NY State Senate Bill 2019-S4804B

Senate Bill S4804B

2019-2020 Legislative Session

Relates to establishing an electronic open auction public bond sale pilot program for certain municipalities

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

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to local government returned to senate died in assembly
Jun 19, 2019	referred to local governments delivered to assembly passed senate home rule request ordered to third reading cal.1690 committee discharged and committed to rules
May 10, 2019	print number 4804b
May 10, 2019	amend and recommit to local government
Apr 05, 2019	print number 4804a
Apr 05, 2019	amend (t) and recommit to local government
Mar 26, 2019	referred to local government

Votes

- Jun 19, 2019 - Floor Vote
  S4804B
  
  62
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 19, 2019
      
      aye (62)
      
      Addabbo Jr.
      
      Akshar
      
      Amedore
      
      Antonacci
      
      Bailey
      
      Benjamin
      
      Biaggi
      
      Boyle
      
      Breslin
      
      Brooks
      
      Carlucci
      
      Comrie
      
      Felder
      
      Flanagan
      
      Funke
      
      Gallivan
      
      Gaughran
      
      Gianaris
      
      Gounardes
      
      Griffo
      
      Harckham
      
      Helming
      
      Hoylman-Sigal
      
      Jackson
      
      Jacobs
      
      Jordan
      
      Kaminsky
      
      Kaplan
      
      Kavanagh
      
      Kennedy
      
      Krueger
      
      LaValle
      
      Lanza
      
      Little
      
      Liu
      
      Martinez
      
      May
      
      Mayer
      
      Metzger
      
      Montgomery
      
      Myrie
      
      O'Mara
      
      Ortt
      
      Parker
      
      Persaud
      
      Ramos
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Salazar
      
      Sanders Jr.
      
      Savino
      
      Sepúlveda
      
      Serino
      
      Serrano
      
      Seward
      
      Skoufis
      
      Stavisky
      
      Stewart-Cousins
      
      Tedisco
      
      Thomas
  Jun 19, 2019 - Rules Committee Vote
  S4804B
  
  19
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Jun 19, 2019
      
      aye (19)
      
      Benjamin
      
      Breslin
      
      Comrie
      
      Flanagan
      
      Gianaris
      
      Griffo
      
      Hoylman-Sigal
      
      Kennedy
      
      Krueger
      
      LaValle
      
      Lanza
      
      Little
      
      Liu
      
      Martinez
      
      Parker
      
      Robach
      
      Savino
      
      Seward
      
      Stewart-Cousins

Bill Amendments

Original

B (Active)

2019-S4804 - Details

See Assembly Version of this Bill:: A7266
Current Committee:: Senate Local Government
Law Section:: Local Finance Law
Laws Affected:: Add §58.20, Loc Fin L
Versions Introduced in 2021-2022 Legislative Session:: S6580, A6133

2019-S4804 - Summary

Establishes an electronic open auction public bond sale pilot program for certain municipalities, to be administered by the municipality's chief fiscal officer and calls for an evaluation of the program annually.

2019-S4804 - Sponsor Memo

                                
 
BILL NUMBER: S4804

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

 
PURPOSE:

The purpose of this bill is to establish a four year pilot program for
Genesee County to sell municipal bonds via an open auction format
instead of by a closed bid format. Such open auction would be conducted
via an electronic means instead of being done in person. This pilot
program would be used to assess the financial and administrative advan-
tages of selling bonds via an open auction format by a nationally recog-
nized electronic securities bidding platform.

 
SUMMARY OF PROVISIONS:

Section 1: Adds a new Local Finance Law section, 58.20 to establish a

local electronic open auction public bond sale pilot program for Genesee
County. The use of an open auction is entirely optional, and can be
utilized or not for each bond sale. This bill is very similar to Chapter
304 of the Laws of 2009,

(Which established the Westchester County open and closed auction pilot
program). The bill enacts a new Local Finance Law section 58.10 to
establish a pilot program in Genesee County for open auctions.

Its provisions are as follows:

-Paragraph (a) adds a definitions section.

-Paragraph (b) establishes the open auction electronic public bond sale
pilot program for Genesee County, in addition to already existing statu-
tory authority for the county of Genesee to conduct electronic sales.

-Paragraph (c) provides that open auction electronic bidding will be
conducted through certain nationally recognized electronic securities
bidding services.

