On Wednesday, February 27, members of the Nevada Senate's Committee on Judiciary heard two blockchain-focused bills introduced by Senator Ben Kieckhefer (R): SB162 and SB163. Although Nevada does not prohibit blockchain technology or otherwise restrict its usage, the two bills provide clarifying language to, as the bill proponents explain, signal that Nevada understands and embraces blockchain and is open to economic development opportunities related to the technology. In a way, the bills could be considered enabling legislation.
A quick digest of the proposed legislation:
- SB162 attempts to accomplish several key goals. The first is to update the definition of the term "blockchain" within the Nevada Revised Statutes to specifically define "public blockchain" (as opposed to other types of blockchain networks, such as a permissioned one). The second is to reaffirm that individuals do not relinquish ownership of any information they choose to secure using a blockchain. SB162 also proposes to include a public blockchain as an electronic record as specified under the Uniform Electronic Transactions Act, and the bill includes language that would prohibit a local Nevada government from restricting public blockchain usage. Lastly, SB162 mandates that states agencies accept blockchain-certified records from other state agencies.
- SB163, on the other hand, primarily relates to blockchain-based records' storage, proposing to authorize certain businesses to store internal records on a blockchain. Further, the bill revises Nevada's definition of "electronic transmission" to include blockchain, as well as specifies that blockchain be included in the list of "most recent technologies" business entities could use to perform their duties (as regulated by the secretary of state).
Several organizations in Nevada demonstrated their support for the bills at Wednesday's hearing. A couple of notable proponents include blockchain company Filament – local to the Reno, Nevada area – as well as the recently formed Nevada Technology Association. These two groups have suggested "friendly" amendments to SB162 related to definitions, though Senator Kieckhefer has stated he is willing to work with these parties to arrive at a compromise.
A representative for the secretary of state testified in neutral for the bills and conveyed some of the office's concerns with SB162. Most notably, the office was concerned with (1) the bill's effective date of January 1, 2020, which the representative suggested was too aggressive, and (2) the potential educational resources needed to educate staff about blockchain technology. That said, Nevada's secretary of state is not necessarily opposed to either bill.
Moreover, representatives for two Nevada recorder's offices – one in Storey County and the other in Las Vegas – were unsure about SB162 and suggested that Nevada's legislators proceed with caution.
All these concerns considered, Matt Digesti, director of the Collaborative Links Division for Blockchains LLC (another proponent of SB162 and SB163), told ETHNews about what these two bills could mean for the state of Nevada:
"With new technology that's not well understood, in order for businesses to invest in the technology, you need clarity on the legal side of things. With blockchain, there's not a lot of clarity on the books at the federal level or the state level. When Nevada passed SB398 in 2017, it provided clarity for blockchain companies in Nevada. As a result, you saw blockchain companies like Blockchains LLC move to the state and invest in the state. With Senator Ben Kieckhefer's two bills this session, we're trying to provide additional clarity. In 2017, SB398 was the foundational legislation that was very successful, and now we're trying to build on that foundation to provide additional clarity for the ecosystem."
(Disclosure: ETHNews is a division of Blockchains Management Inc., which is the parent company of Blockchains LLC.)
The Committee on Judiciary has not made any recommendations regarding SB162 and SB163, though it's important to note that Nevada's legislative session only began about a month ago. The committee has until April 12 to make a recommendation, after which the Senate as a whole will vote on the bills.