by Zachary Burt, ACRE Policy Analyst
The 2023 Legislative Session has seen a flurry of occupational licensing-related bills over the past two months. Many of these bills make small tweaks to licensing rules or board compositions, but several bills with a potentially large impact have either already been passed or stand a high chance of doing so. Three of these bills would join Arkansas to interstate licensing compacts.
Interstate compacts are agreements between two or more states that allow states to enter into agreements with one another with the approval of Congress. These compacts allow states to work together to address common issues and problems that cross state boundaries. They can cover a wide range of areas, including transportation, natural resources, public safety, education, taxation, and healthcare.
Once an interstate compact is in place, it becomes legally binding and enforceable, with each state required to comply with its provisions. The terms of the compact may include a range of provisions, such as requirements for cooperation between states, funding mechanisms, and dispute resolution procedures.
Interstate compacts are sometimes used for professional licensing, allowing professionals to practice their licensed professions in member states without having to obtain a separate license in each state. These compacts are designed to increase the mobility of professionals, while ensuring that they meet the standards of each state they practice in.
The first interstate compacts for occupational licensing were established in the 1990s. They are predominantly used for healthcare licenses, and have been expanding to include compacts for mental healthcare professionals in recent years. Arkansas is currently a member of 33 interstate compacts, covering a variety of issues such as education, law enforcement, resource management, and licensing, among others.
Interstate compacts for professional licensing provide a number of benefits for both license holders and the public. Professionals are able to practice in multiple states, which can expand their career opportunities and provide greater flexibility. In Arkansas, this would make it easier for residents of Texarkana to work on both sides of the city in Texas and Arkansas, or for professionals in Memphis to serve clients on our side of the Mississippi River. The public benefits from increased access to qualified professionals, as well as greater consistency and reliability in the standards for licensing and regulation across states.
The three interstate compact bills to come out of the legislature so far this session all deal with healthcare or mental healthcare licenses. House Bill 1082 will join Arkansas to the Occupational Therapy Licensure Compact, which 21 states are currently party to, with legislation pending in 14 states. House Bill 1181 will join Arkansas to the Counseling Compact, with 17 current members and pending legislation in 21 states. Finally, Senate Bill 91 will join Arkansas to the Audiology and Speech-Language Pathology Compact, with 23 states currently joined and 16 states with pending legislation. HB1082 and HB1181 have already passed both chambers and are awaiting the governor’s signature. SB91 has passed the full Senate and the House committee, but has yet to be heard by the full House. These bills will allow skilled professionals who hold licenses in these areas to move to Arkansas much more easily. This is all around a good thing for Arkansas.
Critics of the bills and of similar licensing policy tend to say that this will effectively make Arkansas’s licensing standards equal to those of the least restrictive state, but this is an over-simplification. Interstate compacts are formed around national standards for licensed professions, and these standards tend to reflect the norm for the field as a whole.
In the most recent edition of their report, License to Work: A National Study of Burdens from Occupational Licensing, the Institute for Justice ranked Arkansas as the 9th most burdensome state for licensing in the country. While Arkansas’s licensing requirements are not far from the national average, the state licenses far more occupations than most states do. Out of 102 occupations covered in the report, Arkansas licenses 71 percent, compared to the 53 percent national average. As long as this is the status quo in Arkansas, interstate compacts and universal recognition policies will be particularly effective here, since these reform strategies together encompass nearly all professional licenses
Interstate compacts are also a distinct policy from Universal Licensing Recognition. Interstate compacts establish common standards and processes for a single professional license, while universal recognition establishes standards and processes for occupational licenses as a whole. To learn more about Universal Licensing Recognition, take a look at this previous blog post. These policy options should not be seen as conflicting. They are complementary options lawmakers can use to fit different needs for licensure reform. Most universal licensing recognition bills, including the one currently on the table in Arkansas, SB90, have provisions that exclude licenses handled under interstate compacts from the legislation. This way, interstate compact licenses are not handled under two separate legal processes.
Between joining three new interstate licensing compacts, and the promising outlook for passing a universal licensing recognition bill, joining the interstate compacts will allow several kinds of healthcare professionals to move to the state more easily, and enacting universal recognition will do the same for a variety of professions, particularly low- and middle-income careers. More and more states are joining interstate compacts and enacting universal licensing recognition, and Arkansas must do the same to ensure we remain a competitive, attractive option for people choosing to relocate their careers.
For more information about occupation licensing in Arkansas, visit this past blog post.
For more information on ACRE’s labor market regulation research, visit this page.