Guam § 22435 - Authorization to Issue Bonds for Certain Capital

§ 22435. Authorization to Issue Bonds for Certain Capital

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Expense Items and Capital Improvement Projects of School

Facilities and for Other Purposes.

(a) Authorization to Issue Bonds. I Maga’lahen Guåhan is

authorized to issue one (1) or more series of bonds of the

government of Guam in the aggregate principal amount necessary

to fund an escrow for the refinancing of the General Fund

obligations listed in subsection (k)(1) hereof and to provide no

more than Ninety Million Dollars ($90,000,000) for the payment

of the General Fund expenses listed in subsection (k)[(2), (3), (4),

(5), (6), (7), (8), (9) and (10)] hereof, and, in each case, to fund

necessary reserves and to pay expenses incurred in the issuance of

such bonds not already provided for by an existing appropriation

for or in the regular budget of a government agency,

instrumentality or public corporation that provides any services

regarding the issuance of such bonds; provided that said bonds

shall not be issued in an amount that would create a violation of

the debt limitation imposed by 48 U.S.C. 1423a (§11 of the

Organic Act of Guam).

(b) Terms and Conditions. The terms and conditions of said

bonds shall be as determined by I Maga’lahen Guåhan and

expressed by his execution of a certificate or indenture authorizing

issuance of the bonds; provided that said terms and conditions

shall be consistent herewith, and that the bonds shall mature no

later than the year 2037, and shall bear interest at such rates and

be sold for such prices as shall result in a yield to the bondholders

not exceeding six and ninety five hundredths percent (6.95%) per

annum. The annual debt service for any of the government of

Guam General Obligation Bonds, 1993 Series A, to remain

outstanding, together with the annual debt service on the bonds

authorized by this Section, for any given year shall not exceed the

aggregate annual debt service for said bonds for the previous year

or the next succeeding year by more than one percent (1%);

provided that no repayment of principal of the bonds authorized

by this Section shall be required during the first two (2) years after

their issuance.

(c) Valid and Binding General Obligations. The bonds

authorized by this Section shall constitute valid and binding

general obligations of the government of Guam. The government

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

of both the 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, a sum

adequate to pay the principal of and interest on the bonds. All

officers charged by law with any duty in the collection of

government revenues from which debt service on the bonds will

be paid shall do every lawful thing necessary to collect such sum.

The validity of said bonds shall not be affected by the validity or

regularity of any proceedings for the payment of the General Fund

expenses paid or to be paid with bond proceeds.

(d) Appropriations from the General Fund. There is hereby

appropriated from the General Fund an amount sufficient to pay

the principal and interest on said bonds.

(e) Additional Bonds. Nothing herein shall be construed to

prohibit the government of Guam from issuing, after appropriate

enabling legislation, other obligations of the government secured

by the general obligation of the government on a parity with or

subordinate to the bonds authorized hereby on such terms as are

created by the bond indenture or certificate. Nothing herein shall

be construed to prohibit the government of Guam from issuing,

after appropriate enabling legislation, other obligations of the

government secured by Real Property Tax Revenues.

(f) Waiver of Immunity; Submission to Jurisdiction.

Notwithstanding Chapter 6 of Title 5 Guam Code Annotated, the

government of Guam hereby waives immunity from any suit or

action in contract based on the said bonds, but does not waive

immunity regarding the personal liability of elected officials and

employees of the government of Guam. Any such action may be

brought in the District Court of Guam.

(g) No Personal Liability. No employee or elected official of

the government of Guam shall be personally liable for the

payments due on the bonds issued pursuant hereto, or for any other

liability arising in connection with the bonds; provided that

nothing herein relieves any employee or elected official from the

performance of a ministerial duty required by law.

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(h) Form of Bonds; Covenants; Appointment of Fiduciaries.

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 this Section,

including covenants relating to the collection of revenues, shall be

as specified in the certificate or indenture executed by

I Maga’lahen Guåhan authorizing issuance of the bonds. The

Trustees on the prior bonds shall remain as Trustees on the

refunding bonds. The Trustee, Co-Trustee or other fiduciaries are

authorized to receive and hold in trust the proceeds of the bonds,

the revenues and other moneys relating thereto, to protect the

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

specified by the certificate or indenture.

I Maga’lahen Guåhan may execute, on behalf of the

government of Guam, any appropriate agreements, certificates or

other instruments relating to the bonds and the sale of bonds.

