NY State Senate Bill 2019-S8479

Senate Bill S8479

2019-2020 Legislative Session

Establishes an electronic open auction public bond sale pilot program for certain municipalities

download bill text pdf

Archive: Last Bill Status - In Senate Committee Rules 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
Jul 20, 2020	reported and committed to rules
Jul 15, 2020	committee discharged and committed to local government
Jun 03, 2020	referred to rules

Votes

- Jul 20, 2020 - Local Government Committee Vote
  S8479
  
  7
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Local Government Committee Vote: Jul 20, 2020
      
      aye (7)
      
      Borrello
      
      Brooks
      
      Gaughran
      
      Harckham
      
      Metzger
      
      Ritchie
      
      Skoufis

2019-S8479 (ACTIVE) - Details

See Assembly Version of this Bill:: A10593
Current Committee:: Senate Rules
Law Section:: Local Finance Law
Laws Affected:: Add §58.11, Loc Fin L
Versions Introduced in 2021-2022 Legislative Session:: S6360, A5786

2019-S8479 (ACTIVE) - 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-S8479 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8479

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 the expiration thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

This legislation would establish a two year electronic open auction bond
sale pilot program to allow municipalities the option to sell municipal
bonds in an open electronic auction format instead of by a closed elec-
tronic bid format. This pilot program would be used to assess the finan-
cial and administrative advantages of selling bonds via an open auction
format by a nationally recognized electronic securities bidding plat-
form.  This bill is similar to Chapter 643 of 2019 as amended by part BB
of S.7505-B of 2020.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends the Local Finance Law by adding a new section 58.10.

- Paragraph (a) adds a definition section.

- Paragraph (b) establishes an electronic open auction bond sale pilot
program, authorizing municipalities to conduct open auction public bond
sales operated through nationally recognized electronic securities
bidding services, approved by the State Comptroller through an applica-
tion process, for use by municipalities.  Information regarding the
approved nationally recognized electronic securities bidding services
will subsequently be posted on the website of the State Comptroller.

- 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 required to accept nonelectronic bids.

-Paragraphs (e) and (f) provide that the program shall be administered
by the municipality's chief fiscal officer, who will subsequently evalu-
ate its favorability over the method previously utilized by the munici-
pality.

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

Section 2 sets the effective date of January 1st next succeeding the
date it has become law, expiring two years after such effective date.

 
JUSTIFICATION:


Electronic bidding processes have been recognized to increase the speed
and efficiency of bidding as well as reduce the administrative burden
and costs of the paper bidding process.  Currently, New York authorizes
electronic bidding through section 58 of the Local Finance Law, but only
permits closed bidding. There are now forty states, including Califor-
nia, New Jersey, Ohio and Texas that have enacted legislation to allow
municipalities to conduct public bond sales through nationally recog-
nized bidding firms, many of them by the electronic bidding open auction
format.

Open auctions are a cost saving tool that have allowed municipalities to
find lower interest rates and save money. When used with large bond
offerings in other states, open auctions have translated into millions
of dollars in savings for municipalities. With the focus on insuring
financial efficiencies, throughout the state, municipalities must be
given every possible option to save money.

This legislation would establish a two year pilot program for eligible
municipalities, would have no financial impact on the state and require
nothing of the municipality. Simply, it allows for the use of another
tool that has been developed through evolving technology, should munici-
palities choose to utilize it.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on immediately and shall expire January 1,
2003 when upon such date the provisions of this act shall be deemed
repealed.

2019-S8479 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8479
 
                             I N  S E N A T E
 
                               June 3, 2020
                                ___________
 
 Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
   when printed to be committed to the Committee on Rules
 
 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 the 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
 58.11 to read as follows:
   §  58.11 ELECTRONIC OPEN AUCTION PUBLIC BOND SALE PILOT PROGRAM. A. AS
 USED IN THIS SECTION:
   1. "MUNICIPALITY" MEANS  A  COUNTY  WITH  A  POPULATION  GREATER  THAN
 FIFTY-SEVEN  THOUSAND, AND LESS THAN SIXTY-ONE THOUSAND, THAT HAS ISSUED
 AT LEAST THREE MILLION FIVE HUNDRED THOUSAND 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 SUPERINTENDENT 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 SUPERINTENDENT.   NATIONALLY  RECOGNIZED
 ELECTRONIC SECURITIES BIDDING SERVICES DESIRING TO OPERATE AN ELECTRONIC
 OPEN  AUCTION  SHALL APPLY TO THE SUPERINTENDENT FOR AUTHORIZATION TO DO
 SO BY FILING AN APPLICATION WITH THE SUPERINTENDENT. THE  SUPERINTENDENT
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD16600-01-0

 S. 8479                             2
 
 SHALL  MAKE  AVAILABLE AN APPLICATION FORM THAT PROVIDES THE SUPERINTEN-
 DENT WITH INFORMATION REGARDING 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 CONDUCT-
 ING ELECTRONIC OPEN AUCTIONS OF BONDS, AND OTHER INFORMATION THE  SUPER-
 INTENDENT MAY DEEM RELEVANT.
   2.  IF  THE SUPERINTENDENT DETERMINES THAT THE REQUIREMENTS AND CONDI-
 TIONS 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 SUPERINTENDENT SHALL POST INFORMATION REGARDING THE NATIONALLY
 RECOGNIZED  ELECTRONIC  SECURITIES  BIDDING  SERVICES  THAT  HAVE   BEEN
 APPROVED  FOR  USE  BY  MUNICIPALITIES  ON  THE  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 SUPERINTENDENT, THE  TEMPO-
 RARY  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 OPEN AUCTIONS IS COMPARABLE
 TO THE COST OF ISSUING PUBLIC BONDS THROUGH THE CURRENT SEALED BID PROC-
 ESS, THE FEES ASSOCIATED WITH NATIONALLY RECOGNIZED  ELECTRONIC  SECURI-
 TIES  BIDDING  SERVICES,  WHETHER  THE  USE  OF ELECTRONIC 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.

 S. 8479                             3
 
   §  2.  This act shall take effect immediately and shall expire January
 1, 2023 when upon such date the provisions of this act shall  be  deemed
 repealed.

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