Florida Senate - 2019 SB 1024 By Senator Gruters 23-01936-19 20191024__ 1 A bill to be entitled 2 An act relating to blockchain technology; providing 3 legislative findings; establishing the Florida 4 Blockchain Working Group in the Agency for State 5 Technology; providing for membership and duties of the 6 working group; requiring the working group to submit a 7 report to the Governor and the Legislature and make 8 presentations; requiring the agency to provide support 9 staff and other assistance to the working group; 10 providing for termination of the working group; 11 providing an effective date. 12 13 WHEREAS, blockchain has the ability to improve processes, 14 increase efficiency, and promote transparency in government, in 15 businesses, and for consumers, and it is imperative that 16 blockchain benefits and applications are studied so that its 17 potential can be fully realized, and 18 WHEREAS, investments in blockchain companies and projects 19 have skyrocketed from millions of dollars in 2015 to billions of 20 dollars in 2018, with venture capital funds and other private 21 investors investing $1.3 billion between January and May of 2018 22 in blockchain and blockchain-adjacent early stage companies, and 23 WHEREAS, increasing legislative activity has occurred at 24 the state and federal levels examining and supporting the 25 benefits of blockchain technology, and a working group is an 26 important first step in coordinating information and technology 27 among industry and legislators to develop real proposals that 28 can be acted upon, and 29 WHEREAS, a cornerstone of any blockchain initiative is the 30 exploration and understanding of blockchain and distributed 31 ledger technology, as these technologies are often complex and 32 must be properly understood and tested before implementation, 33 and a working group can determine applications of blockchain 34 that could cut costs for taxpayers and provide a gateway for 35 entrepreneurs to best understand the laws of their state and 36 surrounding blockchain and virtual currencies, and 37 WHEREAS, establishing a working group is the first step in 38 unlocking the transformative possibilities of blockchain and its 39 tremendous positive impact for economic advancement, NOW, 40 THEREFORE, 41 42 Be It Enacted by the Legislature of the State of Florida: 43 44 Section 1. (1) The Legislature finds that: 45 (a) Blockchain technology and distributed ledger technology 46 allow the secure recording of transactions through cryptographic 47 algorithms and distributed record sharing, and such technology 48 has reached a point where the opportunities for efficiency, cost 49 savings, and cybersecurity deserve study. 50 (b) Blockchain technology is a promising way to facilitate 51 more efficient government service delivery models and economies 52 of scale, including facilitating safe paperless transactions and 53 recordkeeping that are nearly impervious to cyberattacks and 54 data destruction. 55 (c) Blockchain technology can reduce the prevalence of 56 disparate government computer systems, databases, and custom 57 built software interfaces; reduce costs associated with 58 maintenance and implementation; streamline information sharing; 59 and allow more areas of the state to electronically participate 60 in government services. 61 (d) Nations, other states, and municipalities across the 62 world are studying and implementing government reforms that 63 bolster trust and reduce bureaucracy through verifiable open 64 source blockchain technology in a variety of areas, including, 65 but not limited to, medical and health records, land records, 66 banking, tax and fee payments, smart contracts, professional 67 accrediting, and property auctions. 68 (e) It is in the public interest to establish a Florida 69 Blockchain Working Group comprised of government and industry 70 representatives to study the ways in which state, county, and 71 municipal governments can benefit from a transition to a 72 blockchain-based system for recordkeeping, security, and service 73 delivery and to develop and submit recommendations to the 74 Governor and the Legislature concerning the potential for 75 implementation of blockchain-based systems that promote 76 government efficiencies, better services for citizens, economic 77 development, and safer cyber-secure interaction between 78 government and the public. 79 (2) There is established in the Agency for State Technology 80 the Florida Blockchain Working Group to explore and develop a 81 master plan for fostering the expansion of the blockchain 82 industry in the state, to recommend policies and state 83 investments to help make this state a leader in blockchain 84 technology, and to issue a report to the Legislature. The 85 working group shall study if and how state, county, and 86 municipal governments can benefit from a transition to a 87 blockchain-based system for recordkeeping, data security, 88 financial transactions, and service delivery and to identify 89 ways to improve government interaction with businesses and the 90 public. The working group shall comply with the requirements of 91 s. 20.052, Florida Statutes, except as otherwise provided in 92 this section. 93 (a) The master plan shall: 94 1. Identify the economic growth and development 95 opportunities presented by blockchain technology. 96 2. Assess the existing blockchain industry in the state. 97 3. Identify innovative and successful blockchain 98 applications currently used by industry and other governments to 99 determine viability for state applications. 