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New Mississippi Law Will Rein In Licensing Boards, Regulate State Regulators

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Cut regulations, reduce federal lawsuits, create jobs.

Those are the main goals of the Occupational Board Compliance Act (HB 1425), a newly signed law aimed at one of the state’s biggest, if little-known, labor issues: occupational licensing.

Today, nearly one-third of the state’s workforce is either licensed or certified by the government. By comparison, that’s more than the number of Mississippians who are represented by a union or who earn at or below the minimum wage, combined. According to the Heritage Foundation, occupational licensing raises prices for Mississippi households by more than $800 each year.

“This bill marks a watershed moment,” said Lee McGrath, senior legislative counsel at the Institute for Justice (where I work). “When it comes to innovative labor policy, Mississippi lawmakers can proudly say ‘follow our lead.’”

Institute for Justice,

Here’s how the Occupational Board Compliance Act will help. The Act will create an “Occupational Licensing Review Commission” empowered to provide “active supervision” over many of the executive branch’s licensing boards. Any new regulations must first be reviewed by the commission, which could approve, veto or modify them. Additionally, the Act declares that the policy of the state will be to “increase economic opportunities…by promoting competition.” And in furtherance of that goal, any occupational regulation “must use the least restrictive regulation necessary to protect consumers.”

Backed by the Institute for Justice, the Mississippi Center for Public Policy and the Mississippi chapter of Americans for Prosperity, the Occupational Board Compliance Act will rein in Mississippi’s sprawling administrative bureaucracies. Despite numerous attempts to curb and streamline over the years, there are now over 200 boards, agencies and commissions in the Magnolia State, the Clarion-Ledger reported last year. In fact, 60% of all money spent by the state is “controlled by a non-elected agency, board or commission.”

Moreover, the bill will shield licensing board members from liability under federal antitrust laws. Two years ago, the U.S. Supreme Court ruled in North Carolina State Board of Dental Examiners v. FTC that licensing board members, who often work in the same industry, can be sued and potentially subject to millions of dollars of damages, which may ultimately be paid for by taxpayers. But board members can have their immunity restored from federal antitrust lawsuits (and eliminate the exposure to judicial rewards) if they are under “active supervision,” which HB 1425 will implement.

The sheer scope and scale of occupational licensing can thwart determined entrepreneurs. Melony Armstrong knows this all too well. When Melony wanted to open her own natural hair braiding salon in Tupelo, she first had to complete 300 hours of coursework to get a license in “wigology.” None of those hours taught how to braid hair.

She faced an even tougher struggle when she wanted to teach others how braid. At the time, Mississippi wanted her to become a licensed cosmetology instructor, which takes 3,200 hours of classes. And again, none of those required classes taught natural braiding techniques, which, unlike cosmetology, don’t use harsh chemicals or dyes.

With help from the Institute for Justice, Melony filed a lawsuit against the state for infringing her right to economic liberty. In response, the governor signed a law to exempt braiding from the state’s cosmetology laws. Braiders now only need to pay a $25 registration fee and take a common-sense self-test on health and sanitation. Freed from useless government barriers, Melony has taught 125 people how to braid hair, while more than 2,600 braiders have registered.

Unfortunately, licensing laws still prevent far too many Mississippians from earning an honest living. A nationwide study by the Institute for Justice looked at 102 low- and middle-income occupations that are licensed in at least one state. Mississippi requires licenses for 55 of those occupations, more than 45 other states. Those licenses, on average, force Mississippians to finish 155 days of coursework and pass two exams.

Mississippi now has a chance to become a national leader for licensing reform. The Occupational Board Compliance Act will free markets, limit government, reduce litigation and boost entrepreneurship across the state.

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