Michigan Senate Bill 40 would create a review process of the state’s occupational licensing regulations. The Michigan Law Revision Commission would be charged with this task and would recommend the least restrictive regulation necessary to protect consumers from harms that threaten public health and safety.
If the law is passed, the MLRC will annually review the licensing laws of approximately 20% of the occupations that are subject to licensure. Over each five-year period, then, all licensed occupations would be reviewed. In its analysis, the MLRC will employ a rebuttable presumption that market competition and private remedies are sufficient to protect consumers. If that presumption is rebutted, the MLRC will recommend licensing laws tailored to protect consumers and address specific issues identified by the commission.
Under the proposed legislation, the term “least restrictive regulation” is defined using a hierarchy of regulatory mechanisms, ordered here from least to most restrictive:
- Market competition
- Private third-party or consumer-created ratings and reviews
- Voluntary certification from a private third party
- Mediation in civil court to remedy customer harm
- Regulations of the equipment or material used to provide goods or services to consumers, such as requiring these items to meet certain specifications
- Requiring an inspection of facilities or activities
- A mandate to purchase liability insurance
- Voluntary public registration with the state
- Voluntary government certification, with only certified individuals being able to use the term “licensed” or “certified”
- A specialty, optional occupational license established for the purpose of qualifying licensees for third-party payments, such as for medical reimbursement
- An occupational license
Choosing the most appropriate and least restrictive regulation requires a comprehensive evaluation of each licensed occupation in Michigan. What follows are issues that should be considered before making a judgement about which regulatory mechanism would be most appropriate for a given occupation.