II 

115TH CONGRESS 

1ST SESSION S. 1649 

To help States combat abuse of occupational licensing laws by economic 

incumbents, to promote competition, to encourage innovation, to protect 

consumers, and to facilitate the restoration of antitrust immunity to 

State occupational boards, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 27, 2017 

Mr. LEE (for himself, Mr. CRUZ, and Mr. SASSE) introduced the following bill; 

which was read twice and referred to the Committee on the Judiciary 

A BILL 

To help States combat abuse of occupational licensing laws 

by economic incumbents, to promote competition, to encourage innovation, to protect consumers, and to facilitate the restoration of antitrust immunity to State occupational boards, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Restoring Board Im5 munity Act of 2017’’ or the ‘‘RBI Act’’. 

6 SEC. 2. STATEMENT OF FINDINGS AND PURPOSE. 

7 Congress finds the following: 

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1 (1) The prevalence of occupational licensing has 

2 increased dramatically in recent decades, in part be3 cause private interests have sought licensing in order 

4 to limit competition. 

5 (2) Occupational licensing often limits opportu6 nities for workers, frustrates entrepreneurs seeking 

7 to introduce new business models, and raises prices 

8 paid by consumers. 

9 (3) Licensing should be imposed only to combat 

10 real, substantial threats to public health, safety, or 

11 welfare and only where other less restrictive regu12 latory alternatives are insufficient to protect con13 sumers and serve the public interest. 

14 (4) Regulators should consider a range of less 

15 restrictive alternatives before enacting an occupa16 tional licensing regime, which may include inspec17 tions, bonding or insurance requirements, registra18 tion, and voluntary certification. 

19 (5) Voluntary certification provides a particu20 larly significant alternative to licensure, as it allows 

21 market participants to signal to consumers the at22 tainment of personal qualifications without limiting 

23 entry into the marketplace. 

24 (6) The failure of State governments to adopt 

25 less restrictive alternatives to licensing, and less burmstockstill on DSK30JT082PROD with BILLS

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1 densome requirements in those areas where licensing 

2 is deemed necessary, has resulted in significant costs 

3 to consumers and the broader economy. 

4 (7) The United States Supreme Court re5 sponded to these concerns in North Carolina Board 

6 of Dental Examiners v. FTC, 135 S. Ct. 1101 

7 (2015), holding that self-interested licensing boards 

8 may be subject to liability under the antitrust laws, 

9 but that decision has also created significant uncer10 tainty for the States and their licensing boards. 

11 (8) Some States have responded to the decision 

12 in North Carolina Board of Dental Examiners by es13 tablishing a layer of bureaucratic oversight that 

14 merely monitors board actions for consistency with 

15 State licensing laws. This response is a missed op16 portunity for reform, as it does not address the spe17 cific competition concern raised in North Carolina 

18 Board of Dental Examiners or the underlying prob19 lems with over-reliance on occupational licensure as 

20 a regulatory approach and with overly broad enforce21 ment of licensing laws as a means to regulate com22 mercial activities outside an occupation’s scope of 

23 practice. 

24 (9) Legislation is necessary to clarify the re25 quirements of active supervision, both to offer States 

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1 a clear and certain mechanism to immunize their oc2 cupational boards and to make clear that mere bu3 reaucratic oversight to ensure consistency with State 

4 licensing laws does not suffice to confer immunity. 

5 (10) This Act is intended to offer States a 

6 choice between two alternative routes to achieve im7 munity for their occupational licensing boards—ei8 ther establishing a mechanism for meaningful active 

9 supervision of licensing boards by State officials or 

10 establishing a mechanism for meaningful judicial re11 view of board actions in the State courts. 

12 SEC. 3. DEFINITIONS. 

13 In this Act: 

14 (1) CERTIFICATION.—The term ‘‘certification’’ 

15 means a voluntary program under which— 

16 (A) a private organization (in the case of 

17 private certification) or the government of a 

18 State (in the case of government certification) 

19 authorizes an individual who meets certain per20 sonal qualifications to use ‘‘certified’’ as a des21 ignated title with respect to the performance of 

22 a lawful occupation; and 

23 (B) a non-certified individual may perform 

24 the lawful occupation for compensation but may 

25 not use the title ‘‘certified’’. 

