| 1 | 1 | | |
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| 2 | 2 | | FIRST REGULAR SESSION |
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| 3 | 3 | | SENATE BILL NO. 614 |
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| 4 | 4 | | 103RD GENERAL ASSEMBLY |
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| 5 | 5 | | INTRODUCED BY SENATOR FITZWATER. |
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| 6 | 6 | | 2430S.01I KRISTINA MARTIN, Secretary |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | To amend chapters 30 and 67, RSMo, by adding thereto two new sections relating to digital assets. |
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| 9 | 9 | | |
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| 10 | 10 | | Be it enacted by the General Assembly of the State of Missouri, as follows: |
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| 11 | 11 | | Section A. Chapters 30 and 67, RSMo, are amended by adding 1 |
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| 12 | 12 | | thereto two new sections, to be known as sections 30.960 and 2 |
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| 13 | 13 | | 67.2060, to read as follows:3 |
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| 14 | 14 | | 30.960. 1. As used in this section, the following 1 |
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| 15 | 15 | | terms mean: 2 |
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| 16 | 16 | | (1) "Digital asset", virtual currency, 3 |
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| 17 | 17 | | cryptocurrencies, natively electronic assets, includi ng 4 |
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| 18 | 18 | | stablecoins and nonfungible tokens, and other digital -only 5 |
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| 19 | 19 | | assets that confer economic, proprietary, or access rights 6 |
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| 20 | 20 | | or powers; 7 |
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| 21 | 21 | | (2) "Qualified custodian", an entity that manages 8 |
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| 22 | 22 | | digital assets and is: 9 |
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| 23 | 23 | | (a) A federal or state-chartered bank; 10 |
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| 24 | 24 | | (b) A trust company; 11 |
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| 25 | 25 | | (c) A special purpose depository institution; or 12 |
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| 26 | 26 | | (d) A company regulated by the state; 13 |
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| 27 | 27 | | (3) "Qualifying digital asset", any of the following: 14 |
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| 28 | 28 | | (a) A digital asset with a market capitalization of 15 |
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| 29 | 29 | | over five hundred billion dollars averaged over the previous 16 |
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| 30 | 30 | | twelve months; or 17 |
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| 31 | 31 | | (b) A stablecoin; 18 |
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| 32 | 32 | | (4) "Secure custody solution", a technological product 19 |
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| 33 | 33 | | or blended product and service that: 20 SB 614 2 |
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| 34 | 34 | | (a) Maintains cryptographic private keys that secure 21 |
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| 35 | 35 | | digital assets exclusively known by and accessible by the 22 |
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| 36 | 36 | | government entity; 23 |
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| 37 | 37 | | (b) Contains cryptographic private keys exclusively 24 |
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| 38 | 38 | | within an encrypted environment accessible only via end -to- 25 |
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| 39 | 39 | | end encrypted channels; 26 |
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| 40 | 40 | | (c) Does not allow cryptograp hic private keys to be 27 |
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| 41 | 41 | | accessible by or controllable via a smartphone; 28 |
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| 42 | 42 | | (d) Maintains hardware containing cryptographic 29 |
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| 43 | 43 | | private keys in at least two geographically diversified 30 |
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| 44 | 44 | | specially designated secure data centers; 31 |
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| 45 | 45 | | (e) Enforces a multi-party governance structure for 32 |
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| 46 | 46 | | authorizing transactions, user access controls, and logs all 33 |
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| 47 | 47 | | user-initiated actions; 34 |
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| 48 | 48 | | (f) Implements a disaster recovery protocol ensuring 35 |
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| 49 | 49 | | customer access to assets if the provider becomes 36 |
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| 50 | 50 | | unavailable; and 37 |
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| 51 | 51 | | (g) Undergoes regular code audits and penetration 38 |
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| 52 | 52 | | testing from audit firms with prompt remedy of identified 39 |
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| 53 | 53 | | vulnerabilities; 40 |
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| 54 | 54 | | (5) "Stablecoin", a digital asset that: 41 |
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| 55 | 55 | | (a) Is issued by a corporation; 42 |
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| 56 | 56 | | (b) Is backed by dollars or high -quality liquid assets; 43 |
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| 57 | 57 | | (c) Is redeemable on demand by the holder at par for 44 |
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| 58 | 58 | | United States dollars; and 45 |
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| 59 | 59 | | (d) Has received appropriate regulatory approval from: 46 |
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| 60 | 60 | | a. The United States of America; or 47 |
