senate Bill S2369

Signed by Governor Amended

Relates to the notice of sale of bonds

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Bill Status


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

  • 16 / Jan / 2013
    • REFERRED TO LOCAL GOVERNMENT
  • 16 / Apr / 2013
    • 1ST REPORT CAL.326
  • 17 / Apr / 2013
    • 2ND REPORT CAL.
  • 22 / Apr / 2013
    • ADVANCED TO THIRD READING
  • 24 / Apr / 2013
    • PASSED SENATE
  • 24 / Apr / 2013
    • DELIVERED TO ASSEMBLY
  • 24 / Apr / 2013
    • REFERRED TO LOCAL GOVERNMENTS
  • 20 / May / 2013
    • RECALLED FROM ASSEMBLY
  • 20 / May / 2013
    • RETURNED TO SENATE
  • 20 / May / 2013
    • VOTE RECONSIDERED - RESTORED TO THIRD READING
  • 20 / May / 2013
    • AMENDED ON THIRD READING (T) 2369A
  • 03 / Jun / 2013
    • REPASSED SENATE
  • 03 / Jun / 2013
    • RETURNED TO ASSEMBLY
  • 03 / Jun / 2013
    • REFERRED TO LOCAL GOVERNMENTS
  • 17 / Jun / 2013
    • SUBSTITUTED FOR A493A
  • 17 / Jun / 2013
    • ORDERED TO THIRD READING RULES CAL.201
  • 17 / Jun / 2013
    • PASSED ASSEMBLY
  • 17 / Jun / 2013
    • RETURNED TO SENATE
  • 01 / Nov / 2013
    • DELIVERED TO GOVERNOR
  • 13 / Nov / 2013
    • SIGNED CHAP.494

Summary

Relates to the notice of sale of bonds.

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Bill Details

Versions:
S2369
S2369A
Legislative Cycle:
2013-2014
Law Section:
Local Finance Law
Laws Affected:
Amd ยง58.00, Loc Fin L
Versions Introduced in 2011-2012 Legislative Cycle:
A9608, S6372B

Sponsor Memo

BILL NUMBER:S2369

TITLE OF BILL: An act to amend the local finance law, in relation to
the establishment of an electronic public bond sale pilot program for
municipalities; and providing for the repeal of such provisions upon
expiration thereof

PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to
establish a pilot program for all municipalities to sell municipal
bonds via electronic means (as opposed to paper bid Submissions) and
to assess the financial and administrative advantages of selling bonds
via a nationally recognized electronic securities bidding platforms
pursuant to this program.

Under current law, Westchester County is authorized to operate a pilot
program to sell municipal bonds via electronic means (as opposed to
paper bid submissions). Before the enactment of Chapter 304 of the
Laws of 2009, Westchester County (as all other municipalities) 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. Westchester County has realized both financial cost savings
and a reduction in paperwork requirements to conduct such bond bids
due to the enactment of Chapter 304 of the Laws of 2009.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1: Adds a new Local Finance Law section, 58.20 to establish a
state-wide electronic public bond sale pilot program for those
municipalities that wish to participate. This bill is very similar to
Chapter 304 of the Laws of 2009, except that it repositions the terms
defined within this section of law to a new definitions section. This
has been done for clarity within the statute. However, the remainder
of the bill's provisions are essentially the same as Chapter 304.
Chapter 304 was extended in 2012 by Chapter 143 of the Laws of 2012.

The bill enacts a new Local Finance Law section 58.20 to establish a
statewide pilot program. The provisions of this bill are similar to
Local Finance Law section 58.10 which currently applies only for
Westchester County. Its provisions are as follows:

- Paragraph (a) adds a definitions section.

- Paragraph (b) establishes the electronic public bond sale pilot
program for municipalities, in addition to already existing statutory
authority for the county of Westchester to conduct such sales.

- 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 municipality shall not be obligated to receive paper bids.


- Paragraph (e) and (f) provides that the program shall be
administered by the municipality's chief fiscal officer.

- Paragraph (g) provides that the municipality's chief fiscal officer
shall continue to review the program to ensure its functionality and
profitability, and provides certain procedures and requirements for
the program's evaluation.

Section 2: This provision sunsets this pilot program three years after
it has been enacted.

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. A similar program, which was enacted by
Chapter 304 of the Laws of 2009, has enhanced the efficiency and
profitability of Westchester County's sale of public bonds by allowing
them to conduct such sales electronically. 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 securities bidding firms. This act was extended
by Chapter 143 of the Laws of 2012.