-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 (t) 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:

Currently, New York authorizes electronic bidding through Local finance
Law section 58, but only permits closed bidding.  There are now forty
states, including California, New Jersey, Ohio and Texas, that have
enacted legislation that allow municipalities to conduct public bond
sales through nationally recognized bidding firms, many of them by the
electronic bidding open auction format.

Open auctions are a cost saving tool that has allowed municipalities to
find lower interest rates and save money. With an average savings of 9
basis points per transaction, states such as California and Pennsylvania
that have the most experience with open auctions see savings as large as
21 basis points. When used with large bond offerings in other
states,open auctions have translated into millions of dollars in savings
for municipalities in other states that use open auctions. For example,
the Hanover Park Regional High School District in New Jersey saved
approximately $63,000 on a $9.75 million bond.

Our local governments face the pressures of containing costs, and should
be encouraged to find cost savings when available. With the important
focus throughout the state on insuring financial efficiencies, munici-
palities must be given every possible tool to save money. This program
is entirely optional, for each bond sale, has no financial impact on the
state and requires nothing of the a municipality, it simply grants the
use of another tool that has been developed as technology evolves.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
Immediately and shall sunset four years after it goes into effect.

2019-S4804 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4804
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 26, 2019
                                ___________
 
 Introduced  by  Sen.  RANZENHOFER -- 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  open  auction  public  bond sale pilot program for
   certain  municipalities;  and  providing  for  the  repeal   of   such
   provisions upon expiration thereof
 
   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:
   §  58.20 ELECTRONIC OPEN AUCTION PUBLIC BOND SALE PILOT PROGRAM; MUNI-
 CIPALITIES. A. AS USED IN THIS SECTION:
   1. "MUNICIPALITY" MEANS THE COUNTY OF GENESEE.
   2. "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.
   3.  "OPEN AUCTION" MEANS A BOND SALE PROCEDURE THAT ALLOWS A BIDDER TO
 RECEIVE INFORMATION WITH RESPECT TO THE STATUS OR RANK  OF  HIS  OR  HER
 BIDS  PRIOR  TO  THE CONCLUSION OF THE BID SUBMISSION PERIOD AND IMPROVE
 HIS OR HER BID AS A RESULT OF THE  RECEIVED  INFORMATION  IN  ACCORDANCE
 WITH  THE  MUNICIPALITY'S NOTICE OF SUCH BOND SALE CIRCULATED IN ACCORD-
 ANCE WITH APPLICABLE REQUIREMENTS OF THIS SECTION.
   4. "PROGRAM" MEANS THE ELECTRONIC OPEN AUCTION PUBLIC BOND SALE  PILOT
 PROGRAM ESTABLISHED PURSUANT TO THIS SECTION.
   B.  THERE IS HEREBY ESTABLISHED AN ELECTRONIC OPEN AUCTION PUBLIC BOND
 SALE PILOT PROGRAM AUTHORIZING GENESEE COUNTY TO  CONDUCT  OPEN  AUCTION
 PUBLIC  BOND  SALES THROUGH ANY NATIONALLY RECOGNIZED ELECTRONIC SECURI-
 TIES BIDDING SERVICE.
   C. THE CHIEF FISCAL OFFICER OF SUCH MUNICIPALITY MAY ACCEPT ELECTRONIC
 BIDS SUBMITTED  IN  THE  FORM  OF  OPEN  AUCTIONS  CONDUCTED  THROUGH  A
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10912-01-9

 S. 4804                             2
 
 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 BID SUBMISSION 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, THE NOTICE OF SALE MAY CONTAIN A
 PROVISION THAT BIDS WILL ONLY BE ACCEPTED ELECTRONICALLY IN  THE  MANNER
 PROVIDED IN SUCH NOTICE OF SALE.
   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 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; AND THE SALE WAS COMPLETED WITHOUT ERRORS.
   G. THE MUNICIPALITY SHALL CONDUCT EVALUATIONS  OF  THE  PILOT  PROGRAM
 ANNUALLY  WITH  A  SUMMARY  EVALUATION AT THE END OF THE FOUR YEAR PILOT
 PROGRAM. THE MUNICIPALITY SHALL SUBMIT  THE  EVALUATIONS  TO  THE  STATE
 COMPTROLLER,  THE  TEMPORARY  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 MUNICIPALITY.
   § 2. This act shall take effect immediately, and shall expire  and  be
 deemed repealed 4 years after such date.

