The selection of discount rate or rates was largely a matter of negotiation until the amendment of New York 50A.

With that amendment, the Legislature set

• The source for the rates (U.S. 10-Year Treasury rates),
• How they should be used - The selected ten year rate for elements with future payment periods of 20 years or less, and the weighted average of the 10-Year rate for the first 20 years and 2 percentages points above the 10-year rate for each year beyond.

1. 10-year Treasury X 20 years or .04 X 20                             .80
2. 10 year Treas. +2% X years beyond 20 or .06 X 10             .60
                                                                                        ____
   
                                                                                       1.40
   

3. Divided by the total Years 1.40/30 or                                 .04667

To some extent the rate to be used - The rate in effect at the verdict. However, what is the rate in effect?

• The last auction rate
• The last auction yield
• The last monthly yield
• The daily yield
• Some average of rates or yields

The systems provide regular quarterly auction rates and yields from the enactment of Amended 50A. They also incorporate monthly yields from the same period, the ability to select a new 10-Year rate/yield or a single rate applicable to all elements.

The purpose in selecting 10-Year Treasuries was to provide some rate stability and predictability. Recently, the 10-Year Treasury market has been highly unstable. As a result, the reports section contains a facility for calculating

Average regular quarterly Auction rates and yields

• From enactment of Amended New York 50A
• For the past two years
• For the past year

Average weighted regular quarterly Auction rates and yields

• From enactment of Amended New York 50A
• For the past two years
• For the past year

Weighting is applied to increase the impact of the more recent auctions by adding a factor to each auction after the first in the sample. The offered weighting options are from .25 to 1.00. If .5 were used, the weighting for the one-year would be 1.00 for the first auction rate, 1.50 for the second, 2.00 for the third and 2.5 for the last.

• Updated average regular quarterly Auction yields. Whenever the period since the last regular quarterly auction exceeds one month, an estimate of the next auction is calculated using
• Any interim auction
• Weekly yields for each week after the interim auction

That is then combined to regular auctions, and weighted, as appropriate.

Given a selected rate, the system automatically calculates the appropriate rate applicable to an element or a category. The system will produce a valuation summary and provide a side-by-side comparison of the net discounted Award.

The original worksheet offers the opportunity to enter a single rate for all elements, to select a different rate for each of the three categories under 'Array' or to apply individual rates for each element. Indexed rates can be applied in the 'Reports' section.