Legislative Testimony for LB736: Provide restriction on occupation taxes, license fees, and regulation by counties and municipalities

Good afternoon, Chairman Brewer and members of the Government and Military Affairs Committee, my name is Nicole Fox, and I am here today to testify on behalf of the Platte Institute in support of Senator Murman’s LB736.

For the past several legislative sessions, the Platte Institute has been a strong supporter of occupational licensing reform. As I’ve stated at multiple hearings, occupational licensing poses many burdens on workers such as costs of education and training, testing fees, time and costs associated with continuing education, burdensome paperwork, fees for the initial license and renewals and opportunity costs due to delayed entry into the workforce.

Until today, our efforts have focused on occupational licensing at the state level. Last year, Nebraska made headlines nationally when former Senator Laura Ebke’s LB299 was passed by the Legislature.1 The motivation behind this bill was a trend occurring both in Nebraska and nationwide known as “license creep,” or the greater than 3-fold increase in licensure that has occurred since occupational licensing began in the 1950s.

2019 presents an opportunity for Nebraska to make the national stage again, this time, by pushing back on excessive licensing at the local level. We can think of no reason why Nebraska governments at any level should create barriers to people getting jobs who want to work and earn a living. Local control was intended to protect people from overreach from the state - it was never intended to let cities keep people out of work.

I’d like to bring your attention to a bill introduced in Nebraska both last year and this year. Currently many cities in our state require plumbers to get local licenses. Plumbers working in more than one city must get licenses for each city in which they work. This bill would have allowed plumbing boards to raise licensing fees and charge any amount – there was no maximum. You can look up the codes of cities across the state and find no shortage of permits, regulations and fees required. In Nebraska City, one must apply for a permit and pay an occupation tax of $10 annually if they want to have a home-based business. 2,3

The types of jobs individuals can engage in from their homes are endless: party planners, web designers, online p makers, photographers, furniture up-cyclers, bakers, professional bloggers, bookkeepers and accountants to name a few. In Kearney, if you want to be a tattoo artist, you must not only get a state license, but also a local license.4

In Lincoln, if you want to be an auctioneer or an arborist, you must get a local license.5 In both Omaha and Lincoln, if you want to be a second hand jewelry or watch dealer, you must get a local license for these as well.6 The Legislature can rein in out of control job licensing mandates. Other states have done it. Legislation similar to LB736 has already passed in Wisconsin, Tennessee and Michigan.7

The effects of this type of legislation can be significant - if Wisconsin had passed its preemption legislation just a decade earlier, it would now have 100 fewer local licenses.8 Our neighbor Missouri has introduced similar legislation this year.9 In Iowa, all plumbing and mechanical licensing provisions promulgated by any governmental subdivision were null and void as of July 2009 due to local preemption.10

LB736 proposes the following: 1) No political subdivision in the state of Nebraska may impose any occupational fees or licensing requirements on any profession if the political subdivision does not already impose them. 2) If a political subdivision currently imposes occupational fees, those fees may not exceed $25 per year, even if current fees exceed this. 3) No political subdivision in the state of Nebraska may impose any new additional regulations on professions that are already subject to regulation at the state level.

The Legislature has worked hard and had success at the state level. This success has led to Nebraska being recognized nationally as a leader. I ask that you advance LB736 out of committee, as it’s time for duplication of this success at the local level.

1. https://www.wsj.com/articles/a-model-for-licensing-reform-1522795235

2. https://nebraskacityne.gov/permits-licenses/

3. https://nebraskacityne.gov/wp-content/uploads/2014/10/Home-Based-Business.pdf

4. https://library.municode.com/ne/kearney/codes/code_of_ordinances

5. https://online.encodeplus.com/regs/lincoln-ne/ereader/mobile/index.html#p=444

6. https://library.municode.com/ne/omaha/codes/code_of_ordinances?nodeId=PTIIMUCO_CH19 OCTA

7. https://spectator.org/warding-off-job-killing-local-licensing/

8. http://www.governing.com/gov-institute/voices/col-local-government-occupational-licensingabsurdity.html

9. https://www.washingtonexaminer.com/opinion/occupational-licensing-strikes-close-to-home

10. https://www.legis.iowa.gov/docs/ico/chapter/105.pdf

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