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S1158aa....................................by LOCAL GOVERNMENT AND TAXATION
BONDS - NOTES - ELECTRONIC BIDDING - Amends and adds to existing law to
authorize the sale of bonds, notes and other obligations of public entities
at public or private sale; to authorize sale by electronic bidding; to
require a deposit in such amount as the government body deems necessary;
and to authorize the use of a surety bond as bid security.
02/12 Senate intro - 1st rdg - to printing
02/13 Rpt prt - to Loc Gov
03/02 Rpt out - to 14th Ord
03/08 Rpt out amen - to engros
03/09 Rpt engros - 1st rdg - to 2nd rdg as amen
03/12 2nd rdg - to 3rd rdg as amen
03/13 3rd rdg as amen - PASSED - 32-1-2
AYES -- Andreason, Boatright, Branch(Bartlett), Bunderson,
Burtenshaw, Cameron, Danielson, Darrington, Davis, Deide, Dunklin,
Frasure, Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough,
King-Barrutia, Lee, Lodge, Noh, Richardson, Risch, Sandy, Schroeder,
Sorensen, Stegner, Stennett, Thorne, Wheeler, Whitworth
NAYS -- Williams
Absent and excused -- Brandt, Sims
Floor Sponsor -- Thorne
Title apvd - to House
03/14 House intro - 1st rdg - to Rev/Tax
03/20 Rpt out - rec d/p - to 2nd rdg as amen
03/21 2nd rdg - to 3rd rdg as amen
03/26 3rd rdg as amen - PASSED - 65-0-5
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
Bruneel, Callister, Campbell, Chase, Clark, Collins, Crow, Cuddy,
Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Gagner, Gould,
Hadley, Hammond, Hansen, Harwood, Henbest(Farley), Higgins, Hornbeck,
Jaquet, Jones, Kellogg, Kendell, Kunz, Lake, Langford, Loertscher,
Mader, Marley, McKague, Meyer, Montgomery, Mortensen, Moss, Pearce,
Pomeroy, Raybould, Ridinger, Roberts, Robison, Sali, Schaefer,
Sellman, Shepherd, Smith, Smylie, Stevenson, Stone, Tilman, Trail,
Wood, Young, Mr. Speaker
NAYS -- None
Absent and excused -- Bradford, Field(20), Moyle, Pischner, Wheeler
Floor Sponsor -- Kellogg
Title apvd - to Senate
03/28 To enrol - rpt enrol - Pres signed
03/29 Sp signed - to Governor
03/31 Governor signed
Session Law Chapter 264
Effective: 03/31/01
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE SENATE
SENATE BILL NO. 1158
BY LOCAL GOVERNMENT AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO THE SALE OF BONDS, NOTES AND OTHER OBLIGATIONS OF PUBLIC ENTITIES;
