The North Carolina General Assembly is winding down business for this legislative session. There are still several big-ticket items lawmakers need to accomplish, such as passing the biennial budget and drawing voting district lines for the next decade. While lawmakers will prioritize those issues, many pieces of legislation have passed one chamber and await action in the other chamber. Some may still see movement before adjournment, and some may not.
One such piece of legislation is the North Carolina Regulatory Sandbox Act. Companion pieces of the legislation have passed each chamber. The House version of the bill, H.B. 624, passed 103-2 on June 16th and the Senate version, S.B. 470, passed 47-0 on June 14th. My colleague Jon Sanders detailed how regulatory sandboxes work in a recent research brief,
What’s a regulatory sandbox? It’s a colorful phrase for a new administrative approach to regulation when it comes to newly emerging products and services. The idea exhibits the kind of mutual respect for innovation and regulation discussed above.
As described in RealClear Policy, “Regulatory sandboxes are closed testing environments where firms can experiment with innovative new products, services, and business models for a limited period of time, under some form of modified regulatory environment.”
A regulatory sandbox is a creative initiative to keep North Carolina competitive and encourage more businesses to come to the state. It recognizes that government moves much slower than innovators.
So why haven’t legislators completed the process and moved this bipartisan piece of legislation through a subsequent chamber and sent it to the Governor for signing?
Recently, some have taken issue with a claim that the regulatory sandbox in North Carolina would allow for “non-lawyers to own legal practices and paraprofessionals to practice law.” This claim is not accurate. The reality is the North Carolina sandbox would only apply to the finance and insurance industries. Nothing in the bill would change anything with the legal profession. Some states, such a Utah, have implemented a regulatory sandbox for the legal profession. However, North Carolina’s S.B. 470/H.B. 624 does not have any language that would authorize any such change to the legal profession in North Carolina.
Again, S.B. 470/H.B. 624 will only apply to the finance and insurance industries. North Carolina should look to include more industries that could apply to participate in the sandbox in the future. The proven track record of sandboxes makes it a worthwhile reform for North Carolina lawmakers should consider extending to other industries.
Lawmakers should not delay any further on this piece of bipartisan legislation that will keep North Carolina as a regional and national leader for business.