(i) Authorization for Credit Enhancement. I Maga’lahen

Guåhan 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 issued under this

Section. Such contracts or agreements may contain an obligation

to reimburse, with interest, any such bank, insurance company or

other financial institution for advances it makes to pay the

principal of or interest on the bonds and to indemnify any such

bank, insurance company or other financial institution for costs

and expenses incurred in connection with any such advance. Any

such reimbursement obligation and any other obligations of the

government under such contracts or agreements shall be general

obligations of the government of Guam and any such advance, if

necessary, shall be treated for Organic Act purposes as creating an

obligation issued to refund the bonds.

(j) Use of Proceeds from the Sale of the Bonds. The proceeds

from the sale of the bonds shall be used and are hereby

appropriated to (1) refinance the General Fund obligations and to

fund the capital projects and other purposes described in

subsection (k) hereof; (2) establish necessary reserves; (3) pay

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expenses relating to the authorization, sale and issuance of the

bonds, including, without limitation, printing costs, costs of

reproducing documents, credit enhancement fees, underwriting,

legal, financial advisory and accounting fees and charges, fees

paid to banks or other financial institutions providing credit

enhancement, costs of credit ratings and other costs, charges and

fees in connection with the issuance, sale and delivery of the

bonds; and (4) fund capitalized interest on the bonds issued for the

purposes described in subsection (k)(1) hereof for a period ending

not later than thirty (30) months from the receipt of proceeds.

(k) Use of Proceeds of Bonds. The proceeds of said bonds

are appropriated as follows:

(1) to fund an escrow account to pay debt service on

all or a portion of the Government of Guam General

Obligation Bonds, 1993 Series A.

(2) Twenty-nine Million Five Hundred Four Thousand

Dollars ($29,504,000) to fund the capital expense items and

capital improvement projects of the Department of Education

needed to comply with the Every Child is Entitled to an

Adequate Public Education Act as listed in Attachments A

and A-1. Effective October 23, 2014, the Superintendent of

Education is authorized to expend the remaining funds for

facilities repair, and air conditioning and equipment repair

and replacement for public schools.

(3) Sixteen Million Dollars ($16,000,000) to fund

payments to COLA Class awardees as ordered by the

Judgment in Rios v. Camacho, Superior Court Case No.

SP0206-93.

(4) Twenty-one Million One Hundred Ninety-six

Thousand Dollars ($21,196,000) to fund past due Income

Tax Refunds.

(5) Two Million Six Hundred Forty Thousand Dollars

($2,640,000) to fund capital improvement projects of the

Guam Memorial Hospital and Three Hundred Sixty

Thousand Dollars ($360,000) for the University of Guam to

fund renovations and expansion of the Nursing/Health

Science Building.

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(6) Two Million Dollars ($2,000,000) to meet

obligations imposed by the Permanent Injunction (District

Court of Guam CIV01-00041) on the Department of

Integrated Services for Individuals with Disabilities,

provided that said funds shall only be made available to the

Department if the District Court approves its revised Guam

Comprehensive Integration Plan.

(7) Four Million Dollars ($4,000,000) to meet

obligations imposed by the Permanent Injunction (District

Court of Guam CIV01-00041) on the Guam Behavioral

Health and Wellness Center, provided that said funds shall

only be made available to the Department if the District Court

approves its revised Guam Comprehensive Integration Plan.

(8) One Million Dollars ($1,000,000.00) to fund

personnel and operations costs of the Department of Revenue

and Taxation necessary to implement an Aggressive Tax

Collection Effort in FY2009.

(9) Three Hundred Thousand Dollars ($300,000) to the

Department of Education for school water tanks and water

fountains.

(10) The remaining balance of the bond proceeds shall

be used first to fund up to Two Million Dollars ($2,000,000)

for the Department of Law’s APASI system and second to

fund the capital and operating expenses of the Guam

Memorial Hospital.

(l) Permitted Investments. The proceeds of the bonds and any

revenues from the such bonds shall be invested only in

investments authorized by the certificate or indenture pursuant to

which the bonds are issued.

(m) Approval by the Guam Economic Development and

Commerce Authority. No bonds authorized by this Section shall

be sold until the Board of Directors of GEDCA has adopted a

resolution approving the sale.

(n) Approval of Voters Not Required. Notwithstanding Title

3 Guam Code Annotated §§ 17311 and 17312, the issuance of the

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bonds authorized hereby shall not be subject to the approval of the

voters of Guam.