§ 99-t. Contracts with banks or trust companies for the collection of
water or sewer user fees, charges, rates or rentals, or certain special
assessments. 1. Notwithstanding any general, special or local law to the
contrary, a municipal corporation having the responsibility for the
collection of water or sewer user fees, charges, rates or rentals, or
special assessments which are not collected together with real property
taxes, may enter into a contract with one or more banks or trust
companies, as those terms are defined in paragraphs d and e of
subdivision one of section ten of this article, for the collection of
any or all such user fees, charges, rates or rentals, or such special
assessments. For purposes of this section, the term "special assessment"
shall have the same meaning as in subdivision fifteen of section one
hundred two of the real property tax law and shall be limited to those
special assessments not collected together with real property taxes.

2. Such bank or trust company shall collect payments of water or sewer
user fees, charges, rates or rentals, or special assessments, pursuant
to such contract, which contract shall contain provisions relating to:

(a) the period during which payments may be collected;

(b) any authorized prompt payment discounts, penalties and interest
for late payments, and acceptance of partial payments;

(c) the furnishing of receipts to each person paying such user fees,
charges, rates or rentals, or special assessments;

(d) the deposit of all such user fees, charges, rates or rentals, or
special assessments collected, immediately upon receipt, in the account
or accounts designated by the municipal corporation in such bank or
trust company, or in any other bank or trust company designated by the
municipal corporation;

(e) the maintenance of appropriate records of deposits showing the
dates and amounts of all user fees, charges, rates or rentals, or
special assessments collected, and the individuals from whom such user
fees, charges, rates or rentals, or special assessments were collected;

(f) the transmission to the appropriate municipal official of a daily
report of the user fees, charges, rates or rentals, or special
assessments collected, which report shall be accompanied by a statement
showing the deposits credited to the account of the municipal
corporation; and

(g) the performance of such other duties, and the maintenance of such
other records, as the contract may provide.

3. (a) A bank or trust company which has entered into a contract with
a municipal corporation pursuant to this section shall be liable to the
municipal corporation for all loss or damage that may result from any
failure of the bank's or trust company's officers, employees or agents
to discharge their duties, or from any improper or incorrect discharge
of those duties. The bank or trust company shall save the municipal
corporation free and harmless from any and all loss occasioned by or
incurred in the performance of services under a contract pursuant to
this section.

(b) A bank or trust company which has entered into a contract with a
municipal corporation pursuant to this section, and which receives
moneys from an individual for payment of water or sewer user fees,
charges, rates or rentals, or special assessments, shall be liable to
such individual, upon failure to properly credit such payment, for the
amount of the user fees, charges, rates or rentals, or special
assessments, plus interest and penalties imposed thereon.

4. Moneys deposited with a bank or trust company pursuant to this
section shall be secured in the manner provided by section ten of this
chapter.

5. The statutory powers and duties of the municipal officer
responsible for collecting water or sewer user fees, charges, rates or
rentals, or special assessments, including the authority to receive such
user fees, charges, rates or rentals, or special assessments shall not
be affected by the existence of a contract executed pursuant to this
section, except that such official shall:

a. notify the bank or trust company of the commencement of the
collection period for such payments;

b. include in the appropriate notices the fact that payment may be
made to the bank or trust company;

c. notify the bank or trust company of the date on which the
interest-free or penalty-free collection period expires; and

d. make the appropriate entries in the official records of the
municipal corporation, upon receiving each daily report of user fees,
charges, rates or rentals, or special assessments, collected by the bank
or trust company.

6. A contract executed pursuant to this section shall be subject to
the requirements of article five-A of this chapter, and shall be for a
term not to exceed five years, except that it shall be subject to
cancellation by the municipal corporation at any time upon thirty days
notice to the bank or trust company.