§ 58.00 — Notice of sale of bonds

New York § 58.00

• Jurisdiction: New York
• Law LFN: Local Finance
• Title 4: Local Obligations: Terms, Form and Contents Thereof; Sale and Issuance Thereof
• Art. 2: Local Indebtedness

Text

§ 58.00 Notice of sale of bonds. * a. There shall be published, at\nleast once, not less than five nor more than thirty days before the date\nfixed for the public sale of bonds, a notice of such public sale or a\nsummary thereof in accordance with one of the following methods: (1) the\nnotice of sale shall be published in any financial newspaper published\nand circulated in the city of New York which the state comptroller, in\nthe rule or order referred to in paragraph d of section 57.00 of this\nchapter, shall designate for such publication; (2) the notice of sale\nshall be circularized in such manner as the state comptroller shall\nprescribe in such rule or order and shall be published in any newspaper\nor newspapers which the finance board of the municipality, school\ndistrict or district corporation may designate for such purpose; or (3)\n(i) a summary of the notice of sale shall be published in both the\nfinancial newspaper published and circulated in the city of New York\nwhich the state comptroller has designated in the rule or order referred\nto in paragraph d of section 57.00 of this chapter, and (ii) any\nnewspaper or newspapers which the finance board of the municipality,\nschool district or district corporation may designate for such purpose.\nA summary of the notice of sale shall at a minimum contain the name of\nthe issuer, the amount, date, and maturities of the bonds, the frequency\nof interest payments, the place where bids will be received, the\ndesignation of the receiving device if the finance board of the issuing\nmunicipality, school district or district corporation has authorized or\nrequired the receipt of bids in an electronic format, the time and date\nfor the opening of the bids, including circumstances under which such\ntime and date may be changed in accordance with law, the method of award\nand a procedure for promptly obtaining the complete notice of sale and\nany preliminary official statement prepared in connection with the sale,\nand such other information as the state comptroller may prescribe by\nrule or order.\n * NB Effective until June 1, 2028\n * a. There shall be published, at least once, not less than five nor\nmore than thirty days before the date fixed for the public sale of\nbonds, a notice of such public sale or a summary thereof in accordance\nwith one of the following methods: (1) the notice of sale shall be\npublished in any financial newspaper published and circulated in the\ncity of New York which the state comptroller, in the rule or order\nreferred to in paragraph d of section 57.00 of this chapter, shall\ndesignate for such publication; (2) the notice of sale shall be\ncircularized in such manner as the state comptroller shall prescribe in\nsuch rule or order and shall be published in any newspaper or newspapers\nwhich the finance board of the municipality, school district or district\ncorporation may designate for such purpose; or (3) (i) a summary of the\nnotice of sale shall be published in both the financial newspaper\npublished and circulated in the city of New York which the state\ncomptroller has designated in the rule or order referred to in paragraph\nd of section 57.00 of this chapter, and (ii) any newspaper or newspapers\nwhich the finance board of the municipality, school district or district\nor district corporation may designate for such purpose. A summary of the\nnotice of sale shall at a minimum contain the name of the issuer, the\namount, date, and maturities of the bonds, the frequency of interest\npayments, the place where bids will be received, the time and date for\nthe opening of the bids, including circumstances under which such time\nand date may be changed in accordance with law, the method of award and\na procedure for promptly obtaining the complete notice of sale and any\npreliminary official statement prepared in connection with the sale, and\nsuch other information as the state comptroller may prescribe by rule or\norder.\n * NB Effective June 1, 2028\n b. Such notice shall call for sealed bids for the purchase of such\nbonds, and shall state:\n * 1. The place where bids will be received and considered, and the\ndesignation of the receiving device if the finance board of the issuing\nmunicipality, school district or district corporation has authorized or\nrequired the receipt of bids in an electronic format.\n * NB Effective until June 1, 2028\n * 1. The place where bids will be received and considered.\n * NB Effective June 1, 2028\n 2. (a) The time and date for the opening of bids, which shall be only\non weekdays, Saturdays and holidays excluded, between the hours of ten\no'clock ante meridian and four o'clock post meridian, eastern standard\ntime.