senate Bill S6371

Amended

Extends, until January 1, 2017, the expiration of the electronic public bond sale pilot program for the county of Westchester

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 01 / Feb / 2012
    • REFERRED TO LOCAL GOVERNMENT
  • 02 / Mar / 2012
    • AMEND AND RECOMMIT TO LOCAL GOVERNMENT
  • 02 / Mar / 2012
    • PRINT NUMBER 6371A
  • 12 / Jun / 2012
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 12 / Jun / 2012
    • ORDERED TO THIRD READING CAL.1153
  • 12 / Jun / 2012
    • SUBSTITUTED BY A9537

Summary

Extends, until January 1, 2017, the expiration of the electronic public bond sale pilot program for the county of Westchester; and makes technical corrections to the provisions of such program.

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Bill Details

Versions:
S6371
S6371A
Legislative Cycle:
2011-2012
Law Section:
Local Finance Law
Laws Affected:
Amd §58.10, Loc Fin L; amd §2, Chap 304 of 2009

Sponsor Memo

BILL NUMBER:S6371

TITLE OF BILL:
An act to amend the local finance law, in relation to the electronic
public bond sale pilot program; and to amend chapter 304 of the laws of
2009, amending the local finance law relating to the establishment of an
electronic public bond sale pilot program for Westchester county, in
relation to extending the expiration date of the provisions thereof

PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to extend the statutory authority to allow
for the continuation of the ability of Westchester County to operate a
pilot program to sell municipal bonds via electronic means (as opposed
to paper bid submissions) and to assess the advantages of selling public
bonds via nationally recognized electronic securities bidding platforms
pursuant to that program.

Before the enactment of Chapter 304 of the Laws of 2009, Westchester
County had to conduct the sale of public bonds via paper bids. Under the
currently enacted pilot program, Westchester County can conduct an open
auction to sell such municipal bonds via an electronic securities
bidding service.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Amends Local Finance Law section, 58.10 by repositioning
terms defined within this section of law to a new definitions section of
the provision of law. This has been done for clarity within the statute.

The bill further extends as it is written, currently existing provisions
of Local Finance law section 58.10 as follows:

- Paragraph (b) extends the effective date for the recently established
electronic public bond sale pilot program for the county of Westchester.
- Paragraph (c) provides that electronic bidding will be conducted
through certain nationally recognized electronic securities bidding
services, and may be used for both open and closed auctions.
- Paragraph (d) states that, with certain exceptions, where the notice
of sale has specified that bids will only be accepted electronically,
the county shall not be obligated to receive paper bids.
- Paragraph (e) and (f) provides that the program shall be administered
by the County's chief fiscal officer. Paragraph (g) provides that the
County's chief fiscal officer shall continue to review the program to
ensure its functionality and profitability, and provides certain proce-
dures and requirements for the program's evaluation.

Section 2: This provision extends this pilot program's effective date
from August 2012 to January 1, 2017.

JUSTIFICATION:
Electronic bidding processes have been recognized to increase the speed
and efficiency of bidding for municipal bonds as well as reduce the

administrative burden and costs of conducting a the paper bond bidding
process. This program, which was enacted by Chapter 304 of the Laws of
2009, has enhanced the efficiency and profitability of Westchester Coun-
ty's sale of public bonds by allowing them to conduct such sales elec-
tronically. Further, it has enhanced this process for the County by
allowing them to take advantage of the latest advances in internet
bidding platforms operated by nationally recognized electronic securi-
ties bidding firms.

According to Westchester County, not only has this new electronic bond
bidding pilot program reduced the overhead costs for sponsoring a munic-
ipal bond offering, it has increased participation rates among those
interested in purchasing such bonds. This increased participation rate
among bidders helps to drive down the interest rate charged for such
bonds, which provides for further municipal cost savings.

Currently, ten states, including New Jersey, Ohio and Texas, have
enacted legislation that allow municipalities to conduct public bond
sales through these nationally recognized bidding firms.

This is a non-controversial bill that merely extends this very success-
ful program. This bill extends the program for an additional four years,
and continues the obligation of the county to prepare reports for the
Legislature to evaluate the operation of this program. This bill has
been requested by Westchester County.

LEGISLATIVE HISTORY:
Extension of Chapter 304 of the Laws of 2009.

FISCAL IMPLICATIONS:
None to the State, but a demonstrated positive fiscal impact to West-
chester County.

EFFECTIVE DATE:
Extends the provisions of Chapter 304 of the Laws of 2009, which now
sunsets on August 11, 2012.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6371

                            I N  S E N A T E

                            February 1, 2012
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Local Government

