§ 4. The sale agreement. * 1. The state representative, upon the
execution of a sale agreement on behalf of the state may sell to the
corporation, and the corporation may purchase, for cash or other
consideration and in one or more installments, all or a portion of the
state's share. Any such agreement shall provide, among other matters,
that the purchase price payable by the corporation to the state for such
state's share or portion thereof shall consist of the net proceeds of
the bonds issued to finance such purchase price and the residual
interests, if any. Notwithstanding section 121 of the state finance law
or any other law to the contrary, the residual interests shall be
deposited into the Medicaid management information system (MMIS)
statewide escrow fund within thirty days upon the availability of such
residual interests to fund a portion of the cumulative non-federal share
of expenses related to the state takeover of the local share of Medicaid
growth pursuant to part F of chapter 56 of the laws of 2012. Such
deposit shall be in an amount equal to (a) the amount of residual
interests scheduled for deposit into the MMIS statewide escrow fund in
the applicable year's enacted budget financial plan as updated or (b)
the total amount of residual interests available if the total amount of
such residual interests is less than the total amount of residual
interests scheduled for deposit into the MMIS statewide escrow fund in
the applicable year's enacted budget financial plan as updated. At the
discretion of the state representative, any residual interests which
exceed the amount scheduled for deposit into the MMIS statewide escrow
fund in the applicable year's enacted budget financial plan as updated
may either be deposited into the (i) MMIS statewide escrow fund to fund
a portion, as determined by the state representative, of the cumulative
non-Federal share of expenses related to the state takeover of the local
share of Medicaid growth, pursuant to part F of chapter 56 of the laws
of 2012, or (ii) the state general fund; provided, however that any
residual interest derived from other assets shall be applied as directed
by statute. Notwithstanding any other law to the contrary, the amount
used from such deposit to fund a portion of the cumulative non-Federal
share of expenses related to the State takeover of the local share of
Medicaid growth shall be paid without appropriation. Any such sale shall
be pursuant to one or more sale agreements which may contain such terms
and conditions deemed necessary by the state representative to carry out
and effectuate the purposes of this section, including covenants binding
the state in favor of the corporation and its assignees, including the
owners of its bonds such as covenants with respect to the enforcement at
the expense of the state of the payment provisions of the master
settlement agreement, the diligent enforcement at the expense of the
state of the qualifying statute, the application and use of the proceeds
of the sale of the state's share to preserve the tax-exemption on the
bonds, the interest on which is intended to be exempt from federal
income tax, issued to finance the purchase thereof and otherwise as
provided in this act. Notwithstanding the foregoing, neither the state
representative nor the corporation shall be authorized to make any
covenant, pledge, promise or agreement purporting to bind the state with
respect to pledged tobacco revenues, except as otherwise specifically
authorized by this act.

* NB Effective until March 31, 2027

* 1. The state representative, upon the execution of a sale agreement
on behalf of the state may sell to the corporation, and the corporation
may purchase, for cash or other consideration and in one or more
installments, all or a portion of the state's share. Any such agreement
shall provide, among other matters, that the purchase price payable by
the corporation to the state for such state's share or portion thereof
shall consist of the net proceeds of the bonds issued to finance such
purchase price and the residual interests, if any. The residual
interests shall be deposited into the tobacco settlement fund pursuant
to section 92-x of the state finance law, unless otherwise directed by
statute; provided, however that any residual interest derived from other
assets shall be applied as directed by statute. Any such sale shall be
pursuant to one or more sale agreements which may contain such terms and
conditions deemed necessary by the state representative to carry out and
effectuate the purposes of this section, including covenants binding the
state in favor of the corporation and its assignees, including the
owners of its bonds such as covenants with respect to the enforcement at
the expense of the state of the payment provisions of the master
settlement agreement, the diligent enforcement at the expense of the
state of the qualifying statute, the application and use of the proceeds
of the sale of the state's share to preserve the tax-exemption on the
bonds, the interest on which is intended to be exempt from federal
income tax, issued to finance the purchase thereof and otherwise as
provided in this act. Notwithstanding the foregoing, neither the state
representative nor the corporation shall be authorized to make any
covenant, pledge, promise or agreement purporting to bind the state with
respect to pledged tobacco revenues, except as otherwise specifically
authorized by this act.

