Occupational Licensing

Nebraska Just Passed a Major Occupational Licensing Reform Measure. Here's Why It Matters.

Libertarian state Sen. Laura Ebke's bill triggers a review of state licensing laws, opens more opportunities for individuals with criminal histories.


Photo via state Sen. Laura Ebke

Nebraska lawmakers struck a rare tri-partisan blow against onerous occupational licensing laws on the 60th and final day of the 2018 legislative session, voting 45–1 to pass a major reform bill authored by Libertarian state Sen. Laura Ebke.

Ebke's Occupational Board Reform Act requires state lawmakers to undertake a review of Nebraska's occupational licensing laws with an eye toward loosening or eliminating requirements that serve as barriers to employment without benefiting public safety. The bill requires that licensing laws "respect the fundamental right of an individual to pursue an occupation" and instructs lawmakers to favor less restrictive forms of regulation—which could include private certification, registration, insurance or bonding requirements, inspections, open market competition, or a combination of these approaches—in circumstances where one-size-fits-all licensing rules violate that right.

"It will help give power back to Nebraskans to cut the hidden tax of red tape that is creating barriers for working people across our state," says Jim Vokal, CEO of the Platte Institute, a Nebraska-based think tank.

The bill's backers included the free-marketeers at the Platte Institute and the licensing reform campaigners at the Institute for Justice, a libertarian law firm that helped craft the bill. But it also won support across the political spectrum. The Nebraska chapter of the American Civil Liberties Union sponsored a series of events at locations around the state highlighting the bill's importance, and the conservatives at the Wall Street Journal editorial page called the bill a "model for licensing reform."

Nebraska licenses at least 174 different professions. (The full list, including "acupuncturists," "bulk milk haulers," "geologists," "nail technicians," "personal trainers," and even "swimming pool operators," was included on page 3 of the original version of Ebke's bill.) The Platte Institute has found that "many of Nebraska's licensing requirements are more burdensome than its neighboring states."

A 2017 report from the Institute for Justice highlighted how little sense some of the state's licensing rules make. Becoming a cosmetologist in Nebraska requires 2,100 hours of training, compared to just 138 hours of training required to become an emergency medical technician. It is such arbitrary, nonsensical rules that the five-year legislative review process will target.

Ebke, the Libertarian Party's only sitting state senator, told Reason's Brian Doherty earlier this month that her unique position in the Nebraska unicameral legislature might have helped the bill's chances. "Most of the co-sponsors are Republicans," she said. "The fact that I'm not a Republican allows some of the more liberal members of the body to come and talk to me."

The lone "nay" vote Wednesday came from state Sen. Bruce Bostelman (R-Brainard). Gov. Pete Ricketts, a Republican, has not said whether he will sign the bill.

In the wake of Wednesday's vote, Ebke tells Reason she's "very pleased."

"We still need the signature of the governor, but we're optimistic," Ebke says. Passing with such overwhelming support—including "yes" votes from lawmakers who had opposed the bill at early stages in the legislative process—makes it increasingly likely that Ricketts will sign the bill, she notes. Although it passed with a veto-proof majority, there will not be an opportunity to overturn a veto because the legislative session ends today.

"If the governor signs this bill, Nebraska would become a national leader in licensing reform and set a landmark model for other states to follow," says Lee McGrath, senior legislative counsel at the Institute for Justice.

Another important aspect of the bill is a change how state licensing boards will review criminal histories. Under the terms of Ebke's bill, boards would provide an advisory opinion to prospective applicants as to whether or not their criminal history would disqualify them from licensure, even though the underlying license requirements would remain in place.*

That's a big change from the status quo. In many states, licensing boards are allowed to ban anyone with a criminal record from qualifying for a license, usually under vague rules prohibiting anyone not showing "good character" or "moral turpitude" from holding a licensed job. Nebraska has over 450 occupational and business license restrictions on ex-offenders, according to the American Bar Association.

That's obviously good news for ex-cons who want to pursue a a licensed profession, but it's also good news for everyone else. After getting out of prison, the best indicator of whether someone will commit another crime is whether he or she is able to find a job. Not surprisingly, states with stricter licensing rules tend to have higher rates of recidivism, as research from the Arizona State University economist Stephen Slivinski has shown.

"Nebraska's existing professional licensing structure is full of potential barriers for those who have paid their debt to society," Danielle Conrad, executive director of the Nebraska chapter of the American Civil Liberties Union, said last year when the organization announced its support for Ebke's bill. "Removing those barriers will help more Nebraskans secure good jobs which not only helps them and their families, but supports our economy while reducing recidivism."

(*This story has been updated to clarify how the bill addresses licensing requirements for individuals with criminal records)