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Relating to the review of certain occupational licensing rules by the office of the governor.
Estimated Two-year Net Impact to General Revenue Related Funds for SB 1995, Committee
Report 1st House, Substituted: a negative impact of ($1,006,482) through the biennium ending
August 31, 2021.
The bill would make no appropriation but could provide the legal basis for an appropriation of
funds to implement the provisions of the bill.
The Office of the Governor is required to implement a provision of this Act only if the legislature
appropriates money specifically for that purpose. If the legislature does not appropriate money
specifically for that purpose, the Office of the Governor may, but is not required to, implement a
provision of this Act using other appropriations available for that purpose.
SB 1995 would establish a division within the Office of the Governor to review state agency rules. The bill requires all state agencies that issue a license to any business, occupation, or profession to submit to the new division a proposed rule affecting market competition in Texas. The division would be authorized to review any rule that the agency is considering if the rule affects market competition, and the division would provide to the state agency and the public an explanation of the division's reasons for approving or rejecting a rule.
A rule affects market competition if the rule would create a barrier to market participation or result in higher prices or reduced competition for a product or service provided by a license holder.
Texas Action supports SB 1995 because it promotes free markets, limited government, and individual liberty. Of the 150 or so occupational licenses that are issued by the state, well over a majority of those licenses should be repealed. Occupational licensing is often well-intentioned and has been implemented in the name of safety, however, the unintended consequence of this approach has been to create significant barriers to entry for people seeking to go into licensed fields.
Additionally, it is questionable at best whether these supposed safety concerns justify the licensing in the first place. In many if not most cases, occupational licensing has nothing to do with health and safety and merely serves to protect the vested interests of current businesses from unwanted competition in the marketplace.
From teeth-whiteners to hair-braiders to interior designers and beyond there is a vast swath of trades and professions in Texas which require state approval for a person to work in. This is not the proper role of the state. To the extent that this bill will help to examine these issues and shed light on the liberty-infringing aspects of occupational licensure, SB 1995 is an excellent bill which we recommend to the legislature with our strongest endorsement.