TOPEKA — A Republican-led interim committee of the Kansas Legislature and out-of-state deregulation lobbyists endorsed Tuesday introduction of a new bill allowing exemption of businesses from state laws, rules or regulations hindering delivery of products or services.
Under the proposal, Kansas would follow Arizona, Kentucky, Utah and Missouri by creating an innovation “sandbox” for businesses across the spectrum to operate for two or more years under a lighter regulatory framework. A state agency or official would be responsible for approving applications for exemptions. Core objectives would include giving businesses more maneuvering space, attracting entrepreneurial investment and identifying regulatory barriers to profitability.
“A sandbox invites the business community to the table to highlight troublesome rules and regulations, prove they’re not working as intended and, as a result, the state is better welcoming to the innovations of tomorrow,” said Rees Empey of the Utah libertarian think tank Libertas Institute. “It’s a living and breathing approach to regulatory reform that possesses safeguards to protect consumers and the environment.”
Americans for Prosperity policy analyst James Czerniawski, who previously worked for Libertas Institute, said government regulations often forced businesses to fit a square peg in a round hole.
“Many regulations that are currently on the books were designed decades ago, and do not necessarily account for the new and emerging industries,” he told legislators. “It is fair to ask how many companies are crushed before they even get off the ground because regulations got in the way.”
Only advocates of bringing the sandbox model to Kansas offered testimony to the interim committee. During the 2024 legislative session, however, the Kansas Sierra Club and Kansas State Board of Healing Arts raised objections to the concept.
‘Closer to a solution’
In the 2024 session, the Republicans’ sandbox bill died in the Kansas House due to questions about justification, and ramifications of reform. Issues were raised about constitutionality of a program supervised by the state’s attorney general. Objections were made by health care regulators and environmentalists. There were questions about unfairness of state government picking which businesses could sidestep regulations.
“It didn’t go anywhere,” said Rep. Sean Tarwater, a Stilwell Republican who chairs the House commerce committee. “There was a lot of confusion around that bill. I feel like we’re getting much closer to a solution.”
Tarwater embraced the interim House and Senate committee’s recommendation to revamp the stalled bill and press ahead in the 2025 session. Instead of an industry-specific approach tied to insurance, technology or banking, the legislation wouldn’t exclude any type of business from Kansas’ sandbox. It didn’t make sense to forbid certain businesses from applying, he said.
Wichita Democratic Rep. John Carmichael, among members of the committee opposed to the sandbox, said it was alarming the Republican majority was intent on creating two classes of businesses — those with regulatory exemptions and those without.
“Do you find anything objectionable that under this scheme some businesses are subject to regulation and others aren’t?” Carmichael said. “Is that a fair and level playing field?”
Dane Ishihara, director of the Utah Office of Regulatory Relief, told legislators that Utah’s system generally required at least two business applicants to step forward and apply for an exemption. If there was a single applicant, he said, the state was likely to deny the application unless it was the only player in that piece of the state’s economy.
The Kobach factor
In 2024, the Kansas House considered a bill placing Kansas Attorney General Kris Kobach in charge of a division of regulatory overreach in which laws, regulations or rules could be suspended up to 24 months for benefit of select businesses. The attorney general’s division also would be responsible for identifying regulations ripe for repeal by the Legislature and governor.
