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:

  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[,] (I) a certified  or  cash-
ier's  check  drawn upon an incorporated bank or trust company OR (II) A
FINANCIAL GUARANTY BOND 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; WHICH SHALL BE  PAYABLE  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. 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  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
insurance  company  authorized to do business in this state, the claims-
paying ability of which is rated in the highest rating  category  by  at
least  two  nationally  recognized statistical rating organizations; and
"eligible letter of credit" shall mean an irrevocable letter  of  credit
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

ration, 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  obli-
gations)  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.
  S 2. This act shall take effect immediately.