Today, the Indiana House of Representatives and the Indiana Senate overwhelmingly approved a bill to deregulate the practice of natural or African-style hair braiding. Authored by Rep. Timothy Wesco, HB 1243 now heads to Gov. Eric Holcomb for signature. Currently, braiders can only work if they first obtain a cosmetology license, which takes at least 1,500 hours…
At FoxNews.com, Institute for Justice President Scott Bullock and U.S. Sen. Rand Paul have a joint op-ed on civil forfeiture, which allows law enforcement to confiscate property without filing criminal charges. To improve federal forfeiture laws, Sen. Paul has introduced the FAIR Act, which would strengthen due process protections for innocent property owners and “end the perverse incentives that encourage police to pursue cash over criminals.”
To give just one example of forfeiture abuse, their op-ed discusses the case of IJ client Russ Caswell, who owned a motel in Massachusetts:
Although Russ was never charged with a crime, the federal government and local police claimed his motel “facilitated” criminal activity.
The reason? Prosecutors identified 15 “drug-related incidents” that occurred out of 196,000 rented rooms.
It was later revealed that a federal drug agent was found combing through public records, searching for properties the government could seize.
Thankfully, after the Institute for Justice took on his case pro bono, Russ won in federal court and could finally sell his motel and retire.
Read the whole piece here.
Arlington, Virginia—Pop quiz: What is the proper role of government? Is your answer: To protect politically powerful special interests from competition? No? Unfortunately, too many lawmakers and special interests see protectionism as a proper use of government force. Examples abound: There are the recent actions taken by lawmakers and the hotel industry against Airbnb. And…
Today, the New Hampshire Senate approved a bill to deregulate the practice of natural or African-style hair braiding. Under New Hampshire law, braiders can only work if they first obtain a cosmetology license, which takes at least 1,500 hours of training. Only six states have stricter requirements. But if enacted, HB 82 will exempt braiding from…
Author’s note: This piece has been updated to reflect the full range of states with active or enacted legislation as of April 20, 2017.
Occupational licensing is a silent job killer, but that is beginning to change as the current state legislative sessions have begun across the country.
Between the 1950s and today, the number of Americans who need a license to work has exploded, from about five percent to around 25 percent. The issue has been scrutinized by both the Obama and the Trump administrations, and this year lawmakers in 19 states have been enacted or currently have active bills to reform occupational licensing. However, these reforms face an uphill battle before reaching their respective governors’ desks.
Occupational licenses are often created not by concerned citizens seeking safeguard against harmful businesses, but by “bottleneckers.” The Institute for Justice’s (IJ) Chip Mellor and Dick Carpenter recently published a book, Bottleneckers: Gaming the Government for Power and Private Profit, which gives a history of bottleneckers in different occupations, ranging from interior designers to street vendors, and offers a pathway to reforms. According to the book, a bottlenecker is a person who advocates for the creation or perpetuation of government regulation—particularly through occupational licensing—to restrict entry into his or her occupation. In this way, the “bottlenecker” wins an economic advantage without providing any benefit to consumers.
Occupational licensing used to be an issue criticized mainly by academics like Milton Friedman, Simon Kuznets and Morris Kleiner. In 2012, IJ published the report License to Work, which studied licensing requirements for 102 occupations in all 50 states and Washington, D.C. The report found that the types of occupations requiring a license, and the requirements to obtain those licenses, often differed from state to state, with many licenses being required in only a few states. Following the publication of License to Work, nonprofits and policymakers from across the political spectrum have criticized occupational licensing:
This growing agreement has resulted in multiple states’ filing bills to reform or end occupational licensing requirements.
Hair braiding is one of the leading occupations seeing licensing reform. Many states require hair braiders to obtain a cosmetology license to practice professionally, which could involve thousands of hours of training and cost tens of thousands of dollars, even though barely any cosmetology schools teach hair braiding. This year, lawmakers in seven states introduced bills to exempt hair braiders from needing a cosmetology license.
IJ’s first lawsuit successfully challenged these licensing requirements in Washington, D.C. 25 years ago. Since then, more and more states have exempted braiders from needing a cosmetology license, with an uptick in recent years. In 2015, four states—Arkansas, Colorado, Maine, and Texas—exempted braiders and in 2016 five states—Delaware, Iowa, Kentucky, Nebraska, and West Virginia—exempted hair braiders from needing a cosmetology license to practice. At the time of publication, 21 states do not require braiders to obtain a license to work.
Eliminating Licensing Barriers for Ex-Offenders
In addition to eliminating licenses for hair braiders, three states have proposed bills that would grant ex-offenders more rights in seeking a license. In Minnesota and Nebraska bills were filed that would allow offenders to petition licensing boards regarding their eligibility to obtain a license before they invest in education or training. This would prevent applicants from spending time and money in training for a license they ultimately are unqualified for because of past criminal convictions. The bills also would flip the burden to prove the offender’s past is predictive of future crime. In Kentucky, Gov. Matt Bevin signed SB 120 into law which prohibits boards from denying a license solely for having a criminal record and granting applicants the right to a hearing before being disqualified. These laws would help ex-offenders seeking to obtain a license and earn an honest living.
The following states are also working to reform licensing.
Opposition to Reforms
The anticompetitive protections that licenses provide create a strong incentive for bottleneckers to fight tooth and nail against reforms. Two licensing reform battles, in Iowa and Mississippi, highlight the strength of resistance that bottleneckers can bring to state legislators.
In February, Iowa state Rep. Bobby Kaufmann was applauded after yielding to bottleneckers’ pressures and literally ripping up a cover sheet for House Study Bill 138, during a panel on the bill. The bill included provisions that would have ended licensure for occupations including dietitians, massage therapist, barbers, and many other occupations and replaced them with registrations. At the hearing, licensees testified negatively for more than an hour before Kaufmann tore up the bill. Kaufmann also said he received more than 3,600 emails about the bill, the overwhelming majority of which opposed it. This is the resistance that reformers meet when trying to pass legislation to reduce the burdens of occupational licensing.
A similar type of resistance was mounted in Mississippi when a bill to deregulate hair braiding was submitted to the state legislature. In 2004, three hair braiders partnered with IJ to challenge the state’s requirement for a cosmetology license to practice hair braiding. This led to legislation being filed to exempt hair braiders from needing a cosmetology license. In the documentary Locked Out, Mississippi Rep. Steven Holland recalled how “a thousand cosmetologists showed up” to a hearing to protest the bill. But Rep. Holland was resolved to pass the bill, and ultimately it was passed and signed into law in April 2005. As of May 2016, more than 2,600 hair braiders had registered with the state of Mississippi and are realizing, like all Americans, the dignity that comes from work and one’s service to others.
Responding to Opposition
Mississippi showed that opposition to licensing reforms can be overcome. But legislators need more tools in the legislative toolkit to pass reforms. IJ created a model economic liberty bill that included provisions to give state governments the tools to reign in burdensome licensing. One of these provisions would create a sunrise process, in which a study is required to analyze the necessity of proposed licenses. Another provision would include a sunset process, in which a certain percentage of licenses are reauthorized annually. This process gives legislators the opportunity to scrutinize the necessity of each individual license. A third provision, based on an inverted pyramid described in the IJ report, Boards Behaving Badly, would be used to convert existing licenses to less restrictive forms of regulations.
Working from the top of the pyramid, state policymakers should consider the least restrictive form of regulation as an alternative to licensing. The options become more restrictive, and should be used less often as policymakers consider each level separately.
The model bill also includes provisions for oversight of licensing boards, which would help those boards reclaim immunity from litigation following North Carolina State Board of Dentistry v. FTC. Finally, the bill includes provisions allowing ex-offenders to petition licensing boards regarding their eligibility for a license, prior to investing time and money into training for a license. Together, these provisions would strike a balance between safeguarding the public and workers from dangerous businesses while still allowing entrepreneurs to pursue their goals.
Regulatory Review and/or Board Supervision and Oversight
This year, eight states filed bills to provide oversight of licensing boards and create review processes to eliminate burdensome licenses:
The Road Ahead
The agreement by policymakers from parties and think-tanks of varying political persuasions will likely lead to further reform proposals. Rather than allowing bottleneckers to call the shots, policymakers should seek less restrictive means to protect the public and workers alike. Doing so will lead to more entrepreneurship, more jobs, and more opportunities for everyone.
This morning, the U.S. Supreme Court issued a 7-1 decision in Nelson v. Colorado, striking down a Colorado law that forced people to go to court to affirmatively prove their own innocence in order to recover funds paid as a result of a criminal conviction, after the conviction was reversed on appeal. The Court found…
Kids in Utah will no longer have to worry about the police shutting down their lemonade stands. Under a new state law (SB 81) that passed with overwhelming, bipartisan support, cities and counties cannot require a license or permit for any occasional business operated by a minor.
Lawmakers shouldn’t even have to enact this type of Ron Swanson-style common sense, and yet licensing laws have stymied kid entrepreneurs all across the country. Police in Overton, Texas once stopped Zoey and Andria Green (aged seven and eight) from selling lemonade, because the two girls didn’t have the proper permits. Eleven-year-old Madison Root couldn’t sell mistletoe at a holiday market in Portland, Oregon without a permit, though begging for money would have been allowed.
In New Jersey, Matt Molinari and Eric Schnepf went door to door, offering to shovel snow ahead of an incoming snowstorm. But police soon barred the two teens because they lacked a solicitation permit, which can cost $450 in some boroughs. Their story later inspired lawmakers to scrap the ban.
But in Utah, the ban on local licenses will shield young entrepreneurs from government crackdowns. SB 81 follows an earlier measure passed in Salt Lake County, the state’s most populous county. Four years prior, the county council approved a business ordinance that specifically singled out “lemonade stands and similar operations run by children” from needing a government permission slip. Thanks to SB 81, that type of exemption now applies throughout the entire state.
SB 81 also provides some regulatory relief for adults. The new law bans local licenses and excessive fees for home-based businesses that are operated occasionally in Utah. According to the bill’s sponsor, Sen. Jacob Anderegg, many local licensing fees create a “perverse incentive to raise money” for the government. A fiscal note for the bill estimates that the reform will save home-based businesses over $720,000 each year.
Still, many stringent licensing laws remain in force. A 2012 report by the Institute for Justice found that the Beehive State is the “12th most extensively and onerously licensed state.”
Could you imagine being labelled a criminal for selling homemade baked goods like cupcakes, muffins or cookies online? This bizarre scenario is a bewildering reality under current Florida law, which imposes a $5,000 fine for any “violation” of the blanket ban on selling homemade baked goods over the internet. But state lawmakers could soon change that.
Lawmakers in the Florida Senate recently advanced Senate Bill 1136 through committee and scheduled it for hearings in the full chamber. If it passes the legislature and Gov. Scott signs it into law, SB 1136 would more than triple the sales cap on homemade baked goods, which the law calls cottage food, and allows such food products “to be advertised, sold, and paid for over the Internet.”
According to a 2017 report from the Food Marketing Institute and Nielsen, 23 percent of U.S. households buy food online today, and Americans will spend more than $100 billion annually on such purchases by 2025. Amid this growing paradigm shift in food-buying habits, eliminating Florida’s total ban on online cottage food sales would be a major win for hardworking entrepreneurs and hungry customers alike.
But SB 1136 is not perfect. Although the new law would raise the annual sales cap on cottage food from $15,000 to $50,000 per “operation” (i.e., person), any mandatory sales limit is an unnecessary shackle on economic growth and opportunity. Nothing magical happens when somebody sells the 50,001st dollar worth of pie, bread, or pickled food. The bill would also require food purchased online to be delivered directly to the consumer or to an event venue, like a farmer’s market. Florida law already admits that cottage food is “not a potentially hazardous food,” and as such, there is no legitimate public health or safety reason for these restrictions.
The Institute for Justice (IJ) is a national advocate for homemade bakers. IJ filed a lawsuit against a similar ban on homemade baked goods in Minnesota, which ultimately led to repeal of the onerous law in 2015, and is now fighting Wisconsin’s cottage food ban in court. The Institute has also been active in the broader fight for food freedom across Florida. IJ is currently challenging a local ban on front-yard vegetable gardens in Miami Shores, and its attorney recently won a lawsuit against the state’s unconstitutional ban on accurately labelling skim milk as skim milk.
All Americans should be free to produce, sell and buy food safely and responsibly with their own resources without government infringement. If enacted, SB 1136 would be a good step toward food freedom for all hardworking Floridians.
“License and registration.” That’s what Texas shrimp unloaders could be hearing when they return to dock at a port in Texas. SB 2017, filed in late March, would prohibit shrimp fishermen from unloading their catch unless they have a government permission slip in the form of a gulf shrimp unloading license.
You read that right. To take shrimp from a boat in a Texas port, a fisherman would need to first pay the state $1,500 to obtain an unloading license.
Occupational licensing is all too often used by politically-connected insiders to keep out competition. SB 2017 is no different. The law carves exceptions for existing commercial gulf shrimp licensees or those holding a federal commercial vessel permit for gulf shrimp from the National Oceanic and Atmospheric Administration. This would make the license at best redundant and overall an extra burden for an already heavily regulated industry.
The Institute for Justice (IJ) report, License to Work, ranked Texas as the 17th most burdensome state for occupational licensing laws. On average, these laws impose an average of $304 in fees, 326 days of training and two exams on those interested in entering licensed occupations.
The good news is that the legislative trend is moving toward deregulation of licensed occupations. Eighteen states have enacted or currently have active bills to reform occupation licensing during their current legislative sessions. So licensing is being scrutinized across the nation. And, in 2015, the Texas Supreme Court issued a landmark decision, in response to an IJ challenge to licensing requirements for eyebrow threaders, that interpreted the Texas Constitution as providing meaningful protection for economic liberty—the strongest in the nation today.
Last night, the Charlestown City Council passed a resolution that announced it would be extending the city’s illegal code enforcement regime to homeowners in the Pleasant Ridge neighborhood. Prior to last night’s vote, the illegal inspections only targeted rental properties. For the last four months, Charlestown Mayor Bob Hall has defended the city’s illegal land…
Arlington, Va.—In a victory for free speech, the Alabama Ethics Commission agreed to eliminate its onerous in-person training requirement for private citizens who want to speak with state lawmakers. This comes in response to an August 2016 federal lawsuit filed by Maggie Ellinger-Locke and her employer, the Marijuana Policy Project (MPP), represented by the Institute…
Gov. Phil Bryant signed the Occupational Board Compliance Act on Tuesday, which will provide new oversight for Mississippi’s sprawling licensing boards. Occupational licensing is now one of the biggest labor problems facing the state, with 23 percent of Mississippians needing a license to work. A 2012 report by the Institute for Justice, License to Work,…