Security Token Offerings State Capital Financing
In the capital financing context generally and as defined in section 2 of the act:
- A security token is a digital, liquid contract made verifiable and secure through the use of blockchain technology that establishes its holder's right to a fraction of a financial asset such as a stock, bond, or certificate of participation; and
- A security token offering is a capital financing method in which security tokens representing fractional interests in a financial asset are sold to investors in lieu of selling the actual financial asset to investors.
Section 2 also requires the state treasurer to study the feasibility of using security token offerings for state capital financing and determine the extent to which the use of security token offerings of state capital financing would be in the best interest of the state. The state treasurer is required to complete the study and report the study findings to the finance committees and joint budget committee of the general assembly by March 1, 2023, and to post the study findings on the department of the treasury's website. If the state treasurer determines, after completing the feasibility study, that the use of security token offerings for state capital financing is in the best interest of the state, the state treasurer may recommend as part of the report that the general assembly enact legislation to authorize such use.
Section 1 authorizes the state treasurer to spend up to $125,000 from the state public financing cash fund to fund the completion of the feasibility study.
Section 3 broadens the definition of "eligible state facility" used for purposes of identifying the types of state-owned assets that may be used as collateral for state capital financing used to finance capital construction and transportation projects to include any financially unencumbered state-owned asset that is not part of the state emergency reserve.
Section 4 makes an appropriation of $100,000 to the department of the treasury for implementation of the act, of which $70,000 is for use by the administration division for operating expenses and $30,000 is for the purchase of legal services.
(Note: This summary applies to this bill as enacted.)