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1 (2) GOOD FAITH.—The term ‘‘good faith’’, with 

2 respect to performance— 

3 (A) means diligent performance that is di4 rected towards achieving the policies set forth 

5 in this Act; 

6 (B) does not include performance that is— 

7 (i) designed to subvert or evade the 

8 policies set forth in this Act; or 

9 (ii) carried out in a manner that has 

10 the systematic effect of subverting or evad11 ing the policies set forth in this Act; and 

12 (C) refers to an objective, rather than sub13 jective, standard. 

14 (3) LAWFUL OCCUPATION.—The term ‘‘lawful 

15 occupation’’ means a course of conduct, pursuit, or 

16 profession that includes the sale of goods or services 

17 that are not themselves illegal to sell irrespective of 

18 whether the individual selling the goods or services 

19 is subject to occupational licensing laws. 

20 (4) LEAST RESTRICTIVE REGULATION.—The 

21 term ‘‘least restrictive regulation’’ means, from least 

22 to most restrictive: 

23 (A) One or more of the following, each of 

24 which shall be considered equally restrictive: 

25 (i) Market competition. 

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1 (ii) Industry or consumer-related rat2 ings and reviews. 

3 (iii) Private certification. 

4 (iv) A specific private civil cause of 

5 action to remedy consumer harm. 

6 (v) A deceptive trade practice act. 

7 (vi) A regulation of the process of 

8 providing the specific goods or services to 

9 consumers. 

10 (vii) Inspections. 

11 (viii) Bonding or insurance. 

12 (ix) Registration. 

13 (x) Government certification. 

14 (B) Specialty occupational license for med15 ical reimbursement. 

16 (C) Occupational license. 

17 (5) LESS RESTRICTIVE ALTERNATIVES TO OC18 CUPATIONAL LICENSING.—The term ‘‘less restrictive 

19 alternatives to occupational licensing’’— 

20 (A) means regulations that achieve the 

21 public health or safety goals asserted by the 

22 government to justify licensing while imposing a 

23 less onerous restriction on entry into the mar24 ketplace; and 

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1 (B) includes the alternative forms of regu2 lation described in paragraph (4)(A). 

3 (6) MEMBER, OFFICER, OR EMPLOYEE.—The 

4 term ‘‘member, officer, or employee’’, with respect to 

5 an occupational licensing board, means an individual 

6 appointed by a State to the board. 

7 (7) OCCUPATIONAL LICENSE.—The term ‘‘occu8 pational license’’ means a nontransferable authoriza9 tion under law for an individual to perform a lawful 

10 occupation for compensation based on meeting per11 sonal qualifications established by the State govern12 ment. 

13 (8) OCCUPATIONAL LICENSING BOARD.—The 

14 term ‘‘occupational licensing board’’ or ‘‘board’’ 

15 means an entity established under State law— 

16 (A) the express purpose of which is to reg17 ulate the personal qualifications required to en18 gage in or practice a particular lawful occupa19 tion; 

20 (B) that has authority conferred by State 

21 law to interpret or enforce the occupational li22 censing laws of the State; and 

(C) not less than 2 23 ⁄3 of the members of 

24 which are appointed by an elected official of the 

25 State. 

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1 (9) OCCUPATIONAL LICENSING LAW.—The term 

2 ‘‘occupational licensing law’’— 

3 (A) means a State statute that allows an 

4 individual to work in a lawful occupation and 

5 use an occupational title; and 

6 (B) does not include a business license, fa7 cility license, building permit, or zoning and 

8 land use regulation, except to the extent that 

9 the law regulates an individual’s personal quali10 fications to engage in or practice a lawful occu11 pation. 

