Bill Text: NY A08336 | 2019-2020 | General Assembly | Amended

Bill Title: Establishes an electronic open auction public bond sale pilot program to conduct open auction public bond sales through nationally recognized securities bidding services.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Introduced) 2019-06-20 - substituted by s5886a [A08336 Detail]

Download: New_York-2019-A08336-Amended.html

                STATE OF NEW YORK


                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                      June 14, 2019

        Introduced  by  M. of A. THIELE, HUNTER -- read once and referred to the
          Committee on Local Governments -- committee discharged, bill  amended,
          ordered reprinted as amended and recommitted to said committee

        AN  ACT  to  amend the local finance law, in relation to establishing an
          electronic open auction bond sale pilot program 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:

     1    Section 1. The local finance law is amended by adding  a  new  section
     2  58.10 to read as follows:
     3    § 58.10 Electronic open auction public bond sale pilot program. a.  As
     4  used in this section:
     5    1.  "Municipality"  means  a  county with a population of four hundred
     6  thousand or more, or a city or town with a  population  of  one  hundred
     7  thousand or more that has issued at least twenty-five million dollars in
     8  bonds within at least one of the preceding three years.
     9    2. "Nationally recognized electronic securities bidding service" means
    10  a  bidding service that is approved by the state comptroller pursuant to
    11  subdivision b of this section.
    12    3. "Open auction" means a bond sale procedure that allows a bidder  to
    13  receive information with respect to the ranking of its bids prior to the
    14  conclusion  of  the bidding period in accordance with the municipality's
    15  notice of such  bond  sale  circulated  in  accordance  with  applicable
    16  requirements of this chapter.
    17    4.  "Program" means the electronic open auction public bond sale pilot
    18  program established pursuant to this section.
    19    b. 1. There is hereby established an electronic open auction bond sale
    20  pilot program authorizing municipalities to conduct open auction  public
    21  bond  sales  through  any  nationally  recognized  electronic securities
    22  bidding service approved by the state comptroller. Nationally recognized
    23  electronic securities bidding services desiring to operate an electronic

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 8336--A                          2

     1  open auction shall apply to the state comptroller for  authorization  to
     2  do  so  by  filing  an application with the state comptroller. The state
     3  comptroller shall make available an application form that  provides  the
     4  state comptroller with information regarding the technology and security
     5  practices  maintained by the nationally recognized electronic securities
     6  bidding service, the requirements  to  be  established  for  bidding  by
     7  bidders,  the  methods by which auction sales are conducted, the experi-
     8  ence of the nationally recognized electronic securities bidding  service
     9  in  conducting  electronic open auctions of bonds, and other information
    10  the state comptroller may deem relevant.
    11    2. If the state  comptroller  determines  that  the  requirements  and
    12  conditions  of the open auction are in accordance with the provisions of
    13  this chapter and the bidding service provides a secure, open and compet-
    14  itive opportunity for qualified bidders to submit proposals, the  appli-
    15  cation shall be deemed approved.
    16    3.   The  state  comptroller  shall  post  information  regarding  the
    17  nationally recognized electronic securities bidding services  that  have
    18  been  approved  for  use  by  municipalities  on  the  state comptroller
    19  website.
    20    c. If the chief fiscal officer of the municipality has authorized  the
    21  receipt  of  bids  in an electronic open auction format, such electronic
    22  bids may be submitted in the form of open auctions conducted  through  a
    23  nationally recognized electronic securities bidding service which entity
    24  shall  be  deemed  to  be  the  designated  receiving device pursuant to
    25  section 58.00 of this title. Notice of any bond sale shall  provide  for
    26  the manner in which the bidding period may be extended and the basis for
    27  determination of the winning bidder.
    28    d.  Notwithstanding the provisions of subdivision one of section three
    29  hundred five of the state technology law, if the notice of sale for  the
    30  open  auction  public  bond  contains a provision that bids will only be
    31  accepted electronically in the manner provided in such notice  of  sale,
    32  the  municipality shall not be required to accept non-electronic bids in
    33  any form.
    34    e. The  municipality's  chief  fiscal  officer  shall  administer  the
    35  program  and  shall publish its policies and procedures for the procure-
    36  ment of nationally recognized electronic securities bidding services  on
    37  the  municipality's internet website. Such policies and procedures shall
    38  include policies to prevent fraud. Except as modified by  this  section,
    39  the  municipal  program  shall  comply  with  this chapter and all other
    40  applicable laws, rules and regulations related to the sale of bonds.
    41    f. The municipality's chief fiscal officer shall review the electronic
    42  open auction bidding process to ensure that the bond sale was  completed
    43  in  a  timely  fashion;  the  sale was completed without errors; and the
    44  process was favorable as compared to the method currently  used  by  the
    45  municipality.
    46    g.  The municipality shall conduct evaluations of the program annually
    47  with a summary evaluation at the end of the two year program. The  muni-
    48  cipality  shall  submit  the  evaluations  to the state comptroller, the
    49  temporary president of the senate and the speaker of the assembly.  Such
    50  report  shall  include, but not be limited to, any demonstrated evidence
    51  that sale of public bonds using electronic open auctions  is  comparable
    52  to the cost of issuing public bonds through the current sealed bid proc-
    53  ess,  the  fees associated with nationally recognized electronic securi-
    54  ties bidding services, whether  the  use  of  electronic  open  auctions
    55  resulted  in  an increased number of bidders and whether the process was
    56  favorable as compared to the method currently used by the municipality.

        A. 8336--A                          3

     1    § 2. This act shall take effect on the first of January next  succeed-
     2  ing  the  date  on which it shall have become a law and shall expire two
     3  years after such effective date, when upon such date the  provisions  of
     4  this act shall be deemed repealed.