HF 85 (LSB 1066YH (3) 91)

HOUSE FILE 85

BY  WILLS

A BILL FOR

An Act providing for a regulatory relief program. 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  15E.22  Regulatory relief office.
   1.  The authority shall establish a regulatory relief office under the control of the director of the authority.
   2.  The regulatory relief office shall have all of the following duties:
   a.  Administer the regulatory relief program as described in section 15E.24.
   b.  Act as a liaison between private businesses and applicable state agencies to identify state laws or regulations that could potentially be waived or suspended under the regulatory relief program.
   3.  The regulatory relief office may do any of the following:
   a.  Review state laws and regulations that may unnecessarily inhibit the creation and success of new companies or industries and provide recommendations to the governor and the general assembly on modifying such state laws and regulations.
   b.  Create a framework for analyzing the risk level to the health, safety, and financial well-being of consumers related to permanently removing or temporarily waiving laws and regulations inhibiting the creation or success of new and existing companies or industries.
   c.  Propose potential reciprocity agreements between states that use or are proposing to use similar regulatory relief programs as described in this subchapter.
   4.  By October 1 of each year, the regulatory relief office shall issue a written annual report on the activities of the office, which report must include all of the following:
   a.  Information regarding each participant in the regulatory relief program, including which industries each participant represents and the anticipated or actual cost savings that each participant experienced.
   b.  Recommendations regarding any laws or regulations that should be permanently modified.
   c.  Information regarding outcomes for consumers.
   d.  Recommendations for changes to the regulatory relief program or other duties of the regulatory relief office.
   5.  The authority shall adopt rules pursuant to chapter 17A as necessary for purposes of establishing the office and implementing the requirements of the regulatory relief program.
    Sec. 2.  NEW SECTION.  15E.23  Regulatory relief advisory committee.
   1.  The authority shall establish a regulatory relief advisory committee consisting of thirteen members, including nine voting members and four ex officio nonvoting members. The advisory committee shall be composed of all of the following:
   a.  Nine voting members, appointed by the director of the authority, as follows:
   (1)  Six members who represent business interests.
   (2)  Three members who represent state agencies that regulate businesses.
   b.  The nonvoting members of the committee shall be two state representatives, one appointed by the speaker of the house of representatives and one by the minority leader of the house of representatives, and two state senators, one appointed by the majority leader of the senate and one by the minority leader of the senate.
   2.  The director of the authority shall, on an annual basis, designate the chairperson of the advisory committee. Members of the advisory committee appointed by the director shall serve four-year staggered terms as determined by the director.
   3.  A majority of the voting members of the advisory committee constitutes a quorum for the purpose of conducting advisory committee business, and the action of the majority of a quorum constitutes the action of the advisory committee.
   4.  The advisory committee shall advise and make recommendations to the regulatory relief office concerning the regulatory relief program as described in section 15E.24.
    Sec. 3.  NEW SECTION.  15E.24  Regulatory relief program.
   1.  The regulatory review office shall establish a regulatory relief program. The purpose of the regulatory relief program is to enable a business to obtain legal protections and limited access to the market in this state to demonstrate an innovative offering without obtaining a license or other authorization that might otherwise be required.
   2.  a.  The regulatory review office shall establish a process for purposes of receiving applications from businesses to participate in the regulatory relief program. 
   b.  The application must include a description of the innovative offering to be demonstrated by the participant, to include all of the following information:
   (1)  Statements from the applicant on how the offering is subject to licensing, legal prohibition, or other authorization requirements.
   (2)  Identification of each law or regulation that the applicant seeks to have waived or suspended while participating in the regulatory relief program.
   (3)  How the innovative offering would benefit consumers.
   (4)  What risks might exist for consumers who use or purchase the offering.
   (5)  How participating in the regulatory relief program would enable a successful demonstration of the offering.
   (6)  A description of the proposed demonstration plan for the offering, including estimated time periods for beginning and ending the demonstration.
   (7)  How the applicant will end the demonstration and protect consumers if the demonstration fails.
   (8)  A list of each state agency, if any, that the applicant knows regulates the applicant’s business relative to the offering.
   (9)  Disclosure of criminal convictions of the applicant or any person who seeks to participate with the applicant in demonstrating an offering.