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| 61 | 61 | | b. A state of the United States of America. 48 |
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| 62 | 62 | | 2. In addition to other authorized investments, the 49 |
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| 63 | 63 | | state treasurer may invest a portion of public funds in 50 |
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| 64 | 64 | | qualifying digital assets. The amount of public funds that 51 |
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| 65 | 65 | | the state treasurer may invest may not, at the time the 52 SB 614 3 |
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| 66 | 66 | | investment is made, exceed t en percent of the total amount 53 |
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| 67 | 67 | | of public funds in that account. 54 |
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| 68 | 68 | | 3. The state treasurer shall hold digital assets 55 |
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| 69 | 69 | | acquired under this section: 56 |
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| 70 | 70 | | (1) Directly through the use of a secure custody 57 |
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| 71 | 71 | | solution; 58 |
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| 72 | 72 | | (2) Through a qualified custodian on behalf of the 59 |
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| 73 | 73 | | state; or 60 |
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| 74 | 74 | | (3) In the form of an exchange traded product issued 61 |
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| 75 | 75 | | by a registered investment company. 62 |
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| 76 | 76 | | 4. The state treasurer may engage in staking of 63 |
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| 77 | 77 | | qualifying digital assets if: 64 |
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| 78 | 78 | | (1) The treasurer's office retains legal ownership of 65 |
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| 79 | 79 | | the digital asset; and 66 |
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| 80 | 80 | | (2) The staking is conducted using a third -party 67 |
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| 81 | 81 | | solution. 68 |
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| 82 | 82 | | 5. The state treasurer may loan qualifying digital 69 |
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| 83 | 83 | | assets if: 70 |
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| 84 | 84 | | (1) The loan does not increase the financial risk to 71 |
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| 85 | 85 | | the state; and 72 |
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| 86 | 86 | | (2) The loan complies with rules established by the 73 |
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| 87 | 87 | | treasurer. 74 |
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| 88 | 88 | | 67.2060. 1. This section shall be known and may be 1 |
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| 89 | 89 | | cited as the "Blockchain Basics Act". 2 |
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| 90 | 90 | | 2. As used in this section, the following terms mean: 3 |
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| 91 | 91 | | (1) "Blockchain", data that is: 4 |
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| 92 | 92 | | (a) Shared across a network to create a ledger of 5 |
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| 93 | 93 | | verified transactions or information among network 6 |
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| 94 | 94 | | participants linked using cryptography to maintain the 7 |
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| 95 | 95 | | integrity of the ledger and to execute other functions; and 8 |
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| 96 | 96 | | (b) Distributed among network participants in an 9 |
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| 97 | 97 | | automated fashion to concurrently update network 10 SB 614 4 |
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| 98 | 98 | | participants on the state of the ledger and any other 11 |
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| 99 | 99 | | functions; 12 |
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| 100 | 100 | | (2) "Blockchain protocol", any executable software 13 |
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| 101 | 101 | | deployed to a blockchain composed of source code that is 14 |
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| 102 | 102 | | publicly available and accessible including, but not limited 15 |
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| 103 | 103 | | to, a smart contract or any network of smart contracts; 16 |
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| 104 | 104 | | (3) "Consumer Price Index", the Consumer Price Index 17 |
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| 105 | 105 | | for All Urban Consumers (CPI -U) (1982-1984 = 100), not 18 |
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| 106 | 106 | | seasonally adjusted, as defined and officially recorded by 19 |
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| 107 | 107 | | the United States Department of Labor, or its successor 20 |
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| 108 | 108 | | agency, from January first of the current year compared to 21 |
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| 109 | 109 | | January first of the preceding year; 22 |
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| 110 | 110 | | (4) "Digital asset", virtual currency, 23 |
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| 111 | 111 | | cryptocurrencies, natively electronic assets including, but 24 |
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| 112 | 112 | | not limited to, stablecoins and nonfungible tokens, and 25 |
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| 113 | 113 | | other digital-only assets that confer economic, proprietary, 26 |
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| 114 | 114 | | or access rights or powers; 27 |
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| 115 | 115 | | (5) "Digital asset mining", using electricity to power 28 |
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| 116 | 116 | | a computer or node for the purpose of securing a blockchain 29 |
