H.F. _____ Section 1. Section 554D.103, subsections 4, 8, and 9, Code 1 2022, are amended to read as follows: 2 4. “Contract” means the total legal obligation resulting 3 from the parties’ agreement as affected by this chapter and 4 other applicable law. “Contract” includes any contract secured 5 through distributed ledger technology and a smart contract. 6 8. “Electronic record” means a record created, generated, 7 sent, communicated, received, or stored by electronic means. 8 “Electronic record” includes any record secured through 9 distributed ledger technology. 10 9. “Electronic signature” means an electronic sound, symbol, 11 or process attached to or logically associated with a record 12 and executed or adopted by a person with the intent to sign the 13 record. “Electronic signature” includes a signature that is 14 secured through distributed ledger technology. 15 Sec. 2. Section 554D.103, subsections 5 and 16, Code 2022, 16 are amended by striking the subsections. 17 Sec. 3. Section 554D.108, subsection 2, Code 2022, is 18 amended to read as follows: 19 2. A contract shall not be denied legal effect or 20 enforceability solely because an electronic record was used in 21 its formation or because the contract is a smart contract or 22 contains a smart contract provision . 23 Sec. 4. NEW SECTION . 554E.1 Definitions. 24 As used in this chapter, unless the context otherwise 25 requires: 26 1. “Account” means the same as defined in section 554.9102. 27 2. “Chattel paper” means the same as defined in section 28 554.9102. 29 3. “Contract” means same as defined in section 554D.103. 30 4. “Controllable account” means an account evidenced by a 31 controllable electronic record that provides that the account 32 debtor undertakes to pay a person that under the uniform 33 commercial code has control of the controllable electronic 34 record. 35 -1- LSB 5341YC (5) 89 es/rn 1/ 6

H.F. _____ 5. “Controllable electronic record” means an electronic 1 record that can be subjected to control under any applicable 2 article of the uniform commercial code. “Controllable 3 electronic record” does not include a deposit account, 4 electronic copy of a record evidencing chattel paper, 5 electronic chattel paper, electronic document of title, 6 electronic money, investment property, or a transferable 7 record. 8 6. “Controllable payment intangible” means a payment 9 intangible evidenced by a controllable electronic record that 10 provides that the account debtor undertakes to pay a person 11 that under any applicable article of the uniform commercial 12 code has control of the controllable electronic record. 13 7. “Deposit account” means the same as defined in section 14 554.9102. 15 8. “Digital asset” means any electronic record that 16 represents or evidences economic value or economic, 17 proprietary, or access rights and may be used as payment. 18 “Digital asset” does not include a deposit account, electronic 19 copy of a record evidencing chattel paper, electronic chattel 20 paper, account or general intangible that is evidenced by an 21 electronic record, controllable account, controllable payment 22 intangible, electronic money, electronic document of title, 23 investment property, or transferable records. 24 9. “Distributed ledger technology” means: 25 a. An electronic ledger where the ledger is redundantly 26 maintained or processed by more than one computer or machine 27 to guarantee the consistency. 28 b. An electronic record of transaction or data where 29 the electronic record is uniformly ordered and maintained 30 or processed to guarantee nonrepudiation of the recorded 31 transactions. 32 10. “Electronic chattel paper” means the same as defined in 33 section 554.9102. 34 11. “Electronic document of title” the same as defined in 35 -2- LSB 5341YC (5) 89 es/rn 2/ 6

H.F. _____ section 554.1201. 1 12. “Electronic money” means an electronic medium of 2 exchange currently authorized or adopted by a domestic 3 or foreign government, not including a deposit account. 4 “Electronic money” includes a monetary unit of account 5 established by an intergovernmental organization or by 6 agreement between two or more countries. 7 13. “Investment property” means the same as defined in 8 section 554.9102. 9 14. “Payment intangible” means the same as defined in 10 section 554.9102. 11 15. “Record” means the same as defined in section 554D.103. 12 16. “Smart contract” means an electronic record that is an 13 event-driven program or computerized transaction protocol that 14 runs on a distributed, decentralized, shared, and replicated 15 ledger that executes the term of a contract, including but not 16 limited to taking custody over and instructing the transfer of 17 assets. 18 17. “Transaction” means a sale, trade, exchange, transfer, 19 payment, or conversion of a digital asset or other property or 20 any other action or set of actions occurring between two or 21 more persons relating to the conduct of business, commercial, 22 or governmental affairs. 23 18. “Transferable record” means the same as electronic 24 signatures defined in the federal Electronic Signatures in 25 Global and National Commerce Act, 15 U.S.C. §7021(a)(1) and as 26 defined in the uniform electronic transactions Act, section 27 554D.118, subsection 1. 28 Sec. 5. NEW SECTION . 554E.2 Classification of digital 29 assets. 30 Digital assets are intangible personal property. 31 Sec. 6. NEW SECTION . 554E.3 Legal effect of distributed 32 ledger technology and smart contract. 33 1. A record, signature, or contract shall not be denied 34 legal effect or enforceability solely because it is created, 35 -3- LSB 5341YC (5) 89 es/rn 3/ 6

