1     
UTAH OFFICE OF REGULATORY RELIEF REVISIONS

2     
2024 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: A. Cory Maloy

5     
Senate Sponsor: Curtis S. Bramble

6     

7     LONG TITLE
8     Committee Note:
9          The Business and Labor Interim Committee recommended this bill.
10               Legislative Vote:     12 voting for     0 voting against     9 absent
11     General Description:
12          This bill modifies the Utah Office of Regulatory Relief and the General Regulatory
13     Sandbox Program (regulatory sandbox).
14     Highlighted Provisions:
15          This bill:
16          ▸     defines terms;
17          ▸     clarifies responsibilities of the Utah Office of Regulatory Relief;
18          ▸     reduces the membership of the General Regulatory Sandbox Program Advisory
19     Committee (advisory committee);
20          ▸     under certain circumstances, permits the director to temporarily appoint additional
21     advisory committee members;
22          ▸     requires the advisory committee to:
23               •     approve or reject an application into the regulatory sandbox; and
24               •     annually select a chair of the advisory committee;
25          ▸     amends the application requirements of the regulatory sandbox;
26          ▸     removes a regulatory government agency's ability to reject an application into the
27     regulatory sandbox;

28          ▸     modifies a regulatory government agency's reporting requirements; and
29          ▸     makes technical and conforming changes.
30     Money Appropriated in this Bill:
31          None
32     Other Special Clauses:
33          None
34     Utah Code Sections Affected:
35     AMENDS:
36          63N-16-102, as last amended by Laws of Utah 2022, Chapter 332
37          63N-16-103, as last amended by Laws of Utah 2022, Chapter 332
38          63N-16-104, as last amended by Laws of Utah 2022, Chapter 332
39          63N-16-201, as last amended by Laws of Utah 2022, Chapter 332
40          63N-16-205, as enacted by Laws of Utah 2021, Chapter 373
41          63N-16-206, as last amended by Laws of Utah 2022, Chapter 332
42     

43     Be it enacted by the Legislature of the state of Utah:
44          Section 1. Section 63N-16-102 is amended to read:
45          63N-16-102. Definitions.
46          As used in this chapter:
47          (1) "Advisory committee" means the General Regulatory Sandbox Program Advisory
48     Committee created in Section 63N-16-104.
49          (2) "Applicable agency" means a department or agency of the state that by law
50     regulates a business activity and persons engaged in such business activity, including the
51     issuance of licenses or other types of authorization, which the office determines would
52     otherwise regulate a sandbox participant.
53          (3) "Applicant" means a person that applies to participate in the regulatory sandbox.
54          (4) "Blockchain technology" means the use of a digital database containing records of
55     financial transactions, which can be simultaneously used and shared within a decentralized,
56     publicly accessible network and can record transactions between two parties in a verifiable and
57     permanent way.
58          (5) "Consumer" means a person that purchases or otherwise enters into a transaction or

59     agreement to receive an offering pursuant to a demonstration by a sandbox participant.
60          (6) "Demonstrate" or "demonstration" means to temporarily provide an offering in
61     accordance with the provisions of the regulatory sandbox program described in this chapter.
62          (7) "Director" means the director of the Utah Office of Regulatory Relief created in
63     Section 63N-16-103.
64          (8) "Executive director" means the executive director of the Governor's Office of
65     Economic Opportunity.
66          (9) "Financial product or service" means:
67          (a) a financial product or financial service that requires state licensure or registration;
68     or
69          (b) a financial product, financial service, or banking business that includes a business
70     model, delivery mechanism, offering of deposit accounts, or element that may require a license
71     or other authorization to act as a financial institution, enterprise, or other entity that is regulated
72     by Title 7, Financial Institutions Act, or other related provisions.
73          (10) "Health, safety, and financial well-being" includes protecting against physical
74     injury, property damage, or financial harm.
75          (11) "Innovation" means the use or incorporation of a new or existing idea, a new or
76     emerging technology, or a new use of existing technology, including blockchain technology, to
77     address a problem, provide a benefit, or otherwise offer a product, production method, or
78     service.
79          [(11)] (12) "Insurance product or service" means an insurance product or insurance
80     service that requires state licensure, registration, or other authorization as regulated by Title
81     31A, Insurance Code, including an insurance product or insurance service that includes a
82     business model, delivery mechanism, or element that requires a license, registration, or other
83     authorization to do an insurance business, act as an insurance producer or consultant, or engage
84     in insurance adjusting as regulated by Title 31A, Insurance Code.
85          [(12)] (13) (a) "Offering" means a product, production method, or service, including a
86     financial product or service or an insurance product or service, that includes an innovation.
87          (b) "Offering" does not include a product, production method, or service that is
88     governed by Title 61, Chapter 1, Utah Uniform Securities Act.
89          [(13)] (14) "Product" means a commercially distributed good that is:

