Title: RBI Act
Policy area: Commerce

Summary:
Restoring Board Immunity Act of 2017 or the RBI Act
This bill grants antitrust immunity to state occupational licensing boards in states that satisfy occupational licensing law requirements, including: (1) requiring a board's actions to be authorized by a non-frivolous interpretation of the state's occupational licensing laws; and (2) using less restrictive alternatives to occupational licensing to address threats to public health, safety, or welfare. Such states must also establish an office to supervise boards or provide for judicial review of occupational licensing laws.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1649 Introduced in Senate (IS)]

<DOC>






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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Restoring Board Immunity Act of 
2017'' or the ``RBI Act''.

SEC. 2. STATEMENT OF FINDINGS AND PURPOSE.

    Congress finds the following:
            (1) The prevalence of occupational licensing has increased 
        dramatically in recent decades, in part because private 
        interests have sought licensing in order to limit competition.
            (2) Occupational licensing often limits opportunities for 
        workers, frustrates entrepreneurs seeking to introduce new 
        business models, and raises prices paid by consumers.
            (3) Licensing should be imposed only to combat real, 
        substantial threats to public health, safety, or welfare and 
        only where other less restrictive regulatory alternatives are 
        insufficient to protect consumers and serve the public 
        interest.
            (4) Regulators should consider a range of less restrictive 
        alternatives before enacting an occupational licensing regime, 
        which may include inspections, bonding or insurance 
        requirements, registration, and voluntary certification.
            (5) Voluntary certification provides a particularly 
        significant alternative to licensure, as it allows market 
        participants to signal to consumers the attainment of personal 
        qualifications without limiting entry into the marketplace.
            (6) The failure of State governments to adopt less 
        restrictive alternatives to licensing, and less burdensome 
        requirements in those areas where licensing is deemed 
        necessary, has resulted in significant costs to consumers and 
        the broader economy.
            (7) The United States Supreme Court responded to these 
        concerns in North Carolina Board of Dental Examiners v. FTC, 
        135 S. Ct. 1101 (2015), holding that self-interested licensing 
        boards may be subject to liability under the antitrust laws, 
        but that decision has also created significant uncertainty for 
        the States and their licensing boards.
            (8) Some States have responded to the decision in North 
        Carolina Board of Dental Examiners by establishing a layer of 
        bureaucratic oversight that merely monitors board actions for 
        consistency with State licensing laws. This response is a 
        missed opportunity for reform, as it does not address the 
        specific competition concern raised in North Carolina Board of 
        Dental Examiners or the underlying problems with over-reliance 
        on occupational licensure as a regulatory approach and with 
        overly broad enforcement of licensing laws as a means to 
        regulate commercial activities outside an occupation's scope of 
        practice.
            (9) Legislation is necessary to clarify the requirements of 
        active supervision, both to offer States a clear and certain 
        mechanism to immunize their occupational boards and to make 
        clear that mere bureaucratic oversight to ensure consistency 
        with State licensing laws does not suffice to confer immunity.
            (10) This Act is intended to offer States a choice between 
        two alternative routes to achieve immunity for their 
        occupational licensing boards--either establishing a mechanism 
        for meaningful active supervision of licensing boards by State 
        officials or establishing a mechanism for meaningful judicial 
        review of board actions in the State courts.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Certification.--The term ``certification'' means a 
        voluntary program under which--
                    (A) a private organization (in the case of private 
                certification) or the government of a State (in the 
                case of government certification) authorizes an 
                individual who meets certain personal qualifications to 
                use ``certified'' as a designated title with respect to 
                the performance of a lawful occupation; and
                    (B) a non-certified individual may perform the 
                lawful occupation for compensation but may not use the 
                title ``certified''.
            (2) Good faith.--The term ``good faith'', with respect to 
        performance--
                    (A) means diligent performance that is directed 
                towards achieving the policies set forth in this Act;
                    (B) does not include performance that is--
                            (i) designed to subvert or evade the 
                        policies set forth in this Act; or
                            (ii) carried out in a manner that has the 
                        systematic effect of subverting or evading the 
                        policies set forth in this Act; and
                    (C) refers to an objective, rather than subjective, 
                standard.
            (3) Lawful occupation.--The term ``lawful occupation'' 
        means a course of conduct, pursuit, or profession that includes 
        the sale of goods or services that are not themselves illegal 
