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
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 Ann., 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.

(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
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.(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 Ann. §§ 17311 and 17312, the issuance of the

bonds authorized hereby shall not be subject to the approval of the voters of Guam.

SOURCE: Added by P.L. 28-149:II:VII:2 (Sept. 30, 2006). Repealed by
P.L. 29-002:VI:33 (May 18, 2007). Added by P.L. 29-019:VIII:1 (Sept.
29, 2007). Subsection (k)(8) amended by P.L. 29-113:VI:24 (Sept. 30,
2008). Subsection (k)(2) amended by P.L. 32-207:8 (Oct. 31, 2014).

2007 COMMENT: Public Law 21-019:VIII:5 (Sept. 29, 2007), as amended by P.L. 29-021:5 (Oct. 22, 2007) provides:

Section 5. Early Redemption of Bonds. The certificate or indenture authorized by Title 5 Guam Code Ann. $22435 shall authorize the early redemption, on or after November 15, 201 7, of the bonds authorized thereby. Fifty percent (50%) of any amount in excess of One Hundred Million Dollars ($100,000,000) paid to the government of Guam by the Government of the United States pursuant to Section 30 of the Organic Act, Title 48 U.S. Code §1421h, in any fiscal year shall be used for the early redemption of said bonds.

2013 NOTE: Pursuant to P.L. 32-024:2 (May 6, 2013) which renamed the Department of Mental Health and Substance Abuse (DMHSA) to the Guam Behavioral Health and Wellness Center, all references to DMHSA were altered to the Guam Behavioral Health and Wellness Center.