90          (a) tangible personal property;
91          (b) the result of a production process; and
92          (c) passed through the distribution channel before consumption.
93          [(14)] (15) "Production" means the method or process of creating or obtaining a good,
94     which may include assembling, breeding, capturing, collecting, extracting, fabricating, farming,
95     fishing, gathering, growing, harvesting, hunting, manufacturing, mining, processing, raising, or
96     trapping a good.
97          [(15)] (16) "Regulatory relief office" means the Utah Office of Regulatory Relief
98     created in Section 63N-16-103.
99          [(16)] (17) "Regulatory sandbox" means the General Regulatory Sandbox Program
100     created in Section 63N-16-201, which allows a person to temporarily demonstrate an offering
101     under a waiver or suspension of one or more state laws or regulations.
102          [(17)] (18) "Sandbox participant" means a person whose application to participate in
103     the regulatory sandbox is approved in accordance with the provisions of this chapter.
104          [(18)] (19) "Service" means any commercial activity, duty, or labor performed for
105     another person.
106          Section 2. Section 63N-16-103 is amended to read:
107          63N-16-103. Creation of regulatory relief office and appointment of director --
108     Responsibilities of regulatory relief office.
109          (1) There is created within the Governor's Office of Economic Opportunity the Utah
110     Office of Regulatory Relief.
111          (2) (a) The regulatory relief office shall be administered by a director.
112          (b) The director shall report to the executive director or the executive director's
113     designee and may appoint staff subject to the approval of the executive director.
114          (3) The regulatory relief office shall:
115          (a) administer the provisions of this chapter;
116          (b) administer the regulatory sandbox program; and
117          (c) act as a liaison between private businesses and applicable agencies to identify state
118     laws or regulations that could potentially be waived or suspended under the regulatory sandbox
119     program, or amended.
120          (4) The regulatory relief office may:

121          (a) review state laws and regulations that may unnecessarily inhibit the creation and
122     success of [new] companies or industries and provide recommendations to the governor and
123     the Legislature on modifying such state laws and regulations;
124          (b) create a framework for analyzing the risk level to the health, safety, and financial
125     well-being of consumers related to permanently removing or temporarily waiving laws and
126     regulations inhibiting the creation or success of new and existing companies or industries;
127          (c) propose potential reciprocity agreements between states that use or are proposing to
128     use similar regulatory sandbox programs as described in this chapter; and
129          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
130     the provisions of this chapter, make rules regarding:
131          (i) administering the regulatory sandbox, including making rules regarding the
132     application process and the reporting requirements of sandbox participants; and
133          (ii) cooperating and consulting with other agencies in the state that administer sandbox
134     programs.
135          Section 3. Section 63N-16-104 is amended to read:
136          63N-16-104. Creation and duties of advisory committee.
137          (1) There is created the General Regulatory Sandbox Program Advisory Committee.
138          (2) The advisory committee shall have [11] 9 members as follows:
139          (a) [six] four members appointed by the director who represent [businesses] business
140     interests and are selected from a variety of industry clusters;
141          (b) three members appointed by the director who represent state agencies that regulate
142     businesses;
143          (c) one member of the Senate, appointed by the president of the Senate; and
144          (d) one member of the House of Representatives, appointed by the speaker of the
145     House of Representatives.
146          (3) (a) Subject to Subsection (3)(b), members of the advisory committee who are not
147     legislators shall be appointed to a four-year term.
148          (b) Notwithstanding the requirements of Subsection (3)(a), the director may adjust the
149     length of terms of appointments and reappointments to the advisory committee so that
150     approximately half of the advisory committee is appointed every two years.
151          [(4) The director shall select a chair of the advisory committee on an annual basis.]

