In October 2019, Colorado’s Office of Legislative Legal Services (OLLS), through Thomas Morris, Managing Senior Attorney, concluded in a Legal Opinion addressed to State Representative Jonathan Singer that a State Public Bank, assuming it is organized as a TABOR enterprise, and would apply for a charter under Colorado’s banking laws, would probably be legal under Colorado’s Constitution.
The opinion notes that a party challenging its constitutionality must prove its unconstitutionality “beyond a reasonable doubt.” Read the Legal Opinion here.
The formation of a public bank as a TABOR enterprise enables it to overcome any argument under Article XI of the constitution that the state may not “lend its credit” to another, or that the state is prohibited from contracting a debt or multi-year debt.
Just as OLLS concluded that a state bank organized as a TABOR enterprise is probably legal under the Colorado constitution, it concluded in a follow-up opinion, that for the same reasons, it is “equally certain” that the legislature could authorize local governments to create their own public banks organized as TABOR enterprises. That opinion also concluded that a home rule city or county could probably create such a public bank without the need for state legislation if it limits its business operations to purely local matters and otherwise follows its charter. See Legal Opinion for Cities and Counties here.