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State of Ohio - Controlling Board Request
STATE OF OHIO
CONTROLLING BOARD
30 East Broad Street, 34th Floor
Columbus, Ohio 43215-3457
(614) 466-5721 FAX:(614) 466-3813
OPERATING REQUEST Controlling Board No.
AGO0100678
Status:  Approved
Meeting Date:  6/15/2020

GENERAL INFORMATION
Agency
Attorney General's Office


Division/Institution
Finance
Waiver of Competitive Selection  (Revised Code Section 127.16B)
      No Competitive Opportunity
      Agency Released Competitive Opportunity
Agency Released Competitive Opportunity (Revised Code Section 127.162)
Other Statutory Authority/Bill Section:
Operating Transfer Request  (Revised Code Section 127.14)
      Appropriation
      Cash
      Other Statutory Authority/Bill Section:
Fiscal Year(s)
2020
Bill No.
H.B. 166
Eligible for OBM
Director Approval?
No

VENDOR INFORMATION
For FYAmountNameAddressCityStateCountyZip Code
AGO01 2020 $153,993.07 State of Maryland 3112 Lee Bldg. College Park MD 20742

FUNDING INFORMATION
Fund GroupFund CodeAppropriation Line ItemAppropriation Line Item NameFYAmountFYAmount
U087 055402 Tobacco Settlement Oversight/Administration/Enforcement 2020 $153,993.07 $.00

SIGNATURES
     
Dave Yost 06/15/2020
   
Agency Director or Authorized Agent On The Date Of
   
05/22/2020 W. Fletch Zimpher
   
Date Controlling Board President/OBM Director
   
AGENCY CONTACT
Name:  Jay Easterling Title:  Chief Financial Officer
Phone:  (614) 728 - 9335 Fax:  (866) 818 - 6153 E-Mail:  jay.easterling@ohioattorneygeneral.gov
REQUIRED EXPLANATION OF REQUEST
  The Attorney General's Office (AGO) respectfully requests Controlling Board approval to waive competitive selection in order to make Ohio's proportional share payment to the Attorney General of the State of Maryland for the costs associated with the upcoming 2005 through 2007 diligent enforcement arbitration cases. Along with payments from the nine other participating states, an initial fund will be established to pay the expenses of the arbitration cases.  
  In the mid-1990s, State Attorneys General sued major tobacco companies for conspiracy to target kids with their marketing and hide the health risks and addictive nature of their cigarettes from the government and the public. In 1998, 46 states, Washington D.C. and 5 U.S. territories settled with four major tobacco manufacturers in the Master Settlement Agreement (MSA). In the MSA, the major tobacco companies agree to certain business limitations and prohibitions. In addition to those restrictions, the MSA requires the major tobacco companies to make yearly payments to the states in perpetuity. In 2007, Ohio sold its tobacco revenue stream to bondholders. Through July 2018, Ohio has received more than $6 billion in MSA payments, with the State receiving just over $3 billion and the Buckeye Tobacco Settlement Finance Authority receiving just over $3 billion.

Annual MSA payments are potentially subject to a number of adjustments including a downward adjustment known as the Non-Participating Manufacturer Adjustment. The MSA provides a 'safe harbor' from the Adjustment if States are found to have 'diligently enforced' the provisions of their Qualifying Statute (R.C. 1346.01-.02). In 2006, the common pleas court ruled that the question of diligent enforcement must be determined in an arbitration proceeding. That decision was affirmed by the court of appeals in 2008. Since that time, Ohio has been actively seeking arbitration awards that it diligently enforced its Qualifying Statute.

In 2013, an arbitration panel determined that Ohio was entitled to be paid for the downward adjustment to its annual payment for calendar year 2003. The 52 governmental jurisdictions under the MSA entered into a cost share agreement to pay for common costs in this arbitration proceeding for calendar year 2003. Ohio presented its case for calendar year 2004 in March 2018 and is waiting for a final award from the arbitration panel.   About 27 governmental jurisdictions joined together in a cost share agreement for the arbitration for calendar year 2004.
 
   
Attachments Controlling Board Request No.: AGO0100678
Attachment TypeAttachment Description
Other States Cost Share Agreement Proposed Allocation
Other States Cost Share Agreement Draft-final
 
Release and Permit Information
NameFYAmountR & P #R & P DateIssued ByComments
State of Maryland 2020 $153,993.07