152          (4) Notwithstanding the requirements in Subsection (2), the director may temporarily
153     appoint up to three additional members to the advisory committee who represent business
154     interests, industry, or regulatory or compliance interests to which an application for
155     participation in the regulatory sandbox relates.
156          (5) A majority of the advisory committee constitutes a quorum for the purpose of
157     conducting advisory committee business, and the action of the majority of a quorum constitutes
158     the action of the advisory committee.
159          (6) The advisory committee shall:
160          (a) advise and make recommendations to the regulatory relief office as described in this
161     chapter[.];
162          (b) approve or reject an application for participation in the regulatory sandbox; and
163          (c) annually select a chair of the advisory committee.
164          (7) The regulatory relief office shall provide administrative staff support for the
165     advisory committee.
166          (8) (a) A member may not receive compensation or benefits for the member's service,
167     but a member appointed under Subsection (2)(a) may receive per diem and travel expenses in
168     accordance with:
169          (i) Sections 63A-3-106 and 63A-3-107; and
170          (ii) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
171     63A-3-107.
172          (b) Compensation and expenses of a member who is a legislator are governed by
173     Section 36-2-2 and Legislative Joint Rules, Title 5, Legislative Compensation and Expenses.
174          Section 4. Section 63N-16-201 is amended to read:
175          63N-16-201. General Regulatory Sandbox Program -- Application requirements.
176          (1) There is created in the regulatory relief office the General Regulatory Sandbox
177     Program.
178          (2) In administering the regulatory sandbox, the regulatory relief office:
179          (a) shall consult with each applicable agency;
180          (b) shall establish a program to enable a person to obtain legal protections and limited
181     access to the market in the state to demonstrate an offering without obtaining a license or other
182     authorization that might otherwise be required;

183          (c) may enter into agreements with or adopt the best practices of corresponding federal
184     regulatory agencies or other states that are administering similar programs; and
185          (d) may consult with businesses in the state about existing or potential proposals for
186     the regulatory sandbox.
187          (3) (a) An applicant for the regulatory sandbox may contact the regulatory relief office
188     to request a consultation regarding the regulatory sandbox before submitting an application.
189          (b) The regulatory relief office shall provide relevant information regarding the
190     regulatory sandbox program.
191          (c) The regulatory relief office may provide assistance to an applicant in preparing an
192     application for submission.
193          (4) An applicant for the regulatory sandbox shall provide to the regulatory relief office
194     an application in a form prescribed by the regulatory relief office that:
195          (a) confirms the applicant is subject to the jurisdiction of the state;
196          (b) confirms the applicant has established a physical or virtual location in the state,
197     from which the demonstration of an offering will be developed and performed and where all
198     required records, documents, and data will be maintained;
199          (c) contains relevant personal and contact information for the applicant, including legal
200     names, addresses, telephone numbers, email addresses, website addresses, and other
201     information required by the regulatory relief office;
202          (d) discloses criminal convictions of the applicant or other participating personnel, if
203     any;
204          (e) contains a description of the offering to be demonstrated, including statements
205     regarding:
206          (i) how the offering is subject to licensing, legal prohibition, or other authorization
207     requirements outside of the regulatory sandbox;
208          (ii) each law or regulation, accompanied by their statutory reference or citation, that the
209     applicant seeks to have waived or suspended while participating in the regulatory sandbox
210     program;
211          (iii) how the offering would benefit consumers;
212          (iv) how the offering is different from other offerings available in the state;
213          (v) any identifiable, likely, and significant harm to the health, safety, or financial

