Reprinted from the February 27, 2020, issue of the Memorial Business Journal
By T. Scott Gilligan. NFDA general counsel
Spurred on by libertarian groups such as the Goldwater Institute and the Institute for Justice, several state legislatures are proposing the elimination or watering down of occupational licensing requirements. All these attacks against state licensing requirements include embalmer and funeral director licensing.
The most recent and potentially most harmful challenge is being posed by a bill introduced in Tennessee that would deregulate licensing requirements for more than 25 trades and professions, including architects, accountants, engineers and funeral directors/embalmers. Under this bill, any individual without any training or education could offer these services to the public as long as their customers acknowledge in writing that the person they hired is not licensed and that they will not sue if the unlicensed person performs poorly. In a nutshell, if this bill passes, Tennesseans will be able to hire unlicensed individuals to design and construct buildings as long as they do not sue them if the buildings collapse.
Another legislative effort being pushed by these groups, some of which are funded by the billionaire Koch Brothers, is labeled “universal recognition.” The first of these was enacted in Arizona in 2019 and requires most of its state licensing boards to issue reciprocal licenses to any individual who relocates from another state and has been licensed in that state for at least one year. Although that person may be licensed in a state that has educational or other licensing standards below those found in Arizona, the regulatory board must issue a reciprocal license to the applicant if they have been licensed for at least one year in another state.
Pennsylvania also enacted a universal recognition bill in 2019. However, unlike Arizona, the Pennsylvania bill only mandates state licensing boards to issue licenses to out-of-state applicants if the licensing requirements in their home states are substantially similar to Pennsylvania’s. The new law also authorizes state licensing boards to issue provisional licenses to out-of-state applicants, allowing them to practice in Pennsylvania while they are completing any necessary licensing requirements.
Universal recognition bills have been introduced this year in Mississippi and Ohio. Mississippi’s proposal (HB 261) is very similar to Arizona’s in that it requires the applicant for the reciprocal license to relocate to Mississippi. In addition, the bill allows state agencies to require the out-of-state applicant to take a Mississippi laws exam in order to receive a reciprocal license.
Ohio’s universal recognition bill (SB 246) is being fast-tracked in that state’s Republican-controlled General Assembly. Unlike the Arizona and Mississippi measures, it would not require an out-of-state applicant to relocate to Ohio in order to receive a reciprocal license. In addition, the bill would not only mandate that state licensing boards issue reciprocal licenses to out-of-state applicants with one year of licensing, it would also require reciprocal licenses to be issued to applicants from states that do not license the applicant’s particular trade as long as the applicant has sufficient similar work experience.
Under the bill, if an out-of-state applicant is from a state without licensing, then Ohio will still issue a license as long as that individual has had at least three years’ work experience. For example, a person serving as a funeral director in Colorado, which has no licensing for funeral professionals, could obtain an Ohio funeral director’s license as long as the person worked for at least three years as a funeral director in Colorado. Despite the fact that Ohio requires a bachelor’s degree to be a licensed funeral director, the Colorado applicant could qualify with no post-secondary education as long as he or she has the required work experience.
The Ohio Funeral Directors Association is opposed to SB 246 and has filed written comments detailing how it will water down Ohio’s funeral director and embalmer licenses. Other professions and trades have also testified against the bill. Whether these efforts will be successful in a heavy Republican General Assembly remains to be seen.
NFDA Model Reciprocal Licensing Law
At the same time universal recognition bills began to surface, the NFDA Policy Board was looking at state reciprocity licensing laws as they apply to funeral directors and embalmers. A survey of reciprocity laws shows that every state has a law that allows out-of-state funeral licensees to obtain a reciprocal license or a license by endorsement from another state. However, in 25 states, the out-of-state applicant must be licensed in a state with licensing requirements at least as stringent as the state granting the reciprocal license.
In the other 25 states, an out-of-state applicant may obtain a reciprocal license even though he or she was originally licensed from a state with less stringent licensing requirements. Thirteen of the 25 will grant one or more exemptions from their licensing requirements for funeral directors holding a license from another state, and 12 states will provide blanket exemptions depending on the years of licensing. Under these state reciprocity statutes, the duration that funeral directors must hold licensing from another state varies from one year to 10.
During Policy Board deliberations on this issue, a number of factors were discussed. First, Policy Board members from states with higher educational requirements sought to avoid watering down their licenses. Yet many also understood that reciprocity laws with less stringent requirements are beneficial to help the free movement of licensees to those areas with labor shortages. It was also generally recognized that work experience could compensate for the lack of post-secondary education required in many situations.
In the end, the Policy Board recommended and the NFDA Board of Directors approved a model law that would grant reciprocity to applicants from states with lower licensing standards as long as they have been licensed for a minimum of five years and have passed the National Board Exam or its equivalent. The five years of licensed experience and passing of the National Board Exam would satisfy all of the licensing requirements of the reciprocating state, even though that state may have higher educational and licensing requirements than the state in which the applicant was originally licensed.
The model law for reciprocity also authorizes states to require an applicant to pass a state laws test and have had a license in good standing from the original licensing state. Because some states have a single funeral director/embalmer license while other states have dual licenses, there are two forms of the model state law. State associations interested in the model reciprocity law can find the two forms under Model Laws and Best Practices in the Compliance & Legal section of the NFDA website.
The adoption of a model reciprocity law by a multitude of states may be an effective guard against measures such as universal recognition laws that water down the value of education and other licensing requirements.