100 4. Review workforce needs and academic programs required to 101 build blockchain technology expertise across all relevant 102 industries. 103 5. Make recommendations to the Governor and the Legislature 104 that will promote innovation and economic growth by reducing 105 barriers to and expedite the expansion of the state’s blockchain 106 industry. 107 (b) The working group shall consist of 19 members. Members 108 must demonstrate an interest in, familiarity with, or knowledge 109 of blockchain technology. Membership shall be as follows: 110 1. Two members appointed by the Governor. 111 2. Two members appointed by the President of the Senate. 112 3. Two members appointed by the Speaker of the House of 113 Representatives. 114 4. One member appointed by the Minority Leader of the 115 Senate. 116 5. One member appointed by the Minority Leader of the House 117 of Representatives. 118 6. One member appointed by the Chief Financial Officer. 119 7. One member appointed by the Attorney General. 120 8. The Secretary of the Department of Management Services 121 or his or her designee. 122 9. The executive director of the Agency for State 123 Technology or his or her designee. 124 10. One member of the Florida Technology Council, appointed 125 by the Florida Technology Council. 126 11. One member appointed by the Florida League of Cities. 127 12. One member appointed by the Florida Association of 128 Counties. 129 13. One member appointed by the Florida Local Government 130 Information Systems Association. 131 14. One member appointed by the Florida City and County 132 Management Association. 133 15. One member of the Florida Chamber of Commerce, 134 appointed by the Florida Chamber of Commerce. 135 16. One member appointed by the Chancellor of the State 136 University System. 137 (c) At least 10 members of the working group must have 138 knowledge and experience in blockchain technology. 139 (d) Within 90 days after the effective date of this act, a 140 majority of the members of the working group must be appointed 141 and the working group shall hold its first meeting. The working 142 group shall elect one of its members to serve as chair. Members 143 of the working group shall serve for the duration of the 144 existence of the working group. Any vacancy that occurs shall be 145 filled in the same manner as the original appointment. Working 146 group members shall serve without compensation but may be 147 reimbursed for necessary expenses incurred in the performance of 148 their duties and shall be allowed per diem and travel expenses 149 as provided in s. 112.061, Florida Statutes. 150 (e) The working group shall study blockchain technology, 151 including, but not limited to, the following: 152 1. Opportunities and risks associated with using blockchain 153 and distributed ledger technology for state and local 154 government. 155 2. Different types of blockchains, both public and private, 156 and different consensus algorithms. 157 3. Projects and cases currently under development in other 158 states and local governments, and how these cases could be 159 applied in this state. 160 4. Ways the Legislature can modify general law to support 161 secure, paperless recordkeeping, increase cybersecurity, improve 162 interactions with citizens, and encourage blockchain innovation 163 for businesses in the state. 164 5. Identifying potential economic incentives for companies 165 investing in blockchain technologies in collaboration with the 166 state. 167 6. Recommending projects for potential blockchain 168 solutions, including, but not limited to, use cases for state 169 agencies that would improve services for citizens or businesses. 170 7. Identifying the technical skills necessary to develop 171 blockchain technology and ensuring that instruction in such 172 skills is available at secondary and postsecondary educational 173 institutions in this state. 174 (3) The working group shall submit a report to the 175 Governor, the President of the Senate, and the Speaker of the 176 House of Representatives and present its findings to the 177 appropriate legislative committees in each house of the 178 Legislature within 180 days after the initial meeting of the 179 working group. The report must include: 180 (a) A general description of the costs and benefits of 181 state and local government agencies using blockchain technology. 182 (b) Recommendations concerning the feasibility of 183 implementing blockchain technology in the state and the best 184 approach to finance the cost of implementation. 185 (c) Recommendations for specific implementations to be 186 developed by relevant state agencies. 187 (d) Any draft legislation the working group deems 188 appropriate to implement such blockchain technologies. 189 (e) Identification of one pilot project that may be 190 implemented in the state. 191 (f) Any other information deemed relevant by the working 192 group. 193 (4) The working group is entitled to the assistance and 194 services of any state agency, board, bureau, or commission as 195 necessary and available for the purposes of this act. 196 (5) The Agency for State Technology shall provide support 197 staff for the working group and any relevant studies, data, and 198 materials in its possession to assist the working group in the 199 performance of its duties. 200 (6) The working group shall terminate upon submission of 201 the report and the presentation of findings. 202 Section 2. This act shall take effect upon becoming a law.