House Committee on Regulatory Reform

By Fred Moreno 

Now that the 2023 legislative session is underway, numerous House and Senate committees are meeting to discuss current legislation along with studies and issues of concern by members of the public, state agencies, and trade groups. One such committee, the House Committee on Regulatory Reform (“HCRR”), is of particular interest to this section. The HCRR met on Wednesday, March 15, and invited the John Locke Foundation along with the Rules Review Commission to give presentations to its committee members.

Jon Sanders, on behalf of the John Locke Foundation, gave a presentation entitled “Occupational Licensing.” Sanders started his presentation off by noting that the North Carolina Constitution states that “enjoyment of the fruits of their own labor” is among a North Carolina citizen’s inalienable rights. He went on to say that occupational licensing is an “entry barrier to someone seeking work in a desired field” and that licensing is North Carolina’s most restrictive occupational regulation, which should be used only when risk to the public welfare is highest. Sanders noted that the North Carolina Department of Commerce’s database shows 931 licenses, which include privilege licenses and special events permitting. He went on to discuss the benefits of licensure (i.e., to protect health, safety and welfare) along with the costs (i.e, fees and background checks). Sanders explained that these regulations result in higher prices for licensed work, fewer options, and poor or dangerous alternatives. He went on to state that these regulations also result in limited growth in licensed occupations, less competition, fewer economic opportunities and less wealth creation. Sanders did not cite any resources or data for these conclusions. Sanders suggested to reserve occupational licensing only for a significant public harm and to instead explore certification, registration, bonding/insurance, inspections, and stronger laws for consumer protections to combat other public harm. Finally, Sanders suggested that the legislative members consider other reforms such as Universal License Recognition, which has been passed in 19 states, along with an Occupational Licensing Consumer Choice Act. The latter would allow unlicensed persons to provide a non-license disclosure form to consumers, which would show their lack of licensure, but would list their other training, experience, or certifications. Sanders stated that consumers would be able to sue the “bad actors” for redress in court and could leave bad reviews for them, which would warn other consumers. He also welcomed people in that industry to call out the bad actors in their profession through advertising.

Bill Peaslee and Ashley Snyder, on behalf of the Rules Review Commission (“RRC”), gave a presentation on the Office of Administrative Hearings (“OAH”). They explained the functions of the different divisions of OAH and spent most of the time informing legislators of the rules review process, its delegation of authority, and the Administrative Procedure Act. Snyder discussed the difference between a “rule” and a “policy” and for members to be careful when drafting legislation to ensure that they are granting the proper amount of authority intended (“broad v. specific). Mr. Peaslee noted that OAH estimates that there are in excess of 1,000 administrative rules currently in the North Carolina Code where the adopting agency’s statutory authority was subsequently repealed. Mr. Peaslee requested that members support Senate Bill 81, which would permit Ms. Snyder, the current Codifier of Rules, to remove rules with repealed authority from the Code after giving notice to the agency affected.

Fred Moreno is the Vice-Chair of the NCBA Administrative Law Section. He is the Chief Deputy Legal Counsel for the North Carolina Real Estate Commission.