On Tuesday, Iowa Attorney General Brenna Bird announced that she has reached a settlement agreement with Tobacco Manufacturers that will result in the State of Iowa receiving extra payments of more than $171 million over the next six years. The State is now expected to receive approximately $136 million additional payments in April 2024 and the remaining amounts annually from 2025 to 2029. Under Iowa law, 78% of these payments will be used to pay down the State’s debt to bondholders and the remaining will be deposited in the State Treasury’s Rebuild Iowa Infrastructure Fund.
“It was time to stop wasting public resources on a never-ending fight that only benefits the lawyers,” said Attorney General Bird. “This is a good deal for Iowa taxpayers, getting us the $136 million we are owed now instead of staying tied up in litigation for decades.”
The settlement resolves a long-standing dispute between the State and Tobacco Manufacturers over their annual payments to the State under the 1998 Tobacco Master Settlement Agreement. Iowa was one of only nine states that was still litigating this dispute in slow-moving and massive arbitration proceedings. Before this settlement, Iowa and those States had still been fighting over the annual payment amounts from over 18 years ago and had not been paid any of those disputed amounts. Iowa now joins the 37 other States that have already entered into the settlement.