3 AMENDING SECTION 42-4110, IDAHO CODE, TO AUTHORIZE THE SALE OF WATER OR
4 SEWER DISTRICT REVENUE BONDS AT PUBLIC OR PRIVATE SALE, TO AUTHORIZE SALE
5 BY ELECTRONIC BIDDING AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
6 57-214, IDAHO CODE, TO AUTHORIZE SALE OF MUNICIPAL BONDS AT PUBLIC OR PRI-
7 VATE SALE, TO AUTHORIZE THE PUBLIC SALE OF BONDS, NOTES OR OTHER OBLIGA-
8 TIONS BY ELECTRONIC BIDDING, AND TO MAKE A TECHNICAL CORRECTION; AMENDING
9 SECTION 57-215, IDAHO CODE, TO PROVIDE FOR NOTICE OF PUBLIC SALE OF BONDS
10 AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 57-216, IDAHO CODE, TO
11 SPECIFY THE CONTENTS OF A NOTICE OF PUBLIC SALE OF BONDS, TO PROVIDE FOR
12 ELECTRONIC BIDDING, TO REQUIRE A DEPOSIT IN SUCH AMOUNT AS THE GOVERNMENT
13 BODY DEEMS NECESSARY AND TO AUTHORIZE THE USE OF A SURETY BOND AS BID
14 SECURITY, TO PROVIDE FOR PRIVATE SALE; AMENDING CHAPTER 2, TITLE 57, IDAHO
15 CODE, BY THE ADDITION OF A NEW SECTION 57-232, IDAHO CODE, TO PROVIDE A
16 DEFINITION OF PRIVATE SALE OF BONDS, NOTES OR OTHER OBLIGATIONS; AMENDING
17 CHAPTER 2, TITLE 57, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 57-233,
18 IDAHO CODE, TO PROVIDE FOR THE SALE OF BONDS, NOTES OR OTHER OBLIGATIONS
19 BY ELECTRONIC BIDDING; AND DECLARING AN EMERGENCY.
20 Be It Enacted by the Legislature of the State of Idaho:
21 SECTION 1. That Section 42-4110, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 42-4110. BONDS -- FORM -- CONDITIONS. All rRevenue bonds issued under
24 authority of this act shall be sold, executed and delivered at public or pri-
25 vate sale in the same manner as provided by the municipal bond law. for the
26 sale of general obligation negotiable coupon bonds Revenue bonds may also be
27 sold by electronic bidding as provided in section 57-233, Idaho Code. The res-
28 olution authorizing the issuance of said bonds shall prescribe the form of
29 bonds. Said bonds shall bear interest at a rate or rates, payable annually, or
30 at such lesser intervals as may be prescribed by resolution; may be in one (1)
31 or more series, bear such date or dates, mature at such time or times, and be
32 redeemable before maturity at the option of the district; may be payable in
33 such medium of payment, at such place or places, may carry such registration
34 privileges, may be subject to such terms of redemption, may contain such
35 terms, covenants and conditions, and may be in such form, either coupon or
36 registered, as such resolution may provide. Said bonds shall be sold at not
37 less than par with accrued interest. Pending preparation of the bonds, interim
38 certificates, in such form and with such provisions as the commissioners may
39 determine, may be issued. Said bonds and interim certificates shall be fully
40 negotiable within the meaning of and for all the purposes of the negotiable
41 instruments law.
42 Notwithstanding the provisions of the municipal bond law, the governing
43 body in any proceedings authorizing bonds under this act may:
2
1 (a) pProvide for the initial issuance of one (1) or more bonds, in this
2 act called "bond," aggregating the amount of the entire issue;
3 (b) mMake such provision for instalment installment payments of the prin-
4 cipal amount of any such bond as it may consider desirable;
5 (c) pProvide for the making of any such bond payable to bearer or other-
6 wise, registrable as to principal or as to both principal and interest, and
7 where interest accruing thereon is not represented by interest coupons, for
8 the indorsing endorsing or payments of interest on such bonds; and
9 (d) fFurther make provision in any such proceedings for the manner and
10 circumstances in and under which any such bond may in the future, at the
11 request of the holder thereof, be converted into bonds of smaller denomina-
12 tions, which bonds of smaller denominations may in turn be either coupon bonds
13 or bonds registrable as to principal, or principal and interest, or both.
14 SECTION 2. That Section 57-214, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 57-214. SALE OF BONDS -- PROCEDURE -- MINIMUM PRICE. Funding and refund-
17 ing bonds shall be sold as provided in sections 57-214 to through 57-218,
18 inclusive Idaho Code, or they may be issued by way of exchange for unpaid
19 indebtedness or outstanding bonds to be funded or refunded thereby, as may be
20 determined by any such governing body.
21 All other bonds shall be sold at private sale as provided in section
22 57-232, Idaho Code, after notice given as herein provided, at public sale at a
23 regular or special meeting of the governing body of the issuer corporation,
24 and any funding or refunding bonds shall be sold in like manner, if so ordered
25 by any such governing body. No bonds shall be sold for less than par and
26 accrued interest to date of delivery. Any bonds, notes or other obligations
27 may be sold by electronic bidding as provided in section 57-233, Idaho Code.
