Gov. Jared Polis is advocating for the repeal of state licensing requirements for some professions, a move he said “will allow more people to work,” but one that critics from his own party argue would erode consumer protections.
The Democratic governor made his argument in three vetoes issued late Friday that rejected new legislation to regulate managers of homeowner associations, genetic counselors and sports agents. He also called on the General Assembly to remove other “existing outdated or counterproductive licenses,” pointing to the potential for cost savings for consumers.
“Our hope is that this will allow more people to work, to access various services and to make sure that licenses protect consumers from harm — not industry insiders from competition,” Polis wrote in the veto letters for the three licensing bills.
Polis vetoed two other measures Friday bringing the total in his first term to five. He rejected one bill regarding state contracts for infringing on executive authority and another measure regarding child welfare background checks conducted by Native American tribes because of a mistake in the drafting. The deadline to act on legislation is Monday.
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Democratic lawmakers who sponsored the legislation expressed surprise at the governor’s moves. With Democrats in charge in both chambers now, Polis said in at the end of session that he didn’t plan to make any vetoes.
Four of the five bills he denied had at least some Republican support and most carried strong bipartisan backing. The state legislature cannot override the vetoes because the session ended May 3.
His predecessor, Gov. John Hickenlooper, averaged three vetoes a year in his two terms in office with the most ever in his final year. He rejected nine bills in 2018.
Polis’ vetoes outline new priority, but specifics remain unclear
In making his vetoes, Polis outlined a new policy doctrine for his administration that didn’t appear prominently in his legislative agenda or his campaign promises. He argued that certification of occupational skills “is best done by guilds, unions and professional associations” rather than the state.
But he said his administration would not “categorically rule out allowing any regulation” of occupations, but state licensing is only appropriate in “cases that are compelling for consumer safety and economic reasons.”
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The position aligns Polis with conservatives who blocked such measures in prior legislative sessions when Republicans controlled the state Senate.
Colorado currently licenses more than 100 occupations and industries through the Department of Regulatory Agencies, ranging from accountants and acupuncturists to tow trucks and water conditioning installers.
The oversight allows the state to create safety standards and discipline bad actors.
In fiscal year 2017, the regulatory agency issued nearly 220,000 licenses and responded to nearly 7,000 complaints, according to an annual report.
Polis argued that licensing in the past has prevented minorities and economically disadvantaged populations from accessing certain occupations, and a limited supply of professionals increases the cost for services.
“Occupational licensing is not always superior to other forms of consumer protection,” Polis wrote in his veto letters.
It’s not clear what existing licensing requirements for professions Polis wants to remove. The governor’s office said it does not have a list.
Polis spokeswoman Shelby Wieman said Saturday that Polis’ background as an entrepreneur makes him “acutely aware that there is more that we can do to cut red tape and streamline regulation.” And a major concern are costs paid by professionals that are passed along to consumers. “Adding extra costs to HOA fees, genetic counseling, and athletic representation is not the best path forward as the costs do not outweigh the benefits,” Wieman said.
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Democratic lawmakers criticize Polis’ position
Democratic lawmakers who sponsored House Bill 1212 to extend licensing for 1,617 managers of homeowner associations, or HOAs, for one year blasted Polis for the veto.
“The governor’s veto has reduced protection for consumers who live in managed communities and I plan on working to restore that protection,” said Sen. Rhonda Fields, an Aurora Democrat and bill sponsor in a statement.
The veto defied a 2017 report from state officials that recommended extending the regulations with changes to help make sure the people who manage HOAs are competent. The legislation was designed to continue the program while interested parties discussed the issue before the 2020 session.
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In his announcement, Polis suggested the regulations helped protect consumers in “very few instances.” But the state report found in fiscal year 2017 that regulators issued 12 cease-and-desist orders, eight letters of admonishment and censured two individuals. One license was denied and one other was revoked. The state also issued seven fines totaling $5,750.
The state’s Division of Real Estate reports that 44% of the state’s residents live in communities governed by HOAs. Now, because of the veto, HOA managers are no longer regulated.
“We have no consumer protections at all for HOAs, no licensing, no complaint process, no background checks — none of what was in place requiring transparency and requiring them to look out for the consumer,” said Rep. Monica Duran, D-Wheat Ridge. “We don’t have that at all.”
Polis agrees changes to regulations are needed, but says the issue deserves a broader look. He issued an executive order along with the veto to require the state to study HOA regulations — not just those involving the association managers — ahead of the 2020 legislative session.
Veto blocks regulation of genetic counselors
Likewise, the veto of Senate Bill 133 to regulate genetic counselors perplexed Democratic lawmakers. “There really was no significant opposition to the bill anywhere this session,” said state Rep. Dafna Michaelson Jenet, a Commerce City Democrat.
At least 22 states regulate genetic counselors and another five are drafting rules for how the health care professionals evaluate a family’s risk of medical conditions, according to a trade organization.
But the state’s regulatory agency recommended against licensure in 2017 because no problems existed and 98% of the 115 that practiced in Colorado were privately certified. But Michaelson Jenet said that report is outdated and came before the recent popularization of genetic testing.
“Our concern is with the explosion of things like 23andMe, ancestry people can just throw up a shingle and say, ‘Hey, I’m a genetic counselor, let me help you explore your results and help you make decisions about your life,’” Michaelson Jenet said.
“To me, this bill was getting ahead of the problem instead of waiting for injury to happen,” she added.
But Polis suggested regulating the industry would hurt its growth. “Genetic counseling is a new field, and we must balance quality assurances with consumer access to innovation and affordability,” he wrote in the veto letter.
The third regulatory measure vetoed, Senate Bill 99, required agents for athletes to register with the state every two years. The measure was supported by the Denver Broncos. But Polis cited concerns about regulating professions and procedural issues.
On a broader level, Polis’ stance toward regulating industries raises big questions for Michaelson Jenet, who often works on mental health care legislation, when it comes to ensuring quality services for consumers.
“I want to make sure that the individuals that are caring for our youth, caring for our vets, caring for our cancer patients are as licensed as possible to make sure we have the highest bar in the country to getting exceptional care,” she said. “This is to me a step in the direction of exceptional care.”
Updated 3:30 p.m. June 3, 2019: An earlier version of this story incorrectly described the vote breakdown of the bills that Gov. Jared Polis vetoed. The final version of House Bill 1212 was approved without Republican support in the House. Updated: 10:31 a.m. June 11, 2020: This corrects that Duran represents Wheat Ridge, not Denver.