Bill Text: TX HB5067 | 2023-2024 | 88th Legislature | Comm Sub

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Bill Title: Relating to a study by the General Land Office on the establishment and implementation by the General Land Office of a distributed ledger-based title registry pilot program.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Introduced - Dead) 2023-05-11 - Committee report sent to Calendars [HB5067 Detail]

Download: Texas-2023-HB5067-Comm_Sub.html

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88R25378 KBB-F
By: Bhojani H.B. No. 5067
Substitute the following for H.B. No. 5067:
By: Burns C.S.H.B. No. 5067

A BILL TO BE ENTITLED
AN ACT
relating to a study by the General Land Office on the establishment
and implementation by the General Land Office of a distributed
ledger-based title registry pilot program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. DEFINITIONS. In this Act:
(1) "Distributed ledger" means a peer-to-peer network
that operates without a central administrator or database and uses
a distributed network of devices to utilize cryptography to
immutably record and verify the accuracy of data.
(2) "Hybrid model" means a method of recording title
to real property in which basic information from the deed is
recorded on a public ledger with an identifier to the full document
that is held on a separate, permissioned distributed ledger.
(3) "Office" means the General Land Office.
(4) "Onchain recordation" means recording and
verifying the accuracy of data through a central administrator or
database.
(5) "Pilot program" means the distributed
ledger-based title registry pilot program to be studied under this
Act.
(6) "Public ledger" means a method of recording titles
in which all records are documented on a publicly accessible
distributed ledger where the county provides free public access to
all documents.
(7) "Rural county" means a county that is outside the
boundaries of a primary metropolitan statistical area or a
metropolitan statistical area.
(8) "Study" means the study conducted under this Act
by the General Land Office on the establishment and implementation
by the office of a distributed ledger-based title registry pilot
program.
(9) "Urban county" means a county that is partially or
entirely inside the boundaries of a primary metropolitan
statistical area.
SECTION 2. STUDY ON PILOT PROGRAM. (a) The office shall
conduct a study on establishing and implementing, in partnership
with the working group established by Section 3 of this Act, a
distributed ledger-based title registry pilot program to record
title transfers with distributed ledger technology.
(b) A pilot program considered by the study must:
(1) include at least two counties of which at least one
is a rural county and one is an urban county and determine the
potential impact of the pilot program on those types of counties in
particular and counties generally;
(2) incorporate the recording of property liens
simultaneously with existing recording methods so as to not disrupt
current processes;
(3) collect cost data sufficient to allow comparison
of the costs to a participating county of:
(A) continuing to facilitate onchain
recordation; and
(B) adapting to a distributed ledger;
(4) determine whether existing data must be migrated
to an immutable and public ledger for backwards compatibility;
(5) evaluate both the public ledger and hybrid model
as methods of recording to compare:
(A) costs;
(B) security;
(C) transparency; and
(D) overall complexity;
(6) provide for the recording of title transfers in
connection with the pilot program in addition to existing recording
methods;
(7) determine the ability to expand the pilot program
methods to other types of documents and information relating to
real property;
(8) incorporate the requirements of existing statutes
related to the recording of property liens; and
(9) ensure data privacy and proper protection against
fraud.
(c) The goals of the study shall include:
(1) establishing a protocol for implementation of
distributed ledger-based recording;
(2) identifying counties to be included in a pilot
program;
(3) determining the costs of the pilot program and of
converting to a statewide distributed ledger system;
(4) developing protocols for:
(A) working with the selected counties to
implement the program by training, educating, and collaborating
with the counties to ensure that the pilot program is successful,
efficient, and complies with a budget established by the office;
and
(B) partnering with a software company to create
an application programming interface to integrate existing systems
with the distributed ledger system and ensure that title transfer
records are seamlessly incorporated;
(5) identifying and considering issues concerning
transparency and regulation of a distributed ledger-based title
registry system;
(6) determining funding sources for and other
available resources to support implementation of the pilot program;
and
(7) determining appropriate vendor selection
processes.
SECTION 3. WORKING GROUP. The office shall establish a
framework for a working group to discuss ideas, give feedback, and
explore other opportunities relating to the study. The working
group shall consist of representatives from:
(1) counties;
(2) title insurance agents;
(3) title insurance companies;
(4) the banking industry;
(5) appropriate regulators; and
(6) the Texas Blockchain Council.
SECTION 4. PARTICIPATION OF REGULATORS. The office shall
engage appropriate regulators to provide information for the study
regarding the manner in which regulators could participate in
crafting guidance for a pilot program that would include protection
for all parties involved in a real estate transaction the title
transfer for which is recorded with distributed ledger technology.
SECTION 5. RULES. Not later than October 1, 2023, the
office shall adopt rules necessary to administer the study.
SECTION 6. REPORT. Not later than January 1, 2025, the
office shall submit to the legislature a report on the findings of
the study and any recommendations for legislative or other action.
SECTION 7. EXPIRATION. This Act expires September 1, 2025.
SECTION 8. EFFECTIVE DATE. This Act takes effect September
1, 2023.