28 SECTION 3. That Section 57-215, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 57-215. SALE OF BONDS -- NOTICE AND REQUEST FOR BIDS -- PUBLICATION. If
31 bonds are sold at public sale, nNotice of the intention to sell any such bonds
32 and requesting bids therefor shall be published in the name of the governing
33 body of any such issuer in the official newspaper thereof for at least three
34 (3) consecutive publications therein at weekly intervals. The date of sale
35 thereof, as therein designated, shall be after the lapse of at least twenty-
36 one (21) full days from and after the date of the first publication of such
37 notice, counting the date of the first publication (as the first publication)
38 as the first of such twenty-one (21) days; and if said corporation shall not
39 have designated an official newspaper the publication shall be had in any
40 newspaper published and of general circulation within the corporate limits of
41 said issuing corporation as specially designated or approved by any such gov-
42 erning body; and if there shall be no newspaper published within the corporate
43 limits of any such issuing corporation, such notice shall be published in a
44 newspaper of general circulation in the county of such issuing corporation as
45 designated or approved by any such governing body. The mayor or chairman or
46 presiding officer of any such corporation and the clerk or secretary thereof
47 shall cause such publication to be made and given as prescribed herein, sub-
48 ject to the direction, designation or approval of any such governing body as
49 herein set forth. It shall be proper to commence the publication of such
50 notice of sale prior to, or contemporaneous with, the publication of the
51 notice of the election at which the proposition of the issuance of any such
3
1 bonds shall be submitted: provided only, that such bonds shall not be sold
2 until their issuance shall have been duly authorized.
3 SECTION 4. That Section 57-216, Idaho Code, be, and the same is hereby
4 amended to read as follows:
5 57-216. SALE OF BONDS -- CONTENTS OF NOTICE -- BIDS -- DEPOSIT BY BIDDER
6 -- ACCEPTANCE OR REJECTION OF BIDS. Such A notice of public sale shall set
7 forth the intention of the issuing corporation to sell such bonds or a speci-
8 fied part thereof and shall request and require sealed or electronic bids
9 therefor and require bidders to submit bids specifying (a) the lowest rate of
10 interest and premium, if any above par, at which the bidder will purchase such
11 bonds, or (b) the lowest rate of interest at which the bidder will purchase
12 such bonds at par, and shall require each such bid (except any bid which may
13 be received from the state of Idaho or its department of finance) to be accom-
14 panied by a cashier's check, or a certified check, or surety bond made pay-
15 able to the issuing corporation in an such amount equaling five per cent (5%)
16 of the amount of any such bid as the governing body deems necessary or by a
17 cash deposit in like amount, which such cashier's check, or certified check,
18 surety bond or cash deposit shall be returned to any such bidder if his bid be
19 not accepted, and which cashier's check, or certified check, surety bond or
20 cash deposit of any successful bidder who shall fail, neglect, or refuse to
21 accept the bonds so sold to complete and to pay therefor in accordance with
22 the terms of such successful bid within thirty (30) days following the accep-
23 tance thereof, shall be forfeited to the issuing corporation. Such notice
24 shall state the maximum rate of interest which such bonds may legally bear and
25 that none of the bonds shall be sold for less than par and accrued interest to
26 date of delivery thereof, and shall specify the place and designate the day
27 and hour, respectively, as the place where, and the time prior to which, any
28 such sealed or electronic bids will be received for the purchase of such
29 bonds; and at said place and time so specified in such notice and fixed or
30 approved by the governing body as the place and time for the consideration of
31 any such bids the said governing body and the mayor, chairman, or other chief
32 executive officer or presiding officer of the governing body shall meet in
33 public special or regular meeting for the purpose of considering such bids,
34 awarding the bonds, or rejecting any and all bids therefor. At such meeting or
35 at an adjournment thereof the said bonds shall be sold to the bidder making
36 the best bid therefor, subject, as aforesaid, to the right of any such govern-
37 ing body to reject any and all bids and to readvertise any such bonds for sale
38 in the manner herein prescribed, or at private sale, until said bonds have
39 been sold.
