ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature

First Regular Session

Senate: FIN DP 4-3-0-0 | 3rd Read 16-13-1-0-0

SB 1191: disbursements; applicability; definition

Sponsor: Senator Mesnard, LD 13

Committee on Commerce

Overview

Includes distributed ledger technology transfers as a permissible form of deposit into an escrow account.  

History

Escrow agents are persons engaged in the business of accepting escrows, which is any transaction wherein escrow property is delivered to a person not otherwise having any right, title or interest in connection with the sale, transfer, encumbrance or lease of real or personal property to be delivered or redelivered upon the contingent happening or non-happening of a specific event or prescribed act (A.R.S. § 6-801).

Pursuant to A.R.S. § 6-843, escrow agents may only disburse money out of an escrow account if deposits are previously made that are at least equal to the disbursements and the deposits relate directly to the transaction for which the money is being disbursed.  The deposits are statutorily required to be in at least one of the following forms: 1) wire transfers; 2) checks, drafts, negotiable orders of withdrawal, money orders or any other item that has become available for withdrawal in accordance with federal law; 3) credit transfers through the automated clearing house that are deemed available by the depository institution receiving the credits; 4) cashier's checks, certified checks or teller's checks; or 5) checks made by an affiliate of a state or federally regulated depository institution.

However, an escrow agent may disburse up to $500 per transaction or any funds that are available as cash without complying with the disbursement requirements.

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteProvisions

1.   Adds, to the permissible forms of deposit into an escrow account, distributed ledger technology transfers (Transfers) within or among a secure network of federally insured depository institutions where disbursements are recorded on a ledger and securely deposited in an escrow agent's depository account. (Sec. 1)

2.   Requires a depository institution to settle Transfers using an established national clearing house network. (Sec. 1)

3.   Prohibits Transfers from being settled or backed by a digital currency of the U.S. government. (Sec. 1)

4.   Mandates Transfers to be fully settled, irrevocably credited and transferred in U.S. dollars. (Sec. 1)

5.   Defines distributed ledger technology as a decentralized, shared and immutable ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless. (Sec. 1)

6.   Stipulates the ledger must be tamper resistant and protected with cryptography to preserve the data. (Sec. 1)

7.   Specifies a Transfer, whether tokenized or tokenless, must maintain price stability by backing the value of the transferred digital asset to U.S. dollars that is redeemable on a one-to-one basis. (Sec. 1)

8.   Makes technical changes. (Sec. 1)

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12.                    SB 1191

13.  Initials PRB/HG    Page 0 Commerce

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