(TRENTON) – A legislative packaged sponsored by Assembly Democrats Andrew Zwicker, Reed Gusciora and Valerie Vainieri Huttle to allow private companies to use blockchain technology for record keeping, and explore the benefits of implementing this technology for government record keeping was released Thursday by the Assembly Science, Innovation and Technology Committee.
Blockchain is the term for a series of digital transactions that allow for highly secure, nearly incorruptible electronic transactions and digital records-keeping. It is a distributed ledger database that records and shares every transaction that occurs in the network of users. Each chain is encrypted so that no one can change the transaction data once it is recorded in the ledger.
The first bill (A3768), sponsored by Zwicker, would allow corporations to utilize electronic networks, including distributed electronic networks, in order to meet recordkeeping requirements.
“Because of the security that blockchain technology provides against hacking, it has significant potential for constructive use in information-intensive industries where data privacy is crucial such as healthcare, banking, and government,” said Zwicker (D-Somerset / Mercer / Middlesex / Hunterdon).
“For corporations that do business in our state, this would simplify shareholder recordkeeping, while allowing them to meet the requirements under current law,” said Zwicker.
Current law requires corporations to keep records containing the names and addresses of all shareholders, the number, class and series of shares held by each and the dates when they respectively became the owners of the shares. This bill provides that these corporate records of shares may be kept on an electronic network. It also provides that corporations may use electronic transmissions from electronic networks to meet with certain notice provisions of existing law.
As used in the bill, “electronic network” means one or more electronic networks or databases, including one or more distributed electronic networks or databases that utilize blockchain technology, administered by or on the behalf of the corporation.
This bill is based on recent changes to the Delaware General Corporation Law which allow Delaware corporations to utilize distributed electronic networks, also known as blockchain technology, in order to create and maintain certain shareholder records and meet with certain shareholder notice requirements. This bill clarifies that New Jersey corporations may use blockchain technology in order to simplify recordkeeping requirements.
The second bill (A3613), sponsored by Gusciora and Vainieri Huttle, would establish the “New Jersey Blockchain Initiative Task Force” in the Office of Information Technology. The task force would be charged with studying whether state, county, and municipal governments can benefit from a transition to a blockchain-based system for recordkeeping and service delivery.
“This technology provides opportunities for efficiency, cost savings and cybersecurity – all things that government entities at all levels can benefit from,” said Gusciora (D-Mercer / Hunterdon).
“One of the main gripes about government is the bureaucracy that can often complicate the most mundane tasks. Blockchain technology can help counter that by making government work more aptly and efficiently,” said Vainieri Huttle (D-Bergen). “That is worth exploring.”
The task force would be comprised of 14 members as follows:
* two members appointed by the Governor;
* two members appointed by the President of the Senate;
* two members appointed by the Speaker of the General Assembly;
* one member appointed by the Assembly Minority Leader;
* one member appointed by the Senate Minority Leader; and
* the Chief Technology Officer; the Commissioner of Banking and Insurance; the Clerk of Bergen County; the Mayor of Newark; the Mayor of Jersey City; and the Mayor of Camden, or their designees, who will serve ex-officio.
Under the bill, the task force would be required to issue a report to the governor and the Legislature and present its findings to the General Assembly Science, Innovation and Technology Committee within 180 days after the initial meeting of the task force.
The bill would require the report to include a general description of the costs and benefits of state and local government agencies utilizing blockchain technology; recommendations concerning the feasibility of implementing blockchain technology and the best approach to finance the cost of implementation; any draft legislation the task force deems appropriate to implement Blockchain technology; and any other information relevant to the subject of the report.
The two bills were released by the committee, which is chaired by Zwicker.