Examining the Right to Earn a Living Act, part 9

To this point, the Right to Earn a Living Act has made the case for structural reform of occupational licensing, resolving to limit entry regulations and public service restrictions to only those that are determined to be demonstrably necessary and carefully tailored. The previous entry explained the importance of those two terms. Acting in concert, they function as a very difficult test for a proposed occupational regulation (or existing one, under review) to pass.

What is the mechanism for removal of those regulations that fail the test? Here is how the act would provide that:

Section 6. {Elimination of Entry Regulations.}

(A) Within one year following enactment, every agency shall conduct a comprehensive review of all entry regulations within their jurisdictions, and for each such entry regulation it shall:
(1) Articulate with specificity the public health, safety, or welfare objective(s) served by the regulation, and
(2) Articulate the reason(s) why the regulation is necessary to serve the specified objective(s).

(B) To the extent the agency finds any regulation that does not satisfy the standard set forth in Section 4, it shall:
(1) Repeal the entry regulation or modify the entry regulation to conform with the standard of Section 4 if such action is not within the agency’s authority to do so; or
(2) Recommend to the legislature actions necessary to repeal or modify the entry regulation to conform to the standard of Section 4 if such action is not within the agency’s authority.

(C) Within 15 months following enactment, each agency shall report to the legislature on all actions taken to conform with this section.

First, the act would subject all affected regulations to review by their originating agency. This review would be stricter than periodic review with sunset provisions — which, as North Carolina leaders know, is a strong policy for limiting heedless rulemaking and fighting arbitrary regulation in its own right. This review would also require the originating agency to specify which exact “public health, safety, or welfare objective(s)” are served by the regulation, then specify the precise reasons why the regulation is what meeting those objectives requires.

Basically, it would require (within a reasonable amount of time) the licensing agency to state what it intends to accomplish with the entry regulation, then attest that the regulation is the only way to accomplish it. Those articulations would feature in legislative oversight of agency decisions, but also in court reviews should the regulation be challenged.

This approach is similar to a regulatory accountability reform long promoted by the John Locke Foundation: stated objectives and outcome measures. As I explained here,

No matter how seemingly well considered it is, any new rule poses a real risk of unintended, unforeseen negative consequences. For this reason, agencies should be mandated to include stated objectives and outcome measures for regulations, so that when the time for review arrives, the regulations can be held accountable to them.

Furthermore, each rule creates its own winners and losers, and the winners of any regulation would be able to point to positive effects among themselves, regardless of whether the rule actually addresses its original purposes. It is therefore also important to be able to test a rule according to its foundational purposes, not any unintended, extraneous, isolated positive effects it has.

If the licensing agency cannot make a good case for the entry regulation or public service restriction, then under the act it would be compelled either to repeal the regulation or modify it to a form that it could explain. After the review, then, all remaining licensing restrictions would be explicitly explained and justified by their originating agencies.

The next step under the act, after the agency has officially documented its reasons for the entry regulation or public service restriction, is to allow for a member of the public to challenge it. The next entry in this series will examine how the Right to Earn a Living Act would handle such challenges.


Posts examining the Right to Earn a Living Act:

Part 1: A fundamental civil right
Part 2: A well-known path up from poverty
Part 3: Legitimate vs. arbitrary regulation
Part 4: Fewer jobs, higher prices
Part 5: Greater burden for poor workers and consumers
Part 6: Three main objectives
Part 7: Defining the terms
Part 8: A very high bar
Part 9: Defending the decision to license
Part 10: Challenging the decision to license
Epilogue: Securing rights on the local level, too

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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