senate Bill S2369A

Signed By Governor
2013-2014 Legislative Session

Relates to the notice of sale of bonds

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Archive: Last Bill Status - Signed by Governor


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Nov 13, 2013 signed chap.494
Nov 01, 2013 delivered to governor
Jun 17, 2013 returned to senate
passed assembly
ordered to third reading rules cal.201
substituted for a493a
Jun 03, 2013 referred to local governments
returned to assembly
repassed senate
May 20, 2013 amended on third reading (t) 2369a
vote reconsidered - restored to third reading
May 20, 2013 returned to senate
recalled from assembly
Apr 24, 2013 referred to local governments
delivered to assembly
passed senate
Apr 22, 2013 advanced to third reading
Apr 17, 2013 2nd report cal.
Apr 16, 2013 1st report cal.326
Jan 16, 2013 referred to local government

Votes

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Apr 16, 2013 - Local Government committee Vote

S2369
9
0
committee
9
Aye
0
Nay
0
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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Committee Vote: Apr 16, 2013

Bill Amendments

Original
A (Active)
Original
A (Active)

S2369 - Bill Details

See Assembly Version of this Bill:
A493A
Law Section:
Local Finance Law
Laws Affected:
Amd §58.00, Loc Fin L
Versions Introduced in 2011-2012 Legislative Session:
A9608, S6372B

S2369 - Bill Texts

view summary

Relates to the notice of sale of bonds.

view 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.

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                    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.

S2369A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A493A
Law Section:
Local Finance Law
Laws Affected:
Amd §58.00, Loc Fin L
Versions Introduced in 2011-2012 Legislative Session:
A9608, S6372B

S2369A (ACTIVE) - Bill Texts

view summary

Relates to the notice of sale of bonds.

view sponsor memo
BILL NUMBER:S2369A

TITLE OF BILL: An act to amend the local finance law, in relation to
the notice of sale of bonds

PURPOSE OR GENERAL IDEA OF BILL: To authorize municipalities, school
districts and district corporations to require electronic submission of
sealed bids for the bonds issued.

SUMMARY OF SPECIFIC PROVISIONS: Section 1 amends paragraph a of section
58 of the local finance law, to provide that a summary of the notice of
the public sale of bonds shall contain the designation of the receiving
device if the finance board of the issuing municipality, school district
or district corporation has required the receipt of bids in electronic
format.

Section 2 amends subdivision 1 of paragraph b of section 58 of the local
finance law to extend the provisions of the subdivision to those cases
in which the issuing municipality, school district or district corpo-
ration has required the receipt of bids in electronic format.

Section 3 amends paragraphs d, e and f of section 58 of the local
finance law. Paragraphs d and e are amended to reflect gender equality
in the provisions of the law. Paragraph f is amended to provide that
submission in electronic format may be required as the sole method for
the submission of sealed bids.

Section 4 provides the effective date.

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 paper bond
bidding process. A pilot program, which was enacted by Chapter 304 of
the Laws of 2009, has enhanced the efficiency and profitability of West-
chester County's sale of public bonds by allowing municipalities to
conduct such sale electronically.

According to Westchester County, the electronic bond bidding pilot
program has not only reduced the overhead costs for sponsoring a munici-
pal bond offering, but it has also increased participation rates among
those interested in purchasing public bonds. This increased partic-
ipation rate among bidders helps to drive down the interest rate charged
for such bonds, providing further cost savings.

This bill allows municipalities to require the submission of sealed bids
in electronic format. This would extend the positive results of a very
successful program that is being operated by Westchester County to every
municipality in the State.

PRIOR LEGISLATIVE HISTORY: Similar to A.9608A of 2012, referred to local
governments. Same as S.6372-B (Klein), referred to local government.

Similar to the demonstration program established by Chapter 304 of the
Laws of 2009.

FISCAL IMPLICATIONS: None to the State; potential cost savings to muni-
cipalities.

EFFECTIVE DATE: This act shall take effect January 1, 2014.

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

                                 2369--A
    Cal. No. 326

                       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  --
  reported  favorably  from  said committee, ordered to first and second
  report, ordered to a third reading, passed by Senate and delivered  to
  the  Assembly, recalled, vote reconsidered, restored to third reading,
  amended and ordered reprinted, retaining its place  in  the  order  of
  third reading

AN ACT to amend the local finance law, in relation to the notice of sale
  of bonds

