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.
STATE OF NEW YORK
________________________________________________________________________
3483
2025-2026 Regular Sessions
IN ASSEMBLY
January 28, 2025
___________
Introduced by M. of A. JONES -- 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.
LBD00869-01-5
A. 3483 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.
