Fla. Admin. Code Ann. R. 14-116.002 - Letters of Credit
(1) Purpose. This rule establishes the
requirements of the Department of Transportation Comptroller for the approval
of letters of credit, which are provided by a bank or savings association at
the request of an applicant/professional service provider/contractor.
(2) Qualifications of Banks or Savings
Associations Providing Letters of Credit.
(a)
The letter of credit provided at the request of the applicant/professional
service provider/contractor shall be issued by banks or savings associations
which must:
1. Be organized and existing
under the laws of this state; or
2.
Be organized under the laws of the United States and have its principal place
of business in this state; or
3.
Have a branch office which is authorized under the laws of this state or of the
United States to receive deposits in this state; and,
4. Have and maintain an average financial
condition ranking of 35 or more from two nationally recognized financial rating
services, compiled quarterly by the Florida Department of Financial Services,
Division of Treasury.
(b)
In the event the required average financial condition set forth in subparagraph
(2)(a)4. above is not maintained, the Department will notify the
applicant/service provider/contractor of such noncompliance. Within 30 days
after receiving the notice of noncompliance, the applicant/professional service
provider/contractor shall provide to the Department a substitute letter of
credit issued by a bank or savings association meeting the requirements of this
rule.
(3) Requirements of
Letter of Credit. Letters of credit shall be issued solely for the benefit of
the Department. Letter of credit language must be approved by the Department's
Comptroller and include the following:
(a) The
expiration date of the letter of credit shall be automatically extended without
amendment, for one year from the expiration date unless otherwise authorized in
writing by the Department. Letters of credit furnished under the requirements
of Section 337.106, F.S., shall not be
required to be extended beyond the duration required by that section. If the
letter of credit is not automatically extended for such additional one year
period then at least 30 days prior to the expiration date then in effect, the
bank or savings association shall notify the Department by registered or
certified U.S. Mail or courier, postage prepaid, return receipt requested. This
notification shall be sent to the Florida Department of Transportation, Office
of Comptroller, 605 Suwannee Street, Mail Station 42B, Tallahassee, Florida
32399-0450, or to any other address specified in writing by the Department's
Comptroller.
(b) If notice is given
that the letter of credit will not be automatically extended and if the purpose
for which the letter of credit was issued still exists, the Department shall
draw down any remaining balance on the letter of credit unless a substitute
letter of credit meeting the requirements of this rule is provided at least 14
days prior to the expiration date of the letter of credit for which the
substitute letter of credit is being provided.
(c) Once it is determined by the Department
that the average financial condition ranking of a bank or savings association
is less than 35, the Department will notify the bank or savings association and
the applicant/professional service provider/contractor by registered mail that
if a substitute letter of credit is not received within 30 days of
notification, the Department will draw down any remaining balance on the letter
of credit if the purpose for which the letter of credit was issued still
exists.
(d) The letter of credit
must provide for draws to be made on a bank or savings association located in
the United States and additionally must provide for draws by electronic
presentation of a draft via facsimile transmission or electronic mail, or
both.
Notes
Rulemaking Authority 334.044(2) FS. Law Implemented 334.044(30), 334.187, 337.106, 337.175 FS.
New 3-23-93, Amended 8-24-93, 10-11-94, 10-5-97, 2-18-04, 2-18-09, 1-11-10.
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