\n (b) In lieu of the statement of the time and date for the opening of\nbids required by subparagraph (a) of this subdivision, a statement (i)\nthat the time and date for the opening of bids will be provided on not\nless than twenty-four hours prior notice by means of a supplemental\nnotice of sale and indicating the manner in which such supplemental\nnotice will be provided, or (ii) setting a time and date for the opening\nof bids, stating that notice of a change in the time or date for the\nopening of bids may be provided not less than one hour prior to the time\noriginally scheduled for the opening of bids by means of a supplemental\nnotice of sale and indicating the manner in which such supplemental\nnotice will be provided. Where notice is given that the time or date of\na sale will be changed without specifying the new time or date, notice\nof the new time or date of sale must be provided by means of a second\nsupplemental notice of sale at least one hour prior to the new time for\nthe opening of bids.\n (c) A supplemental notice of sale shall refer to and be deemed a part\nof the notice of sale required by this section and shall not establish\nor change the terms of the sale other than the time or date for the\nopening of bids, the amount of principal scheduled to be repaid in each\nyear, the right of redemption prior to maturity, and the face value at\nmaturity of the issue or any installment thereof. The time set for the\nopening of bids in the supplemental notice of sale shall not be less\nthan five nor more than thirty days after publication of the notice of\nsale required pursuant to paragraph a of this section.\n (d) The supplemental notice of sale shall be provided by transmittal\nover a definitive trade wire service of the municipal bond industry\nwhich, in general, makes available information regarding activity and\nsales of municipal bonds and is generally available to participants in\nthe municipal bond industry, or by publication in the financial\nnewspaper published and circulated in the city of New York which the\nstate comptroller, in the rule or order referred to in paragraph d of\nsection 57.00 of this article, shall designate for such publication. In\naddition, when the time and date for the opening of bids is delayed by\nmore than twenty-four hours, public notice of the time and date set for\nthe opening of bids in the supplemental notice of sale shall be given to\nthe news media and shall be posted in one or more designated public\nlocations within the issuing municipality, school district or district\ncorporation at least twenty-four hours prior to the time and date set\nfor the opening of bids; provided however, that such public notice shall\nnot be construed to require publication as a legal notice.\n 3. The maximum rate of interest, if any, fixed by or pursuant to\nparagraph b of section 57.00 of this chapter.\n c. Such notice shall also include:\n 1. A statement that the rate or rates of interest to be bid shall be a\nmultiple of one-hundredth of one per centum per annum or a multiple of\none-eighth of one per centum per annum, as the agency in charge of the\nsale may determine and may require or permit in such notice.\n 2. A statement of the conditions of sale and the methods of bidding\nwhich shall include the following:\n a. A statement that one or more than one rate of interest may be bid;\nprovided, however, that only one rate of interest may be bid for bonds\nof the same maturity. Where more than one rate of interest may be bid,\nsuch notice shall specify the maximum number of rates which may be bid.\nWhere the net interest cost method of calculating interest cost is used,\nor where the notice so provides, the interest rate for each maturity\nshall not be less than the interest rate for any prior maturity. Such\nnotice shall also state that such rate or any of such rates may not be\nhigher than the maximum rate prescribed in such notice, if a maximum\nrate has been prescribed. Notwithstanding the above, in inviting\nproposals for the sale of bonds in an amount of twenty million dollars\nor more, a municipality may advertise in such notice to sell, in series,\nat a single bid price per bond. b. Where two or more issues are offered\nin the same notice of sale, a statement specifying whether each of the\nissues so offered shall be sold separately as a single bond issue,\nwhether some of the issues shall be combined and sold separately as one\nor more single bond issues, or whether the aggregate amount of bonds of\nall of the issues shall be combined and sold as a single bond issue. c.\nWhere the finance board of a municipality, school district or district\ncorporation has determined to provide for substantially level or\ndeclining annual debt service pursuant to paragraph d of section 21.00\nof this article, a statement specifying the dates of maturity for such\nbonds and the dates for payment of interest on such bonds, and setting\nforth the annual principal installments expected to provide for,\ntogether with the interest thereon, substantially level or declining\nannual debt service on such bonds. Such notice shall state that the\nmunicipality, school district or district corporation may, after\nselecting the low bidder, adjust such installments to the extent\nnecessary to meet the requirements of substantially level or declining\ndebt service.