[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 4211 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
2d Session
S. 4211
To establish a regulatory sandbox program under which agencies may
provide waivers of agency rules and guidance, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 12, 2022
Mr. Lee (for himself, Mr. Marshall, and Mr. Scott of Florida)
introduced the following bill; which was read twice and referred to the
Committee on Homeland Security and Governmental Affairs
_______________________________________________________________________
A BILL
To establish a regulatory sandbox program under which agencies may
provide waivers of agency rules and guidance, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Promoting Innovation and Offering
the Needed Escape from Exhaustive Regulations Act'' or the ``PIONEER
Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Office of Information and Regulatory
Affairs.
(2) Agency; rule.--The terms ``agency'' and ``rule'' have
the meanings given those terms in section 551 of title 5,
United States Code.
(3) Applicable agency.--The term ``applicable agency''
means an agency that has jurisdiction over the enforcement or
implementation covered provision for which an applicant is
seeking a waiver under the Program.
(4) Covered provision.--The term ``covered provision''
means--
(A) a rule, including a rule required to be issued
under law; or
(B) guidance or any other document issued by an
agency.
(5) Director.--The term ``Director'' means the Director of
the Office.
(6) Economic damage.--The term ``economic damage'' means a
risk that is likely to cause tangible, physical harm to the
property or assets of consumers.
(7) Health or safety.--The term ``health or safety'', with
respect to a risk, means the risk is likely to cause bodily
harm to a human life, loss of human life, or an inability to
sustain the health or life of a human being.
(8) Office.--The term ``Office'' means the Office of
Federal Regulatory Relief established under section 3(a).
(9) Program.--The term ``Program'' means the program
established under section 4(a).
(10) Unfair or deceptive trade practice.--The term ``unfair
or deceptive trade practice'' has the meaning given the term
in--
(A) the Policy Statement of the Federal Trade
Commission on Deception, issued on October 14, 1983;
and
(B) the Policy Statement of the Federal Trade
Commission on Unfairness, issued on December 17, 1980.
SEC. 3. OFFICE OF FEDERAL REGULATORY RELIEF.
(a) Establishment.--There is established within the Office of
Information and Regulatory Affairs within the Office of Management and
Budget an Office of Federal Regulatory Relief.
(b) Director.--
(1) In general.--The Office shall be headed by a Director,
who shall be the Administrator or a designee thereof, who
shall--
(A) be responsible for--
(i) establishing a regulatory sandbox
program described in section 4;
(ii) receiving Program applications and
ensuring those applications are complete;
(iii) referring complete Program
applications to the applicable agencies;
(iv) filing final Program application
decisions from the applicable agencies;
(v) hearing appeals from applicants if
their applications are denied by an applicable
agency in accordance with section 4(c)(6); and
(vi) designating staff to the Office as
needed; and
(B) not later than 180 days after the date of
enactment of this Act--
(i) establish a process that is used to
assess likely health and safety risks, risks
that are likely to cause economic damage, and
the likelihood for unfair or deceptive
practices to be committed against consumers
related to applications submitted for the
Program, which shall be--
(I) published in the Federal
Register and made publicly available
with a detailed list of the criteria
used to make such determinations; and
(II) subject to public comment
before final publication in the Federal
Register; and
(ii) establish the application process
described in section 4(c)(1).
(2) Advisory boards.--
(A) Establishment.--The Director shall require the
head of each agency to establish an advisory board,
which shall--
(i) be composed of 10 private sector
representatives appointed by the head of the
agency--
(I) with expertise in matters under
the jurisdiction of the agency, with
not more than 5 representatives from
the same political party;
(II) who shall serve for a period
of not more than 3 years; and
(III) who shall not receive any
compensation for participation on the
advisory board; and
(ii) be responsible for providing input to
the head of the agency for each Program
application received by the agency.
(B) Vacancy.--A vacancy on an advisory board
established under subparagraph (A), including a
temporary vacancy due to a recusal under subparagraph
(C)(ii), shall be filled in the same manner as the
original appointment with an individual who meets the
qualifications described in subparagraph (A)(i)(I).