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

  Section 1. Paragraph a of section 58.00 of the local finance  law,  as
amended  by  section  6  of part X of chapter 62 of the laws of 2003, is
amended to read as follows:
  a. There shall be published, at least once, not  less  than  five  nor
more  than  thirty  days  before  the  date fixed for the public sale of
bonds, a notice of such public sale or a summary thereof  in  accordance
with  one  of  the  following  methods:  (1) the notice of sale shall be
published in any financial newspaper published  and  circulated  in  the
city  of  New  York  which  the  state comptroller, in the rule or order
referred to in paragraph d of  section  57.00  of  this  chapter,  shall
designate  for  such publication; (2) the notice of sale shall be circu-
larized in such manner as the state comptroller shall prescribe in  such
rule  or  order  and  shall  be published in any newspaper or newspapers
which the finance board of the municipality, school district or district
corporation may designate for such purpose; or (3) (i) a summary of  the
notice  of  sale  shall  be  published  in  both the financial newspaper
published and circulated in the city of New York which the  state  comp-
troller  has  designated in the rule or order referred to in paragraph d
of section 57.00 of this chapter, and (ii) any newspaper  or  newspapers
which the finance board of the municipality, school district or district

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05062-03-3

S. 2369--A                          2

corporation  may designate for such purpose.  A summary of the notice of
sale shall at a minimum contain the name  of  the  issuer,  the  amount,
date,  and  maturities of the bonds, the frequency of interest payments,
the  place where bids will be received, the designation of the receiving
device if the finance board of the issuing municipality, school district
or district corporation has authorized OR REQUIRED the receipt  of  bids
in  an electronic format, the time and date for the opening of the bids,
including circumstances under which such time and date may be changed in
accordance with law, the method of award and a  procedure  for  promptly
obtaining  the  complete  notice  of  sale  and any preliminary official
statement prepared in connection with the sale, and such other  informa-
tion as the state comptroller may prescribe by rule or order.
  S  2.  Subdivision  1  of  paragraph  b  of section 58.00 of the local
finance law, as amended by section 7 of part X of chapter 62 of the laws
of 2003, is amended to read as follows:
  1. The place where bids will  be  received  and  considered,  and  the
designation  of the receiving device if the finance board of the issuing
municipality, school district or district corporation has authorized  OR
REQUIRED the receipt of bids in an electronic format.
  S 3. Paragraphs d, e, and f of section 58.00 of the local finance law,
paragraph  d  as amended by chapter 581 of the laws of 1949, paragraph e
as added by chapter 663 of the laws of 1949, and paragraph f as  amended
by chapter 741 of the laws of 2005, are amended to read as follows:
  d. It may be a condition of the sale of bonds that every bidder may be
required  to accept a portion of the whole amount of the bonds for which
he OR SHE has bid, at the same rate for such portion as may be specified
in his OR HER bid for the full amount. If such condition is imposed, the
notice of sale shall so state and such notice also shall state that,  in
addition,  any bidder may offer to purchase all or none of such bonds on
different terms.
  e. The notice of sale may provide that the bidder to  whom  the  bonds
are  to be awarded, at his OR HER option, may refuse to accept the bonds
if prior to the delivery of the bonds any income tax law of  the  United
States of America shall provide that the interest on such bonds is taxa-
ble,  or  shall  be  taxable  at  a  future date, for federal income tax
purposes.
  f. For purposes of this section and section  59.00  of  this  chapter,
"sealed  bids"  shall  include  bids  submitted in an electronic format,
provided that the finance board  of  the  issuing  municipality,  school
district  or  district  corporation,  by  resolution, has authorized the
receipt of bids in such format.  Submission  in  electronic  format  may
[not,  however,]  be  required  as the sole method for the submission of
bids. Bids submitted in an electronic format  shall  be  transmitted  by
bidders  to the receiving device designated by the issuing municipality,
school district or district corporation.  Any  method  used  to  receive
electronic  bids shall comply with article three of the state technology
law and any rules and regulations promulgated and  guidelines  developed
thereunder  and,  at  a minimum, must: (a) document the time and date of
receipt of each bid received electronically; (b) authenticate the  iden-
tity of the sender; (c) ensure the security of the information transmit-
ted;  and  (d)  ensure the confidentiality of the bid until the time and
date established for the opening of bids. The timely  submission  of  an
electronic  bid  in  compliance  with  instructions  provided  for  such
submission in the notice of sale and any  supplemental  notice  of  sale
shall be the responsibility solely of each bidder or prospective bidder.
No  issuing  municipality, school district or district corporation shall

S. 2369--A                          3

incur any liability from delays of or  interruptions  in  the  receiving
device designated for the submission and receipt of electronic bids.
  S  4.  This  act shall take effect January 1, 2014; provided, however,
that the amendments to paragraph a, subdivision 1 of  paragraph  b,  and
paragraph  f  of section 58.00 of the local finance law made by sections
one, two, and three of this act shall not affect the expiration of  such
paragraphs or subdivision and shall expire and be deemed repealed there-
with.

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