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State law should be amended to consolidate the administrative functions of professional licensing boards and commissions.

Background

Most states license persons who practice various professions and occupations as part of their duty to protect the health, safety, and welfare of their citizens, and Texas is no exception. The state has an extensive array of boards and commissions regulating dozens of occupations.

States generally oversee regulated occupations by establishing guidelines on the professional qualifications and requirements that licensees must meet to practice in the state. Another common practice among states is to require licensees to support professional regulation through fees.

States use different models to carry out occupational regulation. Some states administer licensing through a single body, but most states generally have at least some separate professional licensing boards. Texas has both approaches: two agencies administering a group of occupational licensing bodies and 26 agencies for particular professions.

In fiscal 1996, Texas' 26 independent licensing agencies received $34.3 million in appropriations and served more than a million licensees.[1] Each of these agencies operates independently, yet they perform many of the same administrative functions, such as payroll, personnel, purchasing, revenue processing, and financial reporting.

The 1993 Legislature created the Health Professions Council to coordinate health licensing boards. So far, this group's major achievement is to co-locate health licensing boards. The council cannot enforce its decisions, so it seems unlikely that the boards will take steps to consolidate their common functions and trim their staffs.

Current state operations support the notion that centralized administration does not impede the state's ability to oversee regulated occupations. As already mentioned, two agencies have consolidated administration for occupational license functions: the Texas Department of Licensing and Regulation (TDLR) and the Texas Department of Health (TDH). TDLR oversees the regulation of more than a dozen occupations, while TDH coordinates the regulation of 15 health-related occupations.[2]

Recommendation

State law should be amended to consolidate the administrative functions of Texas' occupational licensing agencies in the Texas Department of Licensing and Regulation.

This recommendation would allow licensing agencies to focus on their primary duties of investigating complaints, administering exams, and developing policies for their professions.

TDLR could provide administrative services to the other occupational licensing agencies, including revenue processing, payroll, personnel processing, purchasing, and financial reporting. Licensing agencies would retain authority to make most day-to-day decisions affecting their operations (such as hiring and promotional decisions and approval of purchases and travel), but routine administrative duties would be coordinated through TDLR. Individual agencies would retain responsibility for developing strategic plans and budget requests.

While the administrative functions of health-related agencies could be coordinated through the Health Professions Council, this arrangement would address only a portion of the duplication that exists among all licensing agencies, and overlook opportunities for consolidating administrative functions in professional licensing agencies unrelated to health occupations.

Fiscal Impact

In the first year, the state would incur a cost to develop TDLR's capability to assume its new responsibility. Thereafter, savings would equal 15 percent of current appropriations to licensing administration agencies minus the net costs to TDLR.

TPR's estimate of savings assumes that appropriations to the affected agencies would be reduced by $5.1 million each fiscal year beginning in fiscal 1999. In each of these years, an additional $2 million would be appropriated to TDLR for the cost of serving as administrative agent for 26 boards and commissions. In fiscal 1998, TDLR would receive a one-time appropriation of $1.5 million for program development. Changes in FTEs assume that some agencies would accommodate reduced appropriations by eliminating positions.

Fiscal Year	Savings to the General Revenue Fund	Cost to the General Revenue Fund	Net Savings/(Cost) to the General Revenue Fund	Change in FTEs
1998	$0	$1,500,000	$(1,500,000)	0.0
1999	5,100,000	2,000,000	3,100,000	-40.0
2000	5,100,000	2,000,000	3,100,000	-40.0
2001	5,100,000	2,000,000	3,100,000	-40.0
2002	5,100,000	2,000,000	3,100,000	-40.0

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Footnotes

[1] Texas H.B. 1, 74th Leg., Reg. Sess. (1995), Article VIII.

[2] Health Professions Council, Health Professions Council's Fiscal Year 1995 Report to the Governor, Lieutenant Governor and Speaker of the House of Representatives (Austin, Texas, January 22, 1996), p. 1.