New Mexico Governor Orders Major Overhaul of State’s Licensing Laws

New Mexico Gov. Susana Martinez issued an executive order on Wednesday to reform the state’s “overly-restrictive licensure schemes.” Today, occupational licensing  is one of the biggest labor market barriers in the nation, with one-third of New Mexico’s workforce needing either a license or certification to legally work. That red tape also raises prices for consumers with little proven improvements to public health and safety, according to a 2015 report from the Obama administration.

“Burdensome licensing restrictions prevent people from escaping poverty and disproportionately impact the working class and minorities,” the order noted. “These schemes impose an undue burden on the fundamental right of New Mexicans to pursue a career in any chosen occupation without permission from the government and cause all New Mexico families to suffer economically.”

The Land of Enchantment actually has the country’s ninth most burdensome licensing laws, according to a recent report from the Institute for Justice. For instance, a contractor’s license to install or repair air conditioners in New Mexican homes or businesses takes at least four years of experience. But in neighboring Colorado, no license is required. Statewide, the average license for lower-income occupations in New Mexico requires $266 in fees, 520 days of courses or training, and passing two exams.

Under the executive order, all of New Mexico’s nearly 40 agencies, boards, commissions, and departments are directed to:

  • Create a “consumer choice” alternative to licensing. Professionals will be able to work without a license so long as they inform consumers that they are unlicensed and if consumers acknowledge that disclosure in writing. The consumer choice alternative will not be implemented for medical services or if it would conflict with an existing state statute but can replace, where applicable, existing administrative rules;
  • Develop new reciprocity agreements to recognize occupational licenses from other states. Additionally, for workers coming from states where their occupation wasn’t licensed, New Mexico will recognize one year of their professional experience as a substitute for 1,000 hours of the state’s required training;
  • Reduce licensing fees to no more than 75 percent of the national average;
  • Streamline online applications and expand the number of online continuing education courses;
  • Waive all licensing and exam fees for low-income workers, National Guardsmen and members of the military; and
  • Specifically list the crimes that can block an applicant with a criminal record from receiving a license to work. Disqualifying crimes must “pertain directly” to the occupation or the applicant’s ability. Applicants will be able to appeal initial denials.

“New Mexico is one of the worst states for imposing licenses, so it’s deeply encouraging to see the governor call for sweeping reforms,” said Paul Avelar, managing attorney of the Institute for Justice Arizona Office. “As the governor rightly noted, earning an honest living should be treated as a ‘fundamental right.’ We look forward to working with the Rio Grande Foundation, the next governor, state agencies, and the New Mexico Legislature to eliminate wasteful and damaging licensing schemes that stifle economic liberty.”

The governor’s executive order follows licensing reforms in other states. In April, Nebraska Gov. Pete Ricketts signed a landmark “sunset review” bill that will closely examine existing regulations to see if they are truly needed to protect the public and if a “least restrictive” alternative could work instead. This year also saw Arizona, California, and 10 other states ease licensing barriers to expand job opportunities for ex-offenders.

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