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| 117 | 117 | | network; 30 |
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| 118 | 118 | | (6) "Digital asset mining business", a group of 31 |
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| 119 | 119 | | computers working that consumes more than one megawatt of 32 |
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| 120 | 120 | | electricity for the purpose of securing a blockchain 33 |
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| 121 | 121 | | protocol; 34 |
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| 122 | 122 | | (7) "Discriminatory rates", the charging of rates for 35 |
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| 123 | 123 | | electricity that are substantially different from the rates 36 |
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| 124 | 124 | | charged for other industrial uses of electricity in similar 37 |
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| 125 | 125 | | geographic areas; 38 |
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| 126 | 126 | | (8) "Home digital asset mining", digital asset mining 39 |
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| 127 | 127 | | in an area zoned for residential use; 40 |
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| 128 | 128 | | (9) "Node", a computational device that does any of 41 |
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| 129 | 129 | | the following: 42 SB 614 5 |
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| 130 | 130 | | (a) Communicates with other devices or participants on 43 |
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| 131 | 131 | | a blockchain to maintain consensus and integrity of that 44 |
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| 132 | 132 | | blockchain; 45 |
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| 133 | 133 | | (b) Creates and validates transaction blocks; or 46 |
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| 134 | 134 | | (c) Contains and updates a copy of a blockchain. 47 |
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| 135 | 135 | | A node does not exercise discretion over transactions 48 |
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| 136 | 136 | | initiated by the end user of the blockchain protocol; 49 |
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| 137 | 137 | | (10) "Self-hosted wallet", a digita l interface used to 50 |
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| 138 | 138 | | secure and transfer digital assets under which the owner of 51 |
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| 139 | 139 | | the digital asset retains independent control over the 52 |
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| 140 | 140 | | digital assets that are secured by such digital interface; 53 |
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| 141 | 141 | | (11) "Staking", using a node to lock digital assets i n 54 |
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| 142 | 142 | | order to operate the consensus mechanism of a blockchain 55 |
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| 143 | 143 | | protocol. 56 |
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| 144 | 144 | | 3. The state shall not prohibit, restrict, or 57 |
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| 145 | 145 | | otherwise impair the ability of an individual to: 58 |
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| 146 | 146 | | (1) Use digital assets to purchase legal goods or 59 |
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| 147 | 147 | | services; or 60 |
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| 148 | 148 | | (2) Self-custody digital assets using a self -hosted 61 |
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| 149 | 149 | | wallet or third-party wallet. 62 |
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| 150 | 150 | | 4. Digital assets used as a method of payment shall 63 |
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| 151 | 151 | | not be subject to any additional tax, withholding, 64 |
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| 152 | 152 | | assessment, or charge by the state or a political 65 |
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| 153 | 153 | | subdivision that is based solely on the use of the digital 66 |
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| 154 | 154 | | asset as the method of payment. 67 |
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| 155 | 155 | | 5. Digital assets used as a method of payment shall 68 |
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| 156 | 156 | | not be subject to capital gains tax subject to a two -hundred- 69 |
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| 157 | 157 | | dollar limit per transaction. The limitation amount shall 70 |
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| 158 | 158 | | be adjusted for inflation on January first annually based on 71 |
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| 159 | 159 | | the percentage increase in the Consumer Price Index. This 72 |
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| 160 | 160 | | subsection shall not be construed to prohibit the state or a 73 SB 614 6 |
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| 161 | 161 | | political subdivision from imposing or collecting a tax, 74 |
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| 162 | 162 | | withholding, assessment, or charge that would otherwise be 75 |
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| 163 | 163 | | offered if the transaction had taken place with United 76 |
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| 164 | 164 | | States legal tender. 77 |
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| 165 | 165 | | 6. (1) Neither the state nor a political subdivision 78 |
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| 166 | 166 | | thereof shall prohibit an individual from participating in 79 |
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| 167 | 167 | | home digital asset mining as long as such individual 80 |
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| 168 | 168 | | complies with all local noise ordinances. 81 |
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| 169 | 169 | | (2) No political subdivision shall place any specific 82 |
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| 170 | 170 | | limit on sound decibels generated from home digital asset 83 |
