This bill has been amended

Bill S5671-2011

Relates to the allowable amount of a letter of credit used as guarantee of performance of a state procurement contract

Relates to the allowable amount of a letter of credit used as guarantee of performance of a state procurement contract.

Details

Actions

  • Jan 4, 2012: REFERRED TO FINANCE
  • Jan 4, 2012: returned to senate
  • Jan 4, 2012: died in assembly
  • Jun 16, 2011: referred to ways and means
  • Jun 16, 2011: DELIVERED TO ASSEMBLY
  • Jun 16, 2011: PASSED SENATE
  • Jun 16, 2011: ORDERED TO THIRD READING CAL.1330
  • Jun 16, 2011: COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • Jun 9, 2011: REFERRED TO FINANCE

Votes

Memo

BILL NUMBER:S5671

TITLE OF BILL: An act to amend the state finance law, in relation to the amount of a letter of credit used as guarantee of performance of a state procurement contract

PURPOSE: To allow the commissioner or state agency discretion as to whether or not to require a bond or other guarantee of performance, and to approve the amount, form and sufficiency thereof.

SUMMARY OF PROVISIONS: Section One - Amends state finance law to allow the commissioner or state agency discretion as to whether or not to require a bond or other guarantee of performance, and to approve the amount, form and sufficiency thereof. If the letter of credit, either by itself or in conjunction with another form or guarantee is used for this purpose, the amount of the letter of credit shall not exceed the actual level of risk involved with the contract, and in no case exceed five percent of the total contract.

Section Two - Establishes the effective date.

JUSTIFICATION: Presently, there is no uniformity or guidelines as to the amount or type of security a state agency or any other state entity requires in the awarding of state contracts or projects. A state agency can require a letter of credit for a certain amount as a security interest in a project or the agency can require a letter of credit and/or a bond as the security. The state can also proceed in awarding a contract or project without a security interest. Since there is no uniform standard, this legislation limits the amount required for a letter of credit only, for any project to the level of risk involved with the contract and in no case shall the letter of credit exceed five percent of the total contract. This legislation does not limit the amounts required for a bond security interest.

LEGISLATIVE HISTORY: New Bill.

FISCAL IMPLICATIONS: None to the State.

EFFECTIVE DATE: This act shall take effect immediately; provided, however, that the amendments to paragraph d of subdivision 10 of section 163 of the state finance law made by section one of this act shall not affect the repeal of such section and shall be deemed repealed therewith


Text

STATE OF NEW YORK ________________________________________________________________________ 5671 2011-2012 Regular Sessions IN SENATE June 9, 2011 ___________
Introduced by Sen. DeFRANCISCO -- read twice and ordered printed, and when printed to be committed to the Committee on Finance AN ACT to amend the state finance law, in relation to the amount of a letter of credit used as guarantee of performance of a state procure- ment contract THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph d of subdivision 10 of section 163 of the state finance law, as added by chapter 83 of the laws of 1995, is amended to read as follows: d. It shall be in the discretion of the commissioner or state agency to require a bond or other guarantee of performance, and to approve the amount, form and sufficiency thereof. IF A LETTER OF CREDIT, EITHER BY ITSELF OR IN CONJUNCTION WITH ANOTHER FORM OF GUARANTEE, IS USED FOR THIS PURPOSE, THE AMOUNT OF THE LETTER OF CREDIT SHALL NOT EXCEED THE LEVEL OF ACTUAL RISK INVOLVED WITH THE CONTRACT AND IN NO CASE SHALL THE AMOUNT OF THE LETTER OF CREDIT EXCEED FIVE PERCENT OF THE TOTAL CONTRACT AWARD AMOUNT. S 2. This act shall take effect immediately; provided, however, that the amendments to paragraph d of subdivision 10 of section 163 of the state finance law made by section one of this act shall not affect the repeal of such section and shall be deemed repealed therewith.

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