214     well-being of consumers that each law or regulation described in Subsection (4)(e)(ii) protects
215     against;
216          [(v)] (vi) what risks might exist for consumers who use or purchase the offering;
217          [(vi)] (vii) how participating in the regulatory sandbox would enable a successful
218     demonstration of the offering;
219          [(vii)] (viii) a description of the proposed demonstration plan, including estimated time
220     periods for beginning and ending the demonstration;
221          [(viii)] (ix) recognition that the applicant will be subject to all laws and regulations
222     pertaining to the applicant's offering after conclusion of the demonstration; and
223          [(ix)] (x) how the applicant will end the demonstration and protect consumers if the
224     demonstration fails;
225          (f) lists each government agency, if any, that the applicant knows regulates the
226     applicant's business; and
227          (g) provides any other required information as determined by the regulatory relief
228     office.
229          (5) The regulatory relief office may collect an application fee from an applicant that is
230     set in accordance with Section 63J-1-504.
231          (6) An applicant shall file a separate application for each offering that the applicant
232     wishes to demonstrate.
233          (7) After an application is filed, the regulatory relief office shall:
234          (a) classify, as a protected record, any part of the application that the office determines
235     is nonpublic, confidential information that if disclosed would result in actual economic harm to
236     the applicant in accordance with Subsection 63G-2-305(83);
237          (b) consult with each applicable government agency that regulates the applicant's
238     business regarding whether more information is needed from the applicant; and
239          (c) seek additional information from the applicant that the regulatory relief office
240     determines is necessary.
241          (8) No later than five business days after the day on which a complete application is
242     received by the regulatory relief office, the regulatory relief office shall:
243          (a) review the application and refer the application to each applicable government
244     agency that regulates the applicant's business;

245          (b) provide to the applicant:
246          (i) an acknowledgment of receipt of the application; and
247          (ii) the identity and contact information of each regulatory agency to which the
248     application has been referred for review; and
249          (c) provide public notice, on the office's website and through other appropriate means,
250     of each law or regulation that the office is considering to suspend or waive under the
251     application.
252          (9) (a) Subject to Subsections (9)(c) and (9)(g), no later than 30 days after the day on
253     which an applicable agency receives a complete application for review, the applicable agency
254     shall provide a written report to the director of the applicable agency's findings.
255          (b) The report shall:
256          (i) describe any identifiable, likely, and significant harm to the health, safety, or
257     financial well-being of consumers that the relevant law or regulation protects against; and
258          (ii) make a recommendation to the regulatory relief office that the applicant either be
259     admitted or denied entrance into the regulatory sandbox.
260          (c) (i) The applicable agency may request an additional five business days to deliver
261     the written report by providing notice to the director, which request shall automatically be
262     granted.
263          (ii) The applicable agency may only request one extension per application.
264          (d) If the applicable agency recommends an applicant under this section be denied
265     entrance into the regulatory sandbox, the written report shall include a description of the
266     reasons for the recommendation, including why a temporary waiver or suspension of the
267     relevant laws or regulations would potentially significantly harm the health, safety, or financial
268     well-being of consumers or the public and the likelihood of such harm occurring.
269          (e) If the agency determines that the consumer's or public's health, safety, [or] and
270     financial well-being can be protected through less restrictive means than the existing relevant
271     laws or regulations, then the applicable agency shall provide a recommendation of how that can
272     be achieved.
273          (f) If an applicable agency fails to deliver a written report as described in this
274     Subsection (9), the director shall assume that the applicable agency does not object to the
275     temporary waiver or suspension of the relevant laws or regulations for an applicant seeking to

276     participate in the regulatory sandbox.
277          (g) Notwithstanding any other provision of this section, an applicable agency may by
278     written notice to the regulatory relief office:
279          (i) within the 30 days after the day on which the applicable agency receives a complete
280     application for review, or within 35 days if an extension has been requested by the applicable
281     agency, [reject an application] recommend an application be rejected if the applicable agency
282     determines, in the applicable agency's [sole] discretion, that the applicant's offering fails to
283     comply with standards or specifications:
284          (A) required by federal law or regulation; or
285          (B) previously approved for use by a federal agency; or
286          (ii) [reject an application] recommend an application be rejected that is preliminarily
287     approved by the regulatory relief office, if the applicable agency:
288          (A) recommended rejection of the application in accordance with Subsection (9)(d) in
289     the agency's written report; and
290          (B) provides in the written notice under this Subsection (9)(g), a description of the
291     applicable agency's reasons why approval of the application would create a substantial risk of
292     harm to the [health or safety] health, safety, or financial well-being of the public, or create
293     unreasonable expenses for taxpayers in the state.
294          [(h) If an applicable agency rejects an application under Subsection (9)(g), the
295     regulatory relief office may not approve the application.]
296          (10) (a) Upon receiving a written report described in Subsection (9), the director shall
297     provide the application and the written report to the advisory committee.
298          (b) The director may call the advisory committee to meet as needed, but not less than
299     once per quarter if applications are available for review.
300          (c) After receiving and reviewing the application and each written report, the advisory
301     committee shall provide to the director the advisory committee's recommendation as to whether
302     or not the applicant should be admitted as a sandbox participant under this chapter.
303          (d) As part of the advisory committee's review of each written report, the advisory
304     committee shall use the criteria required for an applicable agency as described in Subsection
305     (9).
306          (11) (a) In reviewing an application and each applicable agency's written report, the

