On July 1, a whole host of legislation passed by this year’s Idaho Legislature took effect. One of the more overlooked measures was House Bill 482 which made significant changes in the statutes governing 30 Idaho occupational boards.
These boards regulate a wide array of professions employing many thousands of Idahoans, including appraisers, cosmetologists, accountants, doctors, geologists, morticians, nurses, real estate licensees, and many more. The boards oversee licensing for the specific profession and investigate wrongdoing by those licensed. The goal is to protect the public that deals with each occupation.
House Bill 482 was in response to a 2015 U.S. Supreme Court case, North Carolina State Board of Dental Examiners v. Federal Trade Commission, 135 S.Ct. 1101, 191 L.Ed.2d 35 (2015).
The North Carolina board regulated dentists and consisted of eight members, six of which were elected by licensed dentists in North Carolina. About a decade ago, that board took action to bar non-dentists from offering teeth whitening services.
As a consequence, the Federal Trade Commission in 2010 filed a complaint against the board for engaging in an unfair and anticompetitive method of restricting competition. North Carolina defended its board, asserting the board’s actions were protected under the so-called “State Action Doctrine” which derives from a 1943 U.S. Supreme Court case, Parker v. Brown, 317 U.S. 341, 63 S.Ct 307, 87 L. Ed. 315 (1943). Essentially, that doctrine states that actions that reflect a state’s exercise of its sovereign power are exempt from claims of anticompetitive conduct by a federal agency or other party.
In the North Carolina case, the U.S. Supreme Court held that a state board, if controlled by a particular industry, was protected by the State Action Doctrine if 1) a challenged action was authorized by the state and 2) the state actively supervised the board. The North Carolina board was held liable for its decisions on teeth whitening.
Since the Supreme Court’s decision last year, many states have reevaluated their state occupational boards to determine if their boards might be similarly liable.
In Idaho, the result was House Bill 482.
The bill revises the governing laws for the impacted state boards to provide, generally, that the governor may consider not only proposed board members put forth by the profession being regulated (usually a designated professional group) but also other Idahoans who apply for a vacancy. The measure also specifies that all board members serve at the pleasure of the governor (ie. they can be removed at anytime).
Jon Hanian, Gov. Otter’s press secretary, told me that the bill “strengthens and improves state oversight” and prevents conflicts of interest “by separating occupational licensing boards . . from private associations whose role is usually to promote their profession.” He also noted that the measure had no impact on Idaho’s General Fund as each board is funded through licensee fees, not general tax revenues.
Some boards were tweaked more heavily than others.
Before House Bill 482, the Idaho Real Estate Commission, which regulates Idaho real estate agents, had 4 members, all of which were Idaho real estate brokers. The bill adds a new member from the public “with an interest in the rights of consumers of real estate services.”
I asked Jeanne Jackson-Heim, executive director of the Idaho Real Estate Commission, about the impact of this change. She told me: “I don’t expect a major shift in the Commission’s decision-making. It will be interesting to have the perspective of a public member. Most of our counterparts around the country have public members. This will put us more in line with the rest of the country. I think it will be refreshing.”
I also asked her about the ability of the governor to now remove real estate commissioners for any reason. Jackson-Heim didn’t see a problem: “I think enhancing the authority of the governor is the right thing to do. The governor already has the power to choose our members. He should be able to remove them if he so chooses. I think it will be a good change.”
The question is whether these changes are enough to fully shield the impacted Idaho boards under the North Carolina case.
Idaho Attorney General Lawrence Wasden in January issued a legal opinion which suggested even more far reaching modifications, specifically: 1) Add sufficient public members on each board to shift control from members in the regulated industry, or 2) Designate a state official to approve, veto or modify all decisions made by each board.
Whether a broader approach is necessary in the future to protect board members from liability will probably be driven by future court decision, likely originating outside Idaho.
My take is a more practical one. I think House Bill 482 has given the Idaho governor far greater oversight over occupational boards. Now, the governor can appoint all members without relying on industry recommendations and also has the power to sack any board member at his or her pleasure.
That enhanced accountability will likely align such boards more closely with the priorities of Idaho’s elected governor. He or she could use that authority to strengthen or loosen regulation of a particular profession. Or, he or she could remove board members to send a message in the event of a perceived failure to adequately regulate a particular industry.
To paraphrase President Truman, when it comes to the regulation of a wide-range of professions in Idaho, the buck now stops, ultimately, at the governor’s desk.