Bill Text: NY A05997 | 2011-2012 | General Assembly | Introduced
Bill Title: Requires bids for the purchase of municipal bonds to include a certified or cashiers check, or guaranty or surety bond that is rated in one of the two highest rating categories by at least two of the nationally recognized independent securities rating agencies.
Spectrum: Partisan Bill (Republican 7-0)
Status: (Introduced - Dead) 2012-01-04 - referred to local governments [A05997 Detail]
Download: New_York-2011-A05997-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
5997
2011-2012 Regular Sessions
I N A S S E M B L Y
March 3, 2011
___________
Introduced by M. of A. BURLING, GIGLIO, FINCH, MONTESANO -- Multi-Spon-
sored by -- M. of A. CONTE, HAWLEY, J. 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 386 of the laws of 2010, 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 the amount specified in the notice, but in no event
13 less than one-half of one per centum of the amount of bonds to be
14 bid for. Such notice may also provide that, in lieu of a certified or
15 cashier's check, bidders may furnish as security cash in such amount
16 remitted by wire transfer to an account specified in the notice or an
17 eligible surety bond or an eligible letter of credit, approved by such
18 official as to form, sufficiency, and manner of execution. For purposes
19 of this section, "eligible surety bond" shall mean a bond executed by an
20 insurance company authorized to do business in this state, the claims-
21 paying ability of which is rated in the highest rating category by at
22 least two nationally recognized statistical rating organizations; and
23 "eligible letter of credit" shall mean an irrevocable letter of credit
24 issued in favor of the municipality, school district or district corpo-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03171-01-1
A. 5997 2
1 ration, for a term not to exceed ninety days by a bank, as that term is
2 defined in section two of the banking law, whose commercial paper and
3 other unsecured short-term debt obligations (or, in the case of a bank
4 which is the principal subsidiary of a holding company, whose holding
5 company's commercial paper and other unsecured short-term debt obli-
6 gations) are rated in one of the three highest rating categories (based
7 on the credit of such bank or holding company) by at least one
8 nationally recognized statistical rating organization or by a bank that
9 is in compliance with applicable federal minimum risk-based capital
10 requirements.
11 S 2. This act shall take effect immediately.