12 (10) OCCUPATIONAL REGULATION.—The term 

13 ‘‘occupational regulation’’— 

14 (A) means a statute, rule, practice, policy, 

15 or other law that substantially burdens an indi16 vidual’s ability to work in a lawful occupation; 

17 (B) includes a regulation requiring reg18 istration, certification, or an occupational li19 cense; and 

20 (C) does not include a business license, fa21 cility license, building permit, or zoning and 

22 land use regulation except to the extent that 

23 such a requirement or restriction substantially 

24 burdens an individual’s ability to work in a law25 ful occupation. 

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1 (11) PERSONAL QUALIFICATIONS.—The term 

2 ‘‘personal qualifications’’ means criteria related to 

3 an individual’s personal background and characteris4 tics, including completion of an approved educational 

5 program, satisfactory performance on an examina6 tion, work experience, other evidence of attainment 

7 of requisite skills or knowledge, moral standing, 

8 criminal history, and completion of continuing edu9 cation. 

10 (12) REGISTRATION.—The term ‘‘registration’’ 

11 means a requirement that an individual give notice 

12 to the government of a State that may include— 

13 (A) the individual’s name and address; 

14 (B) the individual’s agent for service of 

15 process; 

16 (C) the location of the activity to be per17 formed; and 

18 (D) a description of the service the indi19 vidual provides. 

20 (13) SPECIALTY OCCUPATIONAL LICENSE FOR

21 MEDICAL REIMBURSEMENT.—The term ‘‘specialty 

22 occupational license for medical reimbursement’’ 

23 means a nontransferable authorization in law for an 

24 individual to qualify for payment or reimbursement 

25 from a government agency for the non-exclusive promstockstill on DSK30JT082PROD with BILLS

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1 vision of medical services based on meeting personal 

2 qualifications established by the State legislature. 

3 (14) STATE.—The term ‘‘State’’ means— 

4 (A) each of the several States; and 

5 (B) the District of Columbia. 

6 SEC. 4. ANTITRUST IMMUNITY. 

7 (a) IN GENERAL.—Subject to subsection (b), the 

8 Sherman Act (15 U.S.C. 1 et seq.) shall not apply to any 

9 action of an occupational licensing board of a State, or 

10 any action of a member, officer, or employee of the board 

11 acting in the official capacity of that member, officer, or 

12 employee, if— 

13 (1) the requirements under section 5 of this Act 

14 are satisfied; or 

15 (2) the requirements under section 6 of this Act 

16 are satisfied. 

17 (b) REQUIREMENT OF GOOD FAITH.—The immunity 

18 provided under subsection (a) shall not apply to any action 

19 of an occupational licensing board of a State, or any action 

20 of a member, officer, or employee of the board acting in 

21 the official capacity of that member, officer, or employee, 

22 unless the State acts in good faith to perform the applica23 ble requirements under section 5 or 6. 

24 (c) EXISTING ENTITIES OR PROCEDURES.—The fact 

25 that a State governmental entity or procedure was estabmstockstill on DSK30JT082PROD with BILLS

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1 lished before the date of enactment of this Act shall not 

2 prevent an occupational licensing board of the State, or 

3 a member, officer, or employee of that board, from quali4 fying for immunity under subsection (a) if the State gov5 ernmental entity or procedure satisfies the applicable re6 quirements under section 5 or 6. 

7 (d) SAVINGS CLAUSE.—The immunity provided 

8 under subsection (a) shall not apply to an action unrelated 

9 to regulating the personal qualifications required to en10 gage in or practice a lawful occupation, such as rules of 

11 an occupational licensing board governing minimum prices 

12 or residency requirements. 

13 SEC. 5. ACTIVE SUPERVISION. 

14 (a) IN GENERAL.—The immunity under section 4(a) 

15 shall apply to any action of an occupational licensing 

16 board of a State, or any action of a member, officer, or 

17 employee of that board acting in the official capacity of 

18 that member, officer, or employee, if— 

19 (1) the actions of the occupational licensing 

20 board or member, officer, or employee are author21 ized by a non-frivolous interpretation of the occupa22 tional licensing laws of the State; 

23 (2) the State adopts a policy of using less re24 strictive alternatives to occupational licensing to ad25 dress real, substantial threats to public health, safemstockstill on DSK30JT082PROD with BILLS

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1 ty, or welfare, in accordance with subsection (b) of 

2 this section; and 

3 (3) the State enacts legislation providing for ac4 tive supervision of the actions of an occupational li5 censing board and any member, officer, or employee 

6 of such a board, in accordance with subsection (c) 

7 of this section. 