AN ACT to amend the local finance law, in  relation  to  the  electronic
  public  bond  sale pilot program; and to amend chapter 304 of the laws
  of 2009, amending the local finance law relating to the  establishment
  of  an electronic public bond sale pilot program for Westchester coun-
  ty, in relation to extending the expiration  date  of  the  provisions
  thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 58.10 of the local finance law, as added by chapter
304 of the laws of 2009, is amended to read as follows:
  S 58.10 Electronic public bond sale pilot program. a. AS USED IN  THIS
SECTION, THE FOLLOWING TERMS SHALL MEAN:
  1.  "CLOSED AUCTION" MEANS A BOND SALE PROCEDURE THAT DOES NOT ALLOW A
BIDDER TO RECEIVE INFORMATION WITH RESPECT TO THE RANKING  OR  ITS  BIDS
PRIOR TO THE CONCLUSION OF THE BIDDING PERIOD.
  2. "COUNTY" MEANS THE COUNTY OF WESTCHESTER.
  3. "NATIONALLY RECOGNIZED ELECTRONIC SECURITIES BIDDING SERVICE" MEANS
A BIDDING SERVICE THAT IS RECOGNIZED NATIONALLY BY THE PREDOMINANT USERS
OF  ELECTRONIC  SECURITIES  BIDDING  SERVICES  AS PROVIDING AN ACCURATE,
SECURE AND RELIABLE ON-LINE BIDDING SYSTEM.
  4. "OPEN AUCTION" MEANS A BOND SALE PROCEDURE THAT ALLOWS A BIDDER  TO
RECEIVE INFORMATION WITH RESPECT TO THE RANKING OF ITS BIDS PRIOR TO THE
CONCLUSION  OF THE BIDDING PERIOD IN ACCORDANCE WITH THE COUNTY'S NOTICE
OF SUCH BOND SALE CIRCULATED IN ACCORDANCE WITH APPLICABLE  REQUIREMENTS
OF THIS CHAPTER.
  5.  "PROGRAM"  MEANS  THE  ELECTRONIC  PUBLIC  BOND SALE PILOT PROGRAM
ESTABLISHED PURSUANT TO THIS SECTION.
  B. There is hereby established an electronic public  bond  sale  pilot
program  [(referred to in this section as the "program")] solely for the
county [of Westchester (referred to in this section  as  the  "county")]
authorizing the county to conduct public bond sales through any [bidding
services  that  are  recognized  nationally  by the predominant users of
electronic securities bidding services as providing an accurate,  secure
and  reliable on-line bidding system (referred to in this section as "a]
nationally recognized electronic securities bidding [service")] SERVICE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14217-01-2

S. 6371                             2

  [b.] C. If the finance board of the county has authorized the  receipt
of  bids  in electronic format, such electronic bids may be submitted in
the form of  open  auctions  or  closed  auctions  conducted  through  a
nationally  recognized electronic securities bidding service which shall
be  deemed  to be the designated receiving device. ["Open auction" shall
mean a bond sale procedure that allows a bidder to  receive  information
with  respect  to the ranking of its bids prior to the conclusion of the
bidding period in accordance with the provisions of the county's  notice
of  such bond sale circulated in accordance with applicable requirements
of this chapter. "Closed auction" shall mean a bond sale procedure  that
does not allow a bidder to receive information with respect to the rank-
ing of its bids prior to the conclusion of the bidding period. Such] THE
notice  OF  SUCH  BOND  SALE  shall  provide for the manner in which the
bidding period may be extended and the basis for  determination  of  the
winning bidder.
  [c.]  D.  Notwithstanding the provisions of section three hundred five
of the state technology law or any other law,  if  the  notice  of  sale
contains  a  provision that bids will only be accepted electronically in
the manner provided in such notice of sale,  the  county  shall  not  be
required to accept non-electronic bids in any form.
  [d.] E. The county's chief fiscal officer shall administer the program
and  shall  publish  its  policies and procedures for the procurement of
electronic securities bidding services on the county's internet  website
and  in a nationally recognized publication used by professionals in the
bond market. Except as modified by  this  section,  the  county  program
shall  comply with this chapter and all other applicable laws, rules and
regulations related to the sale of bonds.
  [e.] F. The county's chief fiscal officer shall review the  electronic
bidding  process  to ensure that the bond sale was completed in a timely
fashion; the sale was completed without errors; and the results achieved
were favorable as compared to the manual method currently  used  by  the
county.
  [f.]  G.  The  county  shall  conduct evaluations of the pilot program
[annually] BIENNIALLY with a summary evaluation [at] ON  OR  BEFORE  THE
FIRST OF APRIL PRECEDING the end of the [three year] pilot program.  The
county  will submit the evaluations to the state comptroller, the tempo-
rary president of the senate and  the  speaker  of  the  assembly.  Such
report  shall  include, but not be limited to, any demonstrated evidence
that sale of public bonds using electronic auctions is comparable to the
cost of issuing public bonds through the  current  sealed  bid  process,
that  the  use of electronic auctions resulted in an increased number of
bidders and whether the results achieved for public bond sales conducted
through electronic auctions achieved savings compared to the current bid
process used by the county.
  S 2.  Section 2 of chapter 304 of the laws of 2009, amending the local
finance law relating to the establishment of an electronic  public  bond
sale  pilot  program  for  Westchester  county,  is  amended  to read as
follows:
  S 2. This act shall take effect immediately and shall expire [3  years
after  such  effective  date]  JANUARY  1, 2017, when upon such date the
provisions of this act shall be deemed repealed.
  S 3. This act shall take effect immediately; provided that the  amend-
ments  to section 58.10 of the local finance law, made by section one of
this act, shall not affect the expiration and  repeal  of  such  section
pursuant  to  section  2 of chapter 304 of the laws of 2009, as amended,
and shall expire and be deemed repealed therewith.

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