Bill Text: NY S05886 | 2019-2020 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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: (Passed) 2019-12-12 - SIGNED CHAP.643 [S05886 Detail]

Download: New_York-2019-S05886-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          5886

                               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

        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 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:

     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; muni-
     4  cipalities.  a. As used in this section:
     5    1. "Municipality" means a county, city, town, village, fire  district,
     6  or school district.
     7    2. "Nationally recognized electronic securities bidding service" means
     8  a  bidding  service  that is recognized nationally by municipal users of
     9  electronic securities bidding services as providing an accurate,  secure
    10  and reliable online bidding system.
    11    3.  "Open auction" means a bond sale procedure that allows a bidder to
    12  receive information with respect to the status or rank of its bids prior
    13  to the conclusion of the bid submission period and improve its  bid,  by
    14  submitting  a  bid at a lower interest rate, as a result of the received
    15  information in accordance with the municipality's notice  of  such  bond
    16  sale circulated in accordance with applicable requirements of this chap-
    17  ter.
    18    4.  "Program" means the electronic open auction public bond sale pilot
    19  program established pursuant to this section.
    20    b. There is hereby established an electronic open auction public  bond
    21  sale  pilot  program  for  municipalities.  Such  public bond sale pilot
    22  program shall authorize municipalities to conduct  open  auction  public

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11659-01-9
        S. 5886                             2

     1  bond  sales  through  any  nationally  recognized  electronic securities
     2  bidding service.
     3    c.  The  chief  fiscal officer of a municipality may accept electronic
     4  bids submitted  in  the  form  of  open  auctions  conducted  through  a
     5  nationally recognized electronic securities bidding service, which shall
     6  be deemed to be the designated receiving device. Notice of any bond sale
     7  shall  provide  for the manner in which the bid submission period may be
     8  extended and the basis for determination of the bid selected.
     9    d. Notwithstanding the provisions of section three hundred five of the
    10  state technology law or any other law, the notice of sale may contain  a
    11  provision  that  bids will only be accepted electronically in the manner
    12  provided in such notice of sale.
    13    e. The chief fiscal officer of a  municipality  shall  administer  the
    14  pilot program, and may utilize the program in accordance with the powers
    15  delegated  to  the  chief fiscal officer by the legislative body of such
    16  municipality. Except as modified by this section, each  municipal  pilot
    17  program  shall  comply  with  this section and all other applicable laws
    18  related to the sale of bonds.
    19    f. The chief fiscal officer of a municipality shall review  the  elec-
    20  tronic open auction bidding process to ensure that the bond sale was:
    21    1. completed in a timely fashion; and
    22    2. completed without errors.
    23    g.  1. Each municipality, or two or more municipalities acting jointly
    24  or in cooperation with any  entity  representing  municipalities,  shall
    25  conduct  annual  evaluations  of  such  pilot program or programs with a
    26  summary evaluation at the  end  of  the  two  year  open  auction  pilot
    27  program.  Such annual evaluations shall be conducted on or before Febru-
    28  ary first of each year. The municipality or municipalities shall  submit
    29  such annual evaluations to the state comptroller.
    30    2.  Such  annual  report shall include, but not be limited to: (i) the
    31  cost of using an open auction platform; (ii) a bidding  activity  report
    32  detailing the winning bidder, the number of bidders, the number of bids,
    33  the number of bid improvements, and the number of auction extensions, if
    34  any;  and  (iii) any savings achieved through the open auction, provided
    35  that such savings shall be calculated by determining the cost  differen-
    36  tial  between  the  initial bid submitted and the winning bid in an open
    37  auction. If the initial bid submitted is the ultimate winning  bid,  the
    38  open auction savings would be zero dollars ($0.00).
    39    3.  Annually,  the state comptroller shall compile all the information
    40  received from municipalities pursuant to this subdivision,  and,  on  or
    41  before April first of each year, submit such compiled information to the
    42  legislature,  the  temporary president of the senate, the speaker of the
    43  assembly, the minority leader of the senate and the minority  leader  of
    44  the assembly.
    45    §  2.  This  act shall take effect immediately and shall expire and be
    46  deemed repealed two years after such date.