        to sell irrespective of whether the individual selling the 
        goods or services is subject to occupational licensing laws.
            (4) Least restrictive regulation.--The term ``least 
        restrictive regulation'' means, from least to most restrictive:
                    (A) One or more of the following, each of which 
                shall be considered equally restrictive:
                            (i) Market competition.
                            (ii) Industry or consumer-related ratings 
                        and reviews.
                            (iii) Private certification.
                            (iv) A specific private civil cause of 
                        action to remedy consumer harm.
                            (v) A deceptive trade practice act.
                            (vi) A regulation of the process of 
                        providing the specific goods or services to 
                        consumers.
                            (vii) Inspections.
                            (viii) Bonding or insurance.
                            (ix) Registration.
                            (x) Government certification.
                    (B) Specialty occupational license for medical 
                reimbursement.
                    (C) Occupational license.
            (5) Less restrictive alternatives to occupational 
        licensing.--The term ``less restrictive alternatives to 
        occupational licensing''--
                    (A) means regulations that achieve the public 
                health or safety goals asserted by the government to 
                justify licensing while imposing a less onerous 
                restriction on entry into the marketplace; and
                    (B) includes the alternative forms of regulation 
                described in paragraph (4)(A).
            (6) Member, officer, or employee.--The term ``member, 
        officer, or employee'', with respect to an occupational 
        licensing board, means an individual appointed by a State to 
        the board.
            (7) Occupational license.--The term ``occupational 
        license'' means a nontransferable authorization under law for 
        an individual to perform a lawful occupation for compensation 
        based on meeting personal qualifications established by the 
        State government.
            (8) Occupational licensing board.--The term ``occupational 
        licensing board'' or ``board'' means an entity established 
        under State law--
                    (A) the express purpose of which is to regulate the 
                personal qualifications required to engage in or 
                practice a particular lawful occupation;
                    (B) that has authority conferred by State law to 
                interpret or enforce the occupational licensing laws of 
                the State; and
                    (C) not less than \2/3\ of the members of which are 
                appointed by an elected official of the State.
            (9) Occupational licensing law.--The term ``occupational 
        licensing law''--
                    (A) means a State statute that allows an individual 
                to work in a lawful occupation and use an occupational 
                title; and
                    (B) does not include a business license, facility 
                license, building permit, or zoning and land use 
                regulation, except to the extent that the law regulates 
                an individual's personal qualifications to engage in or 
                practice a lawful occupation.
            (10) Occupational regulation.--The term ``occupational 
        regulation''--
                    (A) means a statute, rule, practice, policy, or 
                other law that substantially burdens an individual's 
                ability to work in a lawful occupation;
                    (B) includes a regulation requiring registration, 
                certification, or an occupational license; and
                    (C) does not include a business license, facility 
                license, building permit, or zoning and land use 
                regulation except to the extent that such a requirement 
                or restriction substantially burdens an individual's 
                ability to work in a lawful occupation.
            (11) Personal qualifications.--The term ``personal 
        qualifications'' means criteria related to an individual's 
        personal background and characteristics, including completion 
        of an approved educational program, satisfactory performance on 
        an examination, work experience, other evidence of attainment 
        of requisite skills or knowledge, moral standing, criminal 
        history, and completion of continuing education.
            (12) Registration.--The term ``registration'' means a 
        requirement that an individual give notice to the government of 
        a State that may include--
                    (A) the individual's name and address;
                    (B) the individual's agent for service of process;
                    (C) the location of the activity to be performed; 
                and
                    (D) a description of the service the individual 
                provides.
            (13) Specialty occupational license for medical 
        reimbursement.--The term ``specialty occupational license for 
        medical reimbursement'' means a nontransferable authorization 
        in law for an individual to qualify for payment or 
        reimbursement from a government agency for the non-exclusive 
        provision of medical services based on meeting personal 
        qualifications established by the State legislature.
            (14) State.--The term ``State'' means--
                    (A) each of the several States; and
                    (B) the District of Columbia.

SEC. 4. ANTITRUST IMMUNITY.