40 SECTION 5. That Chapter 2, Title 57, Idaho Code, be, and the same is
41 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
42 ignated as Section 57-232, Idaho Code, and to read as follows:
43 57-232. SALE OF BONDS -- DEFINITION OF PRIVATE SALE. Whenever the term
44 "private sale" appears in reference to the sale of bonds, notes or other obli-
45 gations of any public entity of the state of Idaho, the term "private sale"
46 means the sale of bonds, notes or other obligations pursuant to a written con-
47 tract, and not to the award of sealed or electronic bids submitted at public
48 sale. "Written contract" means a written contract between the issuer of the
49 bonds, notes or other obligations, as seller, and the purchaser, which con-
50 tract shall specify the principal amounts, maturities, interest rates, redemp-
51 tion provisions, if any, and other relevant terms of the sale.
4
1 SECTION 6. That Chapter 2, Title 56, Idaho Code, be, and the same is
2 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
3 ignated as Section 56-233, Idaho Code, and to read as follows:
4 56-233. SALE OF BONDS -- ELECTRONIC BIDDING. Whenever a public entity is
5 authorized to sell bonds, notes or other obligations at public sale, the gov-
6 erning body may, in its discretion, provide for the sale of such bonds, notes
7 or other obligations pursuant to any system of electronic bidding which the
8 governing body, in the exercise of its sound discretion, deems fair to poten-
9 tial bidders which produces the lowest effective interest rate to the issuer.
10 SECTION 7. An emergency existing therefor, which emergency is hereby
11 declared to exist, this act shall be in full force and effect on and after its
12 passage and approval.
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
Moved by Thorne
Seconded by Ipsen
IN THE SENATE
SENATE AMENDMENTS TO S.B. NO. 1158
1 AMENDMENTS TO SECTION 2
2 On page 2 of the printed bill, in line 21, following "sold" insert: ",
3 after notice given as provided in section 57-215, Idaho Code,"; and in line
4 22, following "Code," insert: "or".
5 AMENDMENTS TO SECTION 3
6 On page 2, in line 30, following "PUBLICATION." insert: "(1)"; and on page
7 3, following line 2, insert:
8 "(2) If bonds are sold at private sale, notice of the intention to sell
9 such bonds at private sale shall be published once in the name of the issuer
10 in a newspaper of general circulation within the issuer's boundaries at least
11 three (3) days prior to the time scheduled by the issuer for approving the
12 private sale of such bonds. Failure to comply with this requirement shall not
13 invalidate the sale of the bonds, so long as the issuer has made a good faith
14 effort to comply.".
15 AMENDMENTS TO SECTION 6
16 On page 4, in line 1, delete "56" and insert: "57"; in line 3, delete "56"
17 and insert: "57"; and in line 4, delete "56" and insert: "57".
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE SENATE
SENATE BILL NO. 1158, As Amended
BY LOCAL GOVERNMENT AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO THE SALE OF BONDS, NOTES AND OTHER OBLIGATIONS OF PUBLIC ENTITIES;
