S T A T E O F N E W Y O R K ________________________________________________________________________ 9608 I N A S S E M B L Y March 20, 2012 ___________ Introduced by M. of A. PAULIN, GALEF, GUNTHER, LUPARDO, P. RIVERA, ROBERTS -- Multi-Sponsored by -- M. of A. BOYLAND, THIELE -- read once and referred to the Committee on Local Governments AN ACT to amend the local finance law, in relation to the establishment of an electronic public bond sale pilot program for municipalities; and providing for the repeal of such provisions upon expiration there- of 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 58.20 to read as follows: 3 S 58.20 ELECTRONIC PUBLIC BOND SALE PROGRAM; MUNICIPALITIES. A. AS 4 USED IN THIS SECTION: 5 1. "CLOSED AUCTION" MEANS A BOND SALE PROCEDURE THAT DOES NOT ALLOW A 6 BIDDER TO RECEIVE INFORMATION WITH RESPECT TO THE RANKING OF ITS BIDS 7 PRIOR TO THE CONCLUSION OF THE BIDDING PERIOD. 8 2. "MUNICIPALITY" MEANS A COUNTY, CITY, TOWN, VILLAGE OR SCHOOL 9 DISTRICT. 10 3. "NATIONALLY RECOGNIZED ELECTRONIC SECURITIES BIDDING SERVICE" MEANS 11 A BIDDING SERVICE THAT IS RECOGNIZED NATIONALLY BY THE PREDOMINANT USERS 12 OF ELECTRONIC SECURITIES BIDDING SERVICES AS PROVIDING AN ACCURATE, 13 SECURE AND RELIABLE ON-LINE BIDDING SYSTEM. 14 4. "OPEN AUCTION" MEANS A BOND SALE PROCEDURE THAT ALLOWS A BIDDER TO 15 RECEIVE INFORMATION WITH RESPECT TO THE RANKING OF ITS BIDS PRIOR TO THE 16 CONCLUSION OF THE BIDDING PERIOD IN ACCORDANCE WITH THE MUNICIPALITY'S 17 NOTICE OF SUCH BOND SALE CIRCULATED IN ACCORDANCE WITH APPLICABLE 18 REQUIREMENTS OF THIS CHAPTER. 19 5. "PROGRAM" MEANS THE ELECTRONIC PUBLIC BOND SALE PILOT PROGRAM 20 ESTABLISHED PURSUANT TO THIS SECTION. 21 B. THERE IS HEREBY ESTABLISHED AN ELECTRONIC PUBLIC BOND SALE PILOT 22 PROGRAM AUTHORIZING MUNICIPALITIES TO CONDUCT PUBLIC BOND SALES THROUGH 23 ANY NATIONALLY RECOGNIZED ELECTRONIC SECURITIES BIDDING SERVICE. 24 C. IF THE FINANCE COMMISSIONER OF A MUNICIPALITY HAS AUTHORIZED THE 25 RECEIPT OF BIDS IN ELECTRONIC FORMAT, SUCH ELECTRONIC BIDS MAY BE EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14222-04-2 A. 9608 2 1 SUBMITTED IN THE FORM OF OPEN AUCTIONS OR CLOSED AUCTIONS CONDUCTED 2 THROUGH A NATIONALLY RECOGNIZED ELECTRONIC SECURITIES BIDDING SERVICE 3 WHICH SHALL BE DEEMED TO BE THE DESIGNATED RECEIVING DEVICE. NOTICE OF 4 ANY BOND SALE SHALL PROVIDE FOR THE MANNER IN WHICH THE BIDDING PERIOD 5 MAY BE EXTENDED AND THE BASIS FOR DETERMINATION OF THE WINNING BIDDER. 