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7 LONG TITLE
8 General Description:
9 This bill makes provisions related to the use of digital user assets to make payments to
10 participating government agencies and political subdivisions.
11 Highlighted Provisions:
12 This bill:
13 ▸ defines terms;
14 ▸ requires the Division of Finance to contract with a third party to accept payments to
15 participating government agencies in the form of digital assets;
16 ▸ authorizes the Division of Finance to contract with a third party to accept payments
17 to political subdivisions in the form of digital assets;
18 ▸ gives the division rulemaking authority to determine standards a third party must
19 meet to provide the payment service; and
20 ▸ describes the assignment of liability with respect to aspects of providing this
21 payment service.
22 Money Appropriated in this Bill:
23 None
24 Other Special Clauses:
25 This bill provides a special effective date.
26 Utah Code Sections Affected:
27 ENACTS:
28 63A-3-112, Utah Code Annotated 1953
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30 Be it enacted by the Legislature of the state of Utah:
31 Section 1. Section 63A-3-112 is enacted to read:
32 63A-3-112. Digital user asset collection.
33 (1) As used in this section:
34 (a) "Agency" means a state government entity that receives payments for services or
35 fees and is eligible to enter into a contract for payment services with the division.
36 (b) "Agency payment" means a payment that is due directly to an agency and that the
37 agency collects either directly or through a third-party payment processor with whom the
38 division has a contract.
39 (c) "Digital asset" means a representation of economic, proprietary, or access rights
40 that is stored in a computer readable format.
41 (d) "Digital security" means a digital asset which constitutes a security, as that term is
42 defined in Section 70A-8-101.
43 (e) (i) "Digital user asset" means a digital asset that is used or bought primarily for
44 consumptive, personal, or household purposes.
45 (ii) "Digital user asset" includes an open blockchain token.
46 (iii) "Digital user asset" does not include a digital security.
47 (f) "Participating agency" means an agency that meets the division's requirements to
48 accept payments made through a service provider with whom the division has a contract.
49 (g) "Political subdivision" means the same as that term is defined in Section
50 63G-7-102.
51 (h) "Political subdivision payment" means a payment that is due directly to a political
52 subdivision and that the political subdivision collects either directly or through a third-party
53 payment processor with whom the political subdivision has a contract.
54 (i) "Service provider" means a person with demonstrated experience exchanging digital
55 user assets for legal tender.
56 (2) The division shall contract with a service provider to provide a service to process
57 an agency payment for a participating agency by:
58 (a) taking the payment in the form of a digital user asset; and
59 (b) converting the digital asset into legal tender to pay the agency payment.
60 (3) (a) When contracting with a service provider to provide the service described in
61 Subsection (2), the division has discretion to choose a service provider that can only provide
62 the exchange service for a limited class or type of digital user asset.
63 (b) The division may contract with more than one service provider to provide the
64 service described in Subsection (2).
65 (c) Nothing in this section shall be interpreted to require the division to provide the
66 service described in Subsection (2) for all types of digital user assets.
67 (4) (a) The person paying the agency payment bears responsibility for any costs the
68 service provider charges for the service provider's service.
69 (b) The division may collect a fee established in accordance with the procedures and
70 requirements of Section 63J-1-504 to cover the costs to the division of providing the service
71 described in Subsection (2).
72 (5) The division shall contract to provide the service described in Subsection (2) on or
73 before January 1, 2023.
74 (6) The division shall, in accordance with Title 63G, Chapter 3, Utah Administrative
75 Rulemaking Act, make rules to:
76 (a) establish standards that a person must meet to be eligible to enter into a contract as
77 a service provider; and
78 (b) establish requirements an agency must meet to be a participating agency.
79 (7) A political subdivision may enter into an agreement with the division for the
80 division to contract with a service provider to, on behalf of the political subdivision:
81 (a) provide a service to collect a political subdivision payment in the form of a digital
82 user asset; and
83 (b) convert the digital asset into legal tender to pay the political subdivision payment.
84 (8) Nothing in this section shall be interpreted to impose liability upon the person
85 paying the agency payment or a participating agency for a change in value of the digital user
86 asset after the moment of payment to the service provider.
87 Section 2. Effective date.
88 This bill takes effect on July 1, 2022.