Hansen Bill to Advance Equitable Investment Opportunities Clears Committee
Legislation would help communities rebound from the pandemic, improve quality of life, and address inequities
DENVER, CO – Today, the Senate Finance Committee unanimously approved a bill sponsored by Senator Chris Hansen (D-Denver) that would implement a new way for people to partake in capital financing by digitizing the origination process and building a transparent system that allows for a broader range of investors.
SB22-025 opens the door for more individuals and businesses to invest in state projects, saves taxpayers money by minimizing transaction fees and lowering interest costs on state debt, and directs the State Treasury to study and, if approved, initiate a secure token offering (STO).
“As we continue to recover from the pandemic and move Colorado forward, we need to ensure that everyone can equitably benefit from our economy,” said Sen. Hansen. “This bill will help advance equitable investment opportunities by reducing costs, lowering barriers of entry to investing, and providing opportunities for all to invest in Colorado – a win for individuals, businesses, and our economy.”
Colorado offers Certificates of Participation (COPs) to finance the construction of important facilities, including the Colorado History Museum, Grand Junction Laboratory, and various higher education facilities. The current system of issuing COPs or bonds is reliant on fees and significant overhead charges, and can lack transparency. Transactions involve several agencies which increases costs, and makes the process more difficult to access for the public. SB22-025 aims to simplify and democratize the process.
The legislation would improve the options for Colorado state financial offerings by allowing the study and use of secure blockchain technology to lower interest rates, reduce costs, increase security, improve oversight, and funnel more essential funding to the programs that need it most.
Debt-based security tokens represent debt instruments like real estate mortgages and corporate bonds. In this case, their function is to broaden the investment pool in state COPs and reduce interest costs for the state.
In 2021, Senator Hansen won a 2021 NewDEAL National Policy Award for his work on the secure tokens for state debt concept.
SB22-025 now moves to the Appropriations Committee for further consideration. Track the progress of the bill here.