Kansas Statutes § 75-790 General regulatory sandbox program; establishment; duties; application; review; approval of application.

75-790. General regulatory sandbox program; establishment; duties; application; review; approval of application. (a) There is hereby created in the regulatory relief division the general regulatory sandbox program. In the administration of the general regulatory sandbox program, the regulatory relief division: (1) Shall consult with each applicable state agency; (2) shall establish a program to enable a person to obtain legal protections and limited access to the market in the state to demonstrate an innovative offering without obtaining a certification or registration that might otherwise be required by state law, except that: (A) Nothing in this act shall be construed to permit any waiver or suspension of any licensing requirement or rule or regulation regarding licensing or to permit a license to be deemed for purposes of federal or state law; and (B) the program shall not be used for any innovative offering regulated under any provision of the Kansas liquor control act, club and drinking establishment act or Kansas cereal malt beverage act, and no waiver or suspension of any licensing requirement or any other rule and regulation under any such act shall be permitted; (3) may enter into agreements with or adopt the best practices of corresponding federal regulatory agencies or other states that are administering similar programs; and (4) may consult with businesses in the state about existing or potential proposals for the general regulatory sandbox program. (b) (1) The regulatory relief division shall provide relevant information regarding the regulatory sandbox program and how to apply for the program. The regulatory relief division may provide assistance to an applicant in preparing an application for submission. (2) An applicant to the general regulatory sandbox program may contact the regulatory relief division to request a consultation regarding the general regulatory sandbox program before submitting an application. (3) An applicant to the general regulatory sandbox program shall provide to the regulatory relief division an application in a form prescribed by the regulatory relief division that: (A) Confirms that the applicant is subject to the jurisdiction of Kansas; (B) confirms that the applicant has established a physical or virtual location in the state from where the demonstration of an innovative offering will be developed and performed and where all required records, documents and data will be maintained; (C) contains relevant personal and contact information for the applicant, including legal names, addresses, telephone numbers, email addresses, website addresses and other information required by the regulatory relief division; (D) discloses criminal convictions of the applicant or other participating personnel, if any; (E) contains a description of the innovative offering to be demonstrated, including statements regarding: (i) How the offering is subject to legal prohibition or other authorization requirements outside of the general regulatory sandbox program; (ii) each rule and regulation that the applicant seeks to have waived or suspended while participating in the general regulatory sandbox program; (iii) how the offering would benefit consumers; (iv) how the offering is different from other offerings available in the state; (v) what risks might exist for consumers who use or purchase the offering; (vi) how participating in the general regulatory sandbox program would enable a successful demonstration of the offering; (vii) a description of the proposed demonstration plan, including estimated time periods for beginning and ending the demonstration; (viii) recognition that the applicant will be subject to all laws and rules and regulations pertaining to the applicant's offering after conclusion of the demonstration; and (ix) how the applicant will end the demonstration and protect consumers if the demonstration fails; (F) lists each agency, if any, that the applicant reasonably believes to regulate the applicant's business; and (G) provides any other required information as determined by the regulatory relief office. (4) For each application submitted, the regulatory relief office may collect a fee of not to exceed $250. (5) An applicant shall file a separate application for each innovative offering that the applicant seeks to demonstrate. (c) (1) The application and any related information provided by the applicant shall be confidential and privileged, except that the application and related information may be disclosed to an expert contracted by the division for specific services to review the records. (2) Except as provided in paragraph 1, the application and any related information provided by the applicant shall be confidential and privileged and not be subject to the provisions of the Kansas open records act as provided by K.S.A. 45-215 et seq., and amendments thereto. The provisions of this subsection shall expire on July 1, 2030, unless the legislature reviews and reenacts this provision pursuant to K.S.A. 45-229, and amendments thereto, prior to July 1, 2030. (d) After an application is filed, the regulatory relief office shall: (1) Consult with each applicable agency that regulates the applicant's business to determine if more information is needed from the applicant; and (2) seek any other information from the applicant that the regulatory relief office determines is necessary for an application to be complete. (e) Not later than five business days after the day when a complete application is received, the regulatory relief office shall: (1) Review the application and refer the application to each applicable agency that regulates the applicant's business; and (2) provide to the applicant an acknowledgment of receipt of the application and the identity and contact information of each agency to which the application has been referred for review. (f) (1) Except as provided by this section, not later than 30 days after the day when an applicable agency receives a complete application for review, the applicable agency shall provide a written report to the director of the applicable agency's findings. Such report shall: (A) Describe any identifiable, likely and significant harm to the health, safety or financial well-being of consumers against which the relevant law or rule and regulation protects; and (B) make a recommendation to the regulatory relief office that the application either be admitted or denied entrance into the general regulatory sandbox program. (2) The applicable agency may request an additional five business days to deliver the written report by providing notice to the director. Such