House File 2237 - Introduced HOUSE FILE 2237 BY PETTENGILL A BILL FOR An Act to establish a right to engage in a lawful occupation 1 free from substantial burdens imposed by occupational 2 regulations unless certain conditions are met and providing 3 remedies. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5659YH (5) 85 je/rj

H.F. 2237 Section 1. NEW SECTION . 27.1 Purpose. 1 The purposes of this chapter are: 2 1. To ensure that an individual may pursue a lawful 3 occupation free from unnecessary occupational regulations. 4 2. To protect against the misuse of occupational 5 regulations to reduce competition and increase prices to 6 consumers. 7 Sec. 2. NEW SECTION . 27.2 Definitions. 8 For purposes of this chapter, unless the context otherwise 9 requires: 10 1. “Business license” means a permit, registration, 11 certification, franchise, or other approval required by law for 12 a person to do business in this state. 13 2. “Certification” means a voluntary program in which the 14 government grants nontransferable recognition to an individual 15 who meets personal qualifications established by law, which 16 permits the individual to use “certified” as a designated 17 title, but which is not required for an individual to engage 18 in a lawful occupation for compensation. “Certification” by 19 the government does not include certification by a private 20 certification organization. 21 3. “Government” means any agency or other entity 22 of government of this state or of any of its political 23 subdivisions. 24 4. “Lawful occupation” means a course of conduct, pursuit, 25 or profession that includes the sale of goods or services that 26 can be legally sold in this state, irrespective of whether 27 the individual selling them is subject to an occupational 28 regulation. 29 5. “Least restrictive means of furthering a compelling 30 governmental interest” , from least to most restrictive, means 31 the following: 32 (1) Absence of any occupational regulations. 33 (2) A provision for private civil action in small claims or 34 district court to remedy consumer harm. 35 -1- LSB 5659YH (5) 85 je/rj 1/ 7

H.F. 2237 (3) Inspection requirements. 1 (4) Bonding or insurance requirements. 2 (5) Registration requirements. 3 (6) Certification requirements. 4 (7) Occupational license requirements. 5 6. “Occupational license” means a nontransferable 6 authorization in law for an individual to engage in a lawful 7 occupation for compensation based on meeting personal 8 qualifications established by law, without which it is illegal 9 for an individual to engage in the occupation for compensation. 10 “Occupational license” does not include registration or 11 certification. 12 7. “Occupational regulation” means a statute, ordinance, 13 rule, practice, policy, or other requirement in law that an 14 individual possess certain personal qualifications in order 15 to engage in a lawful occupation. “Occupational regulation” 16 excludes a business license and zoning and land use regulations 17 except to the extent such requirements regulate an individual’s 18 personal qualifications to perform a lawful occupation. 19 8. “Personal qualifications” means criteria established by 20 law related to an individual’s personal background including 21 but not limited to completion of an approved educational 22 program, satisfactory performance on an examination, work 23 experience, criminal history, moral standing, and completion 24 of continuing education. 25 9. “Registration” means a requirement established by law 26 in which an individual must give notice to the government in 27 order to engage in a lawful occupation and to use “registered” 28 as a designated title. Such notice may include but is not 29 limited to the individual’s name and address, the individual’s 30 agent for service of process, the location of the activity to 31 be performed, and a description of the service the individual 32 provides. “Registration” may require a bond or insurance. 33 “Registration” by the government does not include certification 34 by a private registration organization. A “registration” is 35 -2- LSB 5659YH (5) 85 je/rj 2/ 7

H.F. 2237 nontransferable. 1 10. “Substantial burden” means a requirement in an 2 occupational regulation that imposes significant difficulty or 3 cost on an individual seeking to enter into or continue in a 4 lawful occupation. “Substantial burden” means a burden that is 5 more than incidental. 6 Sec. 3. NEW SECTION . 27.3 Right to engage in a lawful 7 occupation —— remedies. 8 1. An individual has a right to engage in a lawful 9 occupation free from any substantial burden imposed by an 10 occupational regulation unless the government demonstrates all 11 of the following with respect to such occupational regulation: 12 a. The government has a compelling interest in protecting 13 against present and recognizable harm to the public health or 14 safety. 15 b. The occupational regulation is the least restrictive 16 means of furthering that compelling governmental interest. 17 2. a. An individual may assert as a defense in any judicial 18 or administrative proceeding brought by the government to 19 enforce an occupational regulation that such occupational 20 regulation violates the individual’s right established in 21 subsection 1. 22 b. An individual may bring an action for declaratory 23 judgment or injunctive or other equitable relief against the 24 government for an occupational regulation that violates the 25 individual’s right established in subsection 1. An individual 26 need not exhaust administrative remedies to bring such an 27 action. 28 3. An individual who asserts a defense or brings an action 29 under subsection 2 has the initial burden of proof that an 30 occupational regulation substantially burdens the individual’s 31 right to engage in a lawful occupation. 32 4. If the individual meets the burden of proof under 33 subsection 3, the government must demonstrate by clear and 34 convincing evidence that the government has a compelling 35 -3- LSB 5659YH (5) 85 je/rj 3/ 7

