2. Introduction
Licenses – permits to act for specified purposes.
Most people have, in some form, experienced the licensing process when dealing with
government.
The government issues all kinds of licenses:
Drivers’ license
Pilots’ license
License to operate a television/radio station
License to operate a nuclear power plant (Vermont Yankee)
Fishing license
Hunting license
Professional license
Business license
Liquor license
The issuance of each of these types of licenses can involve very different procedures
depending on the subject matter.
The purpose of issuing a license is that it gives greater control over those an agency
regulates by ensuring they follow the regulations in order to maintain the license.
In most cases, operating without a license is subject to criminal prosecution.
3. Purposes of Licensing
Control of Public Resources
Issuing licenses can help maintain responsible control over public resources.
Example: license to cut timber in the national forests.
Purposes: aesthetics, safety, etc.
Fair Allocation of Limited Resources
Examples:
FCC and broadcast licenses
Hunting and fishing licenses
The government must have a fair way of allocating scarce resources.
Licenses cannot be issued in an arbitrary and capricious manner.
Ensures that overuse will not lead to problems.
Assurance of Competence in Complex and Dangerous Occupations
Limits the number of people in certain markets (egg graders, tattoo artists, hair dressers), but also
ensures the competence of those in the market (doctors, lawyers, etc.).
Licensing is critical in these areas because a lack of competence could result in great harm to the
public.
Maintenance of Public Order
Examples:
Drivers’ license
Liquor license
Both require some competency but not the same level of competency as the previous purpose of
licensing.
4. Licensing as Adjudication
Problems:
Licenses have different purposes and vary in their complexity and thus the same
procedure is not appropriate for all licenses.
The degree of hardship placed on the licensee can vary when the license is revoked or
denied.
Section 558(c) of the APA requires formal adjudication for denial,
termination, or revocation of licenses:
“When application is made for a license required by law, the agency, with due regard
for the rights and privileges of all interested parties or adversely affected persons and
within a reasonable time, shall set and complete proceedigns required to be conducted
in accordance with sections 556 and 557 of this title or other proceedings required by
law and shall make its decision.”
Section 554(d)(A) exempts initial applications for licenses from 558’s
hearing procedures.
However, authorizing statutes, in many instances (particularly important
licensing issues), will have due process requirements, which typically
provide for formal adjudication.
