By: Bhojani H.B. No. 5067
  relating to the establishment and implementation by the General
  Land Office of a distributed ledger-based title registry pilot
         SECTION 1.  Title 3, Property Code, is amended by adding
  Chapter 16 to read as follows:
         Sec. 16.001.  DEFINITIONS. In this chapter:
               (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)  "Like-kind exchange" means a transaction in which
  a contractually agreed-upon amount of digital assets are exchanged
  for a specific parcel of land or property by delivering the assets
  to a trustee who completes the transaction and disburses the funds
  as agreed.
               (4)  "Office" means the General Land Office.
               (5)  "Onchain recordation" means recording and
  verifying the accuracy of data through a central administrator or
               (6)  "Pilot program" means the distributed
  ledger-based title registry pilot program, as established by this
               (7)  "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.
               (8)  "Rural county" means a county that is outside the
  boundaries of a primary metropolitan statistical area or a
  metropolitan statistical area.
               (9)  "Stablecoin" means a digital asset that remains
  stable in value against a pegged external traditional asset class.
               (10)  "Urban county" means a county that is partially
  or entirely inside the boundaries of a primary metropolitan
  statistical area.
         Sec. 16.002.  PILOT PROGRAM. (a) The office shall establish
  and implement the distributed ledger-based title registry pilot
  program in partnership with the working group described in Sec.
  16.003 to record title transfers with distributed ledger
  technology. Recording of title transfers in connection with the
  pilot program shall be in addition to existing recording methods.
         (b)  The office shall ensure that the pilot program:
               (1)  includes at least two counties of which at least
  one is a rural county and one is an urban county;
               (2)  incorporates the recording of property liens
  simultaneously with existing recording methods so as to not disrupt
  current processes;
               (3)  collects 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)  determines whether existing data must be migrated
  to an immutable and public ledger for backwards compatibility;
               (5)  evaluates both the public ledger and hybrid model
  as methods of recording to compare:
                     (A)  costs;
                     (B)  security;
                     (C)  transparency; and
                     (D)  overall complexity; and
               (6)  considers the guidance that would be necessary to:
                     (A)  allow title companies to utilize government
  regulated stablecoins as an acceptable form of good funds for
  closing a real estate transaction; and
                     (B)  allow escrow agents to accept digital assets
  in transactions involving stablecoins or like-kind exchanges.
         (c)  To accomplish the goals of the pilot program, the office
               (1)  establish a protocol for implementation of
  distributed ledger-based recording;
               (2)  identify counties to be included in the pilot
               (3)  determine the costs of the pilot program;
               (4)  work 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
               (5)  partner 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.
         Sec. 16.003.  WORKING GROUP. The office shall establish a
  framework for a working group to discuss ideas, give feedback, and
  explore other opportunities relating to the subject of the pilot
  program. 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.
         Sec. 16.004.  PARTICIPATION OF REGULATORS. The office shall
  engage appropriate regulators to participate in crafting guidance
  that includes protection for all parties involved in a real estate
  transaction the title transfer for which is recorded with
  distributed ledger technology.
         Sec. 16.005.  RULES. Not later than October 1, 2023, the
  office shall adopt rules necessary to administer the pilot program.
         Sec. 16.006.  REPORT. Not later than January 1, 2025, the
  office shall submit to the legislature a report on the findings of
  the pilot program and any recommendations for legislative or other
         Sec. 16.007.  EXPIRATION. This chapter expires September 1,
         SECTION 2.  This Act takes effect September 1, 2023.