307     [regulatory relief office] advisory committee shall consult with each applicable agency [and the
308     advisory committee] before admitting an applicant into the regulatory sandbox.
309          (b) The consultation with each applicable agency [and the consultation with the
310     advisory committee] may include seeking information about whether:
311          (i) the applicable agency has previously issued a license or other authorization to the
312     applicant; and
313          (ii) the applicable agency has previously investigated, sanctioned, or pursued legal
314     action against the applicant.
315          (12) In reviewing an application under this section, the [regulatory relief office]
316     advisory committee and each applicable agency shall consider whether a competitor to the
317     applicant is or has been a sandbox participant and, if so, weigh that as a factor in favor of
318     allowing the applicant to also become a sandbox participant.
319          (13) In reviewing an application under this section, the [regulatory relief office]
320     advisory committee shall consider whether:
321          (a) the applicant's plan will adequately protect consumers from potential harm
322     identified by an applicable agency in the applicable agency's written report;
323          (b) the risk of harm to consumers is outweighed by the potential benefits to consumers
324     from the applicant's participation in the regulatory sandbox; and
325          (c) certain state laws or regulations that regulate an offering should not be waived or
326     suspended even if the applicant is approved as a sandbox participant, including applicable
327     antifraud or disclosure provisions.
328          (14) (a) An applicant becomes a sandbox participant if the [regulatory relief office]
329     advisory committee approves the application for the regulatory sandbox and the regulatory
330     relief office enters into a written agreement with the applicant describing the specific laws and
331     regulations that are waived or suspended as part of participation in the regulatory sandbox.
332          (b) Notwithstanding any other provision of this chapter, the regulatory relief office may
333     not enter into a written agreement with an applicant and related parties that waives or suspends
334     a tax, fee, or charge that is administered by the State Tax Commission or that is described in
335     Title 59, Revenue and Taxation.
336          (15) (a) The director may deny at the director's sole discretion any application
337     submitted under this section for any reason, including if the director determines that the

338     preponderance of evidence demonstrates that suspending or waiving enforcement of a law or
339     regulation would cause a significant risk of harm to consumers or residents of the state.
340          (b) If the director denies an application submitted under this section, the regulatory
341     relief office shall provide to the applicant a written description of the reasons for not allowing
342     the applicant to be a sandbox participant.
343          (c) The denial of an application submitted under this section is not subject to:
344          (i) agency or judicial review; or
345          (ii) the provisions of Title 63G, Chapter 4, Administrative Procedures Act.
346          (16) The director shall deny an application for participation in the regulatory sandbox
347     described by this section if the applicant or any person who seeks to participate with the
348     applicant in demonstrating an offering has been convicted, entered a plea of nolo contendere, or
349     entered a plea of guilty or nolo contendere held in abeyance, for any crime involving significant
350     theft, fraud, or dishonesty if the crime bears a significant relationship to the applicant's or other
351     participant's ability to safely and competently participate in the regulatory sandbox program.
352          (17) (a) When an applicant is approved for participation in the regulatory sandbox, the
353     director shall provide public notice of the approval on the office's website and through other
354     appropriate means.
355          (b) The public notice described in Subsection (17)(a) shall state:
356          (i) the name of the sandbox participant;
357          (ii) the industries the sandbox participant represents; and
358          (iii) each law or regulation that is suspended or waived for the sandbox participant as
359     allowed by the regulatory sandbox.
360          (18) In addition to the information described in Subsection (17), the office shall make
361     the following information available on the office's website and through other appropriate
362     means:
363          (a) documentation regarding the office's determination and grounds for approving each
364     sandbox participant; and
365          (b) public notice regarding any sandbox participant's revocation to participate in the
366     regulatory sandbox.
367          Section 5. Section 63N-16-205 is amended to read:
368          63N-16-205. Extensions.