2019-S4804A - Details

See Assembly Version of this Bill:: A7266
Current Committee:: Senate Local Government
Law Section:: Local Finance Law
Laws Affected:: Add §58.20, Loc Fin L
Versions Introduced in 2021-2022 Legislative Session:: S6580, A6133

2019-S4804A - Summary

2019-S4804A - Sponsor Memo

                                
 
BILL NUMBER: S4804A

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

 
PURPOSE:

The purpose of this bill is to establish a four year pilot program for
Genesee County to sell municipal bonds via an open auction format
instead of by a closed bid format. Such open auction would be conducted
via an electronic means instead of being done in person. This pilot
program would be used to assess the financial and administrative advan-
tages of selling bonds via an open auction format by a nationally recog-
nized electronic securities bidding platform.

 
SUMMARY OF PROVISIONS:

Section 1: Adds a new Local Finance Law section, 58.20 to establish a

local electronic open auction public bond sale pilot program for Genesee
County. The use of an open auction is entirely optional, and can be
utilized or not for each bond sale. This bill is very similar to Chapter
304 of the Laws of 2009, (Which established the Westchester County open
and closed auction pilot program). The bill enacts a new Local Finance
Law section 58.10 to establish a pilot program in Genesee County for
open auctions.

Its provisions are as follows:

-Paragraph (a) adds a definitions section.

-Paragraph (b) establishes the open auction electronic public bond sale
pilot program for Genesee County, in addition to already existing statu-
tory authority for the county of Genesee to conduct electronic sales.

-Paragraph (c) provides that open auction electronic bidding will be
conducted through certain nationally recognized electronic securities
bidding services.

-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:
  Currently,  New  York  authorizes  electronic  bidding  through  Local
finance Law section 58, but only permits closed bidding. There  are  now
forty  states,  including  California,  New Jersey, Ohio and Texas, that
have enacted legislation that allow  municipalities  to  conduct  public
bond  sales through nationally recognized bidding firms, many of them by
the electronic bidding open auction format.

Open  auctions are a cost saving tool that has allowed municipalities to
find lower interest rates and save money. With an average savings  of  9
basis points per transaction, states such as California and Pennsylvania
that have the most experience with open auctions see savings as large as
21   basis  points.  When  used  with  large  bond  offerings  in  other
states,open auctions have translated into millions of dollars in savings
for municipalities in other states that use open auctions.  For example,
the Hanover Park Regional High  School  District  in  New  Jersey  saved
approximately $63,000 on a $9.75 million bond.

Our local governments face the pressures of containing costs, and should
be  encouraged  to  find cost savings when available. With the important
focus throughout the state on insuring financial  efficiencies,  munici-
palities  must  be given every possible tool to save money. This program
is entirely optional, for each bond sale, has no financial impact on the
state and requires nothing of the a municipality, it simply  grants  the
use of another tool that has been developed as technology evolves.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
Immediately and shall sunset four years after it goes into effect.

2019-S4804A - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4804--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 26, 2019
                                ___________
 
 Introduced  by  Sen.  RANZENHOFER -- 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  open auction public bond sale pilot program solely
   for certain municipalities; and  providing  for  the  repeal  of  such
   provisions upon expiration thereof
 
   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:
   §  58.20 ELECTRONIC OPEN AUCTION PUBLIC BOND SALE PILOT PROGRAM; MUNI-
 CIPALITIES. 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 STATUS OR RANK OF ITS
 BIDS PRIOR TO THE CONCLUSION OF THE BID SUBMISSION PERIOD.
   2. "MUNICIPALITY" MEANS THE COUNTY OF GENESEE.
   3. "NATIONALLY RECOGNIZED ELECTRONIC SECURITIES BIDDING SERVICE" MEANS
 A BIDDING SERVICE THAT IS RECOGNIZED NATIONALLY BY  MUNICIPAL  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 STATUS OR RANK OF ITS BIDS PRIOR
 TO  THE  CONCLUSION  OF THE BID SUBMISSION PERIOD AND IMPROVE ITS BID BY
 SUBMITTING A BID AT A LOWER INTEREST RATE, AS A RESULT OF  THE  RECEIVED
 INFORMATION  IN  ACCORDANCE  WITH THE MUNICIPALITY'S NOTICE OF SUCH BOND
 SALE CIRCULATED IN ACCORDANCE WITH APPLICABLE REQUIREMENTS OF THIS CHAP-
 TER.
   5. "PROGRAM" MEANS THE ELECTRONIC OPEN AUCTION PUBLIC BOND SALE  PILOT
 PROGRAM ESTABLISHED PURSUANT TO THIS SECTION.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10912-04-9