   (10)  Such other information as the regulatory review office requires.
   3.  Upon receipt of an application to participate in the regulatory relief program, the regulatory relief office shall acknowledge receipt of the application, forward information in the application to affected state agencies for review, and notify the applicant which state agencies will review the application. 
   4.  Each state agency in receipt of an application to participate in the regulatory relief program shall, in a timely fashion, submit a written report to the regulatory relief office which includes a recommendation to the regulatory relief office that the applicant either be admitted or denied participation in the program. The written report must include reasons for the determination by the state agency. 
   a.  A state agency shall recommend that the applicant be admitted into the regulatory relief program 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 laws or regulations. The written report must provide a recommendation of how that can be achieved.
   b.  A state agency shall recommend that the applicant be denied participation in the regulatory relief program if the state agency determines that a temporary waiver or suspension of the relevant laws or regulations would potentially significantly harm the health, safety, or financial well-being of consumers or the public and the harm is likely to occur or would create unreasonable expenses for taxpayers in the state. A state agency may also recommend that the applicant be denied participation in the regulatory relief program if the state agency determines, in the state agency’s sole discretion, that the applicant’s innovative offering fails to comply with standards or specifications required by federal law or regulation or previously approved for use by a federal agency. The written report must include reasons for the determination by the state agency that the applicant be denied participation in the program. 
   c.  If a state agency recommends that an applicant be denied participation in the regulatory relief program, the regulatory relief office shall deny the application and notify the applicant.
   5.  a.  Upon receipt of written reports by applicable state agencies that do not recommend denial of the application, the regulatory review office shall review the application to determine whether to accept the applicant into the regulatory review program. The regulatory review office shall provide the application and written reports to the regulatory relief advisory committee which shall review the application and written reports and submit a recommendation to the office regarding the application. The regulatory relief office may also seek information from affected state agencies in making a decision on whether to accept the applicant into the program. The consultation with each applicable state agency may include seeking information about whether the applicable state agency has previously issued a license or other authorization to the applicant and whether the applicable state agency has previously investigated, sanctioned, or pursued legal action against the applicant.
   b.  In reviewing an application under this section, the regulatory relief office shall consider all of the following:
   (1)  Whether a competitor of the applicant is or has been a participant in the regulatory relief program and, if so, weigh that as a factor in favor of allowing the applicant to also become a participant in the regulatory relief program.
   (2)  Whether the applicant’s plan will adequately protect consumers from potential harm identified by an applicable agency in the applicable agency’s written report.
   (3)  Whether the risk of harm to consumers is outweighed by the potential benefits to consumers from the applicant’s participation in the regulatory relief program.
   (4)  Whether certain state laws or regulations that regulate an offering should not be waived or suspended even if the applicant is approved as a participant in the regulatory relief program, including applicable antifraud or disclosure provisions.
   6.  Following review of the application, the regulatory relief office shall notify the applicant, in writing, whether the regulatory relief office approves or denies the application for participation in the regulatory relief program. If the regulatory relief office director denies an application submitted under this section, the regulatory relief office shall provide to the applicant a written description of the reasons for not allowing the applicant to be a participant in the program.
   7.  If the regulatory relief office approves the application, the regulatory relief office shall enter into a written agreement with the applicant describing the specific laws and regulations that are waived or suspended as part of participation in the regulatory relief program. However, 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 by the department of revenue. The written agreement shall also not waive or suspend any law or regulation if waiving or suspending the law or regulation would prevent a consumer from seeking restitution in the event that the consumer is harmed. When an applicant is approved for participation in the program, the regulatory relief office may provide notice of the approval to the public.
   8.  a.  If the regulatory relief office approves an application and enters into a written agreement with the applicant, the applicant shall be allowed to participate in the regulatory relief program. A participant in the program has twelve months after the day on which the application was approved to demonstrate the offering described in the participant’s application.
   b.  A participant in the regulatory relief program is deemed to possess an appropriate license or other authorization under the laws of the state for the purposes of any provision of federal law requiring licensure or other authorization by the state.
   c.  During the demonstration period, a participant in the regulatory relief program is not subject to the enforcement of state laws or regulations identified in the written agreement between the regulatory relief office and the participant in the program. However, a participant in the program does not have immunity related to any criminal offense committed during the participant’s participation in the regulatory relief program.
