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.