8 (b) POLICY.—The State shall adopt a policy pro9 viding that— 

10 (1) occupational licensing laws should be con11 strued and applied to— 

12 (A) protect public health, safety, and wel13 fare; and 

14 (B) increase economic opportunity, pro15 mote competition, and encourage innovation; 

16 (2) regulators should displace competition 

17 through occupational licensing laws only if less re18 strictive alternatives to occupational licensing will 

19 not suffice to protect consumers from real, substan20 tial threats to public health, safety, or welfare; and 

21 (3) an occupational licensing law should be en22 forced against an individual only to the extent the 

23 individual sells goods or services that are included 

24 explicitly in the statute or regulation that defines 

25 the occupation’s scope of practice. 

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1 (c) ACTIVE SUPERVISION.— 

2 (1) IN GENERAL.—The legislation enacted 

3 under subsection (a)(3) shall satisfy each of the re4 quirements under this subsection. 

5 (2) DAY-TO-DAY SUPERVISION.— 

6 (A) ESTABLISHMENT OF OFFICE OF SU7 PERVISION OF OCCUPATIONAL BOARDS.—The 

8 State shall establish an Office of Supervision of 

9 Occupational Boards (referred to in this sub10 section as the ‘‘Office’’) to review the actions of 

11 occupational licensing boards to ensure compli12 ance with the policy adopted under subsection 

13 (b). 

14 (B) DUTIES.—The Office shall— 

15 (i) review and explicitly approve or re16 ject in writing any occupational regulation 

17 proposed by a board before the board may 

18 adopt or implement the occupational regu19 lation; 

20 (ii) play a substantial role in the de21 velopment of a board’s rules and policies to 

22 ensure they benefit consumers and do not 

23 serve the private interests of providers of 

24 goods and services regulated by the board; 

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1 (iii) disapprove in writing the use of 

2 any board rule or policy relating to an oc3 cupational regulation and terminate any 

4 enforcement action, including any such ac5 tion pending on the date of enactment of 

6 this Act, that is inconsistent with the pol7 icy adopted under subsection (b); 

8 (iv) exercise control over each board 

9 by reviewing and affirmatively approving in 

10 writing only occupational regulations that 

11 are consistent with the policy adopted 

12 under subsection (b); 

13 (v) use the analysis conducted under 

14 paragraph (5) and conduct reasonable in15 vestigations to gain additional information, 

16 including about less restrictive regulatory 

17 approaches, to promote compliance with 

18 subsection (b); 

19 (vi)(I) be staffed by not less than 1 

20 attorney; and 

21 (II) prohibit attorneys working in the 

22 Office from providing general counsel to 

23 any board; and 

24 (vii)(I) approve board actions explic25 itly in writing, rather than implicitly; and 

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1 (II) clearly establish that silence or 

2 inaction does not constitute approval. 

3 (3) INTERNAL REVIEW.— 

4 (A) COMPLAINT.—The State shall estab5 lish a mechanism under which a person who is 

6 a resident of or has a license to operate a busi7 ness in the State may file a complaint with the 

8 Office about an occupational regulation of an 

9 occupational licensing board in the State that 

10 the person believes is inconsistent with the pol11 icy adopted under subsection (b). 

12 (B) OFFICE RESPONSE.—Not later than 

13 90 days after the date on which a person files 

14 a complaint under subparagraph (A), the Office 

15 shall— 

16 (i) investigate the complaint; 

17 (ii) identify remedies and instruct the 

18 board to take action, where appropriate; 

19 and 

20 (iii) respond in writing to the com21 plainant. 