    (a) In General.--Subject to subsection (b), the Sherman Act (15 
U.S.C. 1 et seq.) shall not apply to any action of an occupational 
licensing board of a State, or any action of a member, officer, or 
employee of the board acting in the official capacity of that member, 
officer, or employee, if--
            (1) the requirements under section 5 of this Act are 
        satisfied; or
            (2) the requirements under section 6 of this Act are 
        satisfied.
    (b) Requirement of Good Faith.--The immunity provided under 
subsection (a) shall not apply to any action of an occupational 
licensing board of a State, or any action of a member, officer, or 
employee of the board acting in the official capacity of that member, 
officer, or employee, unless the State acts in good faith to perform 
the applicable requirements under section 5 or 6.
    (c) Existing Entities or Procedures.--The fact that a State 
governmental entity or procedure was established before the date of 
enactment of this Act shall not prevent an occupational licensing board 
of the State, or a member, officer, or employee of that board, from 
qualifying for immunity under subsection (a) if the State governmental 
entity or procedure satisfies the applicable requirements under section 
5 or 6.
    (d) Savings Clause.--The immunity provided under subsection (a) 
shall not apply to an action unrelated to regulating the personal 
qualifications required to engage in or practice a lawful occupation, 
such as rules of an occupational licensing board governing minimum 
prices or residency requirements.

SEC. 5. ACTIVE SUPERVISION.