6 D. NOTWITHSTANDING THE PROVISIONS OF SECTION THREE HUNDRED FIVE OF THE 7 STATE TECHNOLOGY LAW OR ANY OTHER LAW, IF THE NOTICE OF SALE CONTAINS A 8 PROVISION THAT BIDS WILL ONLY BE ACCEPTED ELECTRONICALLY IN THE MANNER 9 PROVIDED IN SUCH NOTICE OF SALE, THE MUNICIPALITY SHALL NOT BE REQUIRED 10 TO ACCEPT NON-ELECTRONIC BIDS IN ANY FORM. 11 E. THE MUNICIPALITY'S CHIEF FISCAL OFFICER SHALL ADMINISTER THE 12 PROGRAM AND SHALL PUBLISH ITS POLICIES AND PROCEDURES FOR THE PROCURE- 13 MENT OF ELECTRONIC SECURITIES BIDDING SERVICES ON THE MUNICIPALITY'S 14 INTERNET WEBSITE AND IN A NATIONALLY RECOGNIZED PUBLICATION USED BY 15 PROFESSIONALS IN THE BOND MARKET. EXCEPT AS MODIFIED BY THIS SECTION, 16 EACH MUNICIPAL PROGRAM SHALL COMPLY WITH THIS CHAPTER AND ALL OTHER 17 APPLICABLE LAWS, RULES AND REGULATIONS RELATED TO THE SALE OF BONDS. 18 F. THE MUNICIPALITY'S CHIEF FISCAL OFFICER SHALL REVIEW THE ELECTRONIC 19 BIDDING PROCESS TO ENSURE THAT THE BOND SALE WAS COMPLETED IN A TIMELY 20 FASHION; THE SALE WAS COMPLETED WITHOUT ERRORS; AND THE RESULTS ACHIEVED 21 WERE FAVORABLE AS COMPARED TO THE MANUAL METHOD CURRENTLY USED BY THE 22 MUNICIPALITY. 23 G. EACH MUNICIPALITY, OR TWO OR MORE MUNICIPALITIES ACTING JOINTLY OR 24 IN COOPERATION WITH ANY ENTITY REPRESENTING MUNICIPALITIES, SHALL, ON OR 25 BEFORE FEBRUARY FIRST, CONDUCT ANNUAL EVALUATIONS OF THEIR PILOT PROGRAM 26 OR PROGRAMS WITH A SUMMARY EVALUATION AT THE END OF THE THREE YEAR PILOT 27 PROGRAM. THE MUNICIPALITY OR MUNICIPALITIES WILL SUBMIT THE EVALUATIONS 28 TO THE STATE COMPTROLLER. SUCH REPORT SHALL INCLUDE, BUT NOT BE LIMITED 29 TO, ANY DEMONSTRATED EVIDENCE THAT SALE OF PUBLIC BONDS USING ELECTRONIC 30 AUCTIONS IS COMPARABLE TO THE COST OF ISSUING PUBLIC BONDS THROUGH THE 31 CURRENT SEALED BID PROCESS, THAT THE USE OF ELECTRONIC AUCTIONS RESULTED 32 IN AN INCREASED NUMBER OF BIDDERS AND WHETHER THE RESULTS ACHIEVED FOR 33 PUBLIC BOND SALES CONDUCTED THROUGH ELECTRONIC AUCTIONS ACHIEVED SAVINGS 34 COMPARED TO THE CURRENT BID PROCESS USED BY THE MUNICIPALITY. ANNUALLY, 35 THE STATE COMPTROLLER SHALL COMPILE ALL THE INFORMATION RECEIVED FROM 36 MUNICIPALITIES PURSUANT TO THIS PARAGRAPH, AND, ON OR BEFORE APRIL 37 FIRST, SUBMIT SUCH COMPILED INFORMATION TO THE LEGISLATURE, THE TEMPO- 38 RARY PRESIDENT OF THE SENATE, THE SPEAKER OF THE ASSEMBLY, THE MINORITY 39 LEADER OF THE SENATE AND THE MINORITY LEADER OF THE ASSEMBLY. 40 S 2. This act shall take effect immediately, and shall expire and be 41 deemed repealed 3 years after such effective date.