ARIZONA HOUSE OF REPRESENTATIVES Fifty-seventh Legislature First Regular Session
	House: COM DPA/SE 9-0-0-1

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HB 2324: technical correction; unclaimed property; interest

S/E: forfeiture; digital assets; reserve fund

Sponsor: Representative Weninger, LD 13

Caucus & COW

Summary of the Strike Everything Amendment to HB 2324

Overview

Provides for the forfeiture and seizure of a digital asset. Establishes the Bitcoin and Digital Assets Reserve Fund.

History

Except as provided in statute, all property, including all interests in such property, described in a statute providing for its forfeiture is subject to forfeiture if:

1) the owner is convicted of an offense to which forfeiture applies; and

2) the state establishes by clear and convincing evidence that the property is subject to forfeiture.

After a person is convicted of an offense for which forfeiture applies, a court may order the person to forfeit:

1) property the person acquired through the commission of the offense;

2) property that is directly traceable to property acquired through the commission of the offense;

3) any property or instrumentality that the person used in the commission of the offense or to facilitate the offense; or

4) substitute assets as prescribed by statute (A.R.S. § 13-4304).

Property that is subject to forfeiture may be seized by a peace officer:

1) on process issued pursuant to the Arizona rules of civil procedure or this title, including a seizure warrant;

2) by making a seizure for forfeiture on property seized on process issued pursuant to law; or

3) by making a seizure for forfeiture without court process if the officer has probable cause to believe that the property is subject to forfeiture and any of the following is true:

a) the seizure for forfeiture is of property seized incident to a lawful arrest for a crime or a lawful search;

b) the property subject to seizure for forfeiture has been the subject of a prior judgment in favor of this state or any other state or the federal government in a forfeiture proceeding; or

c) the peace officer has probable cause to believe that the property is subject to forfeiture and that the delay occasioned by the need to obtain a court order would result in the removal or destruction of the property or otherwise frustrate the seizure (A.R.S. § 13-4305).

Provisions

1. Authorizes a court to order a person who is convicted of an offense for which forfeiture applies to forfeit any digital asset used in, acquired through or traceable to the commission of an offense. (Sec. 2)

2. Adds that property that is subject to forfeiture may be seized by a peace officer by making a seizure of a digital assets by:

a) gaining access to a private key, passphrase or other access mechanism;

b) securing a digital wallet through blockchain technology; and

c) transferring the digital asset to a state-approved, secure digital wallet or platform. (Sec. 3)

3. Requires a digital asset that is seized to be stored in a state-approved, secure digital wallet system that is managed by authorized personnel to prevent loss, theft or unauthorized access. (Sec. 3)

4. Authorizes the entity that receives forfeited property by the state to sell a forfeited digital asset by public or otherwise commercially reasonable sale with expenses of keeping and selling the digital asset and the amount of all valid interests established by claimants paid out of the proceeds for the sale. (Sec. 4)

5. Requires the remaining balance of the proceeds of the sale be deposited as follows:

a) 50% in the state General Fund; and

b) 50% in the Bitcoin and Digital Assets Reserve Fund (Fund). (Sec. 4)

6. Specifies the digital asset must be sold through state-approved cryptocurrency exchanges or other secure platforms to ensure accurate valuation and transparency and may remain in its native form. (Sec. 4)

7. Establishes the Fund to store, manage and allocate digital assets securely. (Sec. 5)

8. Specifies the Fund consisting of forfeited digital assets seized or deposited which may be in the forms of a digit asset and bitcoin. (Sec. 5)

9. Specifies the Fund is administered by the State Treasurer and is subject to legislative appropriation. (Sec. 5)

10. Stipulates that, on legislative approval, 10% of the digital assets held in the Fund are deposited in the state General Fund. (Sec. 5)

11. Defines airdrop, digital asset and non-fungible token. (Sec. 1, 5)

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15.                   HB 2324

16. Initials PB           Page 0 Caucus & COW

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