Massachusetts 2025-2026 Regular Session

Massachusetts House Bill H3279 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1 of 1
2	2	HOUSE DOCKET, NO. 3762 FILED ON: 1/17/2025
3	3	HOUSE . . . . . . . . . . . . . . . No. 3279
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Christopher J. Worrell
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act allowing for fiscal resilience through strategic investment in stable digital financial
13	13	assets.
14	14	_______________
15	15	PETITION OF:
16	16	NAME:DISTRICT/ADDRESS :DATE ADDED:Christopher J. Worrell5th Suffolk1/17/2025 1 of 6
17	17	HOUSE DOCKET, NO. 3762 FILED ON: 1/17/2025
18	18	HOUSE . . . . . . . . . . . . . . . No. 3279
19	19	By Representative Worrell of Boston, a petition (accompanied by bill, House, No. 3279) of
20	20	Christopher J. Worrell relative to taxation and investment in digital financial assets. Revenue.
21	21	The Commonwealth of Massachusetts
22	22	_______________
23	23	In the One Hundred and Ninety-Fourth General Court
24	24	(2025-2026)
25	25	_______________
26	26	An Act allowing for fiscal resilience through strategic investment in stable digital financial
27	27	assets.
28	28	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
29	29	of the same, as follows:
30	30	1 SECTION 1. The General Laws are hereby amended by inserting after chapter 64N the
31	31	2following new chapter:-
32	32	3 CHAPTER 64O. Taxation and Investment in Digital Financial Assets
33	33	4 Section 1. Intent
34	34	5 (a) It shall be the intent of the General Court to authorize the state treasurer and public
35	35	6pension funds to:
36	36	7 (i) permit the inclusion of bitcoin and other stable digital financial assets to serve as
37	37	8stores of value and provide a hedge against inflation, thereby protecting the purchasing power of
38	38	9state funds; 2 of 6
39	39	10 (ii) ensure that the investment strategies employed by the state treasurer and public
40	40	11pension funds are aligned with the goal of enhancing the economic security and financial
41	41	12resilience of the commonwealth; and
42	42	13 (ii) allow flexibility in investment decisions to respond to changing economic conditions
43	43	14and emerging opportunities that may offer better protection or returns on state funds.
44	44	15 Section 2. Definitions
45	45	16 As used in this chapter, the following terms shall have the following meanings unless the
46	46	17context clearly requires otherwise:
47	47	18 "Bitcoin", the decentralized digital currency launched in 2009, a digital asset which is the
48	48	19basis of the Bitcoin exchange traded product which is regulated by the federal securities and
49	49	20exchange commission.
50	50	21 "Digital financial asset", any digital representation of value that is recorded on a
51	51	22cryptographically secured distributed ledger of virtual currency, cryptocurrencies, natively
52	52	23electronic assets including stablecoins and non-fungible tokens or other exclusively digital assets
53	53	24that confer economic, proprietary or access rights or powers that are not cash; provided,
54	54	25however, that for the purposes of taxation pursuant to sections 58 to 65C, inclusive, digital assets
55	55	26shall be considered a cash equivalent.
56	56	27 "Exchange-traded product”, any financial instrument that is approved by the federal
57	57	28securities and exchange commission, the federal commodities future trading commission,or the
58	58	29division of banks that is traded on a United States regulated exchange and derives its value from
59	59	30an underlying pool of assets, such as stocks, bonds, commodities or indexes. 3 of 6
60	60	31 “Private key”, a unique element of cryptographic data used for signing transactions on a
61	61	32blockchain, which is known to the owner of the private key.
62	62	33 “Qualified custodian”, any federal or state-chartered bank, trust company or special
63	63	34purpose depository institution or a company regulated by the state which custodies digital assets
64	64	35for an approved exchange-raded product.
