Bill Text: NY S05654 | 2023-2024 | General Assembly | Amended

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Bill Title: Relates to the delivery of the good faith deposit following award of the bonds to the successful bidder; provides that a municipality, school district or district corporation may require that such deposit be made as a condition precedent to the consideration of a bid for the bonds.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2024-04-15 - REPORTED AND COMMITTED TO FINANCE [S05654 Detail]

Download: New_York-2023-S05654-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         5654--A

                               2023-2024 Regular Sessions

                    IN SENATE

                                     March 10, 2023
                                       ___________

        Introduced  by Sen. MARTINEZ -- 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  delivery  of
          the  good faith deposit following award of the bonds to the successful
          bidder

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1. Subdivision 3 of paragraph c of section 58.00 of the local
     2  finance law, as amended by chapter 416 of the laws of 2012,  is  amended
     3  to read as follows:
     4    3.  A  requirement that [as a condition precedent to the consideration
     5  of his or her bid, each] the successful bidder shall deposit  with  such
     6  official  as the agency in charge of the sale may designate, a certified
     7  or cashier's check drawn upon an incorporated bank or trust  company  to
     8  the  order  of the municipality, school district or district corporation
     9  or such official, for the amount specified in  the  notice,  but  in  no
    10  event  less  than one-half of one      per centum of the amount of bonds
    11  to be bid for. Notwithstanding the provisions  of  this  subdivision,  a
    12  municipality,  school  district or district corporation may require that
    13  such deposit be made as a condition precedent to the consideration of  a
    14  bid  for  the  bonds.  Such  notice  may also provide that, in lieu of a
    15  certified or cashier's check, [bidders  may  furnish  as  security]  the
    16  deposit  may also be in the form of cash in such amount remitted by wire
    17  transfer to an account specified in the notice  or  an  eligible  surety
    18  bond  or  an  eligible letter of credit, approved by such official as to
    19  form, sufficiency,  and  manner  of  execution.  For  purposes  of  this
    20  section,  "eligible surety bond" shall mean a bond executed by an insur-
    21  ance company authorized to do business in this state, the  claims-paying
    22  ability  of which is rated in one of the three highest rating categories

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05688-04-3
        S. 5654--A                          2

     1  by at least one nationally recognized statistical  rating  organization;
     2  and  "eligible  letter  of  credit"  shall mean an irrevocable letter of
     3  credit issued in favor of the municipality, school district or  district
     4  corporation,  for  a  term  not to exceed ninety days by a bank, as that
     5  term is defined in section two of  the  banking  law,  whose  commercial
     6  paper  and  other unsecured short-term debt obligations (or, in the case
     7  of a bank which is the principal subsidiary of a holding company,  whose
     8  holding  company's  commercial paper and other unsecured short-term debt
     9  obligations) are rated in one of the  three  highest  rating  categories
    10  (based  on  the  credit of such bank or holding company) by at least one
    11  nationally recognized statistical rating organization or by a bank  that
    12  is  in  compliance  with  applicable  federal minimum risk-based capital
    13  requirements.
    14    § 2. This act shall take effect immediately.