Illinois General Assembly - Full Text of HB3575
Illinois General Assembly

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Full Text of HB3575  101st General Assembly




State of Illinois
2019 and 2020


Introduced , by Rep. Keith R. Wheeler


New Act

    Creates the Blockchain Technology Act. Provides for the permitted uses of blockchain technology in transactions and proceedings. Provides limitations to the use of blockchain technology. Prohibits units of local government from implementing specified restrictions on the use of blockchain technology. Defines terms.

LRB101 11071 RJF 56276 b





HB3575LRB101 11071 RJF 56276 b

1    AN ACT concerning business.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the
5Blockchain Technology Act.
6    Section 5. Definitions. As used in this Act:
7    "Blockchain" means an electronic record created by the use
8of a decentralized method by multiple parties to verify and
9store a digital record of transactions which is secured by the
10use of a cryptographic hash of previous transaction
12    "Cryptographic hash" means a mathematical algorithm which
13performs a one-way conversion of input data into output data of
14a specified size to verify the integrity of the data.
15    "Electronic" means relating to technology having
16electrical, digital, magnetic, wireless, optical,
17electromagnetic, or similar capabilities.
18    "Electronic record" means a record created, generated,
19sent, communicated, received, or stored by electronic means,
20including a blockchain or a smart contract.
21    "Record" means information that is inscribed on a tangible
22medium or that is stored in an electronic or other medium and
23is retrievable in perceivable form.



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1    "Smart contract" means a contract stored as an electronic
2record which is verified by the use of a blockchain.
3    Section 10. Permitted use of blockchain.
4    (a) A smart contract, record, or signature may not be
5denied legal effect or enforceability solely because a
6blockchain was used to create, store, or verify the smart
7contract, record, or signature.
8    (b) In a proceeding, evidence of a smart contract, record,
9or signature must not be excluded solely because a blockchain
10was used to create, store, or verify the smart contract,
11record, or signature.
12    (c) If a law requires a record to be in writing, submission
13of a blockchain which electronically contains the record
14satisfies the law.
15    (d) If a law requires a signature, submission of a
16blockchain which electronically contains the signature or
17verifies the intent of a person to provide the signature
18satisfies the law.
19    Section 15. Limitations to the use of blockchain.
20    (a) If parties have agreed to conduct a transaction by use
21of a blockchain and a law requires that a contract or other
22record relating to the transaction be in writing, the legal
23effect, validity, or enforceability of the contract or other
24record may be denied if the blockchain containing an electronic



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1record of the transaction is not in a form that is capable of
2being retained and accurately reproduced for later reference by
3all parties or other persons who are entitled to retain the
4contract or other record.
5    (b) Except as otherwise provided in subsection (f), if a
6law other than this Act requires a record to be posted or
7displayed in a certain manner, to be sent, communicated, or
8transmitted by a specified method, or to contain information
9that is formatted in a certain matter, the use of a blockchain
10to post, display, send, communicate, transmit, or store such a
11record does not satisfy the requirement of the other law.
12    (c) If a person inhibits the ability of another person to
13store or retrieve information contained in a blockchain, such
14information is not enforceable by the person who inhibited the
15storage or retrieval.
16    (d) Regardless of whether a smart contract was used to
17establish the relationship between the parties to an agreement,
18a requirement that a notice or an acknowledgment or other
19response to a notice be in writing is not satisfied by
20providing or delivering the notice or recording an
21acknowledgment or other response to the notice by the use of a
22blockchain if the notice is a notice of:
23        (1) the cancellation or termination of service by a
24    public utility;
25        (2) default, acceleration, repossession, foreclosure,
26    or eviction, or the right to cure, under a credit agreement



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1    secured by or a rental agreement for, a primary residence
2    of a natural person;
3        (3) the cancellation or termination of a policy of
4    health insurance, benefits received under a policy of
5    health insurance, or benefits received under a policy of
6    life insurance, excluding annuities; or
7        (4) the recall of a product, or material failure of a
8    product, that risks endangering the health or safety of a
9    person.
10    (e) A requirement that a document be in writing is not
11satisfied by the use of a blockchain if the document is
12required to accompany any transportation or handling of
13hazardous materials, pesticides, or other toxic or dangerous
15    (f) The requirements of this Section may not be varied by
16agreement, except that:
17        (1) to the extent a law other than this Act requires
18    that a contract or other record relating to a transaction
19    be in writing, but permits that requirement to be varied by
20    agreement, the provisions of subsection (a) concerning the
21    denial of legal effect, validity, or enforceability of the
22    contract or other record relating to the transaction may
23    also be varied by agreement; and
24        (2) a requirement under a law other than this Act to
25    send, communicate, or transmit a record by first-class
26    mail, postage prepaid, or regular United States mail, may



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1    be varied by agreement to the extent permitted by the other
2    law.
3    Section 20. Local government restrictions.
4    (a) A unit of local government shall not:
5        (1) impose any tax or fee on the use of a blockchain or
6    smart contract by any person or entity;
7        (2) require any person or entity to obtain from the
8    unit of local government any certificate, license, or
9    permit to use a blockchain or smart contract; or
10        (3) impose any other requirement relating to the use of
11    a blockchain or smart contract by any person or entity.
12    (b) Nothing in this Section prohibits a unit of local
13government from using a blockchain or smart contract in the
14performance of its powers or duties in a manner not
15inconsistent with the provisions of this Act.