Utah Passes Nation’s First (?) Bioprospecting Regulation

By Eric Goldman

The Utah legislature has passed SB 51, the “Utah Bioprospecting Act,” which requires a government-issued license (which presumably will include a royalty cut for the state) before engaging in bioprospecting on government lands not owned by the federal government. The law is awaiting the governor’s signature. If enacted, I believe this will be the nation’s first state law regulating bioprospecting.

What is Bioprospecting?

Bioprospecting is the process of looking for naturally occurring animals or plants that have commercial utility. The issue is quite hot in many developing countries, which are rich in biodiversity but may be underdeveloped in research and commercialization capabilities. As a result, foreign researchers come to the country to investigate the biodiversity, identify a commercially useful native species, and then commercialize that species elsewhere without any clear compensation to the source country. We might debate the fairness of this situation, but I know that some folks have strong feelings that bioprospecting is illegitimate.

One of the main challenges with regulating bioprospecting is simply defining it. Take a look at this law’s messy definition:

(1) (a) “Bioprospecting” means the removal from a natural environment for research or commercial use of: (i) a naturally occurring microorganism, plant, or fungus; or (ii) information concerning a naturally occurring microorganism’s, plant’s, or fungus’ physical or genetic properties.

(b) “Bioprospecting” does not include: (a) horticultural cultivation, except for horticultural genetic engineering conducted in a manner otherwise constituting bioprospecting; (b) an agricultural enterprise; (c) a forest and range management practice; (d) invasive weed management; (e) Christmas tree and related sales; or (f) incidental removal of a microorganism, plant, or fungus while engaged in bona fide research or commercial enterprises.

What??? What does that mean? I think any law that has to say that it’s simultaneously trying not to govern weed removal or Christmas tree farming is overly broad by definition. But look at the drafters’ failed efforts to draw non-overlapping Venn diagrams. In (b)(a), how can the exclusion cover activity “conducted in a manner otherwise constituting bioprospecting”? Isn’t that circular? And doesn’t the (b)(f) exception swallow up the whole?

More generally, look at (1)(a)(ii). The law doesn’t just regulate the removal of physical specimens, but it regulates any commercial use of information about a specimen. Huh? Does that mean that I can’t publish a picture of Utah plants on state lands without the government issued-license? I wonder to what extent the contemplated licensing requirement to disseminate information about plants runs into Constitutional and federal preemption issues.

Why Did Utah Enact a Bioprospecting Law?

In the mid-2000s, Hawaii considered enacting a law about bioprospecting. I can understand this, as Hawaii is a globally leading biodiversity hotspot. Plus, there remains continuing local unrest about Hawaii’s status as a state and the fate of native Hawaiians.

But Utah? I don’t think of Utah either as a biodiversity leader or a self-perceived victim of colonialism or imperialism. Instead, for me, Utah’s main leadership role is as the nation’s leader in state legislative incompetence. While this particular law is not per se stupid (in contrast with many of Utah’s efforts to regulate the Internet), this law makes some of the systematic errors I’ve seen from Utah laws.

First, as indicated above, the law is poorly drafted and ambiguous. I have no idea what it covers. I have the same reaction to most of Utah’s efforts to regulate the Internet.

Second, I don’t understand why this law rose to the top of the legislative priority queue. Part of that is because I have no idea who is bioprospecting in Utah. Are there flinty old bearded codgers, riding burros overburdened with pick axes, steel canteens and blankets, muttering to themselves that “there’s biogold in them thar hills”? If not, then who’s doing it, and how will this regulation affect them? Note that the Utah legislature only meets a couple of months out of the year, so they have limited space to produce laws. Given all of the other obvious legislative needs, why spend time on this law?

Third, like many other Utah laws, the law reflects an unstated assumption that if outsiders are coming into Utah to make money, the Utah government coffers deserve a little taste of the action. This brought to mind Utah’s deplorable “don’t spam the kids” registry, which really was just a backdoor way for Utah to try to tax out-of-state email senders. That efforts was a financial failure; I expect this law to be a financially poor decision as well.

On that point, I was shocked to see the fiscal note that this law had no appropriations and “this bill likely will not result in direct, measurable costs and/or benefits for individuals, businesses, or local governments.” Really? First, if there’s no law enforcement, I imagine most folks will ignore the law. Second, the state will undoubtedly incur some costs to promulgate the statute’s contemplated regulations and to negotiate individual licenses with registering bioprospectors. Third, the imposition of the licensing scheme constitutes a transaction cost that discourages some of the regulated activity from occurring in the first place. Some might conclude that outcome is ultimately a good thing, but it almost assuredly has economic consequences. I cannot figure out how this bill got such a clean financial report. Given the Utah legislature’s sensitivity to costs, I bet a more thoughtful fiscal report would have slowed (and probably scuttled) the bill’s passage.

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