PRINTER'SH2481B3475A05956 AJB:CDM 10/08/24 #90 A05956 AMENDMENTS TO HOUSE BILL NO.

34752481 THESponsor: GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

2481REPRESENTATIVE 2024KEPHART INTRODUCEDPrinter's BYNo. CABELL, KAUFER, FLICK, RYNCAVAGE, ECKER AND KUTZ, JULY 2, 2024 REFERRED TO COMMITTEE ON COMMERCE, JULY 2, 2024 AN ACT Providing for restriction on use and custody of digital assets prohibited and for use of nodes authorized.

The3475 GeneralAmend AssemblyBill, ofpage the2, Commonwealthlines 24 through 26, by striking out "to:" in line 24 and all of Pennsylvanialines hereby25 enactsand as26 follows:and inserting or business to do either of the following:

Section(1) 1.Accept digital assets as a method of payment for legal goods and services.

ShortAmend title.Bill, page 2, line 27, by striking out "maintain" and inserting Maintain Amend Bill, page 3, line 16, by striking out all of said line and inserting Section 5.

ThisConstruction. act shall be known and may be cited as the Digital Assets Authorization Act.

SectionNothing 2.in this act shall be construed to override or limit the applicability of any of the following:

Definitions.(1) 13 Pa.C.S.

The(relating following words and phrases when used in this act shall have the meanings given to themcommercial incode), thisincluding sectionprovisions unlessregarding thetransferrable contextelectronic clearlyrecords. indicates otherwise:

"Blockchain."(2) Data20 thatPa.C.S. is shared across a network to create a ledger of verified transactions or information among network participants linked using cryptography to maintain the integrity of the ledger and to execute other functions and distributed among network participants in an automated fashion to concurrently update network participants on the state of the ledger and any other functions.

"BlockchainCh. protocol." An executable software deployed to a blockchain composed of source code that is publicly available and accessible, including a smart contract or a network of smart contracts.

"Digital39 asset."(relating Ato virtualuniform currency,fiduciary cryptocurrency, native electronic asset, including a stablecoin or nonfungible token, or any other digital-only asset that confers economic, proprietary or access rightsto ordigital powers.assets).

"Hardware(3) wallet."Requirements Afor physicalthe devicelicensing thatand isregulation notof continuouslyvirtual connectedcurrency tobusinesses under the Internetact andof allowsSeptember an2, individual1965 (P.L.490, No.249), referred to secureas andthe transferMoney aTransmission digitalBusiness assetLicensing andLaw, underor whichany theother ownerState oflaw providing for the digitallicensing assetand retainsregulation independentvirtual controlcurrency overbusinesses and the digitalprotection asset.of virtual currency business customers.

"Node."(4) AAny computationalState devicelaw or regulation that containsrequires andthe updatesreporting aand copydisclosure of ainformation blockchain.regarding suspected or attempted financial exploitation or fraud.

"Self-hostedAmend wallet."Bill, Apage digital3, interfaceline used17, toby securestriking andout transfer"5" a digital asset and underinserting which6 the2024/90AJB/HB2481A05956 owner- of1 the- digital asset retains independent control over the digital asset.

Section 3.

Restriction on use and custody of digital assets prohibited.

(a) Prohibition.--The Commonwealth or a municipality may not prohibit, restrict or otherwise impair the ability of an individual to:

(1) use a digital asset to purchase legal goods or services;

and (2) maintain self-custody of a digital asset using a self-hosted wallet or hardware wallet.

(b) Additional taxation prohibited.--The Commonwealth or a municipality may not impose an additional tax, withholding, 20240HB2481PN3475 - 2 - assessment or charge on a digit asset that is based solely on the use of the digital asset as a method of payment to purchase legal goods or services.

Nothing in this subsection shall be construed to prohibit the Commonwealth or a municipality from imposing a tax, withholding, assessment or charge on a digital asset for a purchase if the tax, withholding, assessment or charge would otherwise be imposed for the purchase through the use of legal tender of the United States.

Section 4.

Use of nodes authorized.

It shall be lawful in this Commonwealth to operate a node for any of the following purposes:

(1) Connecting to a blockchain protocol or a protocol built on top of a blockchain protocol.

(2) Transferring a digital asset on a blockchain protocol.

(3) Participating in staking on a blockchain protocol.

Section 5.

Effective date.

This act shall take effect in 60 days.

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