(2) In paragraph one hereof, "public corporation" and "public
authority" shall not include:
(A) a public corporation or public authority created pursuant to
agreement or compact with another state, or
(B) the city of New York, a public corporation or public authority, in
connection with the construction of electrical generating and
transmission facilities or construction, extensions and additions of
light rail or heavy rail rapid transit and commuter railroads.
(b) No such officer or employee, and no person, firm or corporation
acting or purporting to act on behalf of such officer or employee, shall
negotiate, make application for, obtain or procure any of such surety
bonds or contracts of insurance (except contracts of insurance for
builders risk or owners protective liability) which can be obtained or
procured by the bidder, contractor or subcontractor.
(c) This section shall not, however, prevent the exercise by such
officer or employee on behalf of the state or such public corporation or
public authority of its right to approve the form, sufficiency, or
manner of execution, of surety bonds or contracts of insurance furnished
by the insurance company selected by the bidder to underwrite such bonds
or contracts. Any provisions in any invitation for bids, or in any of
the contract documents, in conflict herewith are contrary to the public
policy of this state.