Guam § 49001 - Revenue School Improvement Bonds.

§ 49001. Revenue School Improvement Bonds.

(a) Authorization of Issuance of Revenue School Improvement Bonds.

I Maga’lahen Guåhan is authorized to issue new bonds of the government

of Guam in an aggregate principal amount not to exceed Seventeen Million

Dollars ($17,000,000) to fund all or a portion of the capital outlay and

capital improvement projects described herein, and paying expenses

incurred in connection with the issuance of such new bonds; provided,

however, that the issuance of the new bonds shall not violate the debt

limitation provisions of 48 U.S.C. §1423a.

(b) Terms and Conditions Determined by Indenture. The terms and

conditions of the bonds shall be as determined by I Maga’lahi by the

execution of an indenture securing the bonds upon or before the issuance of

the bonds. The indenture shall contain such terms and conditions as are

consistent with this Section.

(c) Valid and Binding Obligation. To the extent that the debt limitation

provisions of 48 U.S.C. §1423a are not violated, any bonds authorized by

this Section shall constitute the valid and legally binding limited obligations

of the government of Guam payable solely from and secured by a pledge of

the revenues pledged pursuant to Subsection (d) of this Section.

(d) Pledge of Revenues; Not a General Obligation. There is hereby

established the School Improvement Fund, hereinafter known as the ‛SIF’.

Any and all revenues derived from the issuance of new and renewal licenses

issued by the Business License Branch of the Department of Revenue and

Taxation in Guam, and all fees and penalties collected by the Department of

Education, except as restricted by federal law, shall be deposited in the SIF.

All funds held in the SIF may be pledged to secure the repayment of any

bonds issued under this Section and to pay costs incurred in the issuance or

administration of the bonds. Any pledge made to secure the bonds 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,

depository or custodian shall be deposited in a separate account and shall be

COL 110609

immediately subject to the lien of such pledge without any physical delivery

thereof or further act, and the lien of 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 or such trustee, depository or custodian,

regardless of whether the parties have notice thereof. The indenture or

agreement by which such pledge is created need not be recorded. All such

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

appropriated for such purpose. The bonds shall not be, and shall state on

their face that they are not, general obligations of the government of Guam.

(e) Waiver of Immunity. Notwithstanding any substantive or

procedural provision of Chapter 6 of Title 5 of the Guam Code Annotated,

the government of Guam waives immunity from any suit or action in

contract on the bonds, but does not waive sovereign immunity as to the

personal liability of elected officials and employees of the government of

Guam.

(f) 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

maintenance of revenues, shall be as specified in the indenture approved by

I Maga’lahi authorizing the issuance of the bonds. The indenture may

appoint one or more trustees or other fiduciaries authorized to receive and

hold in trust the proceeds of the bonds and revenues relating thereto, to

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

specified in the indenture. I Maga’lahi is also authorized to execute, on

behalf of the government of Guam, any appropriate agreements, certificates

or other instruments relating to the bonds, the sale of the bonds and payment

of the bonds being refunded. The indenture shall be subject to the approval

of I Liheslaturan Guåhan.

(g) Authorization for Credit Enhancement. I Maga’lahi 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 banks, insurance companies or other

financial institutions for advances used to pay principal or interest on the

bonds. Any such reimbursement obligation shall be payable solely from,

COL 110609

and may be secured by a pledge of, the revenues described in Subsection (d)

of this Section.

(h) Use of Proceeds from the Sale of the Bonds. Proceeds from the sale

of the bonds shall be used solely to fund all or a portion of the projects

enumerated in Subsection (j) of this Section, and to pay expenses relating to

the authorization, sale and issuance of the bonds and the payment of the

bonds being refunded, 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, escrow

agent fees and other costs, charges and fees in connection with the issuance,

sale and delivery of the bonds and the payment of the bonds being refunded.

(i) No Personal Liability Except for Failure to Perform Ministerial

Duty. No employee or elected official of the government of Guam shall be

individually or personally liable for the payment of any amounts due on any

bonds issued under this Section, or for any other liability arising in

connection with the bonds; provided, however, that nothing in this Section

shall relieve any employee or elected official from the performance of any

ministerial duty required by law.

(j) Proceeds. The proceeds shall be expended for the following school

improvement projects:

(1) design, repair, renovation and reconstruction of facilities that

are part of public schools in Guam, inclusive of restrooms, classrooms,

cafeterias, labs and other such facilities as determined by the

Superintendent of Education, provided that no such work may be

performed on a facility that is not a school; and

(2) purchase and upgrading of school air conditioning systems,

school fire alarm and safety systems and classroom computers, as

determined by the Superintendent of Education.

(k) Alternative Financing. Should I Maga’lahi determine that an

alternative method of financing, including, but not limited to, a short term

debt, mortgage, loan, federally guaranteed loan or loan by an

instrumentality of the United States Federal Government will better serve

the needs of the school system and the people of Guam, I Maga’lahi is

authorized to pursue such financing by pledging the revenues detailed in

this Section, provided that the proceeds of such alternative financing shall

COL 110609

be as authorized by this Section and provided further that any instrument of

such financing shall be subject to the approval of I Liheslaturan Guåhan

before execution.

(l) Assistance by GEDCA. The Guam Economic Development and

Commerce Authority shall provide such assistance as I Maga’lahi requires

or requests in fulfilling the purpose of this Section. Such assistance will be

provided without fee or compensation of any kind.

2009 NOTE: P.L. 28-045:10 (June 6, 2005) changed the name of the Department of

Education to the Guam Public School System. P.L. 30-050:2 (July 14, 2009) reverted

the name of the Guam Public School System to the Department of Education.

References to Guam Public School System have been changed to Department of

Education pursuant to P.L. 30-050:3.

----------

COL 110609