3 AMENDING SECTION 42-4110, IDAHO CODE, TO AUTHORIZE THE SALE OF WATER OR
4 SEWER DISTRICT REVENUE BONDS AT PUBLIC OR PRIVATE SALE, TO AUTHORIZE SALE
5 BY ELECTRONIC BIDDING AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
6 57-214, IDAHO CODE, TO AUTHORIZE SALE OF MUNICIPAL BONDS AT PUBLIC OR PRI-
7 VATE SALE, TO AUTHORIZE THE PUBLIC SALE OF BONDS, NOTES OR OTHER OBLIGA-
8 TIONS BY ELECTRONIC BIDDING, AND TO MAKE A TECHNICAL CORRECTION; AMENDING
9 SECTION 57-215, IDAHO CODE, TO PROVIDE FOR NOTICE OF PUBLIC SALE OF BONDS
10 AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 57-216, IDAHO CODE, TO
11 SPECIFY THE CONTENTS OF A NOTICE OF PUBLIC SALE OF BONDS, TO PROVIDE FOR
12 ELECTRONIC BIDDING, TO REQUIRE A DEPOSIT IN SUCH AMOUNT AS THE GOVERNMENT
13 BODY DEEMS NECESSARY AND TO AUTHORIZE THE USE OF A SURETY BOND AS BID
14 SECURITY, TO PROVIDE FOR PRIVATE SALE; AMENDING CHAPTER 2, TITLE 57, IDAHO
15 CODE, BY THE ADDITION OF A NEW SECTION 57-232, IDAHO CODE, TO PROVIDE A
16 DEFINITION OF PRIVATE SALE OF BONDS, NOTES OR OTHER OBLIGATIONS; AMENDING
17 CHAPTER 2, TITLE 57, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 57-233,
18 IDAHO CODE, TO PROVIDE FOR THE SALE OF BONDS, NOTES OR OTHER OBLIGATIONS
19 BY ELECTRONIC BIDDING; AND DECLARING AN EMERGENCY.
20 Be It Enacted by the Legislature of the State of Idaho:
21 SECTION 1. That Section 42-4110, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 42-4110. BONDS -- FORM -- CONDITIONS. All rRevenue bonds issued under
24 authority of this act shall be sold, executed and delivered at public or pri-
25 vate sale in the same manner as provided by the municipal bond law. for the
26 sale of general obligation negotiable coupon bonds Revenue bonds may also be
27 sold by electronic bidding as provided in section 57-233, Idaho Code. The res-
28 olution authorizing the issuance of said bonds shall prescribe the form of
29 bonds. Said bonds shall bear interest at a rate or rates, payable annually, or
30 at such lesser intervals as may be prescribed by resolution; may be in one (1)
31 or more series, bear such date or dates, mature at such time or times, and be
32 redeemable before maturity at the option of the district; may be payable in
33 such medium of payment, at such place or places, may carry such registration
34 privileges, may be subject to such terms of redemption, may contain such
35 terms, covenants and conditions, and may be in such form, either coupon or
36 registered, as such resolution may provide. Said bonds shall be sold at not
37 less than par with accrued interest. Pending preparation of the bonds, interim
38 certificates, in such form and with such provisions as the commissioners may
39 determine, may be issued. Said bonds and interim certificates shall be fully
40 negotiable within the meaning of and for all the purposes of the negotiable
41 instruments law.
42 Notwithstanding the provisions of the municipal bond law, the governing
43 body in any proceedings authorizing bonds under this act may:
2
1 (a) pProvide for the initial issuance of one (1) or more bonds, in this
2 act called "bond," aggregating the amount of the entire issue;
3 (b) mMake such provision for instalment installment payments of the prin-
4 cipal amount of any such bond as it may consider desirable;
5 (c) pProvide for the making of any such bond payable to bearer or other-
6 wise, registrable as to principal or as to both principal and interest, and
7 where interest accruing thereon is not represented by interest coupons, for
8 the indorsing endorsing or payments of interest on such bonds; and
9 (d) fFurther make provision in any such proceedings for the manner and
10 circumstances in and under which any such bond may in the future, at the
11 request of the holder thereof, be converted into bonds of smaller denomina-
12 tions, which bonds of smaller denominations may in turn be either coupon bonds
13 or bonds registrable as to principal, or principal and interest, or both.
14 SECTION 2. That Section 57-214, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 57-214. SALE OF BONDS -- PROCEDURE -- MINIMUM PRICE. Funding and refund-
17 ing bonds shall be sold as provided in sections 57-214 to through 57-218,
18 inclusive Idaho Code, or they may be issued by way of exchange for unpaid
19 indebtedness or outstanding bonds to be funded or refunded thereby, as may be
20 determined by any such governing body.
21 All other bonds shall be sold, after notice given as provided in section
22 57-215, Idaho Code, at private sale as provided in section 57-232, Idaho Code,
23 or after notice given as herein provided, at public sale at a regular or spe-
24 cial meeting of the governing body of the issuer corporation, and any funding
25 or refunding bonds shall be sold in like manner, if so ordered by any such
26 governing body. No bonds shall be sold for less than par and accrued interest
27 to date of delivery. Any bonds, notes or other obligations may be sold by
28 electronic bidding as provided in section 57-233, Idaho Code.
