In 2022, the Utah Legislature passed H.B. 243, which made amendments to Utah’s Regulatory Sandbox Program. Utah’s Sandbox program has developed significantly over the past few years and offers an opportunity for innovative businesses. The Sandbox is a way that businesses can introduce new ideas that are restricted by current regulations. Sandbox programs have allowed food trucks, cryptocurrency, and even AI implementation into the legal field.

Here at Long Okura, we have taken a deep dive into the program and are ready to help your business implement a new idea or concept that has never been done before because it is limited by out-of-date rules and regulations. The sandbox program has a detailed application process that involves submitting a plan including how the idea would be subjection to licensing, legal prohibition, or other authorized requirements outside of current laws and regulations in Utah. The application must identify each law or regulation that the applicant seeks to have waived or suspended when participating in the regulatory sandbox program and how the business would benefit consumers. The business idea must be different than other offerings available in the state and the application must identify the risks for consumers. The sandbox has strict requirements for the application process, demonstration period, consumer protection measures, record keeping, reporting, and even requirements for exiting the program.

Keep in mind that any consumer of the business must be a resident of the state of Utah and no law or regulations that prevents a consumer from seeking restitution may be waived in the event the consumer is harmed. After the application process begins the demonstration period. For a period of 12 months, your business operates without the laws or regulations identified and is immune to charges from any state agency. The business must recognize that the laws are returned to normal after the demonstration period unless extension or legislative action takes place. The business also must show how demonstration will end if consumers need protection or if the idea fails. The demonstration period may only be extended after the first year for an additional year. Then the business will rely on permanent action. The Regulatory Relief Office has the power to review the laws and regulations under the Sandbox program and make recommendations to the Governor and Legislature on modifying such state laws and regulations.

Here at Long Okura, we will guide you through the complex application process and help ensure all legal requirements are being met through the process. The demonstration period will require careful reporting and record keeping that we can work with your business to ensure organized systems are in place to maintain compliance under the program. Our firm will help your business identify the risks associated with a Sandbox business and find avenues to reduce that risk including legal contracts, insurance negotiation, and other legal services if necessary. We can even help request an extension under the program, walk your business through the exit process and work with the Regulatory Relief Office so that your business idea is considered in the annual report to the Legislature’s Business and Labor Interim Committee. Overall, the Sandbox program is an incredible tool for the entrepreneurs of tomorrow and setting up your future.

By Jesse K. West