Bill Text: NY S05886 | 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: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2019-06-20 - returned to senate [S05886 Detail]

Download: New_York-2019-S05886-Amended.html

                STATE OF NEW YORK


                               2019-2020 Regular Sessions

                    IN SENATE

                                      May 16, 2019

        Introduced  by Sen. GAUGHRAN -- 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  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

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

        S. 5886--A                          2

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

        S. 5886--A                          3

     1  resulted in an increased number of bidders and whether the  process  was
     2  favorable as compared to the method currently used by the municipality.
     3    §  2. This act shall take effect on the first of January next succeed-
     4  ing the date on which it shall have become a law and  shall  expire  two
     5  years  after  such effective date, when upon such date the provisions of
     6  this act shall be deemed repealed.