29 SECTION 3. That Section 57-215, Idaho Code, be, and the same is hereby
30 amended to read as follows:
31 57-215. SALE OF BONDS -- NOTICE AND REQUEST FOR BIDS -- PUBLICATION. (1)
32 If bonds are sold at public sale, nNotice of the intention to sell any such
33 bonds and requesting bids therefor shall be published in the name of the gov-
34 erning body of any such issuer in the official newspaper thereof for at least
35 three (3) consecutive publications therein at weekly intervals. The date of
36 sale thereof, as therein designated, shall be after the lapse of at least
37 twenty-one (21) full days from and after the date of the first publication of
38 such notice, counting the date of the first publication (as the first publica-
39 tion) as the first of such twenty-one (21) days; and if said corporation shall
40 not have designated an official newspaper the publication shall be had in any
41 newspaper published and of general circulation within the corporate limits of
42 said issuing corporation as specially designated or approved by any such gov-
43 erning body; and if there shall be no newspaper published within the corporate
44 limits of any such issuing corporation, such notice shall be published in a
45 newspaper of general circulation in the county of such issuing corporation as
46 designated or approved by any such governing body. The mayor or chairman or
47 presiding officer of any such corporation and the clerk or secretary thereof
48 shall cause such publication to be made and given as prescribed herein, sub-
49 ject to the direction, designation or approval of any such governing body as
50 herein set forth. It shall be proper to commence the publication of such
51 notice of sale prior to, or contemporaneous with, the publication of the
3
1 notice of the election at which the proposition of the issuance of any such
2 bonds shall be submitted: provided only, that such bonds shall not be sold
3 until their issuance shall have been duly authorized.
4 (2) If bonds are sold at private sale, notice of the intention to sell
5 such bonds at private sale shall be published once in the name of the issuer
6 in a newspaper of general circulation within the issuer's boundaries at least
7 three (3) days prior to the time scheduled by the issuer for approving the
8 private sale of such bonds. Failure to comply with this requirement shall not
9 invalidate the sale of the bonds, so long as the issuer has made a good faith
10 effort to comply.
11 SECTION 4. That Section 57-216, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 57-216. SALE OF BONDS -- CONTENTS OF NOTICE -- BIDS -- DEPOSIT BY BIDDER
14 -- ACCEPTANCE OR REJECTION OF BIDS. Such A notice of public sale shall set
15 forth the intention of the issuing corporation to sell such bonds or a speci-
16 fied part thereof and shall request and require sealed or electronic bids
17 therefor and require bidders to submit bids specifying (a) the lowest rate of
18 interest and premium, if any above par, at which the bidder will purchase such
19 bonds, or (b) the lowest rate of interest at which the bidder will purchase
20 such bonds at par, and shall require each such bid (except any bid which may
21 be received from the state of Idaho or its department of finance) to be accom-
22 panied by a cashier's check, or a certified check, or surety bond made pay-
23 able to the issuing corporation in an such amount equaling five per cent (5%)
24 of the amount of any such bid as the governing body deems necessary or by a
25 cash deposit in like amount, which such cashier's check, or certified check,
26 surety bond or cash deposit shall be returned to any such bidder if his bid be
27 not accepted, and which cashier's check, or certified check, surety bond or
28 cash deposit of any successful bidder who shall fail, neglect, or refuse to
29 accept the bonds so sold to complete and to pay therefor in accordance with
30 the terms of such successful bid within thirty (30) days following the accep-
31 tance thereof, shall be forfeited to the issuing corporation. Such notice
32 shall state the maximum rate of interest which such bonds may legally bear and
33 that none of the bonds shall be sold for less than par and accrued interest to
34 date of delivery thereof, and shall specify the place and designate the day
35 and hour, respectively, as the place where, and the time prior to which, any
36 such sealed or electronic bids will be received for the purchase of such
37 bonds; and at said place and time so specified in such notice and fixed or
38 approved by the governing body as the place and time for the consideration of
39 any such bids the said governing body and the mayor, chairman, or other chief
40 executive officer or presiding officer of the governing body shall meet in
41 public special or regular meeting for the purpose of considering such bids,
42 awarding the bonds, or rejecting any and all bids therefor. At such meeting or
43 at an adjournment thereof the said bonds shall be sold to the bidder making
44 the best bid therefor, subject, as aforesaid, to the right of any such govern-
45 ing body to reject any and all bids and to readvertise any such bonds for sale
46 in the manner herein prescribed, or at private sale, until said bonds have
47 been sold.