\n 3. A requirement that as a condition precedent to the consideration of\nhis or her bid, each bidder shall deposit with such official as the\nagency in charge of the sale may designate, a certified or cashier's\ncheck drawn upon an incorporated bank or trust company to the order of\nthe municipality, school district or district corporation or such\nofficial, for the amount specified in the notice, but in no event less\nthan one-half of one per centum of the amount of bonds to be bid\nfor. Such notice may also provide that, in lieu of a certified or\ncashier's check, bidders may furnish as security cash in such amount\nremitted by wire transfer to an account specified in the notice or an\neligible surety bond or an eligible letter of credit, approved by such\nofficial as to form, sufficiency, and manner of execution. For purposes\nof this section, "eligible surety bond" shall mean a bond executed by an\ninsurance company authorized to do business in this state, the\nclaims-paying ability of which is rated in one of the three highest\nrating categories by at least one nationally recognized statistical\nrating organization; and "eligible letter of credit" shall mean an\nirrevocable letter of credit issued in favor of the municipality, school\ndistrict or district corporation, for a term not to exceed ninety days\nby a bank, as that term is defined in section two of the banking law,\nwhose commercial paper and other unsecured short-term debt obligations\n(or, in the case of a bank which is the principal subsidiary of a\nholding company, whose holding company's commercial paper and other\nunsecured short-term debt obligations) are rated in one of the three\nhighest rating categories (based on the credit of such bank or holding\ncompany) by at least one nationally recognized statistical rating\norganization or by a bank that is in compliance with applicable federal\nminimum risk-based capital requirements.\n 4. A statement that there is reserved to the municipality, school\ndistrict or district corporation the right to reject all bids, and that\nany bid not complying with the terms of the notice will be rejected.\n 5. A statement that the agency prescribing the terms, form and\ncontents of such bonds has reserved to itself the power to call in and\nredeem a portion of such bonds prior to their date of maturity pursuant\nto section 53.00 of this chapter, if such agency has reserved to itself\nsuch power. Such statement shall identify the portion of the bonds which\nmay be so redeemed and shall describe the terms and conditions under\nwhich such bonds may be redeemed.\n 6. A statement indicating which of the methods set forth in paragraph\na of section 59.00 of this chapter will be used in awarding such bonds.\n 7. Such further data and information as shall be prescribed by the\nstate comptroller in the rule or order referred to in paragraph d of\nsection 57.00 of this chapter.\n d. It may be a condition of the sale of bonds that every bidder may be\nrequired to accept a portion of the whole amount of the bonds for which\nhe or she has bid, at the same rate for such portion as may be specified\nin his or her bid for the full amount. If such condition is imposed, the\nnotice of sale shall so state and such notice also shall state that, in\naddition, any bidder may offer to purchase all or none of such bonds on\ndifferent terms.\n e. The notice of sale may provide that the bidder to whom the bonds\nare to be awarded, at his or her option, may refuse to accept the bonds\nif prior to the delivery of the bonds any income tax law of the United\nStates of America shall provide that the interest on such bonds is\ntaxable, or shall be taxable at a future date, for federal income tax\npurposes.\n * f. For purposes of this section and section 59.00 of this chapter,\n"sealed bids" shall include bids submitted in an electronic format,\nprovided that the finance board of the issuing municipality, school\ndistrict or district corporation, by resolution, has authorized the\nreceipt of bids in such format. Submission in electronic format may be\nrequired as the sole method for the submission of bids. Bids submitted\nin an electronic format shall be transmitted by bidders to the receiving\ndevice designated by the issuing municipality, school district or\ndistrict corporation. Any method used to receive electronic bids shall\ncomply with article three of the state technology law and any rules and\nregulations promulgated and guidelines developed thereunder and, at a\nminimum, must: (a) document the time and date of receipt of each bid\nreceived electronically; (b) authenticate the identity of the sender;\n(c) ensure the security of the information transmitted; and (d) ensure\nthe confidentiality of the bid until the time and date established for\nthe opening of bids. The timely submission of an electronic bid in\ncompliance with instructions provided for such submission in the notice\nof sale and any supplemental notice of sale shall be the responsibility\nsolely of each bidder or prospective bidder. No issuing municipality,\nschool district or district corporation shall incur any liability from\ndelays of or interruptions in the receiving device designated for the\nsubmission and receipt of electronic bids.\n * NB Repealed June 1, 2028\n