    (a) In General.--The immunity under section 4(a) shall apply to any 
action of an occupational licensing board of a State, or any action of 
a member, officer, or employee of that board acting in the official 
capacity of that member, officer, or employee, if--
            (1) the actions of the occupational licensing board or 
        member, officer, or employee are authorized by a non-frivolous 
        interpretation of the occupational licensing laws of the State;
            (2) the State adopts a policy of using less restrictive 
        alternatives to occupational licensing to address real, 
        substantial threats to public health, safety, or welfare, in 
        accordance with subsection (b) of this section; and
            (3) the State enacts legislation providing for active 
        supervision of the actions of an occupational licensing board 
        and any member, officer, or employee of such a board, in 
        accordance with subsection (c) of this section.
    (b) Policy.--The State shall adopt a policy providing that--
            (1) occupational licensing laws should be construed and 
        applied to--
                    (A) protect public health, safety, and welfare; and
                    (B) increase economic opportunity, promote 
                competition, and encourage innovation;
            (2) regulators should displace competition through 
        occupational licensing laws only if less restrictive 
        alternatives to occupational licensing will not suffice to 
        protect consumers from real, substantial threats to public 
        health, safety, or welfare; and
            (3) an occupational licensing law should be enforced 
        against an individual only to the extent the individual sells 
        goods or services that are included explicitly in the statute 
        or regulation that defines the occupation's scope of practice.
    (c) Active Supervision.--
            (1) In general.--The legislation enacted under subsection 
        (a)(3) shall satisfy each of the requirements under this 
        subsection.
            (2) Day-to-day supervision.--
                    (A) Establishment of office of supervision of 
                occupational boards.--The State shall establish an 
                Office of Supervision of Occupational Boards (referred 
                to in this subsection as the ``Office'') to review the 
                actions of occupational licensing boards to ensure 
                compliance with the policy adopted under subsection 
                (b).
                    (B) Duties.--The Office shall--
                            (i) review and explicitly approve or reject 
                        in writing any occupational regulation proposed 
                        by a board before the board may adopt or 
                        implement the occupational regulation;
                            (ii) play a substantial role in the 
                        development of a board's rules and policies to 
                        ensure they benefit consumers and do not serve 
                        the private interests of providers of goods and 
                        services regulated by the board;
                            (iii) disapprove in writing the use of any 
                        board rule or policy relating to an 
                        occupational regulation and terminate any 
                        enforcement action, including any such action 
                        pending on the date of enactment of this Act, 
                        that is inconsistent with the policy adopted 
                        under subsection (b);
                            (iv) exercise control over each board by 
                        reviewing and affirmatively approving in 
                        writing only occupational regulations that are 
                        consistent with the policy adopted under 
                        subsection (b);
                            (v) use the analysis conducted under 
                        paragraph (5) and conduct reasonable 
                        investigations to gain additional information, 
                        including about less restrictive regulatory 
                        approaches, to promote compliance with 
                        subsection (b);
                            (vi)(I) be staffed by not less than 1 
                        attorney; and
                            (II) prohibit attorneys working in the 
                        Office from providing general counsel to any 
                        board; and
                            (vii)(I) approve board actions explicitly 
                        in writing, rather than implicitly; and
                            (II) clearly establish that silence or 
                        inaction does not constitute approval.
            (3) Internal review.--
                    (A) Complaint.--The State shall establish a 
                mechanism under which a person who is a resident of or 
                has a license to operate a business in the State may 
                file a complaint with the Office about an occupational 
                regulation of an occupational licensing board in the 
                State that the person believes is inconsistent with the 
                policy adopted under subsection (b).
                    (B) Office response.--Not later than 90 days after 
                the date on which a person files a complaint under 
                subparagraph (A), the Office shall--
                            (i) investigate the complaint;
                            (ii) identify remedies and instruct the 
                        board to take action, where appropriate; and
                            (iii) respond in writing to the 
                        complainant.
                    (C) Review.--The State shall establish a mechanism 
                for review of a determination made by the Office under 
                subparagraph (B), under which a complainant may appeal 
                the determination to the general division of the trial 
                court of the State if the challenged occupational 
                regulation would substantially burden the complainant's 
                ability to--
                            (i) engage in a lawful occupation; or
                            (ii) employ or contract other individuals 
                        for the performance of a lawful occupation; and
            (4) Right to raise defense.--
                    (A) In general.--The State shall authorize an 
                individual to assert as a defense, in any 
                administrative or judicial proceeding to enforce an 
                occupational regulation, that the regulation does not 
                comply with the policy adopted under subsection (b).
                    (B) Procedures.--In a proceeding described in 
                subparagraph (A)--
                            (i) an individual who asserts a defense 
                        under this paragraph has the initial burden of 
                        proof that the occupational regulation being 
                        enforced substantially burdens the individual's 
                        ability to engage in a lawful occupation;
                            (ii) if an individual meets the burden of 
                        proof under clause (i), the State shall be 
                        required to demonstrate by clear and convincing 
                        evidence that the occupational regulation--
                                    (I) advances an important 
                                government interest in protecting 
                                against real, substantial threats to 
                                public health, safety, or welfare; and
                                    (II) is substantially related to 
                                achievement of the important government 
                                interest described in subclause (I), in 
                                light of the availability of less 
                                restrictive alternatives to 
                                occupational licensing; and
                            (iii) in reviewing an alleged violation of 
                        the policy adopted under subsection (b), an 
                        administrative agency or a court--
                                    (I) shall make its own findings of 
                                fact and conclusions of law;
                                    (II) may not rely on a legislative 
                                finding of fact presented in admissible 
                                form to the agency or court; and
                                    (III) may not grant any presumption 
                                to a legislative determination--
                                            (aa) of harm to public 
                                        health, safety, or welfare; or
                                            (bb) that the occupational 
                                        regulation is substantially 
                                        related to achievement of the 
                                        important government interest 
                                        described in clause (ii)(I).
            (5) Periodic advisory review.--
                    (A) In general.--The State shall establish a 
                mechanism for periodic non-binding review of existing 
                occupational regulations, and non-binding review of new 
                proposed occupational regulations, to ensure that the 
                occupational regulations comply with the policy adopted 
                under subsection (b).
                    (B) Scope of review.--The entity conducting the 
                review under subparagraph (A)--
                            (i) shall publish an annual written report 
                        encompassing approximately 20 percent of the 
                        occupations subject to occupational regulations 
                        within the State, such that the entity will 
                        review all occupational regulations within the 
                        State during each 5-year period; and
                            (ii) shall publish a written report 
                        assessing any proposed occupational licensing 
                        law, or other proposed law that would expand 
                        the authority of an occupational licensing 
                        board to impose occupational regulations, 
                        before the proposed law is submitted to a vote 
                        by the State legislature.
                    (C) Requirements for analysis.--In conducting the 
                review required under subparagraph (A), the entity 
                shall--
                            (i) determine whether the law or other 
                        regulation satisfies the policy adopted under 
                        subsection (b) of using the least restrictive 
                        regulation necessary to protect consumers from 
                        real, substantial threats to public health, 
                        safety, or welfare;
                            (ii) evaluate the effects of the law or 
                        other regulation on opportunities for workers, 
                        consumer choices and costs, general 
                        unemployment, market competition, governmental 
                        costs, and other effects;
                            (iii) compare the law or other regulation 
                        to whether and how other States regulate the 
                        applicable occupation; and
                            (iv) if the applicable occupation is 
                        subject to an occupational licensing law, 
                        evaluate--
                                    (I) the feasibility of entering 
                                into reciprocity compacts with one or 
                                more other States to improve worker 
                                mobility and labor market flexibility; 
                                and
                                    (II) the advisability of endorsing 
                                occupational licenses granted by other 
                                States to spouses of active service 
                                military members as if those 
                                occupational licenses were granted by 
                                the State conducting the review.

