New Mexico’s regulatory burden, and how to overcome it

Our friends at the free market Mercatus Center recently published a state-by-state report on regulations. Basically, they counted the number of regulations and determined which states had the most and which had the least. New Mexico came in 19th worst overall which is not as bad as usual, but not great either.

While going line-by-line through each regulation and repealing it is challenging and a non-starter, one solution tried in other states and introduced in New Mexico is called a “regulatory sandbox.” A bill to create such a “sandbox” was introduced by Democratic Rep. Meredith Dixon in 2023. HB 356 would have created the Technology Sandbox Act. The bill would have

provided temporary licensing waivers for individuals and businesses that propose an innovative use of blockchain technology. The bill required that applicants submit an application including a description of the service, consumer risks, a business plan, and the expertise of the applicant among other information. HB356 required the NMAG to evaluate the risk of any entity receiving a regulatory waiver, and required a participant to post a consumer protection bond as security for potential losses and damages suffered by consumers.

In other words, it provided regulatory relief for a specific industry with a few common-sense requirements. The idea being to bring more of that industry to New Mexico. As the Libertas Institute based in Utah notes: sandboxes can be universal and they can be industry-specific. Proposals have been introduced and passed in states all across the nation from the deepest blue to the reddest red.

In fact, in 2024, South Dakota Senator Mike Rounds and New Mexico Senator Martin Heinrich introduced a bill in Congress to establish a sandbox for the use of artificial intelligence in banking.

Needless to say, this is a concept of interest to people and elected officials from across the political spectrum. While all 112 legislators in New Mexico are up for election this fall, we will be working to bring the regulatory sandbox idea to New Mexico in 2025.