Utah has been one of the most business-friendly states for decades, with some of the most innovation-friendly laws to date. And over the last few years, Utah has also been a leader in the regulatory sandbox movement spreading across the states.
A regulatory sandbox is a light-touch regulatory environment where businesses can test new and innovative products within a specified period. If a regulation impedes the creation or implementation of an innovative product or service, a business may enter the sandbox and waive the impeding regulation long enough to try out the new product or service. Usually, after a product or service has been tested out for a year or two, the in-practice data serves as a proof-of-concept to regulators and lawmakers about which areas of the law are ripe for reform.
Going into last year’s legislative session, Utah had already created multiple sandboxes for insurance products, financial technology, and legal services. Then, Representative Cory Maloy sponsored the state’s first universal regulatory sandbox, which garnered over 40 co-sponsors as it passed into law. This universal sandbox has been celebrated as a way for Utah to welcome many business ideas rather than a few niche products.
This year, with the newly-introduced universal sandbox in place, it became clear that Utah’s many regulatory sandboxes could be even better under just one dedicated department rather than many. Thus, Representative Malloy, who sponsored the universal sandbox last year, took the concept a step further by sponsoring HB 243, which streamlines and consolidates all of the sandboxes into one.
The sandbox consolidation bill sailed through the House and Senate this year, and with its enactment, it will open up a whole host of possibilities for innovation in Utah.
Instead of three or four sandboxes with different oversight, operating requirements, and administrative capabilities, all the innovative products and services across Utah’s broad economy will now be overseen by a single sandbox administrator with a dedicated director, staff, and resources to handle applications for regulatory waivers.
Regulatory sandboxes have been a flagship policy priority for Libertas Institute over the last three years. That’s because, as we have written before, sandboxes open up opportunities for innovators in any industry rather than picking winners and losers like most regulations tend to do.
With the pandemic-era economy now at Utah’s back, the all-inclusive sandbox will capitalize on the growth and recovery of the economy with businesses and entrepreneurs at the helm.
Have questions about the regulatory sandbox? Be sure to check out our dedicated page.
