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PIONEER Act would allow businesses to apply for regulatory “sandbox,” a waiver from federal…

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2022-06-08
https://govtrackinsider.com/pioneer-act-would-allow-businesses-to-apply-for-regulatory-sandbox-a-waiver-from-federal-b88e23176e51

PIONEER Act would allow businesses to apply for regulatory “sandbox,” a waiver from federal regulations for up to 10 years

Sen. Mike Lee (R-UT)

You’d expect no less from the only U.S. senator with a lifetime “100” score from libertarian advocacy organization FreedomWorks.

Context

Recently, more states have implemented so-called “sandbox” programs, which allow businesses to apply for exemptions from many or most existing state regulations. The idea is to ease the economic pressure on companies, particularly startups.

Arizona became the first such state in 2018. Since then, at least nine other states followed suit: Florida, Hawaii, Kentucky, Nevada, North Carolina, Utah, Vermont, West Virginia, and Wyoming.

However, Utah did something unique. The other states limited the program to just one industry or only a few select industries — most frequently financial technology, insurance, and legal services. In March, Utah expanded its program to all industries in the state. The bill passed unanimously, by 73–0 in the state House and 27–0 in the state Senate.

Now, one of Utah’s U.S. senators has proposed extending the idea nationwide.

What the bill does

The PIONEER (Promoting Innovation and Offering the Needed Escape from Exhaustive Regulations) Act would create a two-year “sandbox” in which approved businesses are exempt from federal regulations.

The bill would not apply to all businesses, but specifically to those granted a waiver through an application process that would be overseen by a new Office of Federal Regulatory Relief. The office can turn down waiver applications for reasons including the likelihood of health and safety risks, economic harms, or deceptive/fraudulent practices.

Approved businesses could apply for an extension of up to eight more years, but vice versa, the office also has the right to revoke an existing waiver in the middle.

This bill is also worded vaguely enough that it’s unclear which specific kinds of regulations could be evaded. For example, would a company be free to engage in discriminatory hiring practices or allow child labor? Sen. Lee’s office did not respond to emailed questions from GovTrack Insider asking for clarification.

It was introduced in the Senate on May 12 as S. 4211, by Sen. Mike Lee (R-UT).

What supporters say

Supporters argue the bill would unleash economic growth and innovation.

“The federal government is notorious for instituting burdensome regulations that increase costs, inhibit innovation, and rarely expire. Sadly, many of these regulations have resulted from Congress’s long history of ceding legislative authority to bureaucrats,” Sen. Lee said in a press release. The bill “will provide the needed regulatory reform toolbox that can tackle the massive federal regulatory burden allowing our business environment to thrive.”

What opponents say

Opponents say that this proposal, and other similar ones, weaken consumer protections that were put in for a reason.

“The idea that innovation will flourish only by allowing companies to evade laws that protect consumers, and which also safeguard markets and mitigate risk for the financial services industry, is preposterous,” New York State Department of Financial Services’ then-Superintendent Maria Vullo said in a 2018 statement.

“Toddlers play in sandboxes. Adults play by the rules,” Vullo continued. “Companies that truly want to create change and thrive over the long-term appreciate the importance of developing their ideas and protecting their customers within a strong state regulatory framework.”

Odds of passage

The bill has attracted two cosponsors, both Republicans. It awaits a potential vote in the Senate Homeland Security and Governmental Affairs Committee.

Odds of passage are low in the Democratic-controlled chamber.

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This article was written by GovTrack Insider staff writer Jesse Rifkin.

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