. North Carolina Acupuncture Licensing Bd., et al., No. 15-831 (M.D.N.C. Oct. 7, 2015).
27 https://obamawhitehouse.archives.gov/the-press-office/2017/01/12/us-labor-department-awards-75m-fund-researchimproving-geographic.

Blue Star Families, Quality of Life and Spouse Employment

By Donna Counts

The 2016 Blue Star Families Military Lifestyle Survey summary was released in January 2017.  The Blue Star Survey is an annual snapshot of the state of military families and the largest nongovernmental survey of its kind and provides information needed to understand the wellbeing of military families, critical information since family and individual wellbeing is key to the success of the nation’s all-volunteer force.  According to the survey, just over half of all military personnel are married, while 36 percent are married with children.   Survey respondents indicated family quality of life is the top reason for leaving the service.  When asked about their top concerns, 37.9 percent of military spouses site their employment as a major concern.

Military service members and their families often have to move across state lines, and these moves can be difficult on military spouses as they try to maintain their own careers. More than one-third of military spouses are in an occupation that requires them to have a license, and licensing requirements are set at the state level with significant variation from state to state.

Frequent moves and unpredictable work schedules make it difficult for find a job and creates financial stress for the family.  The 2015 Demographics Report prepared by the Department of Defense, the latest report that is available, found that 79 percent of active duty spouses had moved across state lines or abroad in the past five years, and 27 percent of spouses reported that it took ten months or more to find employment after a move.  Perhaps not coincidentally the 2016 Blue Star Families report found that 79 percent of military spouses felt that military spouse status has a negative impact on their ability to pursue a career, and 63 percent of military spouses encountered licensing challenges due to relocation.  This difficulty is reflected in the 2016 unemployment rate for military spouses of 21percent compared to the 4.9 percent national unemployment rate. 

Significant obstacles for military spouses finding employment are state occupational licensing laws.  State licensure can disproportionately affect military families because military families tend to be more mobile.   Other segments of the workforce also face difficulty when moving from place to place due to occupational licensure.  Licensure can ensure that licensed professionals have the qualifications to meet quality, health and safety standards.  Licensure can also help to encourage a higher level of skill and professionalism which can translate into higher wages.  However, licensure can present obstacles to workers attempting to enter a profession by increasing the training requirements and associated costs or when workers move across state lines and have to comply with different state licensing requirements.  While licensure can increase individual wages, it can also increase the prices consumers pay for the services provided by the license professional.   

The problem for military spouses more prevalent in states with a high concentration of military personnel and families.  The following chart illustrates the state-by-state distribution of active duty military and families and the following table presents data on the peent of the workforce requires an occupational license.  California is the state with the highest military population with 324,666 and 20.7 percent of its workforce requires some sort of an occupational license.  Virginia has the second largest military population with 291,225, and 17.2 percent of its workforce requires an occupational license. 

There is little disagreement that licensure serves a needed purpose if the quality, health and safety standards are obvious.  In this case, policy best practices for establishing occupational licensing include standardizing the licensing requirements for occupations and encouraging inter-state compacts that recognize licenses from other states.  When the benefits to the public are less clear and licensure requirements create significant barriers to employment, then it may be time for state leaders and policymakers to re-evaluate the licensure requirements. 

Reading resources:

Blue Star Families. 2016 Annual Military Family Lifestyle Survey: Comprehensive Report. Falls Church, VA: Blue Star Families.

Department of Defense (DoD), Office of the Deputy Assistant Secretary of Defense for Military Community and Family Policy (ODASD (MC&FP), 2015 Demographics Profile of the Military Community, 

Department of Defense (DoD), Defense Manpower Data Center (DMDC), Active Duty Spouses and Active Duty Members:  Spouse Employment, Satisfaction, Financial Health, Relationships, & Deployments, Results from 2015 Survey of Active Duty Spouses & 2013-2014 Status of Forces Surveys of Active Duty Members, July 2016.  

Spouse Employment Report, Institute for Veterans and Military Families, Syracuse University, February 2014.  

Council of State Governemnt, Capitol Ideas, Top 5 Issues in Workforce, 2017 Special Issue

Resolution Supporting Intergovernmental Collaboration on Occupational Licensing for Military Spouses

By CSG Executive Committee

  Download the Resolution in PDF / E-Reader Compatible Format

WHEREAS, military service members and their families make sacrifices for the sake of our country and in defense of our freedom; and

WHEREAS, military families often move across state lines during their service and immediately following; and

WHEREAS, military spouses move households to accommodate their families at a rate ten times higher than non-military spouses; and

WHEREAS, thirty-five percent of military spouses work in an occupation that requires a professional license; and

WHEREAS, the top three occupations held by military spouses – teaching, child care services, and nursing – require occupational licensing; and

WHEREAS, current state laws vary dramatically regarding licensing requirements for many occupations; and

WHEREAS, sixty-eight percent of married service members reported their spouse’s ability to maintain a career impacted their decision to remain in the military by a large or moderate extent; and

WHEREAS, streamlining the occupational licensing process supports military families and promotes employment.

NOW, THEREFORE BE IT RESOLVED, that The Council of State Governments requests that the Congress and the Executive Branch work with state and local governments to promote policies which ease the transition for military service members and their families when they move across state lines by streamlining occupational licensing, which will ease the financial and administrative burdens placed on those families by the need to frequently regain their professional credentials.

Adopted by The Council of State Governments’ Executive Committee this 11th Day of December, 2016 in Colonial Williamsburg, Virginia.