request shall automatically be granted, and the applicable agency may only request one extension per application. (3) If the applicable agency recommends that an application should be denied entrance into the general regulatory sandbox program, the written report shall include a description of the reasons for the recommendation, including why a temporary waiver or suspension of the relevant rules and regulations is likely to significantly harm the health, safety or financial well-being of consumers or the public and the likelihood of such harm occurring. (4) If the agency determines that the consumer's or public's health, safety or financial well-being can be protected through less restrictive means than the existing relevant rules and regulations, the applicable agency shall provide a recommendation of how such less restrictive means can be achieved. (5) If an applicable agency fails to deliver a written report as described in this section, the director shall assume that the applicable agency does not object to the temporary waiver or suspension of the relevant rules and regulations for the application seeking to participate in the general regulatory sandbox program. (6) Notwithstanding any other provision of this section, an applicable agency may: (A) By written notice to the regulatory relief office not more than 30 days after the date when the applicable agency receives a completed application for review, or within 35 days if an extension has been requested by the applicable agency, reject an application if the applicable agency determines, in the applicable agency's sole discretion, that the applicant's offering fails to comply with standards or specifications required by federal law or regulation or previously approved for use by a federal agency; or (B) reject an application preliminarily approved by the regulatory relief office, if the applicable agency recommended rejection of the application in the agency's written report and provides in the written notice under subparagraph (A) a description of the applicable agency's reasons why approval of the application would create a substantial risk of harm to the health or safety of the public or create unreasonable expenses for taxpayers in the state. (7) If an applicable agency rejects an application under paragraph (6), the regulatory relief office shall not approve such application unless the advisory committee recommends that the application should be approved by a 2/3 vote. (g) (1) Upon receiving a written report, the director shall provide the application and the written report to the advisory committee. (2) The director may call the advisory committee to meet, as needed, but not less than once per quarter if applications are available for review. (3) After receiving and reviewing the application and each written report, the advisory committee shall provide to the director the advisory committee's recommendation as to whether or not the applicant should be admitted as a sandbox participant under this section. (4) As part of the advisory committee's review of each written report, the advisory committee shall use the criteria required for an applicable agency as described in subsection (f). (h) (1) In reviewing an application and each applicable agency's written report, the regulatory relief office shall consult with each applicable agency and the advisory committee before admitting an applicant into the general regulatory sandbox program. Such consultation may seek information regarding whether the applicable agency has previously: (A) Issued a license or other authorization to the applicant; and (B) investigated, sanctioned or pursued legal action against the applicant. (2) In reviewing an application, if a competitor to an applicant is or has been a regulatory relief sandbox program participant, the regulatory relief office and each applicable agency shall weigh such competitor's participation as a factor in favor of allowing the applicant to also become a sandbox participant. (i) In reviewing an application under this section, the regulatory relief office shall consider if: (1) The applicant's plan will adequately protect consumers from potential harm identified by an applicable agency in the written report; (2) the risk of harm to consumers is outweighed by the potential benefits to consumers from the applicant's participation in the general regulatory sandbox program; and (3) certain rules and regulations that regulate an offering should not be waived or suspended even if the applicant is approved as a sandbox participant, including applicable anti-fraud or disclosure provisions. (j) An applicant becomes a sandbox participant if the regulatory relief office approves the application and enters into a written agreement with the applicant describing the specific rules and regulations that are waived or suspended as part of participation in the general regulatory sandbox program. (1) The regulatory relief office shall not enter into a written agreement with an applicant that waives or suspends a tax, fee or charge that is administered under the provisions of chapter 79 of the Kansas Statutes Annotated, and amendments thereto. (2) The director may deny any application submitted under this section for any reason, including if the director determines that suspending or waiving enforcement of rule and regulation would cause a significant risk of harm to consumers or residents of the state. (3) (A) If the director denies an application, the regulatory relief office shall provide to the applicant a written description of the reasons for not allowing the applicant to be a sandbox participant. (B) The denial of an application submitted under this section shall not be subject to the administrative procedure act or the Kansas judicial review act. (C) The director shall deny an application for participation in the general regulatory sandbox program described by this section if the applicant or any person who seeks to participate with the applicant, in demonstrating that an offering has been convicted, entered a plea of nolo contendere for any crime involving significant theft, fraud or dishonesty if the crime bears a significant relationship to the applicant's or other participant's ability to safely and competently participate in the general regulatory sandbox program. (4) When an applicant is approved for participation in the general regulatory sandbox program, the director shall provide notice of the approval to competitors of the applicant and to the public. Such notice shall be provided prominently on the website of the attorney general and the website or webpage of the regulatory relief division, if the regulatory relief division has a website or webpage. History: L. 2025, ch. 107, § 3; July 1.