BILL NUMBER: S1801

SPONSOR: SAVINO
 
TITLE OF BILL:

An act to amend the state technology law, in relation to blockchain
technology and smart contracts

 
PURPOSE:

Amends the Electronic Signature and Records Act of the State Technology
law to define and permit signatures secured through blockchain technolo-
gy to be considered an electronic signature.

 
SUMMARY OF PROVISIONS:

Section 1 amends section 302 of the state technology law to define:
"blockchain technology" - as a distributed ledger technology that uses a
distributed, decentralized, shared and replicated ledger.  "smart
contract" - is defined as an event-driven program that runs on a
distributed, shared and replicated ledger.
              

Section 2 - Adds a new section 310 to the state technology law allowing:
a signature secured through blockchain technology to be accepted as an
electronic signature; a record or contract through blockchain technology
to be accepted as an electronic record; and providing for smart
contracts and their enforceability.  Additionally, it maintains a
person's right to ownership and use of information secured using block-
chain technology for interstate or foreign commerce.

Section 3 - provides for an immediate effective date

 
EXISTING LAW:

According to NYS Office of Technology website - Article 3 of the State
Technology Law - The Electronic Signatures and Records Act (ESRA)
provides that "signatures" made via electronic means will be legally
binding just as hand-written signatures now are. The law also enhances
and clarifies the authority of government to create and retain records
in computer produced electronic form. There is now no doubt that elec-
tronic records have the same legal force as those produced in other
formats such as paper and microfilm.

 
JUSTIFICATION:

The Federal and state governments are evaluating distribution technolo-
gy, such as blockchain, to improve transparency, efficiency and trust in
government transactions. Several states have enacted blockchain legis-
lation and this bill is modeled after Arizona's recent amendments to its
Electronic Transactions ACT (AETA) through Chapter 97 of the Laws of
2017.

Blockchain is a distributed ledger database that records and shares
every transaction that occurs in its network of users and its applica-
tions are growing beyond cryptocurrency. In addition, according to
Assembly sponsor Vanel per memo for same as bill A1683 of 2019 Session:
"We are in a dynamic transitional time for technology in the world and
in New York State, in particular. Of utmost importance is New York's
transmission of information over the Internet, the electronic storage of
data, electronic record-keeping and cyber security. The state should
explore viability of the use of new technologies. Blockchain technology
is a form of encryption. "A blockchain is a continuously growing list of
records called blocks, which are linked and secured using cryptography.
They are encrypted with their own unique signature and timestamp. A
signature secured through the blockchain will be more secure than any
other protected server due to its level of encryption and decentrali-
zation from privatization."

 
LEGISLATIVE HISTORY:

2019 Session - New Bill in Senate, S4142 - Passed Senate, No Assembly
action 2020 Session - S.4142 - Passed Senate, No Assembly Action

 
FISCAL IMPLICATIONS:

No anticipated fiscal impact to the state or any localities

 
EFFECTIVE DATE:
Immediately