Section 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; or2. Be organized under the laws of the United States and have its principal place of business in this state; or3. 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.Fla. Admin. Code Ann. R. 14-116.002
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.New 3-23-93, Amended 8-24-93, 10-11-94, 10-5-97, 2-18-04, 2-18-09, 1-11-10.