The 2019 legislative session saw two Southern states enact impressive new laws limiting the ability of occupational licensing boards to exclude qualified applicants based on their criminal record.  North Carolina and Mississippi each passed strong new substantive and procedural licensing rules, and both of the new laws show the influence of the Model Law developed by the Institute for Justice.  Both states have now eliminated vague “good moral character” criteria, and extended procedural protections that should make it substantially harder for boards to deny licenses based on criminal history.

As a result of these bills, both states now prohibit disqualification from licensure unless a crime is “directly related” to the license involved, both require written reasons in the event of denial, and both provide for a preliminary determination as to whether an individual will be favorably considered.  In North Carolina’s case, this “predetermination” is binding on the board when the applicant later applies.  North Carolina’s new law also requires licensing boards to report annually to the legislature on their consideration of applications from people with a criminal record.

In 2019, the following additional states have enacted new restrictions on the occupational licensing process:  Arizona, Arkansas, Florida, Nevada, Ohio, Texas, Utah and West Virginia.  All told, in the past eight months 14 states have enacted 18 laws regulating occupational licensing in one form or another, with Texas accounting for five of the 18.  These new laws are described in the relevant state profiles of the RRP, and they will be discussed in greater detail in our year-end report.  They will also be incorporated into the updating of our general survey of U.S. relief and restoration mechanisms (“Forgiving and Forgetting in American Justice”),  which is now underway.

The provisions of the new North Carolina and Mississippi laws are summarized below, and are set forth in detail in the respective state profiles from the Restoration of Rights Project.  North Carolina first imposed general restrictions on its occupational licensing boards in 2013, and the new law substantially strengthens the earlier law, notably in its procedural protections for applicants.  Mississippi’s Fresh Start Act of 2019 represents that state’s first effort to regulate licensing boards in the State, and so one would not necessarily expect its law to be quite as strong as North Carolina’s – though it is very close.  In summary, both states have taken important new steps to improve employment opportunities and life prospects for people with a criminal record in their states.

North Carolina:

North Carolina first enacted general licensing non-discrimination law in 2013, and its law then prohibited occupational licensing boards from “automatically” disqualifying an individual based on a criminal record unless the board was “otherwise authorized by law” to do so.  The law specified certain factors that agencies could consider in determining whether a license should be granted, but its protections were admittedly quite weak.  The State has now substantially strengthened the law to enhance both substantive and procedural protections for people with a record, and extended its provisions to “state agency licensing boards” as well as “occupational licensing boards.”

Specifically, HB770 amends N.C. Gen. Stat. § 93B-8.1 to impose a “direct relationship standard” for all licenses; to require a board to consider certain factors that before were discretionary, giving effect for the first time to participation in a substance abuse treatment program and to a Certificate of Relief awarded by a court.  It exempts only licenses governed by federal law.  § 93B-8.1(b)-(b3).

The new North Carolina law also provides for robust procedural protections for applicants, including written reasons in the event of a denial and an appeal procedure.  § 93B-1(b4)-(b5).  It also specifies that individuals may at any time apply for a “predetermination” as to whether their record is “likely” to be disqualifying, a determination that is “binding” on the board in the event of a subsequent application.  § 93B-8.1(b6) though (b7).

Finally, it amends § 93B-2(a) to requires each board to report annually to the legislature on how many applications it has received from people with a record, and how many were granted and denied.  For further details, see the North Carolina profile from the RRP. 

Mississippi:

Until 2019, Mississippi also had no general law regulating consideration of conviction in connection with occupational licensing, although it applied a direct relationship test in connection with some licenses.  Under the Fresh Start Act of 2019, no one may be disqualified from engaging in any licensed occupation “solely or in part because of a prior conviction of a crime, unless the crime for which an applicant was convicted directly relates to the duties and responsibilities for the licensed occupation.”  Section 3 of SB2781 (not yet codified).  Only law licensure is excepted.

Under Section 4, licensing authorities shall not include in their rulemaking “vague or generic terms including, but not limited to, ‘moral turpitude,’ ‘any felony,’ and ‘good character.’”  Absent applicable state law, licensing authorities “may only consider criminal records that are specific and directly related to the duties and responsibilities for the licensed occupation when evaluating applicants.”   In determining whether a conviction is “directly related,” the licensing authority shall make its determination by a clear and convincing standard of proof based on several specified factors, including the nature and seriousness of the crime and the passage of time since its commission, and any evidence of rehabilitation or treatment undertaken by the individual that might mitigate against a direct relation.

Under Section 5, an individual with a criminal record may petition a licensing authority at any time for a determination of whether the individual’s criminal record will disqualify the individual from obtaining a license. The licensing authority must inform the individual of his standing within thirty (30) days of receiving the petition, and may charge a fee not to exceed $25.00.  If a licensing authority denies an individual a license solely or in part because of the individual’s prior conviction of a crime, the licensing authority shall notify the individual in writing of the following of the grounds and reasons for the denial, that the individual has the right to a hearing to challenge the licensing authority’s decision.   In any administrative hearing or civil litigation, “the licensing authority shall carry the burden of proof on the question of whether the applicant’s criminal conviction directly relates to the occupation for which the license is sought.”  For further details, see the Mississippi profile from the RRP.