   d.  During the demonstration period, a participant in the regulatory relief program shall provide notice to consumers regarding the participant’s participation in the program in a manner as prescribed by the regulatory relief office.
   e.  During the demonstration period, a participant in the regulatory relief program shall retain records, documents, and data produced in the ordinary course of business regarding an offering demonstrated in the program. The regulatory relief office may request records, documents, and data from a participant and, upon the regulatory relief office’s request, the participant shall make such records, documents, and data available for inspection by the regulatory relief office.
   f.  A participant in the regulatory relief program shall be required to submit quarterly reports and a final report at the conclusion of the demonstration period to the regulatory relief office containing such information as the office may require regarding the participant’s participation in the program. The participant shall also notify the regulatory relief office and each applicable state agency of any incidents that result in harm to the health, safety, or financial well-being of a consumer during the demonstration period.
   g.  If a participant in the regulatory relief program ceases to provide an offering before the end of the demonstration period, the participant shall notify the regulatory relief office and shall no longer be granted the authority provided in the written agreement.
   h.  By written notice, the regulatory relief office may end a participant’s participation in the regulatory relief program at any time and for any reason, including if the regulatory relief office determines that a participant in the program is not operating in good faith to bring an innovative offering to market.
   9.  At least thirty days before the end of the twelve-month demonstration period, a participant shall notify the regulatory relief office that the participant will exit the regulatory relief program and discontinue the participant’s demonstration on the day the twelve-month demonstration period ends or shall seek an extension from the regulatory relief office to continue participation in the program. If the participant seeks an extension, the regulatory relief office shall grant or deny a request for an extension by the end of the demonstration period. The regulatory relief office may grant an extension in accordance with this section for not more than twelve months after the end of the initial demonstration period.
   10.  The regulatory relief office and employees of the regulatory relief office are not liable for any business losses or the recouping of application expenses or other expenses related to the regulatory relief program, including for denying an applicant’s application to participate in the program for any reason or ending a participant’s participation in the regulatory relief program at any time and for any reason.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill establishes a regulatory relief program, administered by a regulatory relief office which is created by the bill.
   New Code section 15E.22 requires the economic development authority (IEDA) to establish a regulatory relief office under the control of the director of IEDA. The bill establishes the duties of the office to include administering the regulatory relief program created by the bill. The office is also required to issue an annual written report concerning the activities of the office. The bill requires IEDA to adopt rules for purposes of the office and the regulatory relief program.
   New Code section 15E.23 establishes a 13-member regulatory relief advisory committee. The committee shall consist of nine voting members, appointed by the director of IEDA, which shall include six members representing business interests and three members representing state agencies that regulate businesses, and four nonvoting legislative members. The bill provides that the director of IEDA designate the chair of the advisory committee. The advisory committee is responsible for advising and making recommendations to the regulatory relief office regarding the regulatory relief program.
   New Code section 15E.24 establishes the regulatory relief program. The bill provides that the purpose of the program is to enable businesses to obtain legal protections and limited access to the market in this state to demonstrate an innovative offering without obtaining a license or other authorization that might otherwise be required. The bill establishes the process by which a business may apply to participate in the program. The bill describes the information required to be included in an application to the regulatory relief office for participation in the program. Applications for participation in the program shall be forwarded by the regulatory relief office to affected state agencies who will issue a written report recommending acceptance or rejection of the application. A state agency rejection of an application will result in denial of the application. If no state agency recommends rejection, the regulatory relief office shall forward the application and the written reports to the regulatory relief advisory committee who shall review the information and submit a recommendation to the office. The regulatory review office shall either accept or deny the application and shall notify the applicant of the decision. If the application is accepted, the regulatory relief agency shall enter into a written agreement with the applicant describing the specific laws and regulations that are waived or suspended as part of the program. Participation in the program shall be for a demonstration period of 12 months. The bill specifies various reporting and disclosure requirements for a participant in the program. The bill allows the regulatory relief office to end a participant’s participation in the program at any time. The bill also permits a participant in the program to request an extension of the program for not more than 12 months after the end of the initial demonstration period. Finally, the bill provides that the regulatory relief office and employees of the regulatory relief office are not liable for any business losses or the recouping of application expenses or other expenses related to the regulatory relief program.