What's happening
This bill creates a two-year pilot program allowing Onondaga County to conduct public bond sales via electronic open auctions.
Why it matters
Promotes transparency and competition. By allowing bidders to see their ranking and improve their bids in real time during electronic open auctions, the program could drive down interest rates and potentially save taxpayer money.
Modernizes municipal finance. The pilot encourages Onondaga County to use secure, nationally recognized electronic bidding platforms, possibly streamlining the bond sale process and increasing efficiency compared to traditional methods.
Generates actionable data for statewide policy. Required annual and final reports on costs, bidding activity, and savings will provide concrete evidence on whether electronic open auction bond sales are beneficial, informing potential expansion to other municipalities.
Maintains oversight and safeguards. The chief fiscal officer must ensure timely, error-free auctions, and the state comptroller will aggregate and relay findings to the legislature, ensuring accountability and transparency throughout the pilot.
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Who cares
Headline styles
Test Online Bond Auctions
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to local government
- Print number 5278a
- Amend and recommit to local government
- Referred to local government
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
In Assembly Committee · Local Governments · Sponsor Pamela J. Hunter
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5278--A
2019-2020 Regular Sessions
IN SENATE
April 23, 2019
Introduced by Sens. MAY, ANTONACCI -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
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 certain municipalities; 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 58.20 to read as follows:
§ 58.20 Electronic open auction public bond sale pilot program; municipalities. a. As used in this section:
1. "Municipality" means the county of Onondaga.
2. "Nationally recognized electronic securities bidding service" means a bidding service that is recognized nationally by municipal users of electronic securities bidding services as providing an accurate, secure and reliable on-line bidding system.
3. "Open auction" means a bond sale procedure that allows a bidder to receive information with respect to the status or rank of its bids prior to the conclusion of the bid submission period and improve its bid by submitting a bid at a lower interest rate, as a result of the received information 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. There is hereby established an electronic open auction public bond sale pilot program solely for municipalities, authorizing municipalities
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11143-05-9
S. 5278--A 2
to conduct open auction public bond sales through any nationally recognized electronic securities bidding service.
c. The chief fiscal officer of a municipality may accept electronic bids submitted in the form of open auctions conducted through a nationally recognized electronic securities bidding service which shall be deemed to be the designated receiving device. Notice of any bond sale shall provide for the manner in which the bid submission period may be extended and the basis for determination of the winning bidder.
d. Notwithstanding the provisions of section three hundred five of the state technology law or any other law, the notice of sale may contain a provision that bids will only be accepted electronically in the manner provided in such notice of sale.
e. The municipality's chief fiscal officer shall administer the program and may utilize the program in accordance with the powers heretofore or hereafter delegated to the chief fiscal officer by the legislative body of the municipality. Except as modified by this section, each municipal program shall comply with this chapter and all other applicable laws 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; and the sale was completed without errors.
g. 1. The municipality shall, on or before February first of each year, conduct annual evaluations of its pilot program or programs with a summary evaluation at the end of the two year open auction pilot program. The municipality shall submit the evaluations to the state comptroller.
2. Such report shall include, but not be limited to: (i) the cost of using an open auction platform; (ii) a bidding activity report detailing the winning bidder, the number of bidders, the number of bids, the number of bid improvements, and the number of auction extensions (if any); and (iii) any savings achieved through the open auction. Any savings shall be calculated by determining the cost differential between the initial bid submitted and the winning bid in an open auction. If the initial bid submitted is the ultimate winning bid, the open auction savings would be zero dollars.
3. Annually, the state comptroller shall compile all the information received from municipalities pursuant to this paragraph, and, on or before April first of each year, submit such compiled information to the legislature, the temporary president of the senate, the speaker of the assembly, the minority leader of the senate and the minority leader of the assembly.
§ 2. This act shall take effect immediately, and shall expire and be deemed repealed 2 years after such date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
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 certain municipalities; and providing for the repeal of such provisions upon expiration thereof
Purpose
The purpose of this bill is to establish a four year pilot program for Onondaga County to sell municipal bonds via an open auction format instead of by a closed bid format. Such open auction would be conducted via an electronic means instead of being done in person. This pilot program would be used to assess the financial and administrative advantages of selling bonds via an open auction format by a nationally recognized electronic securities bidding platform.
Summary of provisions
Section 1: Adds a new Local Finance Law section, 58.20 to establish a local electronic open auction public bond sale pilot program for Ononda- ga County. The use of an open auction is entirely optional, and can be utilized or not for each bond sale. This bill is very similar to Chapter 304 of the Laws of 2009, (Which established the Westchester County open and closed auction pilot program). The bill enacts a new Local Finance Law section 58.10 to establish a pilot program in Onondaga County for open auctions.
Read the full memo (629 words)
Its provisions are as follows:
-Paragraph (a) adds a definitions section.
-Paragraph (b) establishes the open auction electronic public bond sale pilot program for Onondaga County.
-Paragraph (c) provides that open auction electronic bidding will be conducted through certain nationally recognized electronic securities bidding services.
-Paragraph (d) states that, with certain exceptions, where the notice of sale has specified that bids will only be accepted electronically, the municipality shall not be obligated to receive paper bids.
-Paragraph (e) and (f) provides that the program shall be administered by the municipality's chief fiscal officer.
-Paragraph (g) provides that the municipality's chief fiscal officer shall continue to review the program to ensure its functionality and profitability, and provides certain procedures and requirements for the program's evaluation.
Section 2: This provision sunsets this pilot program two years after it has been enacted. *The amended bill removes the definition of "closed auction" from the text.
Justification
Currently, New York authorizes electronic bidding through Local finance Law section 58, but only permits closed bidding. There are now forty states, including California, New Jersey, Ohio and Texas, that have enacted legislation that allow municipalities to conduct public bond sales through nationally recognized bidding firms, many of them by the electronic bidding open auction format.
Open auctions are a cost saving tool that has allowed municipalities to find lower interest rates and save money. With an average savings of 9 basis points per transaction, states such as California and Pennsylvania that have the most experience with open auctions see savings as large as 21 basis points. When used with large bond offerings in other states, open auctions have translated into millions of dollars in savings for municipalities in other states that use open auctions. For example, the Hanover Park Regional High School District in New Jersey saved approxi- mately $63,000 on a $9.75 million bond.
Our local governments face the pressures of containing costs, and should be encouraged to find cost savings when available. With the important focus throughout the state on insuring financial efficiencies, munici- palities must be given every possible tool to save money. This program is entirely optional, for each bond sale, has no financial impact on the state and requires nothing of the a municipality, it simply grants the use of another tool that has been developed as technology evolves.
Legislative history
New bill. Same-as A7288.
Fiscal implications
None to the State.
Effective date
Immediately and shall sunset two years after it goes into effect.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.