H.F. _____ generated, sent, signed, adopted, communicated, received, 1 recorded, or stored by means of distributed ledger technology 2 or a smart contract. 3 2. A contract shall not be denied legal effect or 4 enforceability solely because of any of the following: 5 a. The contract contains a smart contract term. 6 b. An electronic record, distributed ledger technology, or a 7 smart contract was used in the formation of the contract. 8 3. Notwithstanding any other provision to the contrary, a 9 person owning or lawfully using distributed ledger technology 10 to secure information in the course of engaging in or affecting 11 interstate commerce or foreign commerce retains the same 12 rights of ownership or use with respect to such information as 13 before the person secured the information using distributed 14 ledger technology. This subsection does not apply to the use 15 of distributed ledger technology to secure information in 16 connection with a transaction to the extent that the terms of 17 the transaction expressly provide for the transfer of rights of 18 ownership or use with respect to such information. 19 Sec. 7. NEW SECTION . 554E.4 Construction and application. 20 This chapter shall be construed and applied as follows: 21 1. To facilitate transactions and the use of distributed 22 ledger technology and smart contracts consistent with other 23 applicable law. 24 2. To be consistent with reasonable practices concerning 25 distributed ledger technology and smart contracts and with the 26 continued expansion of those practices. 27 Sec. 8. REPEAL. Section 554D.106A, Code 2022, is repealed. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill relates to digital assets, smart contracts, and 32 distributed ledger technology. 33 The bill defines “controllable account” to mean an account 34 evidenced by an electronic record that the debtor undertakes to 35 -4- LSB 5341YC (5) 89 es/rn 4/ 6

H.F. _____ pay the person that has control of the controllable electronic 1 record. The bill defines “controllable payment intangible” to 2 mean a payment intangible that is evidenced by a controllable 3 electronic record that the account debtor undertakes to pay 4 the person that has control of the controllable electronic 5 record. The bill defines “digital asset” to mean any 6 electronic record that represents or evidences economic value 7 or economic, proprietary, or access rights that may be used 8 as a payment with exceptions. The bill defines “distributed 9 ledger technology” to mean an electronic ledger where the 10 ledger is redundantly maintained or processed by more than 11 one computer or machine to guarantee the consistency and an 12 electronic record of transaction or data where the electronic 13 record is uniformly ordered and maintained or processed to 14 guarantee nonrepudiation of the recorded transactions. The 15 bill defines “electronic money” to mean an electronic medium 16 of exchange currently authorized or adopted by a domestic or 17 foreign government, but not including a deposit account. The 18 bill defines “smart contract” to mean an electronic record 19 that is an event-driven, automated transaction that runs on 20 a distributed, decentralized, shared, and replicated ledger 21 that executes the terms of the contract. The bill defines 22 “transaction” to mean the sale, trade, exchange, transfer, 23 payment, or conversion of a digital asset or other property 24 or actions relating to the conduct of business, commercial, 25 or governmental affairs. The bill defines “transferable 26 record” to mean the same as defined in the uniform electronic 27 transaction Act and as “electronic signatures” are defined 28 in the federal Electronic Signatures in Global and National 29 Commerce Act. 30 The bill provides that digital assets are classified 31 as intangible personal property. The bill provides that 32 signatures, records, and contracts executed, created, 33 generated, sent, communicated, received, signed, adopted, 34 recorded, or stored by means of distributed ledger or smart 35 -5- LSB 5341YC (5) 89 es/rn 5/ 6

H.F. _____ contract are valid documents or agreements that maintain 1 full legal effect. A person engaging in commerce who uses 2 distributed ledger technology to secure information retains the 3 same rights of ownership with respect to the information as the 4 person had prior to using the distributed ledger technology. 5 The bill makes conforming amendments. 6 The bill repeals Code section 554D.106A regarding use of 7 distributed ledger technology. 8 -6- LSB 5341YC (5) 89 es/rn 6/ 6