22 (C) REVIEW.—The State shall establish a 

23 mechanism for review of a determination made 

24 by the Office under subparagraph (B), under 

25 which a complainant may appeal the determinamstockstill on DSK30JT082PROD with BILLS

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1 tion to the general division of the trial court of 

2 the State if the challenged occupational regula3 tion would substantially burden the complain4 ant’s ability to— 

5 (i) engage in a lawful occupation; or 

6 (ii) employ or contract other individ7 uals for the performance of a lawful occu8 pation; and 

9 (4) RIGHT TO RAISE DEFENSE.— 

10 (A) IN GENERAL.—The State shall author11 ize an individual to assert as a defense, in any 

12 administrative or judicial proceeding to enforce 

13 an occupational regulation, that the regulation 

14 does not comply with the policy adopted under 

15 subsection (b). 

16 (B) PROCEDURES.—In a proceeding de17 scribed in subparagraph (A)— 

18 (i) an individual who asserts a defense 

19 under this paragraph has the initial bur20 den of proof that the occupational regula21 tion being enforced substantially burdens 

22 the individual’s ability to engage in a law23 ful occupation; 

24 (ii) if an individual meets the burden 

25 of proof under clause (i), the State shall be 

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1 required to demonstrate by clear and con2 vincing evidence that the occupational reg3 ulation— 

4 (I) advances an important gov5 ernment interest in protecting against 

6 real, substantial threats to public 

7 health, safety, or welfare; and 

8 (II) is substantially related to 

9 achievement of the important govern10 ment interest described in subclause 

11 (I), in light of the availability of less 

12 restrictive alternatives to occupational 

13 licensing; and 

14 (iii) in reviewing an alleged violation 

15 of the policy adopted under subsection (b), 

16 an administrative agency or a court— 

17 (I) shall make its own findings of 

18 fact and conclusions of law; 

19 (II) may not rely on a legislative 

20 finding of fact presented in admissible 

21 form to the agency or court; and 

22 (III) may not grant any pre23 sumption to a legislative determina24 tion— 

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1 (aa) of harm to public 

2 health, safety, or welfare; or 

3 (bb) that the occupational 

4 regulation is substantially related 

5 to achievement of the important 

6 government interest described in 

7 clause (ii)(I). 

8 (5) PERIODIC ADVISORY REVIEW.— 

9 (A) IN GENERAL.—The State shall estab10 lish a mechanism for periodic non-binding re11 view of existing occupational regulations, and 

12 non-binding review of new proposed occupa13 tional regulations, to ensure that the occupa14 tional regulations comply with the policy adopt15 ed under subsection (b). 

16 (B) SCOPE OF REVIEW.—The entity con17 ducting the review under subparagraph (A)— 

18 (i) shall publish an annual written re19 port encompassing approximately 20 per20 cent of the occupations subject to occupa21 tional regulations within the State, such 

22 that the entity will review all occupational 

23 regulations within the State during each 5- 

24 year period; and 

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1 (ii) shall publish a written report as2 sessing any proposed occupational licensing 

3 law, or other proposed law that would ex4 pand the authority of an occupational li5 censing board to impose occupational regu6 lations, before the proposed law is sub7 mitted to a vote by the State legislature. 

8 (C) REQUIREMENTS FOR ANALYSIS.—In 

9 conducting the review required under subpara10 graph (A), the entity shall— 

11 (i) determine whether the law or other 

12 regulation satisfies the policy adopted 

13 under subsection (b) of using the least re14 strictive regulation necessary to protect 

15 consumers from real, substantial threats to 

16 public health, safety, or welfare; 

17 (ii) evaluate the effects of the law or 

18 other regulation on opportunities for work19 ers, consumer choices and costs, general 

20 unemployment, market competition, gov21 ernmental costs, and other effects; 

22 (iii) compare the law or other regula23 tion to whether and how other States regu24 late the applicable occupation; and 

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1 (iv) if the applicable occupation is 

