Section 8.535

Title II SOVEREIGNTY, JURISDICTION AND EMBLEMS

Chapter 8

Effective - 07 Jun 2002, see footnote   

  *8.535.  Authority to sell or assign state's share of tobacco settlement. — 1.  (1)  The governor or the governor's designee shall be authorized to sell and assign to the authority, pursuant to one or more sales agreements, not to exceed thirty percent of the state's share to implement sections 8.500 to 8.565; provided, the net proceeds of bonds issued to implement sections 8.500 to 8.565 shall not exceed six hundred million dollars.  The attorney general shall assist the governor in the preparation, modification and review of all documentation as may be necessary to effect such a sale and to implement the provisions of sections 8.500 to 8.565.

  (2)  Any sales agreement shall be consistent with sections 8.500 to 8.565.  The terms and conditions of the sale established in such sales agreement may include but are not limited to any of the following:

  (a)  A requirement that the state enforce and pay the expenses of enforcing the provisions of the master settlement agreement that require payment of the state's share that has been sold to the authority under a sales agreement which obligation shall constitute a material covenant of the state;

  (b)  A requirement that the state not agree to any amendment of the master settlement agreement that materially and adversely affects the authority's ability to receive the state's share that has been sold to the authority under a sales agreement;

  (c)  A statement that the net proceeds from the sale of bonds shall be deposited in the tobacco securitization settlement trust fund established under section 8.550 and that in no event shall the amounts in the trust fund be available or be applied for payment of bonds or any claim against the authority or any debt or obligation of the authority; and

  (d)  An agreement that the effective date of the sale is the date of receipt of the bond proceeds by the authority.

  2.  Any sales made under this section shall be irrevocable during the time when bonds are outstanding under sections 8.500 to 8.565, and shall be a part of the contractual obligation owed to the bondholders.  The sale shall constitute and be treated as a true sale and absolute transfer of the property so transferred and not as a pledge or other security interest for any borrowing.  The characterization of such a sale as an absolute transfer shall not be negated or adversely affected by the fact that only a portion of the state's share is being sold, or by the state's acquisition or retention of an ownership interest in the residual assets.

  3.  On or after the effective date of such sale, the state shall not have any right, title, or interest in the portion of the master settlement agreement sold and such portion shall be the property of the authority and not the state, and shall be owned, received, held, and disbursed by the authority or its trustee or assignee, and not the state.

  4.  On or before the effective date of the sale, the state shall notify the escrow agent or its assignee under the master settlement agreement of the sale and shall instruct the escrow agent or its assignee that subsequent to that date, all payments constituting the portion sold shall be made directly to the authority.

  5.  The authority shall report to the^** board of public buildings on or before the date of the sale, advising it of the status of the sale, its terms, and conditions.

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(L. 2002 S.B. 1191)

Effective 6-07-02

*Section terminates upon satisfaction of all outstanding notes and obligations.  See section 8.589.

**Word "the" does not appear in original rolls.