* NB Effective March 31, 2027

2. Any sale of all or part of the state's share to the corporation
shall 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
by the participants shall not be negated or adversely affected by the
fact that only a portion of the state's share is transferred, nor by the
acquisition or retention by the state of a residual interest, nor by any
characterization of the corporation or its obligations for purposes of
accounting, taxation or securities regulation, nor by the pledge of any
other funds or assets of the corporation to secure bonds, nor by any
other factor whatsoever.

3. On and after the effective date of each sale of any portion
(including all) of the state's share, the state shall have no right,
title or interest in or to the portion of the state's share sold, and
the portion of the state's share so sold shall be the property of the
corporation and not of the state, and shall be owned, received, held and
disbursed by the corporation and not the state treasury. Notwithstanding
section 92-x of the state finance law, on the effective date of any such
sale with respect to tobacco settlement payments, the state through the
attorney general shall notify the independent auditor and the escrow
agent under the master settlement agreement that such portion of the
state's share has been sold to the corporation and irrevocably instruct
such independent auditor and escrow agent that, subsequent to such date,
such portion of the state's share is to be paid directly to the
indenture trustee for the benefit of the owners of the bonds of the
corporation which are secured by a pledge of such amounts, until such
bonds are no longer outstanding pursuant to the resolution or related
indenture under which such bonds are issued.

4. The net proceeds of the bonds and any earnings thereon shall never
be pledged to, nor made available for, payment of the bonds or any
interest or redemption price thereon or any other debt or obligation of
the corporation. The net proceeds of the bonds shall be deposited in the
general fund as directed by the state representative as specified in, or
otherwise provided for by, the sale agreement, and shall be used by the
state (either directly or by reimbursement of the general fund) for any
of the following purposes: (i) for health care purposes in accordance
with section 2807-v of the public health law, including but not limited
to the treatment of smoking-related illnesses and for smoking cessation
efforts, (ii) for any of its capital purposes or for any of its capital
programs, (iii) for payment of debt service on any of its outstanding
bonds or on any state supported bonds, notes or other obligations or in
respect of debt service on any outstanding bonds, notes or other
obligations of local governments, school districts or public benefit
corporations for which state aid is applicable or required to be paid or
for which there is a contract subject to state appropriation provided
that such bonds, notes or other obligations funded capital projects or
programs, (iv) for other grants to local governments, school districts
or public benefit corporations, or (v) to provide a revenue resource for
personal service expenses of the state and general state charges. With
respect to any bonds of the corporation, the interest on which is
intended to be exempt from federal income tax, the corporation and the
state representative may provide restrictions on the use of net proceeds
of the bonds and other amounts in the sale agreement or otherwise in a
tax regulatory agreement only as necessary to assure such exempt status.

5. The director of the budget shall notify in writing the chairs of
the senate finance committee and the assembly ways and means committee
of any plans to sell all or a portion of the state's share of tobacco
settlement payments prior to entering any sale agreement with the
corporation. At the time this notification is given, the chief executive
officer of the corporation and the director of the budget shall provide
a report to the chairs of the senate finance committee and the assembly
ways and means committee on a planned bond sale of the corporation and
such report shall include, but not be limited to: (A) the maximum amount
of bonds expected to be sold by the corporation in connection with a
sale agreement; (B) the expected maximum interest rate and maturity date
of such bonds; (C) the expected amount of the bonds that will be fixed
and/or variable interest rate; (D) the estimated costs of issuance; (E)
the estimated level or levels of reserve fund or funds, if any; (F) the
estimated cost of bond insurance, if any; (G) the anticipated use or
uses of the proceeds; and (H) the maximum expected net proceeds that
will be paid to the state as a result of the issuance of such bonds. Any
such expectations and estimates in the report shall not be deemed a
substantive limitation on the authority of the corporation contained in
this act.