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Utah officials tout regulatory sandbox successes, pivot to targeted industry outreach
Summary
State economic and regulatory officials updated the interim Business, Labor and Commerce Committee on Utah’s industry-agnostic regulatory sandbox, citing two graduated businesses, expanded transparency requirements and a shift toward proactively pursuing reviews of emerging sectors such as energy, aerospace and AI.
The interim Business, Labor and Commerce Committee heard an update on Utah’s regulatory “sandbox” from former Representative Jefferson Moss and Dana Sharara on the state’s approach to waiving or easing state regulatory requirements for emerging businesses.
The sandbox, created by legislation first passed in February 2021 (HP 217) to form the Office of Regulatory Relief, allows businesses to apply for temporary waivers of state statutes or administrative rules so regulators and companies can test innovations without immediately changing permanent law. ‘‘When we did the sandbox a few years ago ... it was, I think, the first in the nation to do something like this,’’ said Jefferson Moss, executive director of the Governor’s Office of Economic Opportunity.
Committee members were told the program has produced two businesses that graduated from the sandbox, two businesses currently under contract and more than 20 firms assisted through pre-application or clarification work. Dana Sharara, director of the Office of Regulatory Relief, said most early contacts are resolved without a formal waiver because agencies and companies can clarify regulatory language or address the issue through an administrative rule rather than a statutory change.
Sharara walked members through the statutory history: HP 217 (02/2021) created the Office of Regulatory Relief and the industry‑agnostic sandbox; HB 243 (02/2022) merged specialty sandboxes and added open‑meeting transparency requirements after concerns about early confidentiality; subsequent 2024 amendments expanded the advisory board (to nine members plus three rotating subject‑matter members) and adjusted the denial process so a denial must come from an executive director within the relevant regulatory agency.
Sharara described procedural changes the office has adopted: prescreening conversations with agencies before formally submitting applications to avoid surprising regulators; deeper review of why a law exists to respect legislative intent; and a new industry regulatory review process that requires a deep dive into at least two industries per year (the office reviewed life sciences and fintech in the most recent year). Sharara said those industry reviews will be included in the office’s annual report due October 1.
Moss and Sharara said the program is moving from a reactive model—waiting for applications—to a more targeted outreach approach. ‘‘We’re now ... going to be more targeted with our approach for the regulatory reviews,’’ Sharara said, describing the shift as moving from “bait fishing” to something more deliberate. Moss said GOEO plans to promote the sandbox as an economic development tool to attract out‑of‑state firms and to engage earlier with innovators so the agency can help identify regulatory hurdles before companies scale.
Committee members asked about startup survivorship and the balance of risk. Moss said sandbox decisions focus on whether the underlying technology or use case is new and whether offering temporary relief poses risks to health, safety or welfare, rather than the firm’s stage of growth. Representative Shallenberg asked how to balance startup failure rates with helping businesses obtain financing; Moss replied the office evaluates the novelty of the application and its public‑safety implications rather than firm longevity.
Members also asked about energy and microgrid opportunities. Moss and committee members discussed microgrids’ need to connect to utilities such as Rocky Mountain Power and the cost‑allocation problems that arise when upgrades benefit many ratepayers. Representative Ballard said he would discuss offline how the state could play an investor role that allows upgrades without making a single microgrid developer pay for system improvements.
The presenters described federal coordination as well: the office now has a point of contact in the Small Business Administration advocacy office and said it will work with federal delegation members when complaints or barriers are clearly within federal jurisdiction. Sharara clarified that the sandbox can waive only state statutes or administrative rules; it cannot change federal regulation or municipal ordinances.
The presenters asked the committee for feedback and said GOEO plans to return in the November interim with a broader strategic plan that will show how the sandbox fits into GOEO priorities. ‘‘We are putting together a strategic plan for GOEO ... This would be one of those,’’ Sharara said.
Why it matters: Utah’s regulatory sandbox is being positioned as both a testing ground for emergent technologies and a marketing tool to attract companies. The statutory changes since 2021 emphasize transparency, targeted expertise for complex applications and stronger agency involvement.
What’s next: GOEO will publish an annual report by Oct. 1 and return to the committee during the November interim with a strategic plan and additional recommendations for targeted industry reviews.
Speakers quoted in this article are identified from the committee meeting transcript and appeared during the sandbox update presentation and questioning.
