Governor Signs Bill That Could Prevent Unnecessary Barriers to Jobs

More independent and in-depth reviews of proposed occupational licenses will keep special interests from using licensing to lock out competition

Andrew Wimer
Andrew Wimer · March 25, 2022

SALT LAKE CITY—Gov. Spencer Cox today signed SB 16, bipartisan legislation that could prevent the state government from creating new, unnecessary occupational licenses. Nearly 1 in 4 Americans needs a government license to work and state lawmakers are frequently asked to consider new licenses. The new law will establish the Office of Professional Licensure Review to conduct an in-depth examination—known as a “sunrise” review—before legislators consider creating new licenses.
“Creating new licenses can make it illegal for some workers to continue earning an honest living in their field,” said Institute for Justice (IJ) Legislative Counsel Meagan Forbes. “Strengthening the process to review requests for new licenses will ensure that Utah legislators think carefully before creating new barriers to jobs.”

IJ recently released the first-ever comprehensive national study of sunrise reviews and found that they overwhelmingly recommend against licensing—and most recommend no new regulation. The report, “Too Many Licenses?,” analyzed Utah’s previous sunrise review process and found it lacking. The reviews, produced by a legislative committee with few resources, lacked independent research and meaningful analysis.

Utah’s new process, by contrast, will allow for a more independent review that will be focused on critical questions about whether a license is necessary. Reviewers will report whether regulation of the occupation is necessary to address a present, recognizable and significant harm and whether the regulation creates barriers to entry into the occupation.

The new IJ study found that at least 83% of requests for new regulations were generated by occupational lobbies whose members would stand to benefit from restricting competition. Only 4% were generated by consumer advocates. All of the Utah requests reviewed in IJ’s report came from industry groups.

The new office will also be responsible for conducting 10-year reviews of existing licenses and subjecting them to the same scrutiny as proposed licenses. This could help lawmakers identify and eliminate unnecessary licenses.

In recent years, Utah has taken steps to reduce licensing barriers. In 2020, Utah made it easier for workers coming from out of state to get their licenses recognized. And last year, Utah exempted hair stylists and shampooers from cosmetology licensing requirements.