|Assembly Actions - Lowercase
Senate Actions - UPPERCASE
|Aug 17, 2012||
|Aug 06, 2012||
delivered to governor
|Jun 14, 2012||
returned to senate
ordered to third reading rules cal.210
substituted for a9676
|Mar 06, 2012||
referred to local governments
delivered to assembly
|Mar 05, 2012||
advanced to third reading
|Mar 01, 2012||
2nd report cal.
|Feb 29, 2012||
1st report cal.234
|Feb 15, 2012||
referred to local government
senate Bill S6483Signed By Governor
Relates to limitations on insurers that may provide certain surety bonds by changing the claims-paying ability rating needed for eligibility
Archive: Last Bill Status - Signed by Governor
- In Committee
- On Floor Calendar
- Passed Senate
- Passed Assembly
- Delivered to Governor
- Signed by Governor
view actions (13)
Mar 6, 2012 - floor VoteS6483581floor58Aye1Nay0Absent2Excused0Abstained
show floor vote details
Floor Vote: Mar 6, 2012aye (58)
Feb 29, 2012 - Local Government committee VoteS648370committee7Aye0Nay0Aye with Reservations0Absent1Excused0Abstained
- show floor vote details
S6483 - Bill Details
- See Assembly Version of this Bill:
- Law Section:
- Local Finance Law
- Laws Affected:
- Amd §58.00, Loc Fin L
S6483 - Bill Texts
Relates to limitations on insurers that may provide certain surety bonds by changing the claims-paying ability rating needed for eligibility.
view sponsor memo
TITLE OF BILL:
to amend the local finance law, in relation to limitations on insurers
that may provide certain surety bonds
The purpose of the bill is to amend the local finance law to
allow highly rated insurers to provide surety bonds in support of
municipal bond underwriting bids.
SUMMARY OF PROVISIONS:
This bill would amend paragraph three of
subsection (c) of section 58 of the local finance law to expand the
range of ratings of insurers authorized to provide surety bonds to
entities bidding to underwrite municipal bonds from those rated
triple-A to those with a rating in the single-A category or higher.
The bill would expand the range of insurers that may
provide an "eligible surety bond" in support of underwriter bids on
new municipal bond issues.
Currently, Section 58 of the Local Finance Law authorizes an entity
bidding to underwrite new municipal bond issues to provide an
"eligible surety bond" in lieu of a certified or cashier's check,
cash, or letter of credit that would otherwise be required as a "good
faith" deposit in connection with its bid.
Such surety bonds save prospective municipal bond underwriters time
and money in the bidding process, and can increase the number of bids
on any given municipal bond issue - particularly issuances from
smaller municipalities that might otherwise be neglected by some
Increased competition in underwriting bids should generate borrowing
cost savings for municipal issuers and local taxpayers and increase
their access to the capital markets.
Section 58, in its present form, requires that "eligible surety bonds"
be executed by an insurance company licensed to do business in New
York with a claims-paying ability "in the highest rating category by
at least two nationally recognized statistical rating organizations."
In view of Standard & Poor's downgrade of the United States' long-term
sovereign credit rating to AA+ from AAA, Section 58's requirement
that a surety bond provider be rated "in the highest rating category"
(AAA or triple-A) is overly restrictive. Financial guaranty insurers,
which are also authorized to write surety bonds under Article 69 of
the Insurance Law, have historically offered this product in New
York, but are presently unable to do so because none are rated
This bill would allow for a highly rated insurer with a rating in the
single-A category or higher to provide an "eligible surety bond."
An expansion of the ratings range for insurers providing surety bonds
in support of municipal bond underwriting bids is appropriate because:
o it would reflect the changed credit ratings landscape in today's
financial markets; and
o it would facilitate the return of an important product to municipal
bond underwriting - a product that can save New York State's
municipal issuers and taxpayers money through increased competition
in the bond issuance process.
Borrowing cost reduction for issuers of municipal
bonds in New York State.
This act will take effect immediately.
view full text
S T A T E O F N E W Y O R K ________________________________________________________________________ 6483 I N S E N A T E February 15, 2012 ___________ Introduced by Sen. MARTINS -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government AN ACT to amend the local finance law, in relation to limitations on insurers that may provide certain surety bonds THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 3 of paragraph c of section 58.00 of the local finance law, as amended by chapter 386 of the laws of 2010, is amended to read as follows: 3. A requirement that as a condition precedent to the consideration of his or her bid, each bidder shall deposit with such official as the agency in charge of the sale may designate, a certified or cashier's check drawn upon an incorporated bank or trust company to the order of the municipality, school district or district corporation or such offi- cial, for the amount specified in the notice, but in no event less than one-half of one per centum of the amount of bonds to be bid for. Such notice may also provide that, in lieu of a certified or cashier's check, bidders may furnish as security cash in such amount remitted by wire transfer to an account specified in the notice or an eligible sure- ty bond or an eligible letter of credit, approved by such official as to form, sufficiency, and manner of execution. For purposes of this section, "eligible surety bond" shall mean a bond executed by an insur- ance company authorized to do business in this state, the claims-paying ability of which is rated in ONE OF the THREE highest rating [category] CATEGORIES by at least [two] ONE nationally recognized statistical rating [organizations] ORGANIZATION; and "eligible letter of credit" shall mean an irrevocable letter of credit issued in favor of the muni- cipality, school district or district corporation, for a term not to exceed ninety days by a bank, as that term is defined in section two of the banking law, whose commercial paper and other unsecured short-term debt obligations (or, in the case of a bank which is the principal subsidiary of a holding company, whose holding company's commercial paper and other unsecured short-term debt obligations) are rated in one of the three highest rating categories (based on the credit of such bank EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14664-01-2 S. 6483 2 or holding company) by at least one nationally recognized statistical rating organization or by a bank that is in compliance with applicable federal minimum risk-based capital requirements. S 2. This act shall take effect immediately.
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