Senate Bill S6580

2021-2022 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

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to local government
May 07, 2021	referred to local government

2021-S6580 (ACTIVE) - Details

Current Committee:: Senate Local Government
Law Section:: Local Finance Law
Laws Affected:: Add §58.20, Loc Fin L
Versions Introduced in 2019-2020 Legislative Session:: S4804

2021-S6580 (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; calls for an evaluation of the program annually.

2021-S6580 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S6580

SPONSOR: RATH
 
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 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 saved approxi-
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:

2019 - S.4804B/A.7266A - PASSED SENATE/Local Governments
2020 - S.4804B/A.7266A - LOCAL GOVERNMENT:/Local Governments

 
FISCAL IMPLICATIONS:

None to the State.

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

2021-S6580 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6580
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                May 7, 2021
                                ___________
 
 Introduced  by  Sen.  RATH  --  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.

                                                            LBD02003-02-1

 S. 6580                             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.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Find your Senator and share your views on important issues.

Do you support this bill?

Senate Bill S6580

Sponsored By

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

Actions

2021-S6580 (ACTIVE) - Details

2021-S6580 (ACTIVE) - Summary

2021-S6580 (ACTIVE) - Sponsor Memo

2021-S6580 (ACTIVE) - Bill Text download pdf

Comments

Do you support this bill?

Get Status Alerts for 2021-S6580

Senate Bill S6580

Share this bill

Sponsored By

Edward A. Rath III

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

Actions

2021-S6580 (ACTIVE) - Details

2021-S6580 (ACTIVE) - Summary

2021-S6580 (ACTIVE) - Sponsor Memo

2021-S6580 (ACTIVE) - Bill Text download pdf

Comments