Is Licensing a Good Idea? Government Reviews Usually Say No
Despite the prevalence of requests for licensure, sunrise reviews most often recommend against it. This suggests that most licensure requests are based on occupational insiders’ professional or economic interest, not real evidence of harm—and that independent fact-finding can often weed out spurious requests. As Figure 4 shows, the overwhelming majority of reviews in our dataset—about 80%—declined to recommend licensure. And over half (54%) concluded no new regulation was needed.
Another 20% of reviews favored other, usually less restrictive, alternatives. These included maintaining or amending an existing license instead of creating a distinct one (6%), certification (3%), registration(3%), and other less restrictive regulations (8%) such as amending building codes for utility contractors in Georgia and enacting bond requirements for closing agents in Colorado. Among the 38 recommendations for other regulations, most (58%) came from Colorado, where the Office of Policy, Research and Regulatory Reform (COPRRR) recommended regulations tailored to specific harms. Seven percent of reviews declined to make a firm recommendation or any recommendation at all, usually because reviewers felt they did not have enough information. 1
All told, just 20% of reviews recommended a new or distinct license (18% new; 2% distinct). 2
Figure 4: Most Sunrise Reviews Recommend No New Regulation
Reviewers’ tendency to avoid recommending new licenses also holds when considering requests for distinct licenses. Out of 42 such requests, reviewers recommended distinct licenses for just nine (21%; see Figure 5). For more than half of distinct license requests (57%), reviewers instead recommended simply maintaining the existing license or, in a few cases, amending it. In one example, West Virginia’s legislative auditor concluded marriage and family therapists did not need their own license because they were already regulated through professional counselor, psychologist and clinical social worker licenses. The legislative auditor wrote, “While it is true that such specialized training exists, and may be effective in certain situations, this is not sufficient to require a separate license for persons trained in these techniques.” 3
Similarly, instead of a new license for art therapists, Vermont’s Office of Professional Regulation recommended that the state’s Board of Allied Mental Health Practitioners better tailor its administrative regulations to address public health and eliminate unnecessary coursework so art therapists could more easily practice under other mental health licenses.
Figure 5: Where a Distinct License was Requested, Most Sunrise Reviews Recommend Simply Maintaining or Amending the Existing License
States varied in how often they recommended new licenses, though all but one recommended it a third of the time or less. As Table 8 and Figure 6 show, Florida, Maine and Utah have never recommended licensure, though they have done relatively few sunrise reviews and no longer regularly produce reports. Among states with more reviews, Colorado recommended licensure the least, in just 8% of reviews. Hawaii followed closely, recommending licensure in 9% of reviews. Arizona recommended licensure most frequently by far—in 61% of reviews. In fact, the rate of new license recommendations across the states drops from 18% to 14% without Arizona.
Table 8: New License Recommendations by State
Number of Reviews
New License Recommendations
Note: * = does not regularly produce reports.
Figure 6: New License Recommendations by State
The drastic differences across states are unsurprising given variation in the level of independent research and fact-finding in reports. Among states with more than a few reviews, those that produce more rigorous reports tend to recommend licensure less often. States like Georgia, Vermont and Washington regularly produce rigorous reports and recommend licensure fairly infrequently. And the states that most closely scrutinize proposed regulations—Colorado and Hawaii—are also those that recommend licensure least often. In contrast, Arizona (together with Utah) produces the least rigorous reports and recommends licensure most often by far.
As an example of report rigor, Colorado’s reports tend to be extremely detailed. Prepared by COPRRR, they typically begin with an outline and summary of the proposal, including a brief statement of the applicant’s rationale for regulation. This is followed by a profile of the occupation, including typical duties, customers, work settings, any specialties, and training and education. Next comes a summary of any prior regulations, including those in other states, followed by an analysis of harms from the occupation, including any anecdotes submitted by the applicant and an explanation of COPRRR’s efforts to find other instances of harm. Importantly, in this section COPRR usually examines how (or whether) the requested regulation might alleviate alleged harms. Finally, the reports typically describe the need, or lack thereof, for regulation and make a recommendation, sometimes including possible alternatives.
In just one example of COPRRR’s rigorous, independent research and fact-finding, for its 2006 sunrise review of a request to license or certify dialysis technicians:
[The office] performed a literature search, contacted and interviewed the individual applicants, reviewed licensure laws in other states, conducted interviews of administrators of those programs, and interviewed numerous patients, technicians, and individuals involved in the industry. [The office] also interviewed members of nationally recognized dialysis certification and advocacy organizations in addition to representatives of the federal Centers for Medicare and Medicaid Services, and the director and staff of Network 15, a federal oversight organization for dialysis patients. In order to determine the degree of state and federal oversight, and the number and types of complaints filed against dialysis technicians in Colorado, [office] staff contacted representatives of the Colorado Department of Public Health and Environment and the Colorado Board of Nursing. To better understand the hemodialysis occupation, the author of this report visited individual hemodialysis facilities in the Denver Metro area, and reviewed education and training programs at various Colorado hemodialysis facilities. 4
Colorado law requires COPRRR to spend at least 10 months on its evaluations, which appears to pay off in report quality.
Arizona’s sunrise process looks very different. While COPRRR’s sunrise reviews take the better part of a year, Arizona’s take place during one to a few meetings of the legislature’s “committees of reference” (COR), which conduct the reviews and prepare the reports. COR members are not expected to conduct independent research or analysis, and, based on meeting minutes, they appear to do so rarely, if ever. Evidence presented in COR meetings is usually limited to that put forth by interested parties, which often takes the form of anecdotes or warnings of potential harm rather than hard data or a showing of patterns of harm. The lack of independent research also means scrutiny of interested parties’ claims is limited to COR members’ offhand queries during the meetings. The final sunrise reports are, together with Utah’s, the sparsest in our dataset, consisting of only a cover page stating the request, applicant and recommendation, plus the application and meeting agendas and minutes.
The rigor of states’ sunrise reports does not always align with the rigor of their laws. For example, based only on their laws, one might expect both Colorado and Hawaii to do a poor job evaluating and recommending least restrictive regulations (see Table 4), yet both do so consistently. This could be because of factors such as reviewer independence and culture. In Hawaii, the Office of the Auditor performs reviews. The office was created specifically to conduct reviews of government without pressure from other executive, legislative or nongovernmental entities. Helping to preserve the office’s independence, a sitting auditor serves renewable eight-year terms and can be removed prior to the end of a term only for cause. 5
The office’s special mandate may contribute to the quality of Hawaii’s reports. And Colorado’s COPRRR, while housed within the Department of Regulatory Agencies, is nevertheless insulated from political influence and prides itself on its long history of restraining regulatory burdens on occupations through sunrise, boasting of its success on its website. 6
Regardless, despite variation across states, most of the sunrise reviews in our dataset recommended against new licenses or any new regulation. And even within states, excepting Arizona, at least two-thirds of reviews recommended against licensure. These findings show licensing proposals tend to unravel under scrutiny, suggesting lawmakers—even in states without sunrise— should greet them with skepticism.