BILL NUMBER: S6899
SPONSOR: COONEY
 
TITLE OF BILL:
An act to amend the public lands law and the real property law, in
relation to establishing central depository databases for governmental
real property transaction records
 
PURPOSE:
The purpose of this bill is to optimize real data management by intro-
ducing a secure easy-to-use system that breaks down data silos for
governments, citizens, and private enterprises.
 
SUMMARY OF PROVISIONS:
Section 1 provides definitions for distributed ledge technology, tolken-
ization, digitalization, blockchain and federated blockchain in public
lands law.
Section 2 authorizes the Commissioner of the Office of General Services
to establish a central depository database for governmental real estate
records. These real estate records are to be stored securely and perma-
nently on a federated blockchain.
Section 3 provides definitions for distributed ledge technology, tolken-
ization, digitalization, blockchain and federated blockchain in real
property law.
Section 4 authorizes the county clerk or city registrar to establish a
central depository database for governmental real estate records. These
real estate records are to be stored securely and permanently on a
federated blockchain.
Section 5 provides the effective date.
 
JUSTIFICATION:
Currently, the real estate transaction process is often slow and cumber-
some. The average real estate transaction time from start to finish is
90 days or more and comes with unnecessary friction (e.g. manual data
recording, transferring ownership, and time-consuming payment proc-
esses). Additionally, there is limited interoperability between the
government sectors responsible for recording real estate transactions,
county registrar, tax collection, tax assessment and construction.
Therefore, the data is parsed, and no single source of verification is
present.
Additionally, the current real estate transactions suffer from poor
transparency and a lack of liquidity. Real estate transaction data is
difficult to access under the current model. There are many types of
real estate data and property conditions are not typically recorded.
This lack of transparency is the primary cause of illiquidity, as all
salient asset details must be acquired and verified before any liquidity
event.
Lastly, and perhaps most importantly, existing real estate records are
susceptible to fraud and damage. These records are extremely susceptible
to exploitation. They are often housed in an unsecured server where they
can be subject to damage, hacks or theft. Ransomware attacks on public
records have become routine and put everyone's data at risk while
increasing costs on local governments.
This legislation will offer the opportunity of leveraging distributed
ledger technology to provide governments with a blockchain-based
solution for improved security, automation, transparency, integration,
and interoperability. It will permit government departments to secure
sensitive real estate documents using an Asset Registry. The Asset
Registry is a highly secure database accessible to all government
departments and is designed to consolidate property data and is resil-
ient to hacking attempts.
The assets are encrypted and tokenized on the blockchain, ensuring their
permanence and immutability as a backup for municipal records. Daily
snapshots are captured, enabling a history of data to the municipality
in the unfortunate event of server breaches or data loss. Each property
serves as an independent "digital filing cabinet", containing property
specific records.
Use of the blockchain will provide for permanent, encrypted records.
Transactions will be faster using instant settlement of transactions and
atomic transfer and recording of deeds and titles. The blockchain is
transparent providing real-time authenticated records and data. Impor-
tantly, records and data are safe and secure. There is no need to fear
deed and mortgage fraud.
 
LEGISLATIVE HISTORY:
New Bill
 
FISCAL IMPLICATIONS:
The legislation will require an initial investment by the governmental
entity to establish usage of blockchain. However, once implemented,
savings will be realized almost immediately as the process becomes more
efficient. Transactions will be less cumbersome and require a signif-
icant reduction in staff time to finalize the transactions. In instances
where there exists paper storage, that need can be eliminated resulting
in additional fiscal savings. Lastly, and very significantly, the secu-
rity provided by the blockchain will not only produce monetary savings,
as theft and fraud will be eliminated, but it will save individuals from
the distress of being a victim of these devasting crimes.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S6899: 2 public lands law, 2(1) public lands law, 290 real property law, 290(12) real property law