2 subject to an occupational licensing law, 

3 evaluate— 

4 (I) the feasibility of entering into 

5 reciprocity compacts with one or more 

6 other States to improve worker mobil7 ity and labor market flexibility; and 

8 (II) the advisability of endorsing 

9 occupational licenses granted by other 

10 States to spouses of active service 

11 military members as if those occupa12 tional licenses were granted by the 

13 State conducting the review. 

14 SEC. 6. JUDICIAL REVIEW. 

15 (a) IN GENERAL.—The immunity under section 4(a) 

16 shall apply to any action of an occupational licensing 

17 board of a State, or any action of a member, officer, or 

18 employee of that board acting in the official capacity of 

19 that member, officer, or employee, if— 

20 (1) the actions of the occupational licensing 

21 board or member, officer, or employee are author22 ized by a non-frivolous interpretation of the occupa23 tional licensing laws of the State; 

24 (2) the State adopts a policy of using less re25 strictive alternatives to occupational licensing to admstockstill on DSK30JT082PROD with BILLS

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1 dress real, substantial threats to public health, safe2 ty, or welfare, in accordance with section 5(b); and 

3 (3) the State enacts legislation providing for ju4 dicial review of occupational licensing laws, in ac5 cordance with subsection (b) of this section. 

6 (b) JUDICIAL REVIEW LEGISLATION.—Legislation 

7 enacted by a State under subsection (a)(3)— 

8 (1) shall— 

9 (A) prohibit the State and any occupa10 tional licensing board from imposing an occupa11 tional licensing law unless the State— 

12 (i) identifies an important government 

13 interest in protecting against real, substan14 tial threats to public health, safety, or wel15 fare; and 

16 (ii) demonstrates that the occupa17 tional licensing law is substantially related 

18 to achievement of the important govern19 ment interest described in clause (i), in 

20 light of the availability of less restrictive 

21 alternatives to occupational licensing; 

22 (B) provide an affirmative defense against 

23 enforcement of any occupational licensing law 

24 of the State under which the State shall be remstockstill on DSK30JT082PROD with BILLS

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1 quired to demonstrate that the standard under 

2 subparagraph (A) has been met; 

3 (C) establish a cause of action under 

4 which— 

5 (i) a person may bring an action for 

6 injunctive relief against enforcement of an 

7 occupational licensing law of the State; 

8 (ii) the plaintiff bears the initial bur9 den to prove that the challenged occupa10 tional licensing law substantially burdens 

11 the plaintiff’s ability to engage in a lawful 

12 occupation; and 

13 (iii) once the plaintiff makes the ini14 tial showing under clause (ii), the State is 

15 required to demonstrate that the standard 

16 under subparagraph (A) has been met; 

17 (D) provide for an award of reasonable 

18 costs and attorney fees to a person who success19 fully challenges the application of an occupa20 tional licensing law of the State by— 

21 (i) raising an affirmative defense 

22 under subparagraph (B); or 

23 (ii) bringing an action under subpara24 graph (C); and 

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1 (E) provide for independent judicial review 

2 of the occupational licensing laws of the State 

3 to ensure that the standard set forth in sub4 paragraph (A) has been met; and 

5 (2) may not authorize a court to— 

6 (A) uphold enforcement of an occupational 

7 licensing law of the State simply because the 

8 court believes the law is rationally related to a 

9 legitimate governmental purpose; 

10 (B) rely on hypothetical risks to public 

11 safety, not substantiated by evidence in the 

12 record, to uphold enforcement of an occupa13 tional licensing law of the State; 

14 (C) defer to factual or legal conclusions of 

15 another person or entity, rather than exercising 

16 independent review; or 

17 (D) rely on a post hoc justification for the 

18 action of an occupational licensing board that 

19 was not put forward by the board at the time 

20 of the challenged action. 

21 (c) RULE OF CONSTRUCTION.—Nothing in sub22 section (b) shall be construed to require legislation enacted 

23 by a State under subsection (a)(3) to provide a right to 

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1 recover monetary damages, other than reasonable costs 

2 and attorney fees as provided under subsection (b)(1)(D). 

Æ 

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