48 SECTION 5. That Chapter 2, Title 57, Idaho Code, be, and the same is
49 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
50 ignated as Section 57-232, Idaho Code, and to read as follows:
51 57-232. SALE OF BONDS -- DEFINITION OF PRIVATE SALE. Whenever the term
4
1 "private sale" appears in reference to the sale of bonds, notes or other obli-
2 gations of any public entity of the state of Idaho, the term "private sale"
3 means the sale of bonds, notes or other obligations pursuant to a written con-
4 tract, and not to the award of sealed or electronic bids submitted at public
5 sale. "Written contract" means a written contract between the issuer of the
6 bonds, notes or other obligations, as seller, and the purchaser, which con-
7 tract shall specify the principal amounts, maturities, interest rates, redemp-
8 tion provisions, if any, and other relevant terms of the sale.
9 SECTION 6. That Chapter 2, Title 57, Idaho Code, be, and the same is
10 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
11 ignated as Section 57-233, Idaho Code, and to read as follows:
12 57-233. SALE OF BONDS -- ELECTRONIC BIDDING. Whenever a public entity is
13 authorized to sell bonds, notes or other obligations at public sale, the gov-
14 erning body may, in its discretion, provide for the sale of such bonds, notes
15 or other obligations pursuant to any system of electronic bidding which the
16 governing body, in the exercise of its sound discretion, deems fair to poten-
17 tial bidders which produces the lowest effective interest rate to the issuer.
18 SECTION 7. An emergency existing therefor, which emergency is hereby
19 declared to exist, this act shall be in full force and effect on and after its
20 passage and approval.
STATEMENT OF PURPOSE
RS 11014
Idaho law currently requires the sale by competitive bid of
general obligation bond issues for several units of local
government such as schools, cities, counties, highway districts
and others. Cities and some other local government entities may
sell revenue bonds at negotiated sale, and State agencies such as
the State Treasurer, the Student Loan Fund, Housing Agency, Water
Resources, etc., are permitted to negotiate their bond issues.
The purpose of the proposed legislation is to add a marketing
option to units of local government. The entities affected are
currently compelled to offer their bonds at public auction. In
today s marketplace of volatile interest rates, picking a date to
hold an auction of bonds downstream 30 to 45 days can arbitrarily
subject the entity to market swings of 50 basis points or more
(Note: 100 basis points equals one percent). If the sale date
happens to follow an announcement by the Federal Reserve Board
Chairman or prominent investment banker personalities, or if
money supply figures are released, treasury borrowing, or any
number of factors that may be interpreted negatively by the
market, the result can be a penalty of 50 basis points or more
for the life of the issue, even though the low bid was awarded
the sale that day. The only recourse currently available to the
unit of local government is to reject all bids and in some cases
negotiate, or re-advertise for bids with the same delay and the
same risk in arbitrarily picking another date.
In some cases the units of local government affected by this
proposed legislation may, for a variety of reasons, feel more
comfortable with a structured competitive sale of their bonds.
The objective is not to restrict that option, but to provide an
alternative that is already available in several states.
In addition, the legislation authorizes competitive sale by electronic
bidding as another option for local governments.
FISCAL IMPACT
None to the General Fund, but may result in savings to local
taxpayers.
Contact
Name: Barbara Strickfaden
Idaho Bankers Association
Phone: 208 342 8282
STATEMENT OF PURPOSE/FISCAL NOTE S 1158