New Jersey Administrative Code
Title 5 - COMMUNITY AFFAIRS
Chapter 30 - LOCAL FINANCE BOARD
Subchapter 2 - LOCAL BOND LAW
Section 5:30-2.10 - Use of financial surety bonds in electronic bond sale auctions

Universal Citation: NJ Admin Code 5:30-2.10

Current through Register Vol. 56, No. 18, September 16, 2024

(a) Subject to the requirements of this section, a local unit may accept a financial surety bond in lieu of a certified, cashier's or treasurer's check as a bid deposit as required by 40A:2-32(a).

(b) The financial surety bond must be provided by an insurance company or other guarantor that is licensed and authorized to do business in the State of New Jersey. Applicants shall possess the requisite financial capability and experience in issuing financial surety bonds to guarantee a bid deposit on the sale of government securities and further, that they possess the capability to respond to requests for the provision of financial surety bonds in a timely and secure manner for the use of bidders who seek to purchase local unit securities.

(c) Acceptance of a financial surety bond by a local unit shall be subject to the following conditions:

1. Financial surety bonds shall be made payable to the order of the issuing local unit in order for a bid to be considered;

2. The requirement or option to use a financial surety bond in the bond sale shall be included in the notice of sale of the bonds;

3. Proof of the financial surety bond must be submitted to the local unit or its agent by a fixed time on the day prior to the opening of the bids;

4. Each financial surety bond must identify the bidder whose deposit is guaranteed by the financial surety bond, and shall state the time and date when it will expire. Said date shall not be earlier than the date for submission of the required deposit;

5. The notice of sale of the bonds shall require the successful bidder using a financial surety bond to submit its deposit to the local unit in such form and a time required by the local unit, which shall be no later than 48 hours of the award of the bonds;

6. If such deposit is not received by the stated time to satisfy the deposit requirement, the local unit may draw the financial surety bond;

7. The deposit of the successful bidder will be applied to the purchase price of the bonds and no interest will be paid thereon; and

8. The local unit shall retain the deposit as liquidated damages should the bidder fail to comply with the terms of the bid.

Disclaimer: These regulations may not be the most recent version. New Jersey may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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