According to Westchester County, not only has this new electronic bond
bidding pilot program reduced the overhead costs for sponsoring a
municipal 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
successful program that is being operated by Westchester County to
every municipality in the State. This bill sunsets in 3 years so that
the State Comptroller and Legislature can evaluate the operation of
this program.

LEGISLATIVE HISTORY: Similar to the demonstration program established
by Chapter 304 of the Laws of 2009, extended by Chapter 143 of the
Laws of 2012. Same as S. 6372 of 2012.

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

EFFECTIVE DATE: Immediate, and shall sunset three years after it goes
into effect.

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

                                  2369

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 16, 2013
                               ___________

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  establishment
  of  an  electronic  public bond sale pilot program for municipalities;
  and providing for the repeal of such provisions upon expiration there-
  of

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

  Section  1.  The  local finance law is amended by adding a new section
58.20 to read as follows:
  S 58.20 ELECTRONIC PUBLIC BOND SALE PROGRAM; MUNICIPALITIES.  A.    AS
USED IN THIS SECTION:
  1.  "CLOSED AUCTION" MEANS A BOND SALE PROCEDURE THAT DOES NOT ALLOW A
BIDDER TO RECEIVE INFORMATION WITH RESPECT TO THE RANKING  OF  ITS  BIDS
PRIOR TO THE CONCLUSION OF THE BIDDING PERIOD.
  2.  "MUNICIPALITY"  MEANS  A  COUNTY,  CITY,  TOWN,  VILLAGE OR SCHOOL
DISTRICT.
  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  MUNICIPALITY'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 AUTHORIZING MUNICIPALITIES TO CONDUCT PUBLIC BOND SALES  THROUGH
ANY NATIONALLY RECOGNIZED ELECTRONIC SECURITIES BIDDING SERVICE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05062-01-3

S. 2369                             2

  C.  IF  THE  FINANCE COMMISSIONER OF A MUNICIPALITY 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.  NOTICE OF
ANY BOND SALE SHALL PROVIDE FOR THE MANNER IN WHICH THE  BIDDING  PERIOD
MAY BE EXTENDED AND THE BASIS FOR DETERMINATION OF THE WINNING BIDDER.
  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 MUNICIPALITY SHALL NOT BE REQUIRED
TO ACCEPT NON-ELECTRONIC BIDS IN ANY FORM.
  E. THE  MUNICIPALITY'S  CHIEF  FISCAL  OFFICER  SHALL  ADMINISTER  THE
PROGRAM  AND  SHALL PUBLISH ITS POLICIES AND PROCEDURES FOR THE PROCURE-
MENT OF ELECTRONIC SECURITIES BIDDING  SERVICES  ON  THE  MUNICIPALITY'S
INTERNET  WEBSITE  AND  IN  A  NATIONALLY RECOGNIZED PUBLICATION USED BY
PROFESSIONALS IN THE BOND MARKET. EXCEPT AS MODIFIED  BY  THIS  SECTION,
EACH  MUNICIPAL  PROGRAM  SHALL  COMPLY  WITH THIS CHAPTER AND ALL OTHER
APPLICABLE LAWS, RULES AND REGULATIONS RELATED TO THE SALE OF BONDS.
  F. THE MUNICIPALITY'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
MUNICIPALITY.
  G. EACH MUNICIPALITY, OR TWO OR MORE MUNICIPALITIES ACTING JOINTLY  OR
IN COOPERATION WITH ANY ENTITY REPRESENTING MUNICIPALITIES, SHALL, ON OR
BEFORE FEBRUARY FIRST, CONDUCT ANNUAL EVALUATIONS OF THEIR PILOT PROGRAM
OR PROGRAMS WITH A SUMMARY EVALUATION AT THE END OF THE THREE YEAR PILOT
PROGRAM.  THE MUNICIPALITY OR MUNICIPALITIES WILL SUBMIT THE EVALUATIONS
TO THE STATE COMPTROLLER.  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 MUNICIPALITY.  ANNUALLY,
THE  STATE  COMPTROLLER  SHALL COMPILE ALL THE INFORMATION RECEIVED FROM
MUNICIPALITIES PURSUANT TO THIS  PARAGRAPH,  AND,  ON  OR  BEFORE  APRIL
FIRST,  SUBMIT  SUCH COMPILED INFORMATION TO THE LEGISLATURE, THE TEMPO-
RARY PRESIDENT OF THE SENATE, THE SPEAKER OF THE ASSEMBLY, THE  MINORITY
LEADER OF THE SENATE AND THE MINORITY LEADER OF THE ASSEMBLY.
  S  2.  This act shall take effect immediately, and shall expire and be
deemed repealed 3 years after such effective date.

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