(C) Conflict of interest.--
(i) In general.--If a member of an advisory
board established under subparagraph (A) is
also the member of the board of an applicant
that submits an application under review by the
advisory board, the head of the agency or a
designee thereof may appoint a temporary
replacement for that member.
(ii) Financial interest.--Each member of an
advisory board established under subparagraph
(A) shall recuse themselves from advising on an
application submitted under the Program for
which the member has a conflict of interest as
described in section 208 of title 18, United
States Code.
(D) Small business concerns.--Not less than 5 of
the members of each advisory board established under
subparagraph (A) shall be representatives of a small
business concern, as defined in section 3 of the Small
Business Act (15 U.S.C. 632).
(E) Rule of construction.--Nothing in this Act
shall be construed to prevent an agency from
establishing additional advisory boards as needed to
assist in reviewing Program applications that involve
multiple or unique industries.
SEC. 4. REGULATORY SANDBOX PROGRAM.
(a) In General.--The Director shall establish a regulatory sandbox
program under which applicable agencies shall grant or deny waivers of
covered provisions to temporarily test products or services on a
limited basis, or undertake a project to expand or grow business
facilities consistent with the purpose described in subsection (b),
without otherwise being licensed or authorized to do so under that
covered provision.
(b) Purpose.--The purpose of the Program is to incentivize the
success of current or new businesses, the expansion of economic
opportunities, the creation of jobs, and the fostering of innovation.
(c) Application Process for Waivers.--
(1) In general.--The Office shall establish an application
process for the waiver of covered provisions, which shall
require that an application shall--
(A) confirm that the applicant--
(i) is subject to the jurisdiction of the
Federal Government; and
(ii) has established or plans to establish
a business that is incorporated or has a
principal place of business in the United
States from which their goods or services are
offered from and their required documents and
data are maintained;
(B) include relevant personal information such as
the legal name, address, telephone number, email
address, and website address of the applicant;
(C) disclose any criminal conviction of the
applicant or other participating persons, if
applicable;
(D) contain a description of the good, service, or
project to be offered by the applicant for which the
applicant is requesting waiver of a covered provision
by the Office under the Program, including--
(i) how the applicant is subject to
licensing, prohibitions, or other authorization
requirements outside of the Program;
(ii) each covered provision that the
applicant seeks to have waived during
participation in the Program;
(iii) how the good, service, or project
would benefit consumers;
(iv) what likely risks the participation of
the applicant in the Program may pose, and how
the applicant intends to reasonably mitigate
those risks;
(v) how participation in the Program would
render the offering of the good, service, or
project successful;
(vi) a description of the plan and
estimated time periods for the beginning and
end of the offering of the good, service, or
project under the Program;
(vii) a recognition that the applicant will
be subject to all laws and rules after the
conclusion of the offering of the good,
service, or project under the Program;
(viii) how the applicant will end the
demonstration of the offering of the good,
service, or project under the Program;
(ix) how the applicant will repair harm to
consumers if the offering of the good, service,
or project under the Program fails; and
(x) a list of each agency that regulates
the business of the applicant; and
(E) include any other information as required by
the Office.
(2) Assistance.--The Office may, upon request, provide
assistance to an applicant to complete the application process
for a waiver under the Program, including by providing the
likely covered provisions that could be eligible for such a
waiver.
(3) Agency review.--
(A) Transmission.--Not later than 14 days after the
date on which the Office receives an application under
paragraph (1), the Office shall submit a copy of the
application to each applicable agency.
(B) Review.--The head of an applicable agency, or a
designee thereof, shall review a Program application
received under subparagraph (A) with input from the
advisory board established under section 3(b)(2).
(C) Considerations.--In reviewing a copy of an
application submitted to an applicable agency under
subparagraph (A), the head of the applicable agency, or
a designee thereof, with input from the advisory board
of the applicable agency established under section
3(b)(2), shall consider whether--
(i) the plan of the applicant to deploy
their offering will adequately protect
consumers from harm;
(ii) the likely health and safety risks,
risks that are likely to cause economic damage,
and the likelihood for unfair or deceptive
practices to be committed against consumers are
outweighed by the potential benefits to
consumers from the offering of the applicant;
and
(iii) it is possible to provide the
applicant a waiver even if the Office does not
waive every covered provision requested by the
applicant.