65	65	36 “Secure custody solution”, a technological product or blended product and service which
66	66	37has the following characteristics:
67	67	38 (1) The cryptographic private keys that secure digital assets are exclusively known by
68	68	39and accessible by a government entity;
69	69	40 (2) the cryptographic private keys that secure digital assets are exclusively contained
70	70	41within an encrypted environment and accessible exclusivelyt via end-to-end encrypted channels;
71	71	42 (3) The cryptographic private keys that secure digital assets are never contained by,
72	72	43accessible by, or controllable via a smartphone;
73	73	44 (4) Any hardware that contains the cryptographic private keys that secure digital assets is
74	74	45maintained in at least 2 geographically diversified and specially designated secure data centers;
75	75	46 (5) The secure custody solution enforces a multi-party governance structure for
76	76	47authorizing transactions, enforces user access controls and logs all user-initiated actions;
77	77	48 (6) The provider of the secure custody solution has implemented a disaster recovery
78	78	49protocol that ensures customer access to assets in the event the provider becomes unavailable;
79	79	50and 4 of 6
80	80	51 (7) The secure custody solution undergoes regular code audits and penetration testing
81	81	52from audit firms; provided, however, that any identified vulnerabilities shall be promptly
82	82	53remedied.
83	83	54 Section 3. Imposition; rate; time of payment
84	84	55 (a) Except as otherwise provided in this chapter or any other general law to the contrary,
85	85	56an excise is hereby imposed upon digital mediums of exchange at the rate of 5 per cent of the
86	86	57total amount of digital gross revenues in digital currency obtained by a taxpayer. The excise shall
87	87	58be paid by the taxpayer to the commissioner at the time provided for filing the returns required
88	88	59by section 16 of chapter 62C.
89	89	60 (b) If a taxpayer received any digital asset as compensation for services or disposed of
90	90	61any digital asset that was held for sale to customers in a trade or business, the taxpayer shall
91	91	62report the income as a taxpayer would be required to report other income of the same type.
92	92	63 (c) If a digital financial asset may be loaned without increasing the financial risk of the
93	93	64state, the state treasurer shall be allowed to loan the digital asset to bring further return to the
94	94	65state through regulations, rules or guidelines established by the state treasurer.The state treasurer
95	95	66may, if they deem such action necessary for the protection of the revenue of the commonwealth,
96	96	67recommend to the commissioner additional regulations for the taxation rate of digital financial
97	97	68assets, which the commissioner may promulgate.
98	98	69 (d) All sums received by the commissioner under this section shall be distributed,
99	99	70credited and paid by the state treasurer upon certification of the commissioner to the amount of
100	100	71the sums received from the sales of digital currency by that taxpayer. A taxpayer seeking to 5 of 6
101	101	72dispute the commissioner's calculation of its distribution under this subsection shall notify the
102	102	73commissioner, in writing, not later than 1 year from the date the tax was distributed.
103	103	74 (e) Any state retirement fund may invest in exchange traded products that have been duly
104	104	75registered by the federal securities and exchange commission, the federal commodity future
105	105	76trading commission or the securities division of the office of the state secretary.
106	106	77 Section 4. Application and investment of tax revenue
107	107	78 (a) The state treasurer shall deposit revenue collected pursuant to this chapter, other than
108	108	79revenue collected pursuant to section 2 of chapter 64H, in the General Fund and it shall be
109	109	80subject to appropriation. The General Fund shall reimburse whatever fund the qualifying digital
110	110	81asset was designated to with United States currency.
111	111	82 (b) The state treasurer may invest public funds in Bitcoin from the following funds:
112	112	83 (1) The General Fund;
113	113	84 (2) The Commonwealth Stabilization Fund established pursuant to section 2H of chapter
114	114	8529;
115	115	86 (3) The State Retiree Benefits Trust Fund established pursuant to section 24 of chapter
116	116	8732A; or
117	117	88 (4) Any other state fund deemed appropriate as requested by the state treasurer and
118	118	89approved by the General Court.
119	119	90 (c) The amount of public funds that the state treasurer may invest in Bitcoin shall not
120	120	91exceed 10 per cent of the total amount of public funds in the applicable account. 6 of 6
121	121	92 (d) Any digital assets acquired by any of the funds listed in subsection (b) shall be held:
122	122	93(i) directly by the state treasurer through the use of a secure custody solution; (ii) on behalf of the
123	123	94state by a qualified custodian; or (iii) in the form of an exchange-traded product issued by a
124	124	95registered investment company.
125	125	96 SECTION 2. Section 1 shall take effect upon enactment.