Licensing Review is All the Buzz in the Beehive State
With “quiet quitting” currently trending and America’s national labor force participation down to 62%, states and businesses alike are testing strategies to attract qualified and experienced workers. Even with its already strong economy and best-in-class ranking in Rich States, Poor States, Utah is not one to be caught resting on its laurels. In March this year, Utah passed SB 16 to review all proposed and existing occupational licenses within the state to identify which licensing regulations protect public “health, safety, or financial welfare” and which create unnecessary restrictions burdening workers. This comes just over a year after Utah Governor Spencer Cox issued a similarly aimed executive order as his first official order as governor.
SB 16 tackles licensing reform broadly by including both sunrise and sunset provisions. In this case, the sunrise review requires that the newly created Office of Professional Licensure Review (OPLR) examine all new applications requesting that an occupation be regulated. SB 16 includes a detailed list of criteria—such as comparing other jurisdictions’ regulation of an occupation and any existing license reciprocity—that the OPLR must use in making its determination. Such specific standards can help ensure that government only imposes these regulations when they are necessary to ensure public health and safety.
Sunset reform in SB 16 addresses the 61 occupations that are licensed already in Utah. It requires that the OPLR review all existing licenses every 10 years in an order approved by the Business and Labor Interim Committee and the Legislative Management Committee. If the OPLR determines an occupation does not need to be licensed, then the legislature can choose from a slew of options to set the proper level of regulation. For example, if the currently licensed athletic agent profession is delicensed, the legislature could provide a measure of regulation by requiring that these agents register with the Secretary of State to avoid “fly-by-night” providers.
These reforms in SB 16 can help Utah address the “19,000 fewer jobs being created and a deadweight loss of nearly $88 million each year” attributed to its licensing structure. Sunrise and sunset reviews reduce barriers to the workforce and ensure that talented workers are not priced out of entering lucrative professions due to restrictions that have limited to no impact on public health and safety. Widening the pool of providers is not just good for workers who gain easier access to enter certain careers, though. It also helps consumers, who gain a wider population of professionals to go to for help.
ALEC’s Commerce, Insurance, and Economic Development (CIED) Task Force has a similarly aimed model policy: the Occupational Licensing Review Act. This act requires legislative leaders to create a commission or committee to conduct sunrise and sunset reviews of occupational licenses in a state. It provides a list of regulatory options available, with occupational licenses being the most restrictive type of professional regulation and “market competition” being the least restrictive. Recommendations for appropriate levels of regulation can be found in Section 100.03.
Senator Curtis Bramble, SB 16’s sponsor, explains that Utah’s efforts to reform licensing “improve regulations and… continue reforming those [regulations] that unduly hinder commerce.” With reforms like his bill and those in the above model policy, other states can also implement important changes to increase opportunities and remove barriers for workers, while still protecting public health and safety.