Requires bids for the purchase of municipal bonds to include a certified or cashiers check, or guaranty or surety bond in an amount equal to 1% of the bonds for which the bid was submitted.
STATE OF NEW YORK
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6574
2009-2010 Regular Sessions
IN ASSEMBLY
March 6, 2009
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Introduced by M. of A. BURLING, GIGLIO, FINCH -- Multi-Sponsored by --
M. of A. CONTE, HAWLEY, MILLER -- read once and referred to the
Committee on Local Governments
AN ACT to amend the local finance law, in relation to requirements for
bids for the purpose of bonds
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 469 of the laws of 1998, is amended
3 to read as follows:
4 3. A requirement that as a condition precedent to the consideration of
5 his or her bid, each bidder shall deposit with such official as the
6 agency in charge of the sale may designate[,] (i) a certified or cash-
7 ier's check drawn upon an incorporated bank or trust company or (ii) a
8 financial guaranty bond or surety bond that is rated in one of the two
9 highest rating categories by at least two of the nationally recognized
10 independent securities rating agencies; which shall be payable to the
11 order of the municipality, school district or district corporation or
12 such official, for not less than one per centum of the amount of bonds
13 to be bid for. Such notice may also provide that, in lieu of a certi-
14 fied or cashier's check, bidders may furnish as security an eligible
15 surety bond or an eligible letter of credit, approved by such official
16 as to form, sufficiency, and manner of execution. For purposes of this
17 section, "eligible surety bond" shall mean a bond executed by [a] an
18 insurance company authorized to do business in this state, the claims-
19 paying ability of which is rated in the highest rating category by at
20 least two nationally recognized statistical rating organizations; and
21 "eligible letter of credit" shall mean an irrevocable letter of credit
22 issued in favor of the municipality, school district or district corpo-
23 ration, for a term not to exceed ninety days by a bank, as that term is
24 defined in section two of the banking law, whose commercial paper and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06277-01-9
A. 6574 2
1 other unsecured short-term debt obligations (or, in the case of a bank
2 which is the principal subsidiary of a holding company, whose holding
3 company's commercial paper and other unsecured short-term debt obli-
4 gations) are rated in one of the three highest rating categories (based
5 on the credit of such bank or holding company) by at least one
6 nationally recognized statistical rating organization or by a bank that
7 is in compliance with applicable federal minimum risk-based capital
8 requirements.
9 § 2. This act shall take effect immediately.
