This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
PUBLIC CONTRACTS -- Retained Percentages (substitution of Local Government Assistance Corporation bonds for)
STATE FINANCE LAW, §139; GENERAL MUNICIPAL LAW, §106; PUBLIC AUTHORITIES LAW, §3244: Bonds and notes of the Local Government Assistance Corporation are securities which may be deposited for the release of retained percentages held by the State Comptroller or by a political subdivision.
This is in reply to your inquiry asking whether bonds of the Local Government Assistance Corporation ("LGAC") may be substituted for cash retainage pursuant to section 139 of the State Finance Law.
Section 139(3) permits a contractor to withdraw all or any part of amounts retained by the State from payments due to such contractor upon the deposit with the State Comptroller, or his designated representative, of certain classes of securities listed in such section, including bonds or notes of the State of New York. The bonds of LGAC are not listed in section 139(3). Section 3244 of the Public Authorities Law (as added by chapter 220 of the Laws of 1990), however, provides, in part, that the bonds and notes of LGAC are:
hereby made securities which may be deposited with and may be received by all public officers and bodies of the state and all municipalities, political subdivisions and public corporations for any purpose for which the deposit of bonds or other obligations of the state is now or may hereafter be authorized.
The clear language of section 3244 makes bonds and notes of LGAC securities which may be deposited for the release of retained percentages held by the Comptroller pursuant to contracts in the manner authorized by section 139 of the State Finance Law. We note that, pursuant to section 3244, bonds and notes of LGAC may also be deposited for the release of retained percentages held by political subdivisions (see General Municipal Law, §106).
November 14, 1991
Tom Miller, Associate Investment Officer
Office of the State Comptroller