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| 171 | 171 | | mining that is more restrictive than other limits se t for 84 |
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| 172 | 172 | | sound pollution enforced by the political subdivision. 85 |
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| 173 | 173 | | 7. (1) Neither the state nor a political subdivision 86 |
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| 174 | 174 | | thereof shall prohibit a digital asset mining business from 87 |
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| 175 | 175 | | operating in any area zoned for industrial use provided they 88 |
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| 176 | 176 | | comply with all current ordinances. 89 |
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| 177 | 177 | | (2) No political subdivision shall place any specific 90 |
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| 178 | 178 | | limit on sound decibels generated from a digital asset 91 |
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| 179 | 179 | | mining business that is more restrictive than other general 92 |
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| 180 | 180 | | limits set for sound pollution in areas zoned for in dustrial 93 |
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| 181 | 181 | | use. 94 |
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| 182 | 182 | | 8. No political subdivision shall impose any 95 |
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| 183 | 183 | | requirement on a digital asset mining business that is not 96 |
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| 184 | 184 | | also a requirement for data centers in its jurisdiction. 97 |
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| 185 | 185 | | 9. No political subdivision shall change the zoning of 98 |
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| 186 | 186 | | a digital asset mining business without satisfying proper 99 |
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| 187 | 187 | | notice and comment requirements. A digital asset mining 100 |
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| 188 | 188 | | business shall be able to appeal a change in zoning to a 101 |
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| 189 | 189 | | court with proper jurisdiction. A judge shall find a 102 |
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| 190 | 190 | | violation of this section and nullif y such a change in 103 |
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| 191 | 191 | | zoning if the judge determines the change was done to 104 |
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| 192 | 192 | | discriminate against a digital asset mining business. 105 SB 614 7 |
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| 193 | 193 | | 10. The public service commission may approve rates 106 |
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| 194 | 194 | | reflective of cost to serve but shall not approve a rate 107 |
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| 195 | 195 | | schedule for digital asset mining that creates 108 |
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| 196 | 196 | | discriminatory rates for digital asset mining businesses. 109 |
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| 197 | 197 | | 11. Anyone engaged in home digital asset mining or a 110 |
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| 198 | 198 | | digital asset mining business shall not be considered a 111 |
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| 199 | 199 | | money transmitter under sections 361.700 to 361.727. 112 |
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| 200 | 200 | | 12. The state shall not prohibit an individual from: 113 |
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| 201 | 201 | | (1) Operating a node for the purpose of connecting to 114 |
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| 202 | 202 | | a blockchain protocol or a protocol built on top of a 115 |
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| 203 | 203 | | blockchain protocol and transferring digital assets on a 116 |
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| 204 | 204 | | blockchain protocol; or 117 |
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| 205 | 205 | | (2) Participating in staking on a blockchain protocol. 118 |
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| 206 | 206 | | 13. An individual or business operating a node or a 119 |
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| 207 | 207 | | series of nodes on a blockchain protocol shall not be 120 |
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| 208 | 208 | | required to obtain a money transmitter license under 121 |
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| 209 | 209 | | sections 361.700 to 361.727 to engage in such activity. 122 |
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| 210 | 210 | | 14. No business offering to provide digital asset 123 |
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| 211 | 211 | | mining or staking services for individuals or to other 124 |
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| 212 | 212 | | businesses shall be considered as offering a security or 125 |
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| 213 | 213 | | investment contract under state law. 126 |
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| 214 | 214 | | 15. Notwithstanding any other provision of law to the 127 |
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| 215 | 215 | | contrary, no individual or entity shall face liability 128 |
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| 216 | 216 | | related to a specific transaction merely by validating such 129 |
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| 217 | 217 | | transaction if such individual or entity: 130 |
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| 218 | 218 | | (1) Engages in digital asset mining; 131 |
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| 219 | 219 | | (2) Operates a node or series of nodes on a blockchain 132 |
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| 220 | 220 | | network; or 133 |
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| 221 | 221 | | (3) Provides digital asset mining or staking services 134 |
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| 222 | 222 | | for individuals or other businesses. 135 |
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| 223 | 223 | | |
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