ARIZONA HOUSE OF REPRESENTATIVES

Fifty-seventh Legislature

First Regular Session

House: COM DPA 10-0-0-0

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

HB 2749: unclaimed property; virtual currency; security

Sponsor: Representative Weninger, LD 13

House Engrossed

Overview

Outlines requirements for a digital asset that is presumed to be abandoned. Creates the Bitcoin and Digital Assets Reserve Fund.

History

Statute requires the holder of property that is presumed abandoned to make a report to the Department of Revenue (DOR) concerning the property. The report must contain a description of the property, certain information of the apparent owner of the property if known, the date on which the property became payable, demandable or returnable and the date of the last transaction with the apparent owner of the property and other information that the department by rule deems necessary. Property is presumed abandoned if unclaimed by the apparent property owner within a statutorily prescribed time frame which differs by type of property.

Within three years after receiving abandoned property, DOR must sell the property to the highest bidder at a public sale at a location in this state that in the judgment of the department affords the most favorable market for the property. The department additionally must sell securities that are listed on an established stock exchange at prices prevailing on the exchange at the time of the sale (Title 44, Chapter 3, A.R.S.).

Provisions

1.   Creates the Bitcoin and Digital Assets Reserve Fund (Reserve Fund) which consists of any airdrops, staking rewards or interest earned. (Sec. 1)

2.   Specifies the Fund is administered by the State Treasurer and is subject to legislative appropriations. (Sec. 1)

3.   Specifies rewards received from staking the digital asset may be in the form of digital assets. (Sec. 1)

4.   Requires, on approval of the Legislature, the State Treasurer to deposit 10% of the digital assets held in the Reserve Fund in the state General Fund. (Sec. 1)

5.   Defines airdrop, digital assets and stake. (Sec. 1, 2)

6.   Presumes digit assets are abandoned three years after a written or electronic community is returned to the owner as undeliverable by mail, email or any other electronic messaging method. (Sec. 3)

7.   Ceases the three-year presumption of abandonment immediately:

a)   on the exercise of an act of ownership interest in the digital asset; or

b)   by a written, oral or electronic communication with the holder of the digital asset that is evidenced by a memorandum or other record that is on file with the holder. (Sec. 3)

8.   Defines exercise of an act of ownership interest. (Sec. 3)

9.   Requires, for an unclaimed digital asset that is reported to DOR, the holder to report and deliver the digital asset in its native form to DOR within 30 days after reporting the property abandoned. (Sec. 4)

10.  Allows DOR's qualified custodian to stake to receive rewards or airdrops. (Sec. 4)

11.  Stipulates that upon the expiration of three years after the date the digital asset was transferred to the qualified custodian and if the property remains unclaimed, any airdrops or staking rewards are transferred to the Reserve Fund. (Sec. 4)

12.  Requires the holder to maintain digital asset until the additional keys required to transfer the digital asset becomes available if the holder possesses a partial key or is unable to move the digital asset. (Sec. 4)

13.  Defines qualified custodian. (Sec. 4)

14.  Instructs DOR to sell digital assets that are listed on an established digital asset exchange at prices prevailing on the exchange at the time of the sale. (Sec. 5)

15.  Prohibits DOR from selling a digital asset listed on an established stock or a digital asset exchange for less than the prevailing price that is listed on the exchange at the time of the sale. (Sec. 5)

16.  Allows DOR to sell a digital asset that is not listed on an established exchange by any commercially reasonable method. (Sec. 5)

17.  Makes technical and conforming changes. (Sec. 1-5)

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21.                    HB 2749

22.  Initials PB           Page 0 House Engrossed

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