A bill advancing through the Texas House of Representatives would require wholesale pecan buyers in five western counties to obtain a state license.
H.B. 32, sponsored by state Rep. Mary González (D-El Paso), would also require bulk pecan buyers to obtain driver’s license numbers and contact information from sellers as part of the licensing requirement. The House Agriculture and Livestock Committee passed the bill and sent it to the Local & Consent Calendars Committee, which schedules floor action, on May 2, 2019.
González says the bill is an effort to address pecan thievery in West Texas.
“This kind of feels like a bill from the wild, wild West,” said González, testifying before the House Agriculture and Livestock Committee on March 18.
“New Mexico passed a law that requires that people who buy pecans are licensed,” said González. “The buyers who were the bad actors are now moving from New Mexico to the western part of [Texas] to buy pecans, and therefore creating a black market.”
‘Pilot Program’ Could Grow
González says a large amount of pecans is stolen from growers in her district each year.
“This is a tool necessary for local law enforcement to ensure that we are not losing millions of dollars to pecan thieves in my area,” said González.
Local growers account for up to half of Texas’ pecan production. González says she would like the law to be extended to the other 249 counties in the state.
“Let’s use this as a pilot program and see if it works,” said González. “We can come back next session and make it statewide. If it doesn’t work, we can just take it away.”
Stealing Pecans ‘Already Illegal’
Requiring occupational licenses for pecan buyers doesn’t target the thieves who sell the pecans, says Arif Panju, managing attorney at the Texas office of the Institute for Justice.
“The justification of the bill being advanced by the bill’s author and those backing the bill is somehow there is some sort of fraud taking place in the pecan market where there are folks reselling stolen goods, misrepresenting their pecans, or something else illegitimate is happening,” Panju told Budget & Tax News. “But those things are already illegal. A less [burdensome approach] would be to enforce the laws.”
Even if existing laws do not adequately address the problem, licensing is still not necessarily justified, says Panju.
“What we look for is what are the harms and are they substantiated—is there actual harm?” Panju said. “Once you find what the harms are, you should look at the least restrictive regulatory option to address the harms.”
Licensing ‘Way Over-Broad’
Texas already overregulates work, Panju testified at the March hearing.
“Texas is known for regulating with a lighter hand than most states,” Panju testified. “One major exception to that is occupational licensing.
“Regulating over 500 occupations by way of licensure—in other words, requiring the government’s permission before you can work—is way over-broad and way beyond the single occupation the Republic of Texas licensed.”
Licensure is backed by larger firms or associations in each business, which dominate the panels that regulate them, says Panju.
“Texas has 49 state licensing boards,” said Panju to the committee. “Market participants populate three-quarters of them and enforce licensing laws [with] cease and desist orders along with rules. … This bill is a barrier to entry [by competitors], with no substantiated harm to the public.”
There are plenty of better alternatives than occupational licensing, says Panju.
“There is a whole panoply of less restrictive regulatory options, and voluntary options, like voluntary state certification, or state registration,” said Panju to the committee.
Less Licensing, Better Economy?
Occupational licensure does more harm than good, says Vance Ginn, senior economist and director of the Center for Economic Prosperity at the Texas Public Policy Foundation.
“When the number of people being injured by occupational licensing is greater than the number of people that would otherwise be harmed without occupational licenses, you reduce the level of economic growth and prosperity you’re able to have,” Ginn said.
“I think it’s kind of ridiculous they’re proposing a licensing requirement for pecan buyers in Texas,” Ginn said. “We should be cutting the number of licenses, not increasing them, especially when it comes to pecans.
“A lot of the research I’ve done, and others have done about occupational licensing, is they’re enacted to protect the health, welfare, and safety of the public,” Ginn said. “However, there are a lot of occupational licenses that don’t do that.”
Licenses ‘Incentivize Bad Behavior’
Florida and Arizona lead the nation when it comes to reducing the number of occupational licenses, says Ginn.
“I think it’s something we should be looking at [in Texas] to boost economic growth and productivity,” said Ginn.
Another reason to deregulate the labor market is help those with a criminal history who want to enter lines of work that have nothing to do with the crimes they committed, says Ginn.
“We are preventing these people from getting an occupational license for the job they want to do, and this puts them at a higher rate of recidivism,” Ginn said. “We should be trying to prevent the government from putting up these sorts of barriers that incentivize bad behavior.”
Kenneth Artz ([email protected]) writes from Dallas, Texas.
Rep. Mary González (D-El Paso): https://house.texas.gov/members/member-page/?district=75