§ 42-133-7 - Sale of state's tobacco receipts.
SECTION 42-133-7
§ 42-133-7 Sale of state's tobaccoreceipts. – (a) On or before June 30, 2002, the state shall sell and assign to and thecorporation shall acquire all or a portion of the state's tobacco receipts. Theattorney general shall assist the governor in the preparation and review of allnecessary documentation to effect such sale and transfer by such date. Theterms and conditions of the sale shall be established in order to accomplishthe purpose and intent set forth in this chapter and shall include, but not belimited to, the price, the net proceeds of the sale of the bonds to be issuedby the corporation and secured by a portion of the state's tobacco receipts,and the beneficial interest of the state in any trust fund created inaccordance with this chapter.
(b) The sale of the state's tobacco receipts to thecorporation shall be irrevocable during the time when any bonds issued by thecorporation are outstanding, and shall constitute a contractual obligation owedto the holders of such bonds. The sale of the state's tobacco receipts shall betreated as a true sale and absolute transfer of the property so transferred andnot as a pledge or other security interest for any borrowing. Thecharacterization of such a sale as an absolute transfer shall not be negated oradversely affected by the fact that only a portion of the state's tobaccoreceipts is being sold or by the state's acquisition or retention of anownership interest in any residual assets.
(c) On or after the effective date of the sale, the stateshall not have any right, title, or interest in all or such portion of thestate's tobacco receipts sold which shall be the sole property of thecorporation, and not of the state, and shall be owned, received, held, anddisbursed by the corporation or its trustee or assignee in accordance with thischapter, and not by the state.
(d) On or before the effective date of the sale and at therequest of the corporation, the state, through the attorney general, shallnotify the independent auditor of the sale and instruct the independent auditorto direct the escrow agent that, subsequent to that date and irrevocably duringthe time when any bonds are outstanding, the state's tobacco receipts acquiredby the corporation are to be paid directly to the corporation or its designee.
(e) With respect to the issuance of the corporation's bondsand in compliance with all applicable federal law, including, but not limitedto, the Internal Revenue Code, the state and the corporation may enter intoagreements for the benefit of the corporation's bondholders with respect to theapplication of the proceeds of the bonds and certain other monies of the state,the investment thereof, and the periodic reporting of certain information, andsuch other matters related thereto.