Guam § 22416 - General Obligation Bonds.

§ 22416. General Obligation Bonds.

(a) Authorization for issuance of General Obligation Bonds;

Terms of Bonds. For the purpose of satisfying the obligation to

the Retirement Fund from the General Fund, the Governor of

Guam is authorized to issue one or more series of general

obligation bonds of the government in an aggregate principal

amount not to exceed Forty-five Million Dollars ($45,000,000);

provided, that the bonds shall not be issued without any

unqualified opinion of bond counsel that the interest on the bonds

would be tax-exempt. The bonds shall mature at such times not

later than July 1, 1996, shall bear interest at such rates not

exceeding ten percent (10%) per annum payable at least

semiannually on such dates commencing not later than one year

after the date of issuance of the bonds, shall be in such

denominations, shall be subject to redemption at such times and

upon payment of such premium not exceeding four percent (4%)

of the principal amount thereof and shall be sold at public or

private sale for such price not less than ninety-six percent (96%)

of the principal amount thereof plus accrued interest, all as

determined by the Governor by execution of one or more

certificates upon or prior to the issuance of the bonds.

(b) Authorization for Credit Enhancement. The Governor is

authorized to enter into such contracts or agreements with such

banks, insurance companies or other financial institutions as he

determines are necessary or desirable to improve the security and

marketability of the bonds. Such contracts or agreements may

contain an obligation to reimburse, with interest, any such banks,

insurance companies or other financial institutions for advances

used to pay principal of or interest on the bonds. Any such

reimbursement obligation may be secured by a pledge of the full

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faith and credit of the government of Guam and the revenues

described in Subsection (i) of this Section.

(c) Use of Proceeds from Sale of Bonds. Proceeds from the

sale of the bonds shall be used solely to satisfy the obligation to

the Retirement Fund from the General Fund and to pay expenses

related to the authorization, sale and issuance of the bonds,

including without limitation, printing costs, costs of reproducing

documents, bond insurance premiums, underwriting, legal and

accounting fees and charges, fees paid to banks or other financial

institutions providing credit enhancement, costs of credit ratings,

fees and charges for execution, transportation and safekeeping of

bonds and other costs, charges and fees in connection with the

issuance, sale and delivery of the bonds.

(d) Pledge of Full Faith and Credit; Authorization to Collect

Revenues. The bonds shall constitute valid and legally binding

general obligations of the government of Guam. The government

of Guam pledges its full faith and credit for the punctual payment

of both principal and interest on the bonds. There shall be

collected annually in the same manner and at the same time as

government revenue for other purposes is collected, such sum as

is required to pay the principal and interest on the bonds. All

officers charged bylaw with any duty in the collection of the

government revenues shall do every lawful thing necessary to

collect such sum.

(e) Appropriation from General Fund. There are appropriated

from the General Fund such sums as will, together with any

pledged revenues, equal in each year the amount of money

necessary to pay the principal and interest on such bonds.

(f) Additional Parity Bonds. The government of Guam, after

appropriate enabling legislation, may issue other general

obligations of the government secured on a parity with such bonds

by the general obligation of the government.

(g) Waiver of Immunity. Notwithstanding any substantive or

procedural provision of Chapter 6 of this Title, the government of

Guam waives immunity from any suit or action in contract on such

bonds.

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(h) Certificate of Governor. The technical form and language

of the bonds, including provisions for execution, exchange,

transfer, registration, paying agency, lost or mutilated bonds,

negotiability, cancellation and other terms or conditions not

inconsistent with Subsection (a) of this Section shall be as

specified in a certificate of authorization approved by the

Governor, authorizing the issuance of the bonds. The Governor

may appoint a trustee authorized to receive and hold in trust the

proceeds of the bonds and revenues related thereto, to protect the

rights of bondholders and to perform such other duties as may be

specified in the certificate. The same or another such certificate

may also authorize persons so designated to execute, on behalf of

the government of Guam, any appropriate documents relating to

the bonds and the sale of the bonds.

(i) Pledge of Section 30 Revenues. All or any part of the

revenues derived by the government of Guam under Section 30 of

the Organic Act may be pledged to secure the repayment of the

bonds. Any pledge made to secure bonds shall be made by the

certificate of authorization delivered pursuant to Subsection (h) of

this Section and shall be valid and binding from the time the

pledge is made. The revenues pledged and thereafter received by

the government of Guam or by any trustee appointed pursuant to

Subsection (h) of this Section. The revenues shall, upon receipt by

or on behalf of the government of Guam, immediately be subject

to the lien of such pledge without any physical delivery thereof or

further act, and the lien of any such pledge shall be valid and

binding against all parties having claims of any kind in tort,

contract or otherwise against the government of Guam,

irrespective of whether the parties have notice thereof. All such

taxes, fees and penalties, to the extent so pledged, are hereby

continuously appropriated for such purposes.