(D) Final decision.--
(i) In general.--Subject to clause (ii),
the head of an applicable agency, or a designee
thereof, who receives a copy of an application
under subparagraph (A) shall, with the
consideration of the recommendations of the
advisory board of the applicable agency
established under section 3(b)(2), make the
final decision to grant or deny the
application.
(ii) In part approval.--
(I) In general.--If more than 1
applicable agency receives a copy of an
application under subparagraph (A)--
(aa) the head of each
applicable agency (or their
designees), with input from the
advisory board of the
applicable agency established
under section 3(b)(2), shall
grant or deny the waiver of the
covered provisions over which
the applicable agency has
jurisdiction for enforcement or
implementation; and
(bb) if each applicable
agency that receives an
application under subparagraph
(A) grants the waiver under
item (aa), the Director shall
grant the entire application.
(II) In part approval by
director.--If an applicable agency
denies part of an application under
subclause (I) but another applicable
agency grants part of the application,
the Director shall approve the
application in part and specify in the
final decision which covered provisions
are waived.
(E) Record of decision.--
(i) In general.--Not later than 180 days
after receiving a copy of an application under
subparagraph (A), an applicable agency shall
approve or deny the application and submit to
the Director a record of the decision, which
shall include a description of each likely
health and safety risk, each risk that is
likely to cause economic damage, and the
likelihood for unfair or deceptive practices to
be committed against consumers that the covered
provision the applicant is seeking to have
waived protects against, and--
(I) if the application is approved,
a description of how the identifiable,
significant harms will be mitigated and
how consumers will be protected under
the waiver;
(II) if the applicable agency
denies the waiver, a description of the
reasons for the decision, including why
a waiver would likely cause health and
safety risks, likely cause economic
damage, and increase the likelihood for
unfair or deceptive practices to be
committed against consumers, and the
likelihood of such risks occurring, as
well as reasons why the application
cannot be approved in part or reformed
to mitigate such risks; and
(III) if the applicable agency
determines that a waiver would likely
cause health and safety risks, likely
cause economic damage, and there is
likelihood for unfair or deceptive
practices to be committed against
consumers as a result of the covered
provision that an applicant is
requesting to have waived, but the
applicable agency determines such risks
can be protected through less
restrictive means than denying the
application, the applicable agency
shall provide a recommendation of how
that can be achieved.
(ii) No record submitted.--If the
applicable agency does not submit a record of
the decision with respect to an application for
a waiver submitted to the applicable agency,
the Office shall assume that the applicable
agency does not object to the granting of the
waiver.
(iii) Extension.--The applicable agency may
request one 30-day extension of the deadline
for a record of decision under clause (i).
(iv) Expedited review.--If the applicable
agency provides a recommendation described in
clause (i)(III), the Office shall provide the
applicant with a 60-day period to make
necessary changes to the application, and the
applicant may resubmit the application to the
applicable agency for expedited review over a
period of not more than 60 days.
(4) Nondiscrimination.--In considering an application for a
waiver, an applicable agency shall not unreasonably
discriminate among applications under the Program or resort to
any unfair or unjust discrimination for any reason.
(5) Fee.--The Office may collect an application fee from
each applicant under the Program, which--
(A) shall be in a fair amount and reflect the cost
of the service provided;
(B) shall be deposited in the general fund of the
Treasury and allocated to the Office, subject to
appropriations; and
(C) shall not be increased more frequently than
once every 2 years.
(6) Written agreement.--If each applicable agency grants a
waiver requested in an application submitted under paragraph
(1), the waiver shall not be effective until the applicant
enters into a written agreement with the Office that describes
each covered provision that is waived under the Program.
(7) Limitation.--An applicable agency may not waive under
the Program any tax, fee, or charge imposed by the Federal
Government.
(8) Appeals.--
(A) In general.--If an applicable agency denies an
application under paragraph (3)(E), the applicant may
submit to the Office one appeal for reconsideration,
which shall--
(i) address the comments of the applicable
agency that resulted in denial of the
application; and
(ii) include how the applicant plans to
mitigate the likely risks identified by the
applicable agency.
