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State Reforms for Universal License Recognition

Occupational licensing affects nearly 1 in 5 American workers and can be a substantial barrier to interstate mobility. In order to foster a more open and prosperous economy, 14 states have enacted universal recognition for out-of-state licensees:

  1. Arizona (2019)
  2. Colorado (2020)
  3. Idaho (2020)
  4. Iowa (2020)
  5. Mississippi (2021)
  6. Missouri (2020)
  7. Montana (2020)
  8. Nevada (2017)
  9. New Hampshire (2018)
  10. New Jersey (2018)
  11. New Mexico (2016)
  12. Pennsylvania (2019)
  13. South Dakota (2021)
  14. Utah (2020)

Universal license recognition laws share many common traits. Eligible applicants must hold a license in good standing in their home state and cannot have any pending disciplinary action from the relevant board or a criminal record that would disqualify them from obtaining the license in the recognizing state. Applicants may still be required to pay fees or take exams administered by the board in the recognizing state. Universal recognition also does not affect interstate compacts.

However, universal recognition can differ quite drastically from state to state. Multiple states have imposed additional rules and requirements that thwart license portability and workforce mobility, undermining the main goals of universal license recognition.

Three states limit universal license recognition to residents:

  1. Arizona
  2. Iowa 
  3. Mississippi

Eleven states do not impose a residency requirement for licensees:

  1. Colorado
  2. Idaho
  3. Missouri
  4. Montana
  5. Nevada
  6. New Hampshire 
  7. New Jersey 
  8. New Mexico
  9. Pennsylvania
  10. South Dakota 
  11. Utah

Eight states only grant licensure if the home state license requires “substantially equivalent” education, experience, or training, which effectively penalizes states with less burdensome requirements:

  1. Colorado
  2. Montana
  3. Nevada
  4. New Hampshire 
  5. New Jersey
  6. New Mexico
  7. Pennsylvania
  8. South Dakota

In contrast, six states allow universal recognition of a home state license if it has a similar “scope of practice” or “at the same practice level” to the recognizing state’s license. This means a board does not have to compare and contrast the license requirements between the two states:  

  1. Arizona
  2. Idaho
    • Uniquely, if the home state’s license has a narrower scope of practice, the licensee can receive a limited license in Idaho.
  3. Iowa
  4. Missouri 
  5. Mississippi 
  6. Utah 
    • However, the division can deny a license to an out-of-state applicant if it has “reasonable cause to believe that the person is not qualified to receive a license in this state.”

In Iowa and Mississippi, applicants from states that didn’t license the occupation can still obtain a license to work if they have at least three years of experience in that occupation.

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