Bill Text: NY A06574 | 2009-2010 | General Assembly | Introduced

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Bill Title: 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.

Spectrum: Partisan Bill (Republican 6-0)

Status: (Introduced - Dead) 2010-01-06 - referred to local governments [A06574 Detail]

Download: New_York-2009-A06574-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         6574
                              2009-2010 Regular Sessions
                                 I N  A S S E M B L Y
                                     March 6, 2009
                                      ___________
       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    S 2. This act shall take effect immediately.