(1) A licensing board or agency shall not use, examine, or request any of the following criminal records in making a determination of good moral character for use as a requirement to establish or operate an organization or facility regulated by this state or for purposes of occupational or professional licensure:

    (a) Records of an arrest that is not followed by a conviction.

    (b) Records of a conviction that has been reversed or vacated, including the arrest records relevant to that conviction.

    (c) Records of an arrest or conviction for a misdemeanor or a felony unrelated to the individual's likelihood to serve the public in a fair, honest, and open manner.

    (d) Records of an arrest or conviction for a misdemeanor for the conviction of which an individual may not be incarcerated in a jail or prison.

    (2) A criminal record shall not be furnished to a licensing board or agency except by the principal department, and shall be furnished only after the director of the principal department or an individual designated by the director has determined that the information to be provided to the board or agency meets the criteria set forth in this section.

    (3) The director or an individual designated by the director of the principal department shall promulgate rules for each licensing board or agency under that department's jurisdiction that prescribe the offenses or categories of offenses that the department considers indicate an individual is not likely to serve the public as a licensee or registrant in a fair, honest, and open manner. Each licensing board or agency may make recommendations to the director regarding the rules described in this subsection. The rules must be consistent with this act and promulgated under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328. Before the promulgation of the rules pertaining to a licensing board or agency, a licensing board or agency shall consider all felonies to be relevant to the ability or likelihood that an individual will serve the public in a fair, honest, and open manner.