LANSING – Business licensing and regulation has been housed with business development efforts for decades, but breaking them apart actually gives the state an opportunity to be more business friendly, said Steven Hilfinger, director of the new Department of Licensing and Regulatory Affairs, told Gongwer News Service in a recent interview.
The new department retains the rulemaking oversight that developed in the old Department of Consumer and Industry Services and reunites it with occupational licensing, last together in the Department of Commerce, but sheds the Michigan Economic Development Corporation, job training and other job attraction programs that had been part of those various predecessor departments, including the energy programs of the Department of Energy, Labor and Economic Growth.
Concentrating most regulation (environmental regulations are still in the Department of Environmental Quality) by itself allows for an intensive review of the rules and licenses to determine which are still needed and how they might be improved, Hilfinger said.
The new Office of Regulatory Reinvention, which this week moved a bit closer to the governor by joining him in the Romney Building, is already planning to do what many legislators are requesting: review all of the state’s rules and regulations.
Hilfinger said his department is now responsible for about half of all the state’s administrative rules, but he said he would be working with other departments as well to develop a review schedule for rules.
Some of the concerns legislators have raised that Michigan’s regulations are too expansive might have some merit, Hilfinger said. “Exceeding federal standards as a baseline presumption is a good place to start (for determining if regulations are excessive),” he said. “There has to be compelling legal or business reasons why that makes sense.”
Businesses already understand the federal regulations, he said, so any deviation from those adds some compliance cost and potential confusion.
He said that was part of the reason the old Single Business Tax, and now the Michigan Business Tax, had to be replaced. They were different from what other states had and made compliance difficult for businesses.
Part of the rules review process will involve advisory committees of stakeholder groups to discuss how the rules are actually functioning.
Robert Nederhood, LARA deputy director overseeing the ORR, said the first of the advisory rules committees, which will cover environment, workplace safety and insurance and finance, are accepting applications through Tuesday. He said other of the advisory committees would be developed as early as late summer.
And the groups will be looking not only at rules, but at the agency policies used to implement those rules.
“Legally, they shouldn’t be binding, but a lot of times they’re used to make policy,” Nederhood said of the guidance letters and other documents. “ORR gives us wide latitude to look at those.”
The agency, and the advisory committees, will also be comparing Michigan rules to those in other states to determine best practices. “We don’t want the regulatory environment to be a competitive disadvantage,” Nederhood said.
One program that Hilfinger will likely not be seeking to end is the Michigan Occupational Safety and Health Administration. While he said legislators were right to seek to prevent rules on ergonomics standards (Governor Rick Snyder had ordered that process to end before the legislation was enacted), he said the program itself was well regarded by most of the business community.
“What we’re hearing, not a universal view, but a majority, is the Michigan program is viewed to be collaborative,” he said. “The attitude on workplace safety is not how can we rack up huge violations.”
When there are violations, he said the agency’s attitude has been, and will continue to be, to focus on preventing a repeat. And he said it has been praised for its training programs.
Hilfinger said he will be, now that all of the occupational licenses are under his purview, looking to thin their ranks.
“We want to take a more comprehensive look at all those occupations,” Hilfinger said. “Do we really need to license and regulate all of these?”
He did not have any particular targets for elimination, but he said many added in the last 10 years are particularly ripe for review.
“Clearly the ones that have a focus on public health and public safety are most important,” Hilfinger said of the occupational licenses. “In the medical field, there are many of those.”
But he questioned the validity of licensing auctioneers and home decorators.
In developing standards for determining which of the currently regulated occupations should remain so, Hilfinger said the department would also be creating standards for determining which future proposals for regulation it at least might not oppose.
He said he will eventually be arguing those standards to the Legislature in seeking to have some licenses discontinued.
Even while trying to thin their ranks, Hilfinger said the department is working to develop a single licensing program that gives all occupations the same feel, and access to the same conveniences.
“We’re creating a licensing environment that’s more simple, fair, efficient and transparent,” Hilfinger said.
Medical professions had been moved into the Department of Community Health originally because the department is focused on the subjects of those professions. But Hilfinger said pulling the licensing back into his department allows Community Health officials to concentrate on the current and upcoming health issues.
Licensed professionals also should, in the near future, be able to conduct more of their licensing business online, Hilfinger said. “We have a lot of old technology” that he is hoping to replace.
Even sooner, professionals will be asked how the department can improve. “We’re trying to implement (Mr. Snyder’s) vision for a more customer-driven agency,” Hilfinger said.
New and renewal licenses will come with a questionnaire. “How was your experience in dealing with our department?” Hilfinger wants to know.
The department retains from DELEG a number of autonomous agencies: the Liquor Control Commission, the Public Service Commission, the Worker’s Compensation Agency and the Unemployment Insurance Agency.
Of those, Hilfinger said the one that would likely receive the most attention is the Liquor Control Commission. “I would like to see improvements in our licensing process,” he said. “I hear from developers, restaurant owners and others in the supply chain that we can do a better job.”
Again, he said, the issue is technology. But he said he expected some money in the budget to address that system.
While some of the functions that have been together for many years have been split up, Hilfinger said the change is actually not that substantial.
“It’s not much of a radical departure,” Hilfinger said. “It’s more of a rationalization of how we look at it.”
He said the programs moved out of the department fit better where they went, mostly to the MEDC. “That’s right in line with what the MEDC wants to do,” he said. “They work on talent development and we work on removing impediments.”
And moving programs frees up other departments to better focus. “We thought there would be some efficiency to have the licensing moved,” Hilfinger said. “It’s a complement to what we’re already doing in commercial services.”
And in any case, he said, the departments would be working together on many of the issues.
The MEDC will be a particularly close working partner because it is in the same management group, he said.
Changes in the various programs also are not yet done.
“The core team’s been on the ground about two weeks,” he said. And so far it has concentrated on the tra
