S T A T E O F N E W Y O R K
________________________________________________________________________
1461--A
2023-2024 Regular Sessions
I N A S S E M B L Y
January 17, 2023
___________
Introduced by M. of A. THIELE -- read once and referred to the Committee
on Local Governments -- 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:
Section 1. Subdivision 3 of paragraph c of section 58.00 of the local
finance law, as amended by chapter 416 of the laws of 2012, is amended
to read as follows:
3. A requirement that [as a condition precedent to the consideration
of his or her bid, each] THE SUCCESSFUL 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 official, 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. NOTWITHSTANDING THE PROVISIONS OF THIS SUBDIVISION, 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. Such notice may also provide that, in lieu of a
certified or cashier's check, [bidders may furnish as security] THE
DEPOSIT MAY ALSO BE IN THE FORM OF cash in such amount remitted by wire
transfer to an account specified in the notice or an eligible surety
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 categories
by at least one nationally recognized statistical rating organization;
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05688-03-3
A. 1461--A 2
and "eligible letter of credit" shall mean an irrevocable letter of
credit issued in favor of the municipality, 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 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.
§ 2. This act shall take effect immediately.