LB 346 – Eliminate the Requirement for a Motor Vehicle, Motorcycle or Trailer Salesperson License

Good afternoon, Chairman Friesen and members of the Transportation and Telecommunications Committee.  My name is Nicole Fox, and I am the Director of Government Relations for the Platte Institute for Economic Research.  Thank you, Senator Lowe, for introducing LB 346.  I am here today to testify in support of this bill.

In Nebraska, the Motor Vehicle Industry Licensing Board is responsible for licensing and regulating businesses involved in the buying and selling of motor vehicles.  Before an individual opens a business to buy and sell motor vehicles, they must obtain a dealer's license.  Currently, Nebraska requires all motor vehicle salespersons to apply to the Motor Vehicle Licensing Board and pay $20 to be licensed.  These salespeople are employed by dealerships.  In Nebraska, having both dealerships and salespeople obtain licenses to sell motor vehicles is unnecessarily duplicative.

Nebraska faces a workforce shortage, and occupational licensing creates a significant labor force issue.  Nearly 200 different occupations in Nebraska require a government license, affecting nearly 1 in 4 workers.  This is negatively impacting businesses trying to hire employees, potential entrepreneurs wanting to start a business and individuals seeking a means to earn an honest living.  Reform of occupational licensing laws to lessen burdensome regulation is an economic issue that needs to be addressed.

Occupational licensing laws were initially created as a means of protecting the public from negligent and unqualified workers, but more and more, instead of protecting the public from harm, we now understand that occupational licensing is making it difficult for new workers to enter the workforce and for employers to hire workers.

Of the six states that border Nebraska, only Kansas and Colorado require licenses for motor vehicle salespeople. In total, 28 states do not require motor vehicle salesperson licensing. This requirement does not make Nebraska competitive with many of our economic rivals.

Licensing also poses a financial barrier to small businesses, and often the cost is passed on to consumers by raising the price of goods and services.  A study by the Heritage Foundation showed that occupational licensing reform could save Nebraska households over $900 annually.

On January 10th, the Platte Institute for Economic Research held a joint press conference with the Governor's office to highlight the 2017 occupational licensing reform efforts.  One of the guests at that press conference was a car dealership owner who commented, "The fee for licensing a salesperson, at this point, has become really just a tax for employing a salesperson, and more importantly it doesn’t provide any protection for the people of the state of Nebraska."

LB 346 will repeal the requirement that all motor vehicle salespersons become licensed.

The Platte Institute for Economic Research strongly supports occupational licensing reform as a means of lessening burdens to both those trying to enter the state’s workforce and those attempting to hire workers and grow their business.  I ask that you advance LB 346 out of committee.

Thank you for the opportunity to testify today.  I am happy to answer any questions the committee may have.