Chapter 51

12 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 1 CHAPTER 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS SOURCE: Added by P.L. 26-058:2 (Nov. 20, 2001). § 51101. Definitions. § 51102. Authorization and Approval of Issuance, Te rms and Conditions of Bonds of the Government for the Sole Purpose of Achieving Debt Service Savings. § 51103. Approval of Issuance, Terms and Condition s of Bonds of Agencies, Authorities and Instrumentalities of the Government for the Sole Purpose of Achieving Debt Service Savings. § 51104. Permitted Investments. § 51105. Financial Contracts to Achieve Savings. § 51106. Local Sale of Bonds. § 51107. Education Facilities Fund. [Repealed.] § 51101. Definitions. The definitions set forth herein shall govern the c onstruction and interpretation of this Chapter: (a) ‘ Prior bond’ means for purposes of this Chapter the following obligations which are to be redeemed or o therwise retired with the proceeds of refunding bonds and in vestment earnings thereon: (1) Loans made pursuant to Public Law No. 24-59, as amended, for the Guam Memorial Hospital Authority, (2) Loans made pursuant to Public Law No.

s of refunding bonds and in vestment earnings thereon: (1) Loans made pursuant to Public Law No. 24-59, as amended, for the Guam Memorial Hospital Authority, (2) Loans made pursuant to Public Law No. 25-72, as amended, for the purpose of funding the voluntar y separation programs, and (3) The 1989 Government of Guam Water System Revenue Bonds, Series 1989. (4) The Judicial Building Loan (Government of Guam Promissory Note to Farmers Home Administration Superior Court Note). COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 2 (b) ‘ Refunding bond’ means a bond authorized or approved pursuant to this Chapter for the purpose o f providing moneys to redeem or otherwise retire prio r bonds, funding any necessary bond reserves or paying expen ses incurred in connection with the issuance of such re funding bonds. (c) ‘ Yield’ shall have the same meaning as when used in §148 of the Internal Revenue Code of 1986, as amend ed. That is, >yield = means the annual discount rate which, when used to discount all payments of debt service on an issue of bonds to the date of issuance of the bonds, using a semiannual compounding interval, results in

means the annual discount rate which, when used to discount all payments of debt service on an issue of bonds to the date of issuance of the bonds, using a semiannual compounding interval, results in the aggregate pres ent value of such payments being equal to an amount equal to the re- offering price to the public of such bonds less fee s to be paid for credit enhancement of such bonds from proceeds thereof. (d) ‘ Debt service’ means the scheduled principal of and interest on bonds plus fees to be paid (other than from bond proceeds) for credit enhancement of such bonds and the net amounts to be paid or received under any financial contract entered into under § 51105 of this Chapter. For pu rposes of this definition, any prior bonds bearing interest a t a variable rate shall be assumed to bear interest at the then- current interest rate on such bonds. (e) ‘ Debt service savings’ means the percentage by which the present value of debt service on the refu nding bonds is less than the present value of debt servic e on the prior bonds, taking into account any moneys transfe rred from the refunded bonds to the refunding bonds and takin g into account any moneys contributed to either

present value of debt servic e on the prior bonds, taking into account any moneys transfe rred from the refunded bonds to the refunding bonds and takin g into account any moneys contributed to either or both bo nd issues. Present value shall be calculated for this purpose using the yield on the refunding bonds as the discount rate. (f) ‘ Bond’ means any bond, note or other evidence of indebtedness. (g) ‘ GEDA ’ means the Guam Economic Development Authority. NOTE : Subsection (a)(4) added by P.L. 26-124:3. COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 3 § 51102. Authorization and Approval of Issuance, Te rms and Conditions of Bonds of the Government for the Sole Purpose of Achieving Debt Service Savings. I Maga =lahen Guåhan [Governor of Guam]is authorized to issue on behalf of the government of Guam one or mo re issues of bonds of the government consisting of refunding bon ds, subject to the following requirements, limitations, terms and conditions, which shall apply separately to each such issue of refunding bonds: (a) The issuance of the refunding bonds shall not c ause a violation of the debt limitation provisions of 48 USC

ms and conditions, which shall apply separately to each such issue of refunding bonds: (a) The issuance of the refunding bonds shall not c ause a violation of the debt limitation provisions of 48 USC 1423a (§11 of the Organic Act of Guam). (b) All obligations of the government to pay debt s ervice on, and the redemption price of, the prior bonds sh all be discharged concurrently with the issuance of the re funding bonds. Thereafter, the prior bonds shall be payabl e solely from and secured solely by an escrow established fo r such purpose. (c) The debt service savings resulting from the iss uance of the refunding bonds shall be not less than two p ercent (2%); provided that such requirement shall not appl y to refunding bonds issued to refinance bonds issued pu rsuant to: (i) Public Law No. 24-59, as amended, relating to a loan made by the Bank of Guam to the Guam Memorial Hospital Authority and (ii) Public Law No. 25-72, as amended, relating to a loan made by the Bank of Hawaii to the government of Guam for the purpose of funding the voluntary separation program. (d) The aggregate amount of scheduled debt service on the refunding bonds in each year to and including t he final

the government of Guam for the purpose of funding the voluntary separation program. (d) The aggregate amount of scheduled debt service on the refunding bonds in each year to and including t he final maturity of the refunding bonds shall be less than or equal to the maximum annual debt service on the prior bonds and the final scheduled maturity date of such refunding bon ds shall be not more than five (5) years after the final sch eduled maturity date of the prior bonds. COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 4 (e) The refunding bonds shall be payable from and secured by all or any portion of the same source, o r sources, of revenues as the prior bonds refunded by the issu e and the amounts to be received under any financial contract entered into under § 51105 of this Chapter, and shall not be payable from or secured by any other source, or sources, of revenues, except as may be authorized by statute. Any pledge or lie n on revenues or other monies authorized to be grante d with respect to the prior bonds refunded by the issue is hereby authorized to be granted with respect to the refund ing bonds.