 S. 4804--A                          2
 
   B.  THERE IS HEREBY ESTABLISHED AN ELECTRONIC OPEN AUCTION PUBLIC BOND
 SALE PILOT PROGRAM SOLELY FOR MUNICIPALITIES, AUTHORIZING MUNICIPALITIES
 TO CONDUCT OPEN AUCTION PUBLIC BOND SALES THROUGH ANY NATIONALLY  RECOG-
 NIZED ELECTRONIC SECURITIES BIDDING SERVICE.
   C.  THE  CHIEF  FISCAL OFFICER OF A MUNICIPALITY MAY ACCEPT ELECTRONIC
 BIDS SUBMITTED  IN  THE  FORM  OF  OPEN  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 BID SUBMISSION 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, THE NOTICE OF SALE MAY CONTAIN A
 PROVISION THAT BIDS WILL ONLY BE ACCEPTED ELECTRONICALLY IN  THE  MANNER
 PROVIDED IN SUCH NOTICE OF SALE.
   E.  THE  MUNICIPALITY'S  CHIEF  FISCAL  OFFICER  SHALL  ADMINISTER THE
 PROGRAM AND MAY UTILIZE THE PROGRAM IN ACCORDANCE WITH THE POWERS  HERE-
 TOFORE  OR HEREAFTER DELEGATED TO THE CHIEF FISCAL OFFICER BY THE LEGIS-
 LATIVE BODY OF THE MUNICIPALITY.  EXCEPT AS MODIFIED  BY  THIS  SECTION,
 EACH  MUNICIPAL  PROGRAM  SHALL  COMPLY  WITH THIS CHAPTER AND ALL OTHER
 APPLICABLE LAWS 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; AND THE SALE WAS COMPLETED WITHOUT ERRORS.
   G.  1. EACH MUNICIPALITY, OR TWO OR MORE MUNICIPALITIES ACTING JOINTLY
 OR IN COOPERATION WITH ANY ENTITY REPRESENTING MUNICIPALITIES, SHALL, ON
 OR  BEFORE  FEBRUARY  FIRST  OF EACH YEAR, CONDUCT ANNUAL EVALUATIONS OF
 THEIR PILOT PROGRAM OR PROGRAMS WITH A SUMMARY EVALUATION AT THE END  OF
 THE  TWO  YEAR  OPEN  AUCTION PILOT PROGRAM. THE MUNICIPALITY OR MUNICI-
 PALITIES SHALL SUBMIT THE EVALUATIONS TO THE STATE COMPTROLLER.
   2. SUCH REPORT SHALL INCLUDE, BUT NOT BE LIMITED TO: (I) THE  COST  OF
 USING AN OPEN AUCTION PLATFORM; (II) A BIDDING ACTIVITY REPORT DETAILING
 THE  WINNING  BIDDER,  THE  NUMBER  OF  BIDDERS, THE NUMBER OF BIDS, THE
 NUMBER OF BID IMPROVEMENTS, AND THE NUMBER  OF  AUCTION  EXTENSIONS  (IF
 ANY);  AND  (III)  ANY  SAVINGS  ACHIEVED  THROUGH THE OPEN AUCTION. ANY
 SAVINGS SHALL BE CALCULATED BY DETERMINING THE COST DIFFERENTIAL BETWEEN
 THE INITIAL BID SUBMITTED AND THE WINNING BID IN AN OPEN AUCTION. IF THE
 INITIAL BID SUBMITTED IS THE ULTIMATE  WINNING  BID,  THE  OPEN  AUCTION
 SAVINGS WOULD BE ZERO DOLLARS.
   3.  ANNUALLY,  THE STATE COMPTROLLER SHALL COMPILE ALL THE INFORMATION
 RECEIVED FROM MUNICIPALITIES PURSUANT TO  THIS  PARAGRAPH,  AND,  ON  OR
 BEFORE APRIL FIRST OF EACH YEAR, 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.
   §  2.  This act shall take effect immediately, and shall expire and be
 deemed repealed 2 years after such date.