369          (1) Not later than 30 days before the end of the 12-month regulatory sandbox
370     demonstration period, a sandbox participant may request an extension of the regulatory
371     sandbox demonstration period.
372          (2) The regulatory relief office shall grant or deny a request for an extension in
373     accordance with Subsection (1) by the end of the 12-month regulatory sandbox testing period.
374          (3) The regulatory relief office may grant an extension in accordance with this section
375     for not more than 12 months after the end of the initial regulatory sandbox demonstration
376     period.
377          Section 6. Section 63N-16-206 is amended to read:
378          63N-16-206. Record keeping and reporting requirements.
379          (1) A sandbox participant shall retain records, documents, and data produced in the
380     ordinary course of business regarding an offering demonstrated in the regulatory sandbox.
381          (2) If a sandbox participant ceases to provide an offering before the end of a
382     demonstration period, the sandbox participant shall notify the regulatory relief office and each
383     applicable agency and report on actions taken by the sandbox participant to ensure consumers
384     have not been harmed as a result.
385          (3) (a) The regulatory relief office shall establish quarterly reporting requirements for a
386     sandbox participant, including information about any consumer complaints.
387          (b) No later than 14 days after the day on which a sandbox participant submits the
388     sandbox participant's second quarterly report to the regulatory relief office, the regulatory relief
389     office shall provide the sandbox participant's first and second quarterly reports to each
390     applicable agency.
391          (c) No later than 30 days after the day on which an applicable agency receives the
392     reports as described in Subsection (3)(b), the applicable agency shall provide a written report to
393     the regulatory relief office on the demonstration that describes any statutory or regulatory
394     reform the applicable agency recommends as a result of the demonstration.
395          (4) The regulatory relief office may request records, documents, and data from a
396     sandbox participant and, upon the regulatory relief office's request, the sandbox participant
397     shall make such records, documents, and data available for inspection by the regulatory relief
398     office.
399          (5) (a) The sandbox participant shall notify the regulatory relief office and each

400     applicable agency of any incidents that result in harm to the health, safety, or financial
401     well-being of a consumer.
402          (b) If a sandbox participant fails to notify the regulatory relief office and each
403     applicable agency of any incidents as described in Subsection (5)(a), or the regulatory relief
404     office or an applicable agency has evidence that significant harm to a consumer has occurred,
405     the regulatory relief office may immediately remove the sandbox participant from the
406     regulatory sandbox.
407          (6) (a) No later than 30 days after the day on which a sandbox participant exits the
408     regulatory sandbox, the sandbox participant shall submit a written report to the regulatory relief
409     office and each applicable agency describing an overview of the sandbox participant's
410     demonstration, including any:
411          (i) incidents of harm to consumers;
412          (ii) legal action filed against the participant as a result of the participant's
413     demonstration; and
414          (iii) complaints filed with an applicable agency as a result of the participant's
415     demonstration.
416          (b) No later than 30 days after the day on which an applicable agency receives [the
417     quarterly reporting described in Subsection (3) or] a written report from a sandbox participant
418     as described in Subsection (6)(a), the applicable agency shall provide a written report to the
419     regulatory relief office on the demonstration that describes any statutory or regulatory reform
420     the applicable agency recommends as a result of the demonstration.
421          (7) The regulatory relief office may remove a sandbox participant from the regulatory
422     sandbox at any time if the regulatory relief office determines that a sandbox participant has
423     engaged in, is engaging in, or is about to engage in any practice or transaction that is in
424     violation of this chapter or that constitutes a violation of a law or regulation for which
425     suspension or waiver has not been granted.
426          Section 7. Effective date.
427          This bill takes effect on May 1, 2024.