Bill Text: NY S07987 | 2019-2020 | General Assembly | Introduced

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Bill Title: Relates to the electronic open auction public bond sale pilot program; provides that the superintendent of financial services shall approve nationally recognized electronic securities bidding services for such program.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-03-06 - REFERRED TO LOCAL GOVERNMENT [S07987 Detail]

Download: New_York-2019-S07987-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          7987

                    IN SENATE

                                      March 6, 2020
                                       ___________

        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  electronic
          open auction public bond sale pilot program

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 58.10 of the local finance law, as added by chapter
     2  643 of the laws of 2019, is amended 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] super-
    11  intendent pursuant to 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    5. "Superintendent" means the superintendent of financial services.
    20    b. 1. There is hereby established an electronic open auction bond sale
    21  pilot program authorizing municipalities to conduct open auction  public
    22  bond  sales  through  any  nationally  recognized  electronic securities
    23  bidding service approved  by  the  [state  comptroller]  superintendent.
    24  Nationally recognized electronic securities bidding services desiring to
    25  operate  an  electronic  open  auction  shall  apply to the [state comp-
    26  troller] superintendent for authorization to do so by filing an applica-
    27  tion with the  [state  comptroller]  superintendent.  The  [state  comp-
    28  troller]  superintendent  shall  make available an application form that

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15544-01-0
        S. 7987                             2

     1  provides the [state comptroller] superintendent with information regard-
     2  ing the technology and security practices maintained by  the  nationally
     3  recognized electronic securities bidding service, the requirements to be
     4  established  for  bidding by bidders, the methods by which auction sales
     5  are conducted, the experience of the  nationally  recognized  electronic
     6  securities  bidding  service  in  conducting electronic open auctions of
     7  bonds, and other information the [state comptroller] superintendent  may
     8  deem relevant.
     9    2.  If  the  [state  comptroller]  superintendent  determines that the
    10  requirements and conditions of the open auction are in  accordance  with
    11  the  provisions  of  this  chapter  and  the  bidding service provides a
    12  secure, open and competitive opportunity for qualified bidders to submit
    13  proposals, the application shall be deemed approved.
    14    3. The  [state  comptroller]  superintendent  shall  post  information
    15  regarding   the  nationally  recognized  electronic  securities  bidding
    16  services that have been approved for use by municipalities on the [state
    17  comptroller] department of financial services website.
    18    c. If the chief fiscal officer of the municipality has authorized  the
    19  receipt  of  bids  in an electronic open auction format, such electronic
    20  bids may be submitted in the form of open auctions conducted  through  a
    21  nationally recognized electronic securities bidding service which entity
    22  shall  be  deemed  to  be  the  designated  receiving device pursuant to
    23  section 58.00 of this title. Notice of any bond sale shall  provide  for
    24  the manner in which the bidding period may be extended and the basis for
    25  determination of the winning bidder.
    26    d.  Notwithstanding the provisions of subdivision one of section three
    27  hundred five of the state technology law, if the notice of sale for  the
    28  open  auction  public  bond  contains a provision that bids will only be
    29  accepted electronically in the manner provided in such notice  of  sale,
    30  the  municipality shall not be required to accept non-electronic bids in
    31  any form.
    32    e. The  municipality's  chief  fiscal  officer  shall  administer  the
    33  program  and  shall publish its policies and procedures for the procure-
    34  ment of nationally recognized electronic securities bidding services  on
    35  the  municipality's internet website. Such policies and procedures shall
    36  include policies to prevent fraud. Except as modified by  this  section,
    37  the  municipal  program  shall  comply  with  this chapter and all other
    38  applicable laws, rules and regulations related to the sale of bonds.
    39    f. The municipality's chief fiscal officer shall review the electronic
    40  open auction bidding process to ensure that the bond sale was  completed
    41  in  a  timely  fashion;  the  sale was completed without errors; and the
    42  process was favorable as compared to the method currently  used  by  the
    43  municipality.
    44    g.  The municipality shall conduct evaluations of the program annually
    45  with a summary evaluation at the end of the two year program. The  muni-
    46  cipality  shall submit the evaluations to the [state comptroller] super-
    47  intendent, the temporary president of the senate and the speaker of  the
    48  assembly.  Such  report shall include, but not be limited to, any demon-
    49  strated evidence  that  sale  of  public  bonds  using  electronic  open
    50  auctions  is  comparable to the cost of issuing public bonds through the
    51  current sealed bid process, the fees associated with  nationally  recog-
    52  nized  electronic  securities bidding services, whether the use of elec-
    53  tronic open auctions resulted in an  increased  number  of  bidders  and
    54  whether  the  process  was favorable as compared to the method currently
    55  used by the municipality.
        S. 7987                             3

     1    § 2. This act shall take effect immediately; provided, that the amend-
     2  ments to section 58.10 of the local finance law made by section  one  of
     3  this act shall not affect the repeal of such section and shall be deemed
     4  to repeal therewith.