2019-S4804B (ACTIVE) - Details

See Assembly Version of this Bill:: A7266
Current Committee:: Senate Local Government
Law Section:: Local Finance Law
Laws Affected:: Add §58.20, Loc Fin L
Versions Introduced in 2021-2022 Legislative Session:: S6580, A6133

2019-S4804B (ACTIVE) - Summary

2019-S4804B (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S4804B

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

 
PURPOSE:

The purpose of this bill is to establish a two year pilot program for
Genesee County to sell municipal bonds via an open auction format
instead of by a closed bid format. Such open auction would be conducted
via an electronic means instead of being done in person. This pilot
program would be used to assess the financial and administrative advan-
tages of selling bonds via an open auction format by a nationally recog-
nized electronic securities bidding platform.

 
SUMMARY OF PROVISIONS:

Section 1: Adds a new Local Finance Law section, 58.20 to establish a

local electronic open auction public bond sale pilot program for Genesee
County. The use of an open auction is entirely optional, and can be
utilized or not for each bond sale. This bill is very similar to Chapter
304 of the Laws of 2009, (Which established the Westchester County open
and closed auction pilot program). The bill enacts a new Local Finance
Law section 58.10 to establish a pilot program in Genesee County for
open auctions.

Its provisions are as follows:

Section 1 -Paragraph (a) adds a definitions section.
-Paragraph (b) establishes the open auction electronic public bond sale
pilot program for Genesee County, in addition to already existing statu-
tory authority for the county of Genesee to conduct electronic sales.
-Paragraph (c) provides the procedure to use open bidding process.
-Paragraph (d) provides that the notice of sale may contain a provision
that bids will only be accepted electronically in the manner provided in
such notice of sale.
-Paragraph (e) and (f) provides that the program shall be administered
by the municipality's chief fiscal officer.
-Paragraph (g) provides that the municipality shall evaluate the program
annually and after two years. These evaluations will be submitted to the
state Comptroller.

Section 2: Provides requirements for reporting by the municipality.

Section 3: sets forth the responsibilities of the Comptroller to compile
information provided by the municipality.

Section 2 - provides for an immediate effective date that it will expire
and be deemed repealed two years after such date.

 
JUSTIFICATION:

Currently, New York authorizes electronic bidding through Local Finance
Law section 58, but only permits closed bidding. There are now forty
states, including California, New Jersey, Ohio and Texas, that have
enacted legislation that allow municipalities to conduct public bond
sales through nationally recognized bidding firms, many of them by the
electronic bidding open auction format.

Open auctions are a cost saving tool that has allowed municipalities to
find lower interest rates and save money. With an average savings of 9
basis points per transaction, states such as California and Pennsylvania
that have the most experience with open auctions see savings as large as
21 basis points. When used with large bond offerings in other states,
open auctions have translated into millions of dollars in savings for
municipalities in other states that use open auctions. For example, the
Hanover Park Regional High School District in New Jersey savedapproxi-
mately $63,000 on a $9.75 million bond.

Our local governments face the pressures of containing costs, and should
be encouraged to find cost savings when available. With the important
focus throughout the state on insuring financial efficiencies, munici-
palities must be given every possible tool to save money. This program
is entirely optional, for each bond sale, has no financial impact on the
state and requires nothing of the municipality, it simply grants the use
of another tool that has been developed as technology evolves.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
Immediately and shall sunset two years after it goes into effect.

2019-S4804B (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4804--B
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 26, 2019
                                ___________
 
 Introduced  by  Sen.  RANZENHOFER -- 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 open auction public bond sale  pilot  program  solely
   for  certain  municipalities;  and  providing  for  the repeal of such
   provisions upon expiration thereof
 
   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:
   § 58.20 ELECTRONIC OPEN AUCTION PUBLIC BOND SALE PILOT PROGRAM;  MUNI-
 CIPALITIES. A. AS USED IN THIS SECTION:
   1.  "MUNICIPALITY" MEANS THE COUNTY OF GENESEE.
   2. "NATIONALLY RECOGNIZED ELECTRONIC SECURITIES BIDDING SERVICE" MEANS
 A  BIDDING  SERVICE  THAT IS RECOGNIZED NATIONALLY BY MUNICIPAL USERS OF
 ELECTRONIC SECURITIES BIDDING SERVICES AS PROVIDING AN ACCURATE,  SECURE
 AND RELIABLE ON-LINE BIDDING SYSTEM.
   3.  "OPEN AUCTION" MEANS A BOND SALE PROCEDURE THAT ALLOWS A BIDDER TO
 RECEIVE INFORMATION WITH RESPECT TO THE STATUS OR RANK OF ITS BIDS PRIOR
 TO THE CONCLUSION OF THE BID SUBMISSION PERIOD AND IMPROVE  ITS  BID  BY
 SUBMITTING  A  BID AT A LOWER INTEREST RATE, AS A RESULT OF THE RECEIVED
 INFORMATION IN ACCORDANCE WITH THE MUNICIPALITY'S NOTICE  OF  SUCH  BOND
 SALE CIRCULATED IN ACCORDANCE WITH APPLICABLE REQUIREMENTS OF THIS CHAP-
 TER.
   4.  "PROGRAM" MEANS THE ELECTRONIC OPEN AUCTION PUBLIC BOND SALE PILOT
 PROGRAM ESTABLISHED PURSUANT TO THIS SECTION.
   B. THERE IS HEREBY ESTABLISHED AN ELECTRONIC OPEN AUCTION PUBLIC  BOND
 SALE PILOT PROGRAM SOLELY FOR MUNICIPALITIES, AUTHORIZING MUNICIPALITIES
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10912-06-9

