Bill Text: NY A01461 | 2023-2024 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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) 2024-01-03 - referred to local governments [A01461 Detail]

Download: New_York-2023-A01461-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          1461

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                    January 17, 2023
                                       ___________

        Introduced by M. of A. THIELE -- read once and referred to the Committee
          on Local Governments

        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
    23  by  at  least one nationally recognized statistical rating organization;
    24  and "eligible letter of credit" shall  mean  an  irrevocable  letter  of

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05688-01-3
        A. 1461                             2

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