Guam § 58108 - Use of Tax-Exempt Bonds for Financing.

§ 58108. Use of Tax-Exempt Bonds for Financing.

(a) To minimize the financing cost to the Education Agency, all

financing utilized by the Contractor to fund the design, construction and

maintenance of an Education Facility shall be through tax-exempt bonds

or other financial instruments, if a mechanism to do so is available. The

purpose for this requirement is to assure the Education Agency pays the

lowest possible interest rate so that the cost of financing the design,

construction and maintenance of an Education Facility to the Education

Agency, amortized through the Lease-Back payments from the

Education Agency to the Contractor, will be lower than regular

commercial rates.

(b) The Lease and the Lease-Back may include a pledge of compact

impact funds or other federal grant revenues that are legally available for

such purpose. Any such pledge made hereunder shall be valid and

binding from the time the pledge is made.

(c) 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 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, irrespective of whether

the parties have notice thereof.

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CONSTRUCTION INITIATIVE ACT OF 2001

(d) The instrument by which such pledge is created need not be

recorded.