Legislation

Search OpenLegislation Statutes
This entry was published on 2021-07-30
The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
SECTION 58.10
Electronic open auction public bond sale pilot program
Local Finance (LFN) CHAPTER 33-A, ARTICLE 2, TITLE 4
* § 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 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
shall make available an application form that provides the
superintendent 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 conducting electronic open auctions of bonds, and other
information the superintendent may deem relevant.

2. If the 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 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
procurement 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
municipality shall submit the evaluations to the superintendent, 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 open auctions is comparable
to the cost of issuing public bonds through the current sealed bid
process, the fees associated with nationally recognized electronic
securities 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.

* NB Repealed January 1, 2024