(B) Office response.--Not later than 60 days after
receiving an appeal under subparagraph (A), the
Director shall--
(i) determine whether the appeal
sufficiently addresses the concerns of the
applicable agency; and
(ii)(I) if the Director determines that the
appeal sufficiently addresses the concerns of
the applicable agency, file a record of
decision detailing how the concerns have been
remedied and approve the application; or
(II) if the Director determines that the
appeal does not sufficiently address the
concerns of the applicable agency, file a
record of decision detailing how the concerns
have not been remedied and deny the
application.
(9) Nondiscrimination.--The Office shall not unreasonably
discriminate among applications under the Program or resort to
any unfair or unjust discrimination for any reason in the
implementation of the Program.
(10) Judicial review.--
(A) Record of decision.--A record of decision
described in paragraph (3)(E) or (8)(B) shall be
considered a final agency action for purposes of review
under section 704 of title 5, United States Code.
(B) Limitation.--A reviewing court considering
claims made against a final agency action under this
Act shall be limited to whether the agency acted in
accordance with the requirements set forth under this
Act.
(C) Right to judicial review.--Nothing in this
paragraph shall be construed to establish a right to
judicial review under this Act.
(d) Period of Waiver.--
(1) Initial period.--Except as provided in this subsection,
a waiver granted under the Program shall be for a term of 2
years.
(2) Continuance.--The Office may continue a waiver granted
under the Program for a maximum of 4 additional periods of 2
years as determined by the Office.
(3) Notification.--Not later than 30 days before the end of
an initial waiver period under paragraph (1), an entity that is
granted a waiver under the Program shall notify the Office if
the entity intends to seek a continuance under paragraph (2).
(4) Revocation.--
(A) Significant harm.--If the Office determines
that an entity that was granted a waiver under the
Program is causing significant harm to the health or
safety of the public, inflicting severe economic damage
on the public, or engaging in unfair or deceptive
practices, the Office may immediately end the
participation of the entity in the Program by revoking
the waiver.
(B) Compliance.--If the Office determines that an
entity that was granted a waiver under the Program is
not in compliance with the terms of the Program, the
Office shall give the entity 30 days to correct the
action, and if the entity does not correct the action
by the end of the 30-day period, the Office may end the
participation of the entity in the Program by revoking
the waiver.
(e) Terms.--An entity for which a waiver is granted under the
Program shall be subject to the following terms:
(1) A covered provision may not be waived if the waiver
would prevent a consumer from seeking actual damages or an
equitable remedy in the event that a consumer is harmed.
(2) While a waiver is in use, the entity shall not be
subject to the criminal or civil enforcement of a covered
provision identified in the waiver.
(3) An agency may not file or pursue any punitive action
against a participant during the period for which the waiver is
in effect, including a fine or license suspension or revocation
for the violation of a covered provision identified in the
waiver.
(4) The entity shall not have immunity related to any
criminal offense committed during the period for which the
waiver is in effect.
(5) The Federal Government shall not be responsible for any
business losses or the recouping of application fees if the
waiver is denied or the waiver is revoked at any time.
(f) Consumer Protection.--
(1) In general.--Before distributing an offering to
consumers under a waiver granted under the Program, and
throughout the duration of the waiver, an entity shall publicly
disclose the following to consumers:
(A) The name and contact information of the entity.
(B) That the entity has been granted a waiver under
the Program, and if applicable, that the entity does
not have a license or other authorization to provide an
offering under covered provisions outside of the
waiver.
(C) If applicable, that the offering is undergoing
testing and may not function as intended and may expose
the consumer to certain risks as identified in the
record of decision of the applicable agency submitted
under section 4(c)(3)(E).
(D) That the entity is not immune from civil
liability for any losses or damages caused by the
offering.
(E) That the entity is not immune from criminal
prosecution for violation of covered provisions that
are not suspended under the waiver.
(F) That the offering is a temporary demonstration
and may be discontinued at the end of the initial
period under subsection (d)(1).
(G) The expected commencement date of the initial
period under subsection (d)(1).
(H) The contact information of the Office and that
the consumer may contact the Office and file a
complaint.
