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SB 1273: Reducing Occupational Licensing Barriers for Those Who Need It Most

February 26, 2018

by Jon Riches
February 26, 2018

Creating an environment where the freedom to earn a living and work in the job of one’s choice should be the objective of every policymaker regardless of political stripe or partisan inclinations.

Yet it is often government restrictions – in the form of occupational licenses and regulations – that makes the ability to get a job difficult for everyday Americans, particularly the less advantaged.

Part of the problem is the sheer volume of occupational licenses – government permission slips to work in the job of one’s choosing.  In the 1950s, only five percent of jobs required an occupational license; today, roughly one in four jobs requires one.  And the types of professions that are licensed would be comical, if the issue weren’t so serious.  In Arizona, Yoga instructors, funeral directors, private investigators, security guards, among many others require an occupational license.  But there are two other – maybe even more pernicious – problems that SB1273 aims to address.

The first is that many occupational licensing rules that affect every day Arizonans – most of them, in fact – are not put in place by elected lawmakers, but by state regulatory boards.  These boards are composed of unelected, and essentially unaccountable, members.  They are not directly accountable to the legislature.  In many instances, they are not accountable to the executive.  And decades of bad court decisions have rendered their regulations nearly immune from legal challenge in the judiciary.  Yet they have the power to impose onerous licensing requirements on one of the most important issues to all of us – who, when and where people can work in the job of their choice.  And they can impose those requirements with little or no consequence.

What’s more, the sad truth is occupational licensing regulations most often fall hardest on the least advantaged in our society.  People who are just trying to earn an honest living but often don’t have the wherewithal to navigate complex and often senseless regulatory requirements.

SB1273 addresses both of these problems.

In Arizona, we are fortunate to have a body created by statute that allows some fair and impartial oversight over regulatory decisions – the Governor’s Regulatory Review Council.  The Council has the authority to review, approve, disapprove, or set aside rules made by state regulatory agencies.

However, with certain exceptions, GRRC is limited in the rules it can review to new rules and reviews submitted to GRRC by the regulatory agencies.  In other words, the party most directly affected by an occupational regulation – a person prevented from getting a job of their choice because of an occupational regulation – doesn’t have a meaningful path for review of those regulations before GRRC.

This bill allows for that review.  Under this legislation, a person, including a regulated party, can petition GRRC to review occupational regulations.  That review is limited to occupational regulations that affect professions with an average salary that is 200% or below the federal poverty guidelines.  If GRRC finds that the regulation is unduly burdensome or does not advance a health or safety objective, GRRC can modify, revise, or set aside the rule.

GRRC conducts this review under existing council practices, so there is no procedural change or undue burdens on the council.

The problem with occupational licensing is a problem of accountability.  And the most dire consequences of licensure fall on the least advantaged.

SB1273 affords people affected by occupational regulations the chance to get meaningful relief in a neutral, impartial venue that is not governed by members of the regulated industry.  It is also limited in its application to professions where the income level is less than 200% of the federal poverty guidelines, allowing review of regulations that harm those who have the least resources to protect their right to earn a living.

SB 1273 is a modest but important reform to make working in the job of one’s choice a reality rather than a promise – particularly for our state’s less advantaged.

Jon Riches is the Director of National Litigation at the Goldwater Institute



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