H.F. 2237 interest in protecting against present and recognizable harm 1 to the public health or safety, and that the occupational 2 regulation is the least restrictive means for furthering that 3 compelling governmental interest. 4 5. The presiding officer or court in a proceeding in 5 which an individual asserts a defense or brings an action 6 under subsection 2 shall make its own findings of fact and 7 conclusions of law with no deference given to any determination 8 by the government or in statute or rule that an occupational 9 regulation serves a compelling governmental interest in 10 protecting against present and recognizable harm to the public 11 health or safety or that the occupational regulation is the 12 least restrictive means of furthering a compelling governmental 13 interest. 14 6. An employer may assert a defense or bring an action under 15 subsection 2 on behalf of an employee or prospective employee. 16 Sec. 4. NEW SECTION . 27.4 Private registration and 17 certification permitted. 18 An individual may use the words “registered” or “certified” 19 as a designated title or as part of a designated title if 20 the individual meets the requirements for registration 21 or certification established by a private registration 22 or certification organization. The individual shall not 23 portray such registration or certification as granted by the 24 government. 25 Sec. 5. NEW SECTION . 27.5 Construction. 26 1. This chapter shall be liberally construed to protect the 27 right established in section 27.3, subsection 1. 28 2. This chapter shall not be construed to create a right of 29 action against a private party or to require a private party to 30 do business with an individual who is not licensed, certified, 31 or registered with the government. 32 3. This chapter shall not be construed to create a right of 33 action against the federal government for its use of a state 34 occupational regulation in federal law. 35 -4- LSB 5659YH (5) 85 je/rj 4/ 7

H.F. 2237 EXPLANATION 1 The inclusion of this explanation does not constitute agreement with 2 the explanation’s substance by the members of the general assembly. 3 This bill provides that an individual has a right to engage 4 in a lawful occupation free from any substantial burden 5 imposed by an occupational regulation unless the government 6 demonstrates with respect to such occupational regulation that 7 the government has a compelling interest in protecting against 8 present and recognizable harm to the public health or safety 9 and the occupational regulation is the least restrictive means 10 of furthering that compelling governmental interest. 11 An individual may assert as a defense in any judicial or 12 administrative proceeding brought by the government to enforce 13 an occupational regulation that such occupational regulation 14 violates this right. An individual may also bring an action 15 for declaratory judgment or injunctive or other equitable 16 relief against the government for an occupational regulation 17 that violates this right. An individual need not exhaust 18 administrative remedies to bring such an action. 19 An individual who asserts such a defense or brings such an 20 action has the initial burden of proof that an occupational 21 regulation substantially burdens the individual’s right to 22 engage in a lawful occupation. If the individual meets the 23 burden of proof, the government must demonstrate by clear 24 and convincing evidence that the government has a compelling 25 interest in protecting against present and recognizable harm 26 to the public health or safety, and that the occupational 27 regulation is the least restrictive means for furthering that 28 compelling governmental interest. The presiding officer or 29 court in such a proceeding shall make its own findings of 30 fact and conclusions of law with no deference given to any 31 determination by the government or in statute or rule that 32 an occupational regulation serves a compelling governmental 33 interest in protecting against present and recognizable harm to 34 the public health or safety or that the occupational regulation 35 -5- LSB 5659YH (5) 85 je/rj 5/ 7

H.F. 2237 is the least restrictive means of furthering a compelling 1 governmental interest. An employer may assert a defense 2 or bring an action on behalf of an employee or prospective 3 employee. 4 The bill defines “occupational regulation” as a statute, 5 ordinance, rule, practice, policy, or other requirement in law 6 that an individual possess certain personal qualifications 7 in order to engage in a lawful occupation. “Occupational 8 regulation” excludes a business license and zoning and 9 land use regulations except to the extent such requirements 10 regulate an individual’s personal qualifications to perform 11 a lawful occupation. The bill defines “substantial burden” 12 as a requirement in an occupational regulation that imposes 13 significant difficulty or cost on an individual seeking to 14 enter into or continue in a lawful occupation. “Substantial 15 burden” means a burden that is more than incidental. The 16 bill defines “government” as any agency or other entity 17 of government of this state or of any of its political 18 subdivisions. 19 The bill defines “least restrictive means of furthering 20 a compelling governmental interest” as, from least to most 21 restrictive, absence of any occupational regulations, a 22 provision for private civil action in small claims or district 23 court to remedy consumer harm, inspection requirements, 24 bonding or insurance requirements, registration requirements, 25 certification requirements, and occupational license 26 requirements. 27 The bill permits an individual to use the words “registered” 28 or “certified” as a designated title or as part of a designated 29 title if the individual meets the requirements for registration 30 or certification established by a private registration or 31 certification organization. An individual cannot portray such 32 registration or certification as granted by the government. 33 The bill is to be liberally construed to protect the right 34 established by the bill. The bill is not to be construed to 35 -6- LSB 5659YH (5) 85 je/rj 6/ 7

H.F. 2237 create a right of action against a private party or to require 1 a private party to do business with an individual who is not 2 licensed, certified, or registered with the government. The 3 bill is not to be construed to create a right of action against 4 the federal government for its use of a state occupational 5 regulation in federal law. 6 -7- LSB 5659YH (5) 85 je/rj 7/ 7