 |
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
disbursements; applicability; definition
Purpose
Adds distributed ledger technology transfers to the permissible forms of deposit into an escrow account.
Background
An escrow agent is any person engaged in the business of accepting escrows. Most real estate transactions use escrow accounts to hold funds relating to the transaction. At the time of closing, escrow agents disburse monies to various entities such as mortgage brokers, realtors and sellers. An escrow agent 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. Deposits must be in a specified format, including: 1) wire transfers; 2) checks, money orders, cashier's checks, certified checks or teller's checks; and 3) credit transfers though the automated clearing house (A.R.S. § 6-801).
Blockchain technology is a type of distributed ledger technology that uses a distributed, decentralized, shared and replicated ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless. The data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth (A.R.S. § 44-7061).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Adds, to the permissible forms of deposit into an escrow account, distributed ledger technology transfers where disbursements are recorded on a ledger and securely deposited in an escrow agent's depository account.
2. Defines distributed ledger technology as a decentralized, shared and immutable ledger, which must be tamperproof and protected with cryptography to preserve the data and may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless.
3. Makes technical changes.
4. Becomes effective on the general effective date.
Prepared by Senate Research
February 2, 2023
MG/ZG/sr