Senate Panel Considers Nixing, Scaling Back Occupational Regulations

December 28, 2011

Investigative Reports

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The NerveA state Senate panel has been considering deregulating aspects of cosmetology and certain other licensed industries in South Carolina.

But if the idea is going to move beyond the deliberation phase, it’s going to take legislative action – and not a small measure of intestinal fortitude in the General Assembly to withstand what would be seemingly guaranteed vicious opposition.

Perhaps surprisingly – or not – the opponents evidently would be individuals in the licensed professions themselves.

Their message so far to the Senate panel: We like being regulated, and we are proud of our licenses.

Several cosmetologists, along with a few representatives of other industries the state licenses and regulates, delivered that message to the Senate subcommittee when it held a hearing on regulatory reform last week.

About three dozen people attended the hearing, including a smattering of lobbyists for the industries in question.

The cosmetologists were particularly animated in their opposition to deregulation, one even quietly tearing up in addressing the issue before the subcommittee, a panel of the Senate Labor, Commerce and Industry Committee.

In what also might be unexpected, the notion of boosting or stifling competition as it relates to deregulation and licensing was not mentioned during the hearing. Instead it was like the proverbial elephant in the room.

“We realize that those desiring more regulations sometimes are motivated to keep out competition,” Sen. Kevin Bryant, R-Anderson and chairman of the subcommittee, said when The Nerve asked him about the matter after the meeting ended.

The hearing was focused on a report on regulatory reform. The director of the S.C. Department of Labor, Licensing and Regulation (LLR) is required to submit such a report to state officials annually.

This year’s 20-page version, released Dec. 19, addresses cosmetology, barbering, real estate, residential building, forestry, geology and environmental certification. The report also covers soil classification, auctioneering and liquefied petroleum gas handling.

The LLR agency provides administrative support to some 40 independent boards or commissions that oversee those and other fields.

“I provide what they need to carry out their regulatory duties,” LLR director Catherine Templeton told the Senate subcommittee.

In a cover letter to the report, Templeton summarized her case for rolling back many of the regulations on the professions it addresses.

“We believe the regulatory schemes identified are more restrictive than necessary to protect the health, safety, or welfare of the public,” Templeton writes in the letter.

“Reducing fees and decreasing onerous regulation rank highly among our goals for the agency. We believe the enclosed recommendations further those goals without diminishing protection of the public.”

Continuing, she says, “Our experience suggests that consumers often overestimate the authority and effectiveness of professional and occupational licensure, resulting in a false sense of security.

“Accordingly, we are concerned that some regulatory schemes may do more harm than good as consumers increasingly rely on imperfect government regulation as a substitute for their own judgment and inquiry.”

In beginning her testimony to the Senate panel, Templeton said she realized that some of her remarks might not be popular with “any kind of moneyed interests that might be here.”

But Templeton said she was on hand to provide facts and commonsense proposals that some of the regulated industries themselves support.

When it comes to residential building, Templeton said that only about 1 percent of citations LLR issues relate to health and safety.

She described the industry as a “specialty contractor” profession that the agency merely makes money from through the licensing process. “We don’t require anything but you give us some money, and now you’ve got your license.”

Subcommittee member Sen. Lee Bright, R-Spartanburg, was incredulous at the idea of it. “It’s not about protecting the consumer,” Bright said. “It’s just a big scam.” He described it as a “game” to raise revenue through fees and fines.

Responded Templeton, “And the Legislature comes and gets it every year. We don’t need the fees and fines we’ve got.”

Answering questions from Bright, Templeton said LLR generates about $50 million per year in licensee revenue, and the agency carried forward about $22 million last fiscal year.

As for cosmetology, Templeton said some of the state regulations go so far as to dictate the size of blackboards and the number of hair dryers and filing cabinets that beauty schools must have. “You vote with your feet in that particular profession,” she said.

But the cosmetologists at the hearing had a decidedly different take on things.

“We are passionate about our profession, and we will fight to protect it,” said Rosanne Kinley, chairwoman of the state Board of Cosmetology.

Kinley said cosmetologists work with substances and perform procedures that can be harmful, and a state license gives consumers confidence that a salon technician is safe.

She warned the senators that “thousands” of cosmetologists and constituents would protest any efforts to deregulate the industry.

Kenneth Schuler, founder and president of the Kenneth Shuler School of Cosmetology chain, echoed that sentiment. “If you want to deregulate cosmetology, it’s going to be the biggest fight of your life,” Shuler told the Senate panel.

Such assertions did not sit well with subcommittee member Sen. Shane Massey, R-Edgefield. “I don’t respond well to threats,” Massey said. “I mean that’s basically what that was.”

If the intention behind the warnings of protests and vicious opposition was to dissuade the subcommittee from embracing deregulation, Massey said, the tactic had the opposite effect on him.

Bryant, the subcommittee chairman, said he heard the message from the cosmetologists that licensing provides a comfort level. “I don’t think we’re going to eliminate the (cosmetology) board or the licensing,” he said.

Regardless, though, at this point the panel’s consideration of deregulation is limited to just that, according to Bryant. “There’s no legislation being considered right now,” he said at the outset of the hearing.

The senator has posted a link to the LLR regulatory report on his blog.

In speaking with The Nerve after the hearing, Bryant said the subcommittee’s work on the issue is finished. If anything more is to happen on it, he said, one or more lawmakers will have to introduce legislation.

Reach Ward at (803) 254-4411 or eric@thenerve.org.