Pou Bill Requiring Active Supervision of Certain Licensing Boards Advances

Pou

TRENTON – A bill sponsored by Senate Commerce Committee Chair Nellie Pou that would require active supervision of certain professional and occupational licensing boards advanced from the Senate Commerce Committee yesterday.

The bill, S-2963, would establish and implement a protocol for state regulatory oversight of professional boards that have a majority membership of active market participants of the same profession or occupation that is regulated by that board. The bill would also maintain antitrust immunity and offer compensation of legal fees to board members in the case of a civil suit.

“In order to effectively act to the best of their abilities, licensing board members should not have to live in fear of being personally sued because of the decisions they make on the board,” said Senator Pou (D-Bergen/Passaic). “These individuals volunteer their time to provide their expertise to the boards they represent. This legislation would give them peace of mind to continue their valued service as board members without the burden of potential personal legal liabilities.”

The bill would direct a regulatory officer in the appropriate state agency for that board to establish and implement a protocol for the review and approval of regulations, actions and decisions proposed by professional boards to determine whether the proposed regulation, action or decision has the potential to displace competition. The regulatory officer would also determine whether a proposal is consistent with and promotes state policy.

A person serving as a member of a board would not be liable for damages to any person in a civil action suit as a result of any action, recommendation or decision made on the board and reviewed by the regulatory officer. The Attorney General would be required to defend the person in any civil suit, unless the person acted in bad faith or with malice.

The bill is needed in the wake of the United States Supreme Court decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission (NC Dental). In that decision, the Court held that if a controlling number of a board’s members are active market participants in the profession or occupation the board regulates, then the board may invoke state-action antitrust immunity only if it is subject to active supervision by the state. The provisions of this bill would direct the appropriate regulatory officer to provide the required active supervision.

The bill advanced from committee with a vote of 4-0, and next heads to the Budget and Appropriations Committee for further consideration.