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Blockchain Agriculture And Uniform Commercial Code

Concerning the use of blockchain technology in commerce, and, in connection therewith, making an appropriation.
2022 Regular Session
Business & Economic Development
Bill Summary

In 2019, the general assembly enacted House Bill 19-1247, which created an advisory group to study the use and benefits of blockchain technology in agriculture. The group issued a report that included the following recommendations:

  • That the legislature authorize the design, development, and deployment of an online program for agricultural producers to learn about the use and benefits of implementing new digital, data-driven systems to facilitate trade in agricultural products; and
  • That the legislature amend the Colorado "Uniform Commercial Code" (UCC) to protect ownership and control of digital information assets generated by agricultural producers in a manner similar to the changes adopted by Wyoming.

To implement the recommendations:

  • Section 1 of the bill instructs the commissioner of agriculture (commissioner) to create and deploy an online program that educates agricultural producers about blockchain technology. The commissioner will consult and cooperate with stakeholders to develop the online program, publicize the program, and encourage agricultural producers to participate in the program.
  • Section 2 :

  • Classifies the various types of digital assets as the appropriate type of property, security, or asset under the UCC;
  • Classifies a bank providing custodial services of a digital asset as a securities intermediary;
  • Establishes that control of a digital asset is the functional equivalent of possessing a physical asset for the purposes of perfecting a security interest in the digital asset;
  • Requires an agreement for a secured party to take control of a digital asset;
  • Clarifies that a secured party may file with the secretary of state a financing statement to perfect a security interest in proceeds from a digital asset;
  • Provides that a transferee takes a digital asset free of any security interest 2 years after the transferee takes the asset for value if the transferee does not have actual notice of an adverse claim; and
  • Clarifies issues of court jurisdiction over digital assets.

To implement the bill, $72,768 is appropriated from the general fund to the department of agriculture for use by the agricultural markets division.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)


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Bill Text