(2) Online offering.--With respect to an offering provided
over the internet under the Program, the consumer shall
acknowledge receipt of the disclosures required under paragraph
(1) before any transaction is completed.
(g) Record Keeping.--
(1) In general.--An entity that is granted a waiver under
this section shall retain records, documents, and data produced
that is directly related to the participation of the entity in
the Program.
(2) Notification before ending offering.--If an applicant
decides to end their offering before the initial period ends
under subsection (d)(1), the applicant shall submit to the
Office and the applicable agency a report on actions taken to
ensure consumers have not been harmed as a result.
(3) Request for documents.--The Office may request records,
documents, and data from an entity that is granted a waiver
under this section that is directly related to the
participation of the entity in the Program, and upon the
request, the applicant shall make such records, documents, and
data available for inspection by the Office.
(4) Notification of incidents.--An entity that is granted a
waiver under this section shall notify the Office and any
applicable agency of any incident that results in harm to the
health or safety of consumers, severe economic damage, or an
unfair or deceptive practice under the Program not later than
72 hours after the incident occurs.
(h) Reports.--
(1) Entities granted a waiver.--
(A) In general.--Any entity that is granted a
waiver under this section shall submit to the Office
reports that include--
(i) how many consumers are participating in
the good, service, or project offered by the
entity under the Program;
(ii) an assessment of the likely risks and
how mitigation is taking place;
(iii) any previously unrealized risks that
have manifested; and
(iv) a description of any adverse incidents
and the ensuing process taken to repair any
harm done to consumers.
(B) Timing.--An entity shall submit a report
required under subparagraph (A)--
(i) 10 days after 30 days elapses from
commencement of the period for which a waiver
is granted under the Program;
(ii) 30 days after the halfway mark of the
period described in clause (i); and
(iii) 30 days before the expiration of the
period described in subsection (d)(1).
(2) Annual report by director.--The Director shall submit
to Congress an annual report on the Program, which shall
include, for the year covered by the report--
(A) the number of applications approved;
(B) the name and description of each entity that
was granted a waiver under the Program;
(C) any benefits realized to the public from the
Program; and
(D) any harms realized to the public from the
Program.
(i) Special Message to Congress.--
(1) Definition.--In this subsection, the term ``covered
resolution'' means a joint resolution--
(A) the matter after the resolving clause of which
contains only--
(i) a list of some or all of the covered
provisions that were recommended for repeal
under paragraph (2)(A)(ii) in a special message
submitted to Congress under that paragraph; and
(ii) a provision that immediately repeals
the listed covered provisions described in
paragraph (2)(A)(ii) upon enactment of the
joint resolution; and
(B) upon which Congress completes action before the
end of the first period of 60 calendar days after the
date on which the special message described in
subparagraph (A)(i) of this paragraph is received by
Congress.
(2) Submission.--
(A) In general.--Not later than the first day on
which both Houses of Congress are in session after May
1 of each year, the Director shall submit to Congress a
special message that--
(i) details each covered provision that the
Office recommends should be amended or repealed
as a result of entities being able to operate
safely without those covered provisions during
the Program;
(ii) lists any covered provision that
should be repealed as a result of having been
waived for a period of not less than 6 years
during the Program; and
(iii) explains why each covered provision
described in clauses (i) and (ii) should be
amended or repealed.
(B) Delivery to house and senate; printing.--Each
special message submitted under subparagraph (A) shall
be--
(i) delivered to the Clerk of the House of
Representatives and the Secretary of the
Senate; and
(ii) printed in the Congressional Record.
(3) Procedure in house and senate.--
(A) Referral.--A covered resolution shall be
referred to the appropriate committee of the House of
Representatives or the Senate, as the case may be.
(B) Discharge of committee.--If the committee to
which a covered resolution has been referred has not
reported the resolution at the end of 25 calendar days
after the introduction of the resolution--
(i) the committee shall be discharged from
further consideration of the resolution; and
(ii) the resolution shall be placed on the
appropriate calendar.
(4) Floor consideration in the house.--
(A) Motion to proceed.--
(i) In general.--When the committee of the
House of Representatives has reported, or has
been discharged from further consideration of,
a covered resolution, it shall at any time
thereafter be in order (even though a previous
motion to the same effect has been disagreed
to) to move to proceed to the consideration of
the resolution.
