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Tennessee legislature gets authority to nix boards’ licensing regulations

Committees of the Tennessee legislature will begin reviewing all regulations of the state’s licensing agencies that affect entry into or practice of occupations, under the state’s sweeping new “Right to Earn a Living Act” (HB 2201/SB2469, now Public Chapter 1053).

Signed into law April 28 by Governor Bill Haslam, the measure allows the house of representatives’ and senate’s Government Operations Committees to disapprove of existing and proposed regulations and request that they be amended or repealed. Only “entry regulations” are affected—but the bill defines such regulations broadly to include almost any rule, policy, or practice of a licensing board that affects a person’s ability to enter or continue to practice in a field.

The law requires licensing authorities (state board, commission, council, or committee) to submit all existing or pending regulations to the committees by December 31, 2016.  Beginning July 2017, all licensing requirements will be subject to a periodic review by the committees.

In its initial form, the bill would have allowed any person to submit a petition challenging a regulation, with the licensing board required to repeal or modify the regulation, or justify it within 90 days. That provision was amended to give the legislative committees the authority to disapprove a regulation.

The reviews will include a study of all submitted regulations and, at their discretion, the committees may conduct a hearing regarding any regulation. Five factors will be considered during the reviews: whether an entry regulation is not required by state or federal law; is unnecessary to protect the public health, safety or welfare; has the purpose or effect of unnecessarily inhibiting competition or arbitrarily denying entry into the profession; could be accomplished by less restrictive means; or is outside the scope of the licensing authority’s statutory authority.

If any regulation meets one of those factors, the committees may disapprove it and request that the authority amend or repeal it.

The “request” has some fairly coercive aspects. The disapproval is publicly announced, and if the licensing agency does not initiate compliance with the committees’ request within ninety days or does not comply within a reasonable amount of time, the committees may then vote to request that the General Assembly suspend all or part of the agency’s rulemaking authority.

Beginning January 1, 2018, each licensing authority must also submit all new entry regulations to the committees prior to a “Sunset” hearing being held.

The committees will issue a joint report containing findings and recommendations by January 1, 2018. Review of regulations is also set as part of the sunset review process to ensure that rules are necessary to protect the public and do not unnecessarily inhibit competition or arbitrarily deny entry into a profession.

Business groups, including the Beacon Center of Tennessee and Americans for Prosperity/Tennessee, backed the measure as part of a broader campaign against entry barriers which they perceive as obstacles to job creation. A key proponent was also the National Federation of Independent Business (NFIB), which has described Tennessee as a “top 15” state for burdensome licensing practices.

The new measure, NFIB says, “is very good news” for workers and entrepreneurs across the state. According to NFIB, an Institute for Justice’s 2012 “License to Work” study found that the state licenses 53 of the 102 low- to middle-income occupations studied at an average licensing fee of $218, with an average of 222 days of education required.

Fending off new state licensing bills and paring back existing occupational regulations were two priorities of the NFIB during the 2016 state legislative session In Tennessee. The organization says it helped defeat or delay at least five new licensing bills this year. The measures would have required continuing education for cosmetologists and other beauty-care licensees, required licensing of HVAC contractors performing work under $25,000, required licensure of persons engaged in lactation care and services, required roof repair or replacement workers to be licensed, and set training standards for executive coaches and life coaches.