HB 1503-FN - AS INTRODUCED
2022 SESSION
22-2784
08/04
HOUSE BILL 1503-FN
SPONSORS: Rep. Ammon, Hills. 40; Rep. Alexander Jr., Hills. 6; Rep. Osborne, Rock. 4; Rep. Warden, Hills. 15; Rep. Edwards, Rock. 4; Rep. Berezhny, Graf. 9; Rep. Baxter, Rock. 20; Rep. White, Merr. 20; Sen. Avard, Dist 12
COMMITTEE: Commerce and Consumer Affairs
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ANALYSIS
This bill exempts the developer, seller, or facilitator of the exchange of an open blockchain token from certain securities laws.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
22-2784
08/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Two
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Open Blockchain Token Exemption. Amend RSA 421-B by inserting after section 2-204 the following new section:
421-B:2-205 Open Blockchain Token Exemption.
(a) Except as otherwise provided by subsection (c) of this section, a developer or seller of an open blockchain token shall not be deemed the issuer of a security and shall not be subject to the provisions of RSA 421-B:3-301 through RSA 421-B:4-412 and RSA 421-B:5-504 if all of the following are met:
(1) The developer or seller of the token, or the registered agent of the developer or seller, files a notice of intent with the secretary of state, as specified in subsection (d) of this section;
(2) The purpose of the token is for a consumptive purpose, which shall only be exchangeable for, or provided for the receipt of, goods, services or content, including rights of access to goods, services or content; and
(3) The developer or seller of the token did not sell the token to the initial buyer as a financial investment. This paragraph shall only be satisfied if:
(A) The developer or seller did not market the token as a financial investment; and
(B) At least one of the following is true:
(i) The developer or seller of the token reasonably believed that it sold the token to the initial buyer for a consumptive purpose;
(ii) The token has a consumptive purpose that is available at the time of sale and can be used at or near the time of sale for use for a consumptive purpose;
(iii) If the token does not have a consumptive purpose available at the time of sale, the initial buyer of the token is prevented from reselling the token until the token is available for use for a consumptive purpose; or
(iv) The developer or seller takes other reasonable precautions to prevent buyers from purchasing the token as a financial investment.
(b) Except as otherwise provided by subsection (c) of this section, a person who facilitates the exchange of an open blockchain token shall not be deemed a broker-dealer or a person who otherwise deals in securities under this chapter and shall not be subject to the provisions of RSA 421-B:3-301 through RSA 421-B:4-412 and RSA 421-B:5-504 if all of the following are met:
(1) The person, or the registered agent of the person, files a notice of intent with the secretary of state, as specified in subsection (d) of this section;
(2) The person has a reasonable and good faith belief that a token subject to exchange conforms to the requirements of paragraphs (a)(1), (2) and (3) of this section; and
(3) The person takes reasonably prompt action to terminate the exchange of a token that does not conform to the requirements of this subsection.
(c) Notwithstanding any other provision of law, a developer, seller or a person who facilitates the exchange of an open blockchain token is subject to the provisions of RSA 421-B:5-501 through RSA 421-B:5-503 and RSA 421-B:5-505 through RSA 421-B:5-510 only to the extent necessary to carry out those sections. The secretary of state shall have the authority provided under RSA 421-B:6-601 through RSA 421-B:6-613 to determine compliance with the provisions of this section, including whether a person qualifies for the exemptions set forth in this section. The evidentiary burdens specified in RSA 421-B:5-503 shall apply in any proceeding initiated by the secretary of state pursuant to this subsection.
(d) A developer, seller or a person who facilitates the exchange of an open blockchain token, or the registered agent of the applicable person, shall electronically file a notice of intent with the secretary of state before the person shall qualify for an exemption under this section. The notice of intent shall contain the name of the person acting as a developer, seller or facilitator, the contact information of the person or the registered agent of the person and specify whether the person will be acting as a developer, seller or facilitator. A secure form shall be made available by the office of the secretary of state on its internet website for this purpose.
(e) As used in this section, "open blockchain token" means a digital unit which is:
(1) Created:
(A) In response to the verification or collection of a specified number of transactions relating to a digital ledger or database;
(B) By deploying computer code to a blockchain network that allows for the creation of digital tokens or other units; or
(C) Using any combination of the methods specified in subparagraphs (A) and (B) of this paragraph.
(2) Recorded in a digital ledger or database which is chronological, consensus-based, decentralized and mathematically verified in nature, especially relating to the supply of units and their distribution; and
(3) Capable of being traded or transferred between persons without an intermediary or custodian of value.
2 Broker-dealer; Open Blockchain Token. Amend RSA 421-B:1-102(6)(D)-(E) to read as follows:
(D) An international banking institution;[ or]
(E) A person excluded by order issued under this chapter; or [.]
(F) A person who facilitates the exchange of an open blockchain token, as defined in RSA 421-B:2-205(e) and subject to RSA 421-B:2-205(c).
3 Issuer; Open Blockchain Token. Amend the introductory paragraph of RSA 421-B:1-102(33) to read as follows:
(33) "Issuer" means a person that issues or proposes to issue a security, subject to RSA 421-B:2-205(a) and the following:
4 Securities; Open Blockchain Token. Amend RSA 421-B:1-102(53)(C)-(D) to read as follows:
(C) Receives a cash fee for such solicitation or referral; [and]
(D) Operates pursuant to a written agreement with the investment adviser that:
(i) Describes the solicitation activities to be engaged in on behalf of the investment adviser and the compensation to be received therefor;
(ii) Contains an undertaking to perform the duties under the agreement in a manner consistent with the instructions of the investment adviser and the provisions of this chapter; and
(iii) Requires that at the time of any solicitation activities for which compensation is paid or to be paid by the investment adviser, that the client be provided with a current copy of the investment adviser's written disclosure statement that describes the solicitation arrangement; and [.]
(E) Does not include an open blockchain token, as defined in RSA 421-B:2-205(e), except as provided by that section.
5 Effective Date. This act shall take effect July 1, 2022.
22-2784
11/22/21
HB 1503-FN- FISCAL NOTE
AS INTRODUCED
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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STATE: | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | $0 | Indeterminable | Indeterminable | Indeterminable |
Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Funding Source: | [ X ] General [ ] Education [ ] Highway [ ] Other | |||
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METHODOLOGY:
This bill exempts the developer, seller, or facilitator of the exchange of an open blockchain token from certain securities laws. To be exempt the developer, seller or a person who facilitates the exchange of an open blockchain token, or the registered agent of the applicable person, shall electronically file a notice of intent with the Secretary of State.
The Department of State indicates to date they have not received an application for registration for "open blockchain tokens", therefore the fiscal impact on state revenue and expenditures is indeterminable. The Department is unable to determine if they would receive any future applications to determine the impact on state revenues. The Department also indicates there would be an indeterminable increase on state expenditures for the electronic filing of the notice of intents as currently the Bureau of Securities Regulation does not have a system for the receipt, recording and maintenance of such electronic filings and in turn would need to purchase and/or develop such an electronic filing system.
AGENCIES CONTACTED:
Department of State