A.Transition property is immediately created by operation of law on the latter of the approval of a financing order, the creation and capitalization of the qualified special purpose entity and issuance and receipt of value for the applicable transition bonds. Transition property continues to exist until the corresponding transition bonds and all ongoing financing costs related to the transition bonds have been fully paid. On creation, transition property belongs to the qualified special purpose entity. A qualified special purpose entity may not conduct any business unrelated to owning, protecting and administering the transition property or issuing, marketing, placing, authorizing, supporting, replaying, refinancing, servicing, administering or refunding transition bonds.
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A. Transition property is immediately created by operation of law on the latter of the approval of a financing order, the creation and capitalization of the qualified special purpose entity and issuance and receipt of value for the applicable transition bonds. Transition property continues to exist until the corresponding transition bonds and all ongoing financing costs related to the transition bonds have been fully paid. On creation, transition property belongs to the qualified special purpose entity. A qualified special purpose entity may not conduct any business unrelated to owning, protecting and administering the transition property or issuing, marketing, placing, authorizing, supporting, replaying, refinancing, servicing, administering or refunding transition bonds.
B. Transition property constitutes a vested, existing, present, continuing and irrevocable property right for all purposes, notwithstanding the fact that the value of the property may depend on, or be affected by, events or actions that have not yet occurred. Transition property shall not be an asset of the applicant or any other public service corporation.
C. An applicant may not have an ownership or beneficial interest or any claim of right in the transition property, other than the requirement to calculate, impose, charge, collect and receive the financing charges as servicer and transfer the resulting financing revenues to the qualified special purpose entity that is entitled to receive those financing revenues.
D. The qualified special purpose entity may pledge all or any portion of the transition property to secure the timely and complete payment of transition bonds and financing costs.
E. Transition property, financing charges, financing revenues and the interests of a financing party or any other person in transition property or in financing revenues are not subject to offset, counterclaim, surcharge or defense by a servicer, a customer, an applicant, a creditor of an applicant, a creditor of the qualified special purpose entity or any other person, or in connection with any default, bankruptcy, reorganization or other insolvency proceeding of any such person.
F. If there is a default on the transition bonds, both of the following apply:
1. Any secured party has the right to foreclose on transition property or otherwise enforce its rights as to the transition property in the same manner as if it were a secured party under the uniform commercial code.
2. On application by an interested party, and without limiting paragraph 1 of this subsection or any other remedies available to the applying party, a court shall order the sequestration and payment of the monies arising from the transition property to the person that is entitled to receive the monies. The order shall remain in full force and effect notwithstanding any bankruptcy, reorganization or other insolvency or receivership proceedings of an applicant or the qualified special purpose entity.
G. For the purposes of this chapter, transition property shall be in existence regardless of whether the revenues or proceeds with respect to such property have accrued and regardless of whether the value of the property right is dependent on customers receiving service.