§ 10 — Agreement with state

New York § 10

• Jurisdiction: New York
• Law TSF: Tobacco Settlement Financing Corporation Act

Text

§ 10. Agreement with state. 1. The state pledges and agrees with the\ncorporation, and the owners of the bonds of the corporation in which the\ncorporation has included such pledge and agreement, that the state shall\n(i) irrevocably direct, through the attorney general, the independent\nauditor and the escrow agent under the master settlement agreement to\ntransfer all pledged tobacco revenues directly to the corporation or its\nassignee, (ii) enforce its right to collect all moneys due from the\nparticipating manufacturers under the master settlement agreement and,\nin addition, shall diligently enforce the qualifying statute as\ncontemplated in section IX(d)(2)(B) of the master settlement agreement\nagainst all tobacco product manufacturers selling tobacco products in\nthe state and that are not in compliance with the qualifying statute, in\neach case in the manner and to the extent deemed necessary in the\njudgment of the attorney general, provided, however, that the sale\nagreement may provide (a) that the remedies available to the corporation\nand the bondholders for any breach of the pledges and agreements of the\nstate set forth in this clause shall be limited to injunctive relief,\nand (b) that the state shall be deemed to have diligently enforced the\nqualifying statute so long as there has been no judicial determination\nby a court of competent jurisdiction in this state, in an action\ncommenced by a participating tobacco manufacturer under the master\nsettlement agreement, that the state has failed to diligently enforce\nthe qualifying statute for the purposes of section IX(d)(2)(B) of the\nmaster settlement agreement, (iii) neither amend the master settlement\nagreement nor the consent decree or take any other action in any way\nthat would materially adversely (a) alter, limit or impair the\ncorporation's right to receive pledged tobacco revenues, or (b) limit or\nalter the rights hereby vested in the corporation to fulfill the terms\nof its agreements with such bondowners, or (c) in any way impair the\nrights and remedies of such bondowners or the security for such bonds\nuntil such bonds, together with the interest thereon and all costs and\nexpenses in connection with any action or proceedings by or on behalf of\nsuch bondowners, are fully paid and discharged (provided, that nothing\nherein shall be construed to preclude the state's regulation of smoking\nand taxation and regulation of the sale of cigarettes or the like or to\nrestrict the right of the state to amend, modify, repeal or otherwise\nalter statutes imposing or relating to the taxes), and (iv) not amend,\nsupersede or repeal the qualifying statute and the complementary\nlegislation, in any way that would materially adversely affect the\namount of any payment to, or materially adversely affect the rights of,\nthe corporation or such bondholders. The state representative is\nauthorized and directed to include this pledge and agreement in the sale\nagreement and authorizes and directs the corporation, as agent of the\nstate to include this pledge and agreement in any contract with the\nbondholders of the corporation. Notwithstanding these pledges and\nagreements by the state, the attorney general may in his or her\ndiscretion enforce any and all provisions of the master settlement\nagreement, without limitation.\n 2. Prior to the date which is one year and one day after the\ncorporation no longer has any bonds outstanding, the corporation shall\nhave no authority to file a voluntary petition under chapter 9 of the\nfederal bankruptcy code or such corresponding chapter or sections as\nmay, from time to time, be in effect, and neither any public officer nor\nany organization, entity or other person shall authorize the corporation\nto be or become a debtor under chapter 9 or any successor or\ncorresponding chapter or sections during such period. The state hereby\ncovenants with the owners of the bonds of the corporation that the state\nwill not limit or alter the denial of authority under this subdivision\nduring the period referred to in the preceding sentence. The corporation\nis authorized and directed as agent of the state to include this\ncovenant as an agreement of the state in any contract with the\nbondholders of the corporation.\n 3. To the extent deemed appropriate by the corporation and with the\napproval of the state representative, any pledge and agreement of the\nstate with respect to the bonds as provided in this section may be\nextended to, and included in, any ancillary bond facility as a pledge\nand agreement of the state with the corporation and the benefited party.\n 4. The state acknowledges and agrees that the other participating\njurisdictions have rights and interests in the consent decree. In\nrecognition of the rights of the other participating jurisdictions\ncontained in the consent decree, the state pledges that the sale of the\nstate's share authorized by this act shall in no way include or be\ndeemed to include, and the state shall not otherwise alter, limit, or\nimpair, the rights of the other participating jurisdictions including,\nbut not limited to, rights to receive payments, set forth in the consent\ndecree. Nothing in this act shall be construed to alter the right of\neach of the other participating jurisdictions under the consent decree\nto receive payments or to sell or assign some or all of its interest in\nthe manner deemed appropriate pursuant to law by its governing body.\n