Assigned to COM FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
FACT SHEET FOR H.B. 2731
regulatory sandbox; expansion
Purpose
Expands the Regulatory Sandbox Program (RSP) to include innovations other than
financial products or services.
Background
In 2018, the Legislature established the RSP (Laws 2018, Ch. 44). The Attorney General
(AG) must establish, in consultation with applicable agencies, an RSP to enable persons to obtain
limited access to the Arizona market to test innovative financial products or services without
obtaining a license or other authorization (A.R.S. § 41-5602). The AG oversees the RSP and
accepts or denies applications from potential RSP participants. Applicants are required to
demonstrate adequate understanding of the innovation and a sufficient plan to test, monitor and
assess the innovation while ensuring consumers are protected from a test's failure (A.R.S.
§ 41-5603). Upon application approval, an applicant is deemed an RSP participant and given 24
months to test the innovative financial products or services described in the application (A.R.S.
§ 41-5604).
An RSP participant must retain records, documents and data produced in the ordinary
course of business regarding an innovative financial product or service tested in the RSP. If an
innovation fails before the end of the testing period, the RSP participant must notify the AG and
report on actions taken to ensure consumers have not been harmed as a result of the innovation's
failure (A.R.S. § 41-5609). Before the 24-month testing period ends, an RSP participant must
notify the AG that the RSP participant will exit the RSP and cease offering any innovative products
or services within 60 days after the 24-month testing period ends or seek an extension in order to
pursue a license or other authorization required by law (A.R.S. § 41-5607).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Expands the RSP to include innovations other than financial products or services.
2. Modifies the definition of innovation by removing the specification on providing a financial
product or service or a substantial component of a financial product or service.
3. Makes technical and conforming changes.
4. Becomes effective on the general effective date. FACT SHEET
H.B. 2731
Page 2
House Action
COM 2/15/22 DP 10-0-0-0
3
rd
Read 2/23/22 39-20-1
Prepared by Senate Research
March 7, 2022
JT/sr