Kansas Could Suffer from Governor’s Veto of Sandbox Legislation

Originally posted at Kansas Policy Institute.

Gov. Laura Kelly just prevented Kansas from capturing a golden opportunity to open the door for new businesses and entrepreneurs trying to build the next big thing.

With her veto of House Bill 2291, Governor Kelly rejected a promising idea: creating a regulatory sandbox—a program designed to let entrepreneurs test new products, services, or business models free from outdated or misaligned regulations.

This bill was built to help the small guy—the startup founder trying to launch a new tech solution, the shop owner developing a unique service, or the innovator with a great idea but no legal team to navigate an outdated rulebook. Instead of welcoming that future, the governor doubled down on the status quo.

The sandbox idea, championed by Rep. Patrick Penn, Sen. Stephen Owens, and others, was simple and smart: allow new businesses a limited window to operate under modified rules while maintaining essential consumer protections. It would’ve been administered through the attorney general’s office with oversight from a multi-agency advisory committee. The program included plenty of safeguards, including the ability to deny applications that could harm consumers or the public.

This wasn’t some reckless deregulation scheme. It was about flexibility. About allowing Kansans with new ideas a chance to try without being shut down by red tape before they even get started.

As Elizabeth Patton, State Director of Americans for Prosperity-Kansas, put it:

“Instead of approving a good bill that would grow Kansas’ economy, we’re disappointed to see Gov. Kelly veto regulatory sandboxes—putting politics over Kansans.”
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And let’s be clear—other states are doing this, and it’s working. According to Libertas Institute, Kansas would’ve become the fifth state to adopt a universal sandbox covering all industries. Utah, West Virginia, Missouri, and Kentucky already have sandbox programs that drive innovation, investment, and job creation. Nevada and New Hampshire had sandboxes in the financial technologies and insurance industries, respectively, but they have since sunsetted, which is why they are yellow in the map below.

Utah, for example, launched a legal sandbox in 2021 that’s already delivering new services and access to justice for underserved communities. Libertas reports that sandboxes across the country are helping entrepreneurs build faster, cheaper, and more consumer-friendly solutions—all while regulators learn in real time how to modernize outdated rules.

That’s the real promise: regulatory sandboxes help everyone by identifying and eliminating unnecessary barriers. Done right, they don’t just help one company—they lead to smarter regulation for all.

Governor Kelly’s stated concerns over committee structure and transparency ring hollow when compared to the opportunity cost for local innovators. The bill passed with overwhelming bipartisan support—31-9 in the Senate and 90-28 in the House. It’s not hard to see why: this was a commonsense policy designed to let Kansas catch up to innovation leaders in other states.

Instead of saying “yes” to the next generation of Kansas entrepreneurs, the Governor slammed the door shut.
Imagine you’re a recent college grad in Wichita with a great idea for a healthcare tech startup—but Kansas’s licensing laws don’t account for your business model. Under the sandbox, you’d have had a shot to prove your concept, work with regulators, and build something real. Without it? You’re stuck, or worse—forced to move to another state where innovation is welcome.

Kansas doesn’t need more red tape. It needs more dynamism. More startups. More risk-takers willing to build here, hire here, and stay here. This veto isn’t just a policy misstep—it’s a signal that Kansas isn’t ready to compete with the states leading on innovation. That’s the wrong message to send to entrepreneurs.
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The Legislature should override the veto and let Kansas finally become a place where innovation doesn’t just survive—but thrives.