 S. 4804--B                          2
 
 TO  CONDUCT OPEN AUCTION PUBLIC BOND SALES THROUGH ANY NATIONALLY RECOG-
 NIZED ELECTRONIC SECURITIES BIDDING SERVICE.
   C.  THE  CHIEF  FISCAL OFFICER OF A MUNICIPALITY MAY ACCEPT ELECTRONIC
 BIDS SUBMITTED  IN  THE  FORM  OF  OPEN  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 BID SUBMISSION 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, THE NOTICE OF SALE MAY CONTAIN A
 PROVISION THAT BIDS WILL ONLY BE ACCEPTED ELECTRONICALLY IN  THE  MANNER
 PROVIDED IN SUCH NOTICE OF SALE.
   E.  THE  MUNICIPALITY'S  CHIEF  FISCAL  OFFICER  SHALL  ADMINISTER THE
 PROGRAM AND MAY UTILIZE THE PROGRAM IN ACCORDANCE WITH THE POWERS  HERE-
 TOFORE  OR HEREAFTER DELEGATED TO THE CHIEF FISCAL OFFICER BY THE LEGIS-
 LATIVE BODY OF THE MUNICIPALITY.  EXCEPT AS MODIFIED  BY  THIS  SECTION,
 EACH  MUNICIPAL  PROGRAM  SHALL  COMPLY  WITH THIS CHAPTER AND ALL OTHER
 APPLICABLE LAWS 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; AND THE SALE WAS COMPLETED WITHOUT ERRORS.
   G.    1.  THE  MUNICIPALITY SHALL, ON OR BEFORE FEBRUARY FIRST OF EACH
 YEAR, CONDUCT ANNUAL EVALUATIONS OF ITS PILOT PROGRAM OR PROGRAMS WITH A
 SUMMARY EVALUATION AT THE  END  OF  THE  TWO  YEAR  OPEN  AUCTION  PILOT
 PROGRAM.  THE  MUNICIPALITY  SHALL  SUBMIT  THE EVALUATIONS TO THE STATE
 COMPTROLLER.
   2. SUCH REPORT SHALL INCLUDE, BUT NOT BE LIMITED TO: (I) THE  COST  OF
 USING AN OPEN AUCTION PLATFORM; (II) A BIDDING ACTIVITY REPORT DETAILING
 THE  WINNING  BIDDER,  THE  NUMBER  OF  BIDDERS, THE NUMBER OF BIDS, THE
 NUMBER OF BID IMPROVEMENTS, AND THE NUMBER  OF  AUCTION  EXTENSIONS  (IF
 ANY);  AND  (III)  ANY  SAVINGS  ACHIEVED  THROUGH THE OPEN AUCTION. ANY
 SAVINGS SHALL BE CALCULATED BY DETERMINING THE COST DIFFERENTIAL BETWEEN
 THE INITIAL BID SUBMITTED AND THE WINNING BID IN AN OPEN AUCTION. IF THE
 INITIAL BID SUBMITTED IS THE ULTIMATE  WINNING  BID,  THE  OPEN  AUCTION
 SAVINGS WOULD BE ZERO DOLLARS.
   3.  ANNUALLY,  THE STATE COMPTROLLER SHALL COMPILE ALL THE INFORMATION
 RECEIVED FROM MUNICIPALITIES PURSUANT TO  THIS  PARAGRAPH,  AND,  ON  OR
 BEFORE APRIL FIRST OF EACH YEAR, 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.
   §  2.  This act shall take effect immediately, and shall expire and be
 deemed repealed 2 years after such date.

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