Senate Bill S6372B

2011-2012 Legislative Session

Establishes the electronic bond sale pilot program for counties, cities, towns, villages and school districts

download bill text pdf

Archive: Last Bill Status - In Senate Committee Local Government Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 22, 2012	print number 6372b
Mar 22, 2012	amend and recommit to local government
Mar 02, 2012	print number 6372a
Mar 02, 2012	amend and recommit to local government
Feb 01, 2012	referred to local government

Bill Amendments

2011-S6372 - Details

See Assembly Version of this Bill:: A9608
Current Committee:: Senate Local Government
Law Section:: Local Finance Law
Laws Affected:: Add §58.20, Loc Fin L
Versions Introduced in 2013-2014 Legislative Session:: A493

2011-S6372 - Summary

Establishes the electronic public bond sale pilot program for counties, cities, towns, villages and school districts; such provisions shall remain in effect for 3 years.

2011-S6372 - Sponsor Memo

                                BILL NUMBER:S6372

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 munici-
palities 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 secu-
rities 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. West-
chester 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 munici-
palities 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.

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 West-
chester 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 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 that is being operated by Westchester County to every muni-
cipality 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.

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

EFFECTIVE DATE:
Immediate.

2011-S6372 - Bill Text download pdf

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

                                  6372

                            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  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, 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  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.
  C.  IF  THE FINANCE BOARD 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

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

                                                           LBD14222-02-2

S. 6372                             2

NATIONALLY RECOGNIZED ELECTRONIC SECURITIES BIDDING SERVICE WHICH  SHALL
BE DEEMED TO BE THE DESIGNATED RECEIVING DEVICE. 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.
  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  EVALUATIONS OF THEIR PILOT PROGRAM OR
PROGRAMS ANNUALLY WITH A SUMMARY EVALUATION AT THE END OF THE THREE YEAR
PILOT PROGRAM.  THE MUNICIPALITY OR MUNICIPALITIES WILL SUBMIT THE EVAL-
UATIONS 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 FIST, SUBMIT SUCH COMPILED INFORMATION TO THE
LEGISLATURE, THE TEMPORARY 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.

2011-S6372A - Details

See Assembly Version of this Bill:: A9608
Current Committee:: Senate Local Government
Law Section:: Local Finance Law
Laws Affected:: Add §58.20, Loc Fin L
Versions Introduced in 2013-2014 Legislative Session:: A493

2011-S6372A - Summary

Establishes the electronic public bond sale pilot program for counties, cities, towns, villages and school districts; such provisions shall remain in effect for 3 years.

2011-S6372A - Sponsor Memo

                                BILL NUMBER:S6372A

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.

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.

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.

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

EFFECTIVE DATE:
Immediate.

2011-S6372A - Bill Text download pdf

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

                                 6372--A

                            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  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee

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.
                                                           LBD14222-05-2

S. 6372--A                          2

  C.  IF  THE FINANCE BOARD 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.

2011-S6372B (ACTIVE) - Details

See Assembly Version of this Bill:: A9608
Current Committee:: Senate Local Government
Law Section:: Local Finance Law
Laws Affected:: Add §58.20, Loc Fin L
Versions Introduced in 2013-2014 Legislative Session:: A493

2011-S6372B (ACTIVE) - Summary

Establishes the electronic public bond sale pilot program for counties, cities, towns, villages and school districts; such provisions shall remain in effect for 3 years.

2011-S6372B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S6372B

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.

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.

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.

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

EFFECTIVE DATE:
Immediate.

2011-S6372B (ACTIVE) - Bill Text download pdf

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

                                 6372--B

                            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  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee -- committee discharged,  bill  amended,
  ordered reprinted as amended and recommitted to said committee

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.

                                                           LBD14222-06-2

S. 6372--B                          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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Jeffrey D. Klein

Archive: Last Bill Status - In Senate Committee Local Government Committee

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