ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
AMENDED
blockchain and cryptocurrency study committee
Purpose
Establishes the Blockchain and Cryptocurrency Study Committee (Study Committee) and prescribes Study Committee membership.
Background
Blockchain technology is a distributed ledger technology that uses a distributed, decentralized, shared and replicated ledger. The data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth. Blockchain technology may be: 1) public or private; 2) permissioned or permissionless; or 3) driven by tokenized crypto economics or token less (A.R.S. 44-7061).
A signature, record or contract secured through blockchain technology is an electronic form of signature or record, respectively (A.R.S. 44-7061).
A city, town or county may not prohibit or restrict an individual from running a node on blockchain technology in a residence. The act of running a node on blockchain technology means providing computing power to validate or encrypt transactions in blockchain technology (A.R.S. 9-500.42 and 11-269.22).
The Legislature appropriated $1,250,000 in FY 2020 from the State Web Portal Fund to the Arizona Commerce Authority to distribute to applied research centers that specialize in blockchain technology across Arizona (Laws 2019, Chapter 263).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Establishes the Study Committee consisting of:
a)
three members of the Senate, no more than two of whom are from the same
political party who are appointed by the President of the Senate;
b) three members of the House of Representatives (House), no more than two of whom are from the same political party who are appointed by the Speaker of the House;
c) a president or chief executive officer of an Arizona-based cryptocurrency company, or their designee, who is appointed by the Speaker of the House;
d) two representatives of the cryptocurrency or blockchain space who may represent private industry in exchanges, payment solutions or non-cryptocurrency transaction purposes, one who is appointed by the Speaker of the House and one who is appointed by the President of the Senate;
e) the Director of the Arizona Department of Revenue or their designee;
f) a university professor who specializes in blockchain, who is from a university under the jurisdiction of the Arizona Board of Regents and who is appointed by the Speaker of the House;
g) a representative of a blockchain or cryptocurrency association who is appointed by the Speaker of the House; and
h) two public members, one who is appointed by the Speaker of the House and one who is appointed by the President of the Senate;
i) two representatives of the financial institutions industry, appointed by the President of the Senate;
j) one representative of a private company or public organization that has experience in identifying illicit uses of cryptocurrency and that specializes in using nonfungible token (NFT) technology, appointed by the President of the Senate;
k) the Director of the Department of Insurance and Financial Institutions or their designee; and
l) the Attorney General or their designee.
2. Directs the Speaker of the House and the President of the Senate to each designate a cochairperson from the appointed legislative members.
3. Directs the Study Committee to:
a) review data on the scope of blockchain and cryptocurrency throughout the country;
b) determine the current status of blockchain and cryptocurrency in relation to previously enacted Arizona legislation on these subjects;
c) compile an overview of potential legislation;
d) solicit ideas and opinions of industry experts on additional legislation;
e) meet as often as the chairperson deems necessary; and
f) submit an initial report by December 31, 2021.
4. Requires, by December 31, 2022, the Study Committee to submit a final report of the Study Committee's findings and recommendations on what will foster a positive blockchain and cryptocurrency economic environment to the Speaker of the House and provide a copy to the Secretary of State.
5. Terminates the Study Committee on October 1, 2023.
6. Becomes effective on the general effective date.
Amendments Adopted by Committee of the Whole:
1. Adds to the Study Committee membership:
a) two representatives of the financial institutions industry, appointed by the President of the Senate;
b) one representative of a private company or public organization that has experience in identifying illicit uses of cryptocurrency and that specializes in using NFT technology, appointed by the President of the Senate;
c) the Director of the Department of Insurance and Financial Institutions or their designee; and
d) the Attorney General or their designee.
2. Requires the President of the Senate and the Speaker of the House to appoint the legislative members to the Study Committee, rather than the President of the Senate and the Speaker of the House appointing two members and the Senate Minority Leader and House Minority Leader appointing one member.
3. Decreases, from three representatives to two representatives, the number of representatives from the blockchain space on the Study Committee.
4. Increases, from one member to two members, the number of public members on the Study Committee.
5. Makes technical changes.
House Action Senate Action
COM 2/9/21 DP 9-0-0-1 FIN 3/24/21 DP 4-2-4
3rd Read 2/23/21 42-17-1
Prepared by Senate Research
April 20, 2021
MG/FDR/gs