(ii) Privilege.--A motion described in
clause (i) shall be highly privileged and not
debatable.
(iii) No amendment or motion to
reconsider.--An amendment to a motion described
in clause (i) shall not be in order, nor shall
it be in order to move to reconsider the vote
by which the motion is agreed to or disagreed
to.
(B) Debate.--
(i) In general.--Debate in the House of
Representatives on a covered resolution shall
be limited to not more than 2 hours, which
shall be divided equally between those favoring
and those opposing the resolution.
(ii) No motion to reconsider.--It shall not
be in order in the House of Representatives to
move to reconsider the vote by which a covered
resolution is agreed to or disagreed to.
(C) No motion to postpone consideration or proceed
to consideration of other business.--In the House of
Representatives, motions to postpone, made with respect
to the consideration of a covered resolution, and
motions to proceed to the consideration of other
business, shall not be in order.
(D) Appeals from decisions of chair.--An appeal
from the decision of the Chair relating to the
application of the Rules of the House of
Representatives to the procedure relating to a covered
resolution shall be decided without debate.
(5) Floor consideration in the senate.--
(A) Motion to proceed.--
(i) In general.--Notwithstanding Rule XXII
of the Standing Rules of the Senate, when the
committee of the Senate to which a covered
resolution is referred has reported, or has
been discharged from further consideration of,
a covered resolution, it shall at any time
thereafter be in order (even though a previous
motion to the same effect has been disagreed
to) to move to proceed to the consideration of
the resolution and all points of order against
the covered resolution are waived.
(ii) Division of time.--A motion to proceed
described in clause (i) is subject to 4 hours
of debate divided equally between those
favoring and those opposing the covered
resolution.
(iii) No amendment or motion to postpone or
proceed to other business.--A motion to proceed
described in clause (i) is not subject to--
(I) amendment;
(II) a motion to postpone; or
(III) a motion to proceed to the
consideration of other business.
(B) Floor consideration.--
(i) General.--In the Senate, a covered
resolution shall be subject to 10 hours of
debate divided equally between those favoring
and those opposing the covered resolution.
(ii) Amendments.--In the Senate, no
amendment to a covered resolution shall be in
order, except an amendment that strikes from or
adds to the list required under paragraph
(1)(A)(i) a covered provision recommended for
amendment or repeal by the Office.
(iii) Motions and appeals.--In the Senate,
a motion to reconsider a vote on final passage
of a covered resolution shall not be in order,
and points of order, including questions of
relevancy, and appeals from the decision of the
Presiding Officer, shall be decided without
debate.
(6) Receipt of resolution from other house.--If, before
passing a covered resolution, one House receives from the other
a covered resolution--
(A) the covered resolution of the other House shall
not be referred to a committee and shall be deemed to
have been discharged from committee on the day on which
it is received; and
(B) the procedures set forth in paragraph (4) or
(5), as applicable, shall apply in the receiving House
to the covered resolution received from the other House
to the same extent as those procedures apply to a
covered resolution of the receiving House.
(7) Rules of the house of representatives and the senate.--
Paragraphs (3) through (7) are enacted by Congress--
(A) as an exercise of the rulemaking power of the
House of Representatives and the Senate, respectively,
and as such are deemed a part of the rules of each
House, respectively, but applicable only with respect
to the procedures to be followed in the House in the
case of covered resolutions, and supersede other rules
only to the extent that they are inconsistent with such
other rules; and
(B) with full recognition of the constitutional
right of either House to change the rules (so far as
relating to the procedure of that House) at any time,
in the same manner, and to the same extent as in the
case of any other rule of that House.
(j) Rule of Construction.--Nothing in this section shall be
construed to--
(1) require an entity that is granted a waiver under this
section to publicly disclose proprietary information, including
trade secrets or commercial or financial information that is
privileged or confidential; or
(2) affect any other provision of law or regulation
applicable to an entity that is not included in a waiver
provided under this section.
(k) Authorization of Appropriations.--There are authorized to be
appropriated to the Office to carry out this section an amount that is
not more than the amount of funds deposited into the Treasury from the
fees collected under subsection (c)(3).
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