HB 91: Streamlining Utah’s Regulatory Sandbox
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In 2020, Utah created a string of industry-specific regulatory sandboxes aimed at waiving specific rules or regulations that place unnecessary burdens on innovation. In 2022, the state streamlined these sandboxes by bringing them together under one universal sandbox and added public reporting requirements to improve public transparency.
However, despite the widespread acclaim for Utah’s universal sandbox effort, the sandbox isn’t perfect.
One major area for improvement is the decision-making authority for sandbox applications. Currently, even if the director of the sandbox and the advisory committee recommend that an application is approved, relevant state regulators are still able to exercise veto authority and reject an application. On the Advisory Committee, there is also an imbalance between members with regulatory expertise vs. members with industry expertise. Finally, the reporting requirements only go one way, with participants providing quarterly reports to the Office of Regulatory Relief, leaving no room for collaboration with regulators regarding future regulatory reform for the industry.
First, the bill would vest the Sandbox Advisory Committee with decision-making authority. At present, agencies are able to reject applications just like they would if a company were to approach the agency directly. This structure is counterintuitive to the purpose of Utah’s sandbox, which was to waive potentially unnecessary laws and regulations that agencies have been slow to review or to reform. By shifting the decision-making authority to the Advisory Committee, which will still include representatives from the relevant agencies, the sandbox is able to make its own decisions.
Second, the bill reduces the number of permanent advisory committee members and allows the director to appoint temporary members to the Advisory Committee. This would bring greater subject-matter expertise to specific applications on a case-by-case basis and alleviate the imbalance between industry members and regulatory members.
Finally, the bill would require the Office of Regulatory Relief to provide the first and second quarter reports of a sandbox participant to each applicable agency no later than 14 days after receiving them. Within 30 days of receiving those quarterly reports, the bill would require applicable agencies to provide the Office of Regulatory Relief a report suggesting any statutory or regulatory reforms based on a participant’s demonstration of its product or service.
Requiring an agency to suggest reform, based on the data reported by a participant, has been a missing piece of the puzzle over the years. The big question many potential applicants ask about participating in the program is, “What happens after we show it’s possible to waive the rule without harming consumers?” The answer so far has been, “Make your own case to legislators.” Now, under this new provision, each agency will be required to suggest reforms, which strengthens the case for streamlining the removal of unnecessary rules and regulations.