HOUSE OF REPRESENTATIVES
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO ECONOMIC DEVELOPMENT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that leading industries and governments are quickly adopting innovative technology to defend against cyber-attacks and revolutionize products and services for the twenty-first century. The legislature also finds that the State, through thoughtful and considered regulation, encourages businesses to explore and adopt new technologies to promote economic growth.
An example of new technology that is being used around the world is "blockchain", a novel peer to peer networking and distributed data storage technology that shifts the primary locus of control from centralized services to individuals or key holders. Blockchain's structure is naturally cyber-resilient, redundant, immutable, and verifiable. Initially built as the underlying structure for a digital cash system known as bitcoin, blockchain can be used in many other areas, including cybersecurity, disaster recovery, clearance and settlement, supply chain transparency, title registries, communications, and document verification.
The legislature recognizes the vast potential for this technology to drastically change and improve public sector operations and private industry capabilities. Blockchain technology is poised to change multiple industries, including the following:
(1) Identity and access management - Verification and identification using advanced cryptography and blockchain technology for digital IDs. Practical applications include verifiable identity for drivers' licenses, tax payments, voting, and other electronic government services;
(2) Health care - Revolutionary enablement of patients' rights to their health care records, and utilization of blockchain technology for "Internet of things" medical devices, increased accountability of health care providers via authentication and record keeping;
(3) Legal - Tracking, verification, authentication, and record keeping of court orders, contracts, titles, and records. This would allow "smart contracts", verified by and recorded on blockchain technology, as immutable records, allowing transparency for the citizens of Hawaii;
(4) Financial Services - Blockchain technology is already widely used in the financial services industry, and is poised to remove billions of dollars in overhead and intermediary fees and services;
(5) Manufacturing - Utilizing blockchains to provide accountability and transparency over provenance of goods and services will reduce counterfeit products and improve competitiveness for local businesses; and
(6) Tourism - Digital currencies such as bitcoin have broad benefits for Hawaii. A large portion of Hawaii's tourism market comes from Asia where the use of bitcoin as a virtual currency is expanding. Hawaii has the unique opportunity to explore the use of blockchain technology to make it easier for visitors to consume local goods and services and to drive the tourism economy.
The legislature finds that highly innovative technologies such as blockchain require an educated and measured approach so that regulations do not stymie innovation and growth in this State.
Therefore, the purpose of this Act is to establish a working group consisting of representation from the public and private sectors to examine, educate, and promote best practices for enabling blockchain technology to benefit local industries, residents, and the State of Hawaii.
SECTION 2. Chapter 201, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:
"§201- Hawaii blockchain technology and digital currency working group. (a) There is established within the department a Hawaii blockchain technology and digital currency working group.
(b) The working group shall consist of the following members:
(1) The director or the director's designee, who shall serve as chairperson of the working group;
(2) The chairperson of the board of land and natural resources, or the chairperson's designee;
(3) The chief information officer of the office of enterprise technology services, or the chief information officer's designee;
(4) The director of taxation, or the director's designee;
(5) The chief election officer, or the chief election officer's designee;
(6) The chair of the house of representatives committee on economic development and business;
(7) The chair of the senate committee on economic development, tourism, and technology;
(8) The mayor of each county, or the mayor's designee;
(9) A representative of the Hawaii information consortium;
(10) Members appointed by the director with experience in the following industries:
(C) Real estate;
(F) Health care;
(G) Financial services;
(H) Agriculture, aquaculture, and farming;
(K) Supply chain management;
(M) Emerging industries, including marijuana; and
(N) Other key industries or stakeholders that the director determines to be necessary; and
(11) Three members appointed by the director with expertise and experience in blockchain technology.
(c) The working group shall not be subject to section 26-34. The working group shall:
(1) Study the uses of blockchain technology;
(2) Develop methods of providing education on blockchain technology; and
(3) Determine and promote best practices for enabling blockchain technology to benefit the State of Hawaii, local businesses, and residents.
(d) The working group shall report its findings and recommendations to the legislature, including any proposed legislation, not later than twenty days prior to the convening of each regular session."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2038.
Blockchain Technology and Digital Currency Working Group
Establishes a working group to study the uses of and determine best practices regarding blockchain technology. Effective 7/1/2038. (HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.