Guest Post: North Dakota Has a Looming Problem With Unaccountable Occupational Licensing Boards

This guest post was submitted by Rod St. Aubyn, who served in the North Dakota House of Representatives from 1991 to 1994, and the state Senate from 1995 to 2000. He has also worked as a lobbyist.

The Legislature is ignoring a potential problem.

For many years now, the Legislature has delegated authority to unelected and for the most part unaccountable people for regulating and licensing occupational boards in our state. Think of these boards as mini-legislatures for occupational regulatory boards in ND. Most of these boards and their board members have acted appropriately over the years. However in the areas of open meetings and open records and a few other state laws, violations have occurred and continue to happen with some boards.

In my many years serving in both the ND House and Senate and in my past life as a lobbyist, I have observed many of these boards operate. I have witnessed many, many violations and have reported many of these illegal actions.

In one case an occupational board hired a lobbyist using its licensing fees to advocate against desires of some of its licensees. To make matters even worse, this board authorized approval “in the dark” through emails instead of an open meeting. I requested an Attorney General’s Opinion via a legislative leader if it was legal for this “public entity” (the occupational regulatory board) to use “public funds” (licensing fees) to hire a lobbyist to advocate against a bill that some of its regulated members were supporting.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]What if a board member were to embezzle money from the board or some other private business? Is this the type of individual we would want on a ND occupational regulating board? Shouldn’t the Governor, who is authorized to appoint members to these boards, also be authorized to remove board members for specified causes?[/mks_pullquote]

The AG opinion ruled against the regulatory board. This same board was already cited for several open meeting/records violations including doing board business by email. I have personally witnessed a additional cases of further open meeting/records violations with this same board, but there has been no other action taken. Where is the oversight?

I noted another board that did not take roll call votes on important issues which is clearly required in the ND Century Code. I quietly brought this to the attention of a board member during a break. He was surprised and stated that they had always operated that way (simple voice vote).

Several years ago I personally heard a recording of a Board Chairman verbally and embarrassingly chastise a female board member implying that that the female board member did not know what she was talking about when she challenged comments made by the Chair. The belittling resulted in tears by the female board member. I reported the issue to the AG’s office who instructed me to visit with the Governor’s Office because the AG’s office does not have authority to manage occupational regulatory boards.

After speaking to a representative from that Governor’s Office, I was informed that the ND Century Code gives no authority to the Governor to remove board members for that Board or to manage these boards. After reading through the different chapters of Title 43 which establishes these occupational regulatory boards, I was shocked how many problems ND has with these boards.

Each board is governed differently in many ways. For example, they all call for appointments to these boards by the Governor. Regarding removal of board members for cause varies as much as ND’s weather. Many are silent about removing a board member for cause, a few allow the Governor to remove a board member AFTER ¾ of the board recommends removal, and other boards expressly give the Governor the authority to remove a board member for cause.

What if a board member were to embezzle money from the board or some other private business? Is this the type of individual we would want on a ND occupational regulating board? Shouldn’t the Governor, who is authorized to appoint members to these boards, also be authorized to remove board members for specified causes?

I have also witnessed in my legislative life where occupational regulatory boards create “fences” to keep out competitors. Now here is where it is problematic. The US Supreme Court ruled in North Carolina State Board of Dental Examiners v. Federal Trade Commission (2015) that in order for states to maintain protection from antitrust liability, they must “actively supervise” regulatory boards and commissions that control market participants.

How does ND “actively supervise” its boards when no entity has any authority over the board other than the legislature which only meets every other year and in many cases no one has authority to remove a dysfunctional board member?

Granted, the legislature does provide some very important oversight regarding proposed occupational regulatory administrative rules through its Administrative Rules Committee, but who provides oversight with other actions such as licensing of the trades’ applicants? These boards are totally unelected and mostly unaccountable to the citizens of our state.

I was pleased when I saw SB 2353 was introduced in the legislature by Sen. Judy Lee which provides necessary “checks and balances” with our state-authorized occupational regulatory boards. When the bill was scheduled for a hearing in the ND House Government & Veterans Affairs Committee chaired by Rep. Jim Kasper, I planned to attend and to offer supportive testimony and some important amendments. Unfortunately the last major storm which shut down both interstates prevented me from attending. Luckily, the bill sponsor, Sen. Judy Lee, agreed to read my testimony to the committee. If my amendments were adopted, the bill would have:

• Standardized some board duties.
• Given the Governor authority to remove board members for specified causes.
• Required training for new board members and the board’s executive director in areas such as open record/meetings and conflicts of interest.
• Established a grievance process for the public who encounter problems with an occupational regulatory board.
• Authorized the state auditor to perform performance audits on these boards upon request by the legislative audit and fiscal review committee.
• Authorized a comprehensive legislative study during the 2019-20 legislative interim for these occupational regulatory committees to see if other legislative fixes are needed in the future.

If the ND House would have adopted these amendments and the bill, the state would have established a good defense against future antitrust claims identified in the aforementioned Supreme Court case dealing with “active supervision” of these occupational regulatory boards and would have made these boards more accountable. Unfortunately the House Government & Veterans Affairs committee recommended a unanimous Do Not Pass (DNP) on this bill and the bill was defeated in the House on Monday by a vote of 28-62 with 4 absent and not voting.

An argument to defeat the bill because things are still in flux and we should wait to see how other states lawsuits on this issue turn out does not have merit. What will time do to change whether a Governor should have the authority to remove dysfunctional board members and to provide additional state supervision? Time will tell if the state will face consequences for failing to act on reasonable and common sense solutions. It would be good to ask your representative why he or she supports unelected, unaccountable, and unsupervised occupational regulatory boards if your representative voted against this bill. Would they rather defend against an approaching storm?