S T A T E O F N E W Y O R K
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I N A S S E M B L Y
March 4, 2020
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Introduced by M. of A. THIELE -- read once and referred to the Committee
on Local Governments
AN ACT to amend the local finance law, in relation to the electronic
open auction public bond sale pilot program
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
643 of the laws of 2019, is amended to read as follows:
§ 58.10 Electronic open auction public bond sale pilot program. a. As
used in this section:
1. "Municipality" means a county with a population of four hundred
thousand or more, or a city or town with a population of one hundred
thousand or more that has issued at least twenty-five million dollars in
bonds within at least one of the preceding three years.
2. "Nationally recognized electronic securities bidding service" means
a bidding service that is approved by the [state comptroller] SUPER-
INTENDENT pursuant to subdivision b of this section.
3. "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.
4. "Program" means the electronic open auction public bond sale pilot
program established pursuant to this section.
5. "SUPERINTENDENT" MEANS THE SUPERINTENDENT OF FINANCIAL SERVICES.
b. 1. There is hereby established an electronic open auction bond sale
pilot program authorizing municipalities to conduct open auction public
bond sales through any nationally recognized electronic securities
bidding service approved by the [state comptroller] SUPERINTENDENT.
Nationally recognized electronic securities bidding services desiring to
operate an electronic open auction shall apply to the [state comp-
troller] SUPERINTENDENT for authorization to do so by filing an applica-
tion with the [state comptroller] SUPERINTENDENT. The [state comp-
troller] SUPERINTENDENT shall make available an application form that
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15544-01-0
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provides the [state comptroller] SUPERINTENDENT with information regard-
ing the technology and security practices maintained by the nationally
recognized electronic securities bidding service, the requirements to be
established for bidding by bidders, the methods by which auction sales
are conducted, the experience of the nationally recognized electronic
securities bidding service in conducting electronic open auctions of
bonds, and other information the [state comptroller] SUPERINTENDENT may
deem relevant.
2. If the [state comptroller] SUPERINTENDENT determines that the
requirements and conditions of the open auction are in accordance with
the provisions of this chapter and the bidding service provides a
secure, open and competitive opportunity for qualified bidders to submit
proposals, the application shall be deemed approved.
3. The [state comptroller] SUPERINTENDENT shall post information
regarding the nationally recognized electronic securities bidding
services that have been approved for use by municipalities on the [state
comptroller] DEPARTMENT OF FINANCIAL SERVICES website.
c. If the chief fiscal officer of the municipality has authorized the
receipt of bids in an electronic open auction format, such electronic
bids may be submitted in the form of open auctions conducted through a
nationally recognized electronic securities bidding service which entity
shall be deemed to be the designated receiving device pursuant to
section 58.00 of this title. 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 subdivision one of section three
hundred five of the state technology law, if the notice of sale for the
open auction public bond 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 nationally recognized electronic securities bidding services on
the municipality's internet website. Such policies and procedures shall
include policies to prevent fraud. Except as modified by this section,
the 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
open auction bidding process to ensure that the bond sale was completed
in a timely fashion; the sale was completed without errors; and the
process was favorable as compared to the method currently used by the
municipality.
g. The municipality shall conduct evaluations of the program annually
with a summary evaluation at the end of the two year program. The muni-
cipality shall submit the evaluations to the [state comptroller] SUPER-
INTENDENT, the temporary president of the senate and the speaker of the
assembly. Such report shall include, but not be limited to, any demon-
strated evidence that sale of public bonds using electronic open
auctions is comparable to the cost of issuing public bonds through the
current sealed bid process, the fees associated with nationally recog-
nized electronic securities bidding services, whether the use of elec-
tronic open auctions resulted in an increased number of bidders and
whether the process was favorable as compared to the method currently
used by the municipality.
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§ 2. 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 repeal of such section and shall be deemed
to repeal therewith.