Bill Text: IL HB2540 | 2019-2020 | 101st General Assembly | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Reinserts the provisions of the engrossed bill, and makes the following changes: (1) removes a Section concerning blockchain-based limited liability companies; (2) removes a Section concerning a public record blockchain study and report; and (3) removes specified defined terms. Makes conforming changes.
Spectrum: Moderate Partisan Bill (Democrat 13-2)
Status: (Passed) 2019-08-09 - Public Act . . . . . . . . . 101-0259 [HB2540 Detail]
Download: Illinois-2019-HB2540-Engrossed.html
Bill Title: Reinserts the provisions of the engrossed bill, and makes the following changes: (1) removes a Section concerning blockchain-based limited liability companies; (2) removes a Section concerning a public record blockchain study and report; and (3) removes specified defined terms. Makes conforming changes.
Spectrum: Moderate Partisan Bill (Democrat 13-2)
Status: (Passed) 2019-08-09 - Public Act . . . . . . . . . 101-0259 [HB2540 Detail]
Download: Illinois-2019-HB2540-Engrossed.html
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1 | AN ACT concerning business.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the | ||||||
5 | Blockchain Business Development Act.
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6 | Section 5. Definitions. As used in this Act:
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7 | "Blockchain" means an electronic record created by the use
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8 | of a decentralized method by multiple parties to verify and
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9 | store a digital record of transactions which is secured by the
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10 | use of a cryptographic hash of previous transaction
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11 | information. | ||||||
12 | "Blockchain technology" means computer software or | ||||||
13 | hardware or collections of computer software or hardware, or | ||||||
14 | both, that utilize or enable a blockchain.
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15 | "Participant" means: (1) each person that has a partial or | ||||||
16 | complete copy of the decentralized consensus ledger or database | ||||||
17 | utilized by the blockchain technology, or otherwise | ||||||
18 | participates in the validation processes of such ledger or | ||||||
19 | database; (2) each person in control of any digital asset | ||||||
20 | native to the blockchain technology; and (3) each person that | ||||||
21 | makes a material contribution to the protocols.
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22 | "Personal information" means data capable of being | ||||||
23 | associated with a particular natural person, including gender |
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1 | identification, birth information, marital status, citizenship | ||||||
2 | and nationality, biometric records, government identification | ||||||
3 | designations, and personal, educational, and financial | ||||||
4 | histories.
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5 | "Protocols" means the designated regulatory model of the | ||||||
6 | software that governs the rules, operations, and communication | ||||||
7 | between nodes on the network utilized by the participants.
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8 | Section 10. Blockchain-based limited liability company.
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9 | (a) For the purposes of this Section, "company" means a | ||||||
10 | blockchain-based limited liability company.
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11 | (b) A limited liability company organized under the Limited | ||||||
12 | Liability Company Act for the purpose of operating a business | ||||||
13 | that utilizes blockchain technology for a material portion of | ||||||
14 | its business activities may elect to be a blockchain-based | ||||||
15 | limited liability company (BBLLC) by:
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16 | (1) specifying in its articles of organization that it | ||||||
17 | elects to be such a company (BBLLC); and
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18 | (2) meeting the requirements of subsections (c) and | ||||||
19 | (d).
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20 | (c) Notwithstanding any provision of law to the contrary, a | ||||||
21 | blockchain-based limited liability company established under | ||||||
22 | this Section may provide for its governance, in whole or in | ||||||
23 | part, through blockchain technology. The operating agreement | ||||||
24 | for the company shall:
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25 | (1) provide a summary description of the mission or |
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1 | purpose of the company;
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2 | (2) specify whether the decentralized consensus ledger | ||||||
3 | or database utilized or enabled by the company will be | ||||||
4 | fully decentralized or partially decentralized and whether | ||||||
5 | such ledger or database will be fully or partially public | ||||||
6 | or private, including the extent of participants' access to | ||||||
7 | information and read and write permissions with respect to | ||||||
8 | protocols;
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9 | (3) adopt voting procedures, which may include smart | ||||||
10 | contracts carried out on the blockchain technology, to | ||||||
11 | address:
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12 | (A) proposals from managers, members, or other | ||||||
13 | groups of participants in the company for upgrades or | ||||||
14 | modifications to software systems or protocols, or | ||||||
15 | both;
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16 | (B) other proposed changes to the company | ||||||
17 | operating agreement; or
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18 | (C) any other matter of governance or activities | ||||||
19 | within the purpose of the company;
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20 | (4) adopt protocols to respond to system security | ||||||
21 | breaches or other unauthorized actions that affect the | ||||||
22 | integrity of the blockchain technology utilized by the | ||||||
23 | company;
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24 | (5) provide how a person becomes a member of the | ||||||
25 | company with an interest, which may be denominated in the | ||||||
26 | form of units, shares of capital stock, or other forms of |
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1 | ownership or profit interests; and
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2 | (6) specify the rights and obligations of each group of | ||||||
3 | participants within the company, including which | ||||||
4 | participants shall be entitled to the rights and | ||||||
5 | obligations of members and managers.