SEC. 6. JUDICIAL REVIEW.

    (a) In General.--The immunity under section 4(a) shall apply to any 
action of an occupational licensing board of a State, or any action of 
a member, officer, or employee of that board acting in the official 
capacity of that member, officer, or employee, if--
            (1) the actions of the occupational licensing board or 
        member, officer, or employee are authorized by a non-frivolous 
        interpretation of the occupational licensing laws of the State;
            (2) the State adopts a policy of using less restrictive 
        alternatives to occupational licensing to address real, 
        substantial threats to public health, safety, or welfare, in 
        accordance with section 5(b); and
            (3) the State enacts legislation providing for judicial 
        review of occupational licensing laws, in accordance with 
        subsection (b) of this section.
    (b) Judicial Review Legislation.--Legislation enacted by a State 
under subsection (a)(3)--
            (1) shall--
                    (A) prohibit the State and any occupational 
                licensing board from imposing an occupational licensing 
                law unless the State--
                            (i) identifies an important government 
                        interest in protecting against real, 
                        substantial threats to public health, safety, 
                        or welfare; and
                            (ii) demonstrates that the occupational 
                        licensing law is substantially related to 
                        achievement of the important government 
                        interest described in clause (i), in light of 
                        the availability of less restrictive 
                        alternatives to occupational licensing;
                    (B) provide an affirmative defense against 
                enforcement of any occupational licensing law of the 
                State under which the State shall be required to 
                demonstrate that the standard under subparagraph (A) 
                has been met;
                    (C) establish a cause of action under which--
                            (i) a person may bring an action for 
                        injunctive relief against enforcement of an 
                        occupational licensing law of the State;
                            (ii) the plaintiff bears the initial burden 
                        to prove that the challenged occupational 
                        licensing law substantially burdens the 
                        plaintiff's ability to engage in a lawful 
                        occupation; and
                            (iii) once the plaintiff makes the initial 
                        showing under clause (ii), the State is 
                        required to demonstrate that the standard under 
                        subparagraph (A) has been met;
                    (D) provide for an award of reasonable costs and 
                attorney fees to a person who successfully challenges 
                the application of an occupational licensing law of the 
                State by--
                            (i) raising an affirmative defense under 
                        subparagraph (B); or
                            (ii) bringing an action under subparagraph 
                        (C); and
                    (E) provide for independent judicial review of the 
                occupational licensing laws of the State to ensure that 
                the standard set forth in subparagraph (A) has been 
                met; and
            (2) may not authorize a court to--
                    (A) uphold enforcement of an occupational licensing 
                law of the State simply because the court believes the 
                law is rationally related to a legitimate governmental 
                purpose;
                    (B) rely on hypothetical risks to public safety, 
                not substantiated by evidence in the record, to uphold 
                enforcement of an occupational licensing law of the 
                State;
                    (C) defer to factual or legal conclusions of 
                another person or entity, rather than exercising 
                independent review; or
                    (D) rely on a post hoc justification for the action 
                of an occupational licensing board that was not put 
                forward by the board at the time of the challenged 
                action.
    (c) Rule of Construction.--Nothing in subsection (b) shall be 
construed to require legislation enacted by a State under subsection 
(a)(3) to provide a right to recover monetary damages, other than 
reasonable costs and attorney fees as provided under subsection 
(b)(1)(D).
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