ny pledge or lie n on revenues or other monies authorized to be grante d with respect to the prior bonds refunded by the issue is hereby authorized to be granted with respect to the refund ing bonds. If the prior bonds being refunded are general obligat ions of the government, the refunding bonds shall be genera l obligations of the government. (f) If and to the extent that any refunding bonds a re not payable from and secured by the revenues of any aut onomous agency of the government that were pledged to secur e the related prior bonds, but are payable from and secur ed by a pledge of revenues that would otherwise be deposite d in the General Fund, such autonomous agency shall pay to t he General Fund on the dates on which any moneys that would otherwise be deposited in the General Fund are appl ied to pay debt service on such refunding bonds an amount equa l to the lesser of (a) the amount of such moneys so applied to pay debt service and (b) the amount of such autonomous agency revenues available for such purpose. (g) The proceeds of the refunding bonds may be used to fund a bond reserve only: (1) to the extent that moneys from any bond reserve for the prior issue are

gency revenues available for such purpose. (g) The proceeds of the refunding bonds may be used to fund a bond reserve only: (1) to the extent that moneys from any bond reserve for the prior issue are transferred to the escrow f rom which the prior bonds will be paid, and (2) if the prior bonds had no bond reserve, in an amount not greater than maximum annual debt service on the related refunding bonds. (h) The terms and conditions of the refunding bonds shall be as determined by I Maga =lahen Guåhan [Governor of Guam]by the execution of a certificate or indent ure authorizing the issuance of the bonds. The certifi cate or COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 5 indenture shall contain terms and conditions that a re consistent with this Chapter, and shall include sub stantially the same additional bond tests, rate covenants and other covenants as were applicable with respect to the pr ior bonds. (i) Any refunding bonds authorized by this Chapter shall constitute valid and binding obligations of the gov ernment of Guam. All officers charged by law with any duty in the collection of any revenues from which debt service on

rized by this Chapter shall constitute valid and binding obligations of the gov ernment of Guam. All officers charged by law with any duty in the collection of any revenues from which debt service on the issue will be payable shall do every lawful thing n ecessary to collect the amount necessary for such purpose. The validity of any such bonds shall not be affected by the vali dity or regularity of any proceedings for the implementatio n of the capital improvement projects funded by the prior bo nds. (j) Any appropriation of revenues or other moneys m ade by the statute authorizing the issuance of the prio r bonds is hereby continued as an appropriation with respect t o the refunding bonds. (k) Notwithstanding any substantive or procedural provision of Chapter 6, Title 5, Guam Code Annotate d, the government of Guam waives immunity from any suit or action in contract on the bonds authorized by this Chapter, but does not waive sovereign immunity as to the per sonal liability of elected officials and employees of the government of Guam. (l) The technical form and language of the refundin g bonds, including provisions for execution, exchange , transfer, registration, paying agency,

d officials and employees of the government of Guam. (l) The technical form and language of the refundin g bonds, including provisions for execution, exchange , transfer, registration, paying agency, lost or muti lated bonds, negotiability, cancellation and other terms, covena nts or conditions not inconsistent with this Chapter, and including covenants relating to the collection of revenues, s hall be as specified in the certificate or indenture executed by I Maga’lahen Guåhan [Governor of Guam] authorizing th e issuance of the refunding bonds. The certificate o r indenture may appoint one (1) or more trustees, or other fidu ciaries authorized to receive and hold in trust the proceed s of the bonds and monies relating thereto, to protect the r ights of bondholders and to perform such other duties as may be specified in the certificate or indenture. Trustee s having COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 6 possession or custody prior to November 20, 2001 of the trust proceeds from the bond(s) being refunded shall rema in as trustees on refunding bonds without going through a new procurement process.

6 possession or custody prior to November 20, 2001 of the trust proceeds from the bond(s) being refunded shall rema in as trustees on refunding bonds without going through a new procurement process. I Maga’lahen Guåhan [Governor of Guam] is also authorized to execute, on behalf of t he government of Guam, any appropriate agreements, certificates or other instruments relating to the b onds and the sale of the bonds. (m) I Maga =lahen Guåhan [Governor of Guam] is authorized to enter into such contracts or agreemen ts with such banks, insurance companies or other financial institutions as he determines are necessary or desi rable to improve the security and marketability of any issue of bonds authorized by this Chapter. Such contracts or agre ements may contain an obligation to reimburse, with intere st, any such banks, insurance companies or other financial institutions for advances used to pay principal of or interest on the issue. Any such reimbursement obligation sh all be payable solely from the same sources as debt servic e on the issue is payable, and any such advance, if necessar y, shall be treated as creating a reimbursement obligation issu ed to refund the issