Mississippi Poised to Become National Leader in Licensing Reform

A bill providing new oversight for Mississippi’s sprawling licensing boards is heading to the governor’s desk, after the Mississippi State Legislature adopted the conference report for the Occupational Board Compliance Act earlier today.

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, found that on average, a license for low- or middle-income occupations in Mississippi requires completing 155 days of training, passing two exams and paying nearly $200 in fees.

Research has shown that these requirements raise consumer prices and block opportunities, particularly for minorities and those with criminal records.

To help ease these burdens, the act, HB 1425, implements several reforms. First, the bill creates an “Occupational Licensing Review Commission” that will review occupational regulations proposed by licensing boards. This provides independent “active supervision” to reduce antirust liability. In addition, any occupational regulations must “increase economic opportunities…by promoting competition,” and must use “the least restrictive regulations necessary to protect consumers,” in accordance with new state policy.

Rather than a binary between licensing and no licensing, a least restrictive framework grants policymakers a wider array of regulatory options including private certification, inspections, bonding, and registration.

“This bill marks a watershed moment,” said Institute for Justice Senior Legislative Counsel Lee McGrath. “When it comes to innovative labor policy, Mississippi lawmakers can proudly say ‘follow our lead.’”

The bill comes as a response to a 2015 decision by the U.S. Supreme Court. In North Carolina State Board of Dental Examiners v. FTC, the High Court ruled that state boards composed of market participants may be subject to antitrust liability unless states exercise “active supervision” over the board. Since many states packed their boards with market participants, the Supreme Court’s ruling exposes them to federal antitrust litigation. By providing active supervision, the Occupational Board Compliance Act will restore antitrust immunity for Mississippi board members.

Calls to reform America’s sclerotic licensing laws have come from a strikingly diverse chorus, including the White House Council of Economic Advisors during the Obama Administration, the Brookings Institution, the Heritage Foundation, the Institute for Justice, and most recently, the acting chair of the Federal Trade Commission.