What's happening
This bill establishes a two-year pilot program allowing large New York municipalities to sell bonds through electronic open auction platforms.
Why it matters
Potential for Increased Competition and Better Pricing. By allowing large municipalities to use electronic open auction platforms for bond sales, the program could attract more bidders (including nontraditional or out-of-state participants), potentially leading to lower borrowing costs and better deals for taxpayers.
Transparency and Real-Time Information. The open auction format lets bidders see their relative ranking during the auction, which may increase transparency and encourage more aggressive bidding—contrasting with traditional sealed bids where bidders have less information.
Accountability and Oversight. The bill requires annual and final evaluations submitted to state leaders, focusing on key metrics like cost-effectiveness, bidder participation, and error rates, which could inform future decisions on expanding or ending electronic bond sales.
Focus on Security and Fraud Prevention. The legislation mandates state comptroller approval of electronic platforms, requires municipalities to publicize anti-fraud policies, and sets standards for secure, competitive bidding—helping to ensure the integrity of potentially large financial transactions.
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Who cares
Eligible counties, cities and towns
The bill would let qualifying municipalities sell bonds through electronic open auctions, with chief fiscal officers responsible for administration, anti-fraud policies and evaluations.
Electronic securities bidding services
Services seeking to run these auctions would need state comptroller approval based on their technology, security practices, bidding requirements and experience.
Municipal bond bidders
Bidders could receive information on their bids’ rankings before bidding closes, and municipalities could require electronic-only bids if specified in the sale notice.
State comptroller
The comptroller would review bidding-service applications, publish approved services online and receive municipal evaluations of auction costs, fees and bidder participation.
Headline styles
Test Online Bond Auctions
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Substituted by S5886A
- Ordered to third reading rules cal.568
- Rules report cal.568
- Reported
- Reported referred to rules
- Reported referred to ways and means
- Print number 8336a
- Amend and recommit to local governments
- Referred to local governments
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Test Online Bond Auctions
Signed by Governor · Sponsor Jim Gaughran
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8336--A
2019-2020 Regular Sessions
IN ASSEMBLY
June 14, 2019
Introduced by M. of A. THIELE, HUNTER -- read once and referred to the Committee on Local Governments -- 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 Assembly, do enact as follows:
Section 1. The local finance law is amended by adding a new section 58.10 to read as follows:
§ 58.10 Electronic open auction public bond sale pilot program. a. As used in this section:
1. "Municipality" means a county with a population of four hundred thousand or more, 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 three years.
2. "Nationally recognized electronic securities bidding service" means a bidding service that is approved by the state comptroller 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.
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 state comptroller. Nationally recognized electronic securities bidding services desiring to operate an electronic
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13197-03-9
A. 8336--A 2
open auction shall apply to the state comptroller for authorization to do so by filing an application with the state comptroller. The state comptroller shall make available an application form that provides the state comptroller 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 state comptroller may deem relevant.
2. If the state comptroller 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 state comptroller shall post information regarding the nationally recognized electronic securities bidding services that have been approved for use by municipalities on the state comptroller 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 state comptroller, 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.
A. 8336--A 3
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall expire two years after such effective date, when upon such date the provisions of this act shall be deemed repealed.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
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