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6 | (d) A member or manager of a blockchain-based limited | ||||||
7 | liability company may interact with the company in multiple | ||||||
8 | roles, including as a member, manager, developer, node, miner, | ||||||
9 | or other participant in the company, or as a trader and holder | ||||||
10 | of the currency in its own account and for the account of | ||||||
11 | others, provided such member or manager complies with any | ||||||
12 | applicable fiduciary duties. The activities of a member or | ||||||
13 | manager who interacts with the company through multiple roles | ||||||
14 | are not deemed to take place in this State solely because the | ||||||
15 | company is organized in this State.
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16 | (e) A blockchain-based limited liability company may adopt | ||||||
17 | any reasonable algorithmic means for accomplishing the | ||||||
18 | consensus process for validating records, as well as | ||||||
19 | requirements, processes, and procedures for conducting | ||||||
20 | operations, or making organizational decisions on the | ||||||
21 | blockchain technology used by the company.
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22 | (f) A blockchain-based limited liability company may, in | ||||||
23 | accordance with any procedure specified under subsection (c), | ||||||
24 | modify the consensus process, requirements, processes, and | ||||||
25 | procedures, or substitute a new consensus process, | ||||||
26 | requirements, processes, or procedures that comply with the |
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1 | requirements of law and the governance provisions of the | ||||||
2 | company.
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3 | (g) Except as expressly provided otherwise, this Section | ||||||
4 | does not exempt a blockchain-based limited liability company | ||||||
5 | from any other judicial, statutory, or regulatory provision of | ||||||
6 | Illinois law or federal law, including State and federal | ||||||
7 | securities laws. Except to the extent inconsistent with the | ||||||
8 | provisions of this Section, the provisions of the Limited | ||||||
9 | Liability Company Act govern.
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10 | Section 15. Public record blockchain study; report.
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11 | (a) On or before January 1, 2021, the Secretary of State | ||||||
12 | shall:
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13 | (1) evaluate blockchain technology for the systematic | ||||||
14 | and efficient management of public records;
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15 | (2) recommend legislation, including uniform laws, | ||||||
16 | necessary to support the possible use of blockchain | ||||||
17 | technology for public records; and
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18 | (3) submit its findings and recommendations to | ||||||
19 | Governor and the General Assembly.
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20 | (b) This Section is repealed January 1, 2022.
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21 | Section 20. Blockchain banking study.
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22 | (a) The Department of Financial and Professional | ||||||
23 | Regulation shall review the potential application of | ||||||
24 | blockchain technology to the provision of banking, and consider |
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1 | areas for potential adoption and any necessary regulatory | ||||||
2 | changes in Illinois.
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3 | (b) On or before January 1, 2021, the Department shall | ||||||
4 | submit a report of its findings and recommendations to the | ||||||
5 | Governor and General Assembly.
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6 | (c) This Section is repealed January 1, 2022.
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7 | Section 25. Blockchain and financial technology promotion. | ||||||
8 | The Department of Commerce and Economic Opportunity shall | ||||||
9 | incorporate into one or more of its economic development | ||||||
10 | marketing and business support programs, events, and | ||||||
11 | activities the following topics:
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12 | (1) opportunities to promote blockchain technology and | ||||||
13 | financial technology-related economic development in the | ||||||
14 | private sector, including in the areas of banking, | ||||||
15 | insurance, retail and service businesses, and | ||||||
16 | cryptocurrency;
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17 | (2) legal and regulatory mechanisms that enable and | ||||||
18 | promote the adoption of blockchain technology and | ||||||
19 | financial technology in this State; and
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20 | (3) educational and workforce training opportunities | ||||||
21 | in blockchain technology, financial technology, and | ||||||
22 | related areas.
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