N.Y. Local Finance Law § 58.10: Electronic open auction public bond sale pilot program

* § 58.10 Electronic open auction public bond sale pilot program. a.

As used in this section:

1. "Municipality" means a county, or a city or town with a population

of one hundred thousand or more that has issued at least twenty-five

million dollars in bonds within at least one of the preceding five

years.

2. "Nationally recognized electronic securities bidding service" means

a bidding service that is approved by the superintendent pursuant to

subdivision b of this section.

3. "Open auction" means a bond sale procedure that allows a bidder to

receive information with respect to the ranking of its bids prior to the

conclusion of the bidding period in accordance with the municipality's

notice of such bond sale circulated in accordance with applicable

requirements of this chapter.

4. "Program" means the electronic open auction public bond sale pilot

program established pursuant to this section.

5. "Superintendent" means the superintendent of financial services.

b. 1. There is hereby established an electronic open auction bond sale

pilot program authorizing municipalities to conduct open auction public

bond sales through any nationally recognized electronic securities

bidding service approved by the superintendent. Nationally recognized

electronic securities bidding services desiring to operate an electronic

open auction shall apply to the superintendent for authorization to do

so by filing an application with the superintendent. The superintendent

shall make available an application form that provides the

superintendent with information regarding the technology and security

practices maintained by the nationally recognized electronic securities

bidding service, the requirements to be established for bidding by

bidders, the methods by which auction sales are conducted, the

experience of the nationally recognized electronic securities bidding

service in conducting electronic open auctions of bonds, and other

information the superintendent may deem relevant.

2. If the superintendent determines that the requirements and

conditions of the open auction are in accordance with the provisions of

this chapter and the bidding service provides a secure, open and

competitive opportunity for qualified bidders to submit proposals, the

application shall be deemed approved.

3. The superintendent shall post information regarding the nationally

recognized electronic securities bidding services that have been

approved for use by municipalities on the department of financial

services website.

c. If the chief fiscal officer of the municipality has authorized the

receipt of bids in an electronic open auction format, such electronic

bids may be submitted in the form of open auctions conducted through a

nationally recognized electronic securities bidding service which entity

shall be deemed to be the designated receiving device pursuant to

section 58.00 of this title. Notice of any bond sale shall provide for

the manner in which the bidding period may be extended and the basis for

determination of the winning bidder.

d. Notwithstanding the provisions of subdivision one of section three

hundred five of the state technology law, if the notice of sale for the

open auction public bond contains a provision that bids will only be

accepted electronically in the manner provided in such notice of sale,

the municipality shall not be required to accept non-electronic bids in

any form.

e. The municipality's chief fiscal officer shall administer the

program and shall publish its policies and procedures for the

procurement of nationally recognized electronic securities bidding

services on the municipality's internet website. Such policies and

procedures shall include policies to prevent fraud. Except as modified

by this section, the municipal program shall comply with this chapter

and all other applicable laws, rules and regulations related to the sale

of bonds.

f. The municipality's chief fiscal officer shall review the electronic

open auction bidding process to ensure that the bond sale was completed

in a timely fashion; the sale was completed without errors; and the

process was favorable as compared to the method currently used by the

municipality.

g. The municipality shall conduct evaluations of the program annually

with a summary evaluation at the end of the two year program. The

municipality shall submit the evaluations to the superintendent, the

temporary president of the senate and the speaker of the assembly. Such

report shall include, but not be limited to, any demonstrated evidence

that sale of public bonds using electronic open auctions is comparable

to the cost of issuing public bonds through the current sealed bid

process, the fees associated with nationally recognized electronic

securities bidding services, whether the use of electronic open auctions

resulted in an increased number of bidders and whether the process was

favorable as compared to the method currently used by the municipality.

* NB Repealed January 1, 2028