House Joint Resolution 25, Blockchain Legislation, and the Future of Illinois

House Joint Resolution 25 created the Illinois Blockchain and Distributed Ledger Task Force, a 17-member task force tasked with studying how, and if, the state of Illinois and units of local government can benefit from a transition to a blockchain based system for recordkeeping and service delivery.  Specifically, the task force studied (1) opportunities and risks associated with using blockchain and other distributed ledger technologies, (2) the different types of blockchains, public and private (3) projects and use cases in other states/nations that Illinois could consider, (4) encryption technology, including Illinois’ digital signature infrastructure, and (5) official reports and recommendations from the Illinois Blockchain Initiative.

On January 31, 2018, the blockchain task force issued its final report.  In the spirit of utilizing blockchain, the report is primarily accessible on the InterPlanetary File System, a blockchain-based file storage system.  The report concluded with 8 legislative recommendations:

  1. Reconcile Illinois digital signature laws with the Uniform Electronic Transactions Act
  2. Modernize Notary Statutes
  3. Self-Notarization of Documents
  4. Clarity to “Pure Notice” Conveyance and Recording Statute
  5. Require Claims Against Real Estate to be Publicly Recorded
  6. Reproduction Versus Storage
  7. Omnibus Real Estate Records Submission Modernization
  8. Statewide Unique Real Property Parcel Numbering System

Blockchain Legislation

Rep. Mike Zalewksi, chairperson of the Illinois Blockchain and Distributed Ledger Task Force, has filed 2 bills that relate to cryptocurrency and blockchain.  HB 5335 authorizes the Illinois Department of Revenue to accept cryptocurrency as payment for any tax imposed by the state.  HB 5553 creates the Blockchain Technology Act, which allows for the limited use of smart contracts and blockchain.  HB 5553 prohibits units of local government from imposing any tax or fee on the use of blockchain or smart contract.  I have included links to the legislation below.

Legislative Hearing

On February 27, the Illinois House of Representatives held a joint hearing between the Revenue & Finance Committee and the Cybersecurity, Analytics, & IT Committees to conduct a subject matter hearing on cryptocurrencies and blockchain.  Testimony was provided by 3 governmental entities and 2 businesses, which are listed below.

The hearing focused on increasing efficiency in government through the use of blockchain.  Decentralizing government computer systems through the use of blockchain could provide for faster and more efficient transactions that currently rely on separate government systems communicating.  Transactions regarding exchanging titles for houses, other types of real estate, and cars could be completed much more quickly and efficiently through the use of blockchain.  Rather than each governmental entity using and upgrading computer systems, blockchain could provide an avenue for multiple governmental entities to use blockchain for the recording of transactions.  For example, the Cook County Recorder of Deeds is in the process of upgrading its computer system, which is currently in its 4th year.  Although it is unclear if, or when, the state of Illinois will begin to utilize blockchain, Illinois has established itself as a thought leader in the sector and will continue to lead the way in exploring how blockchain can help create a more efficient government for its citizens.

Government


  • Tyler Clark……………………………………………….. Department of Innovation & Technology
  • Jennifer O’Rourke……………………. Department of Commerce and Economic Opportunity
  • John Mirkovic…………………………………………………….. Cook County Recorder of Deeds

Business


  • George Vukotich…………………………………………………………………………….. FinTank
  • George Chikovani………………………………………. Innovation and Development Foundation

Links

House Joint Resolution 25https://assets.documentcloud.org/documents/4368019/Blockchain-Task-Force-Final-Report-as-Filed.pdf

HB5553: http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=91&GA=100&DocTypeId=HB&DocNum=5553&GAID=14&LegID=111521&SpecSess=&Session

HB 5335: http://www.ilga.gov/legislation/fulltext.asp?DocName=10000HB5335&GA=100&SessionId=91&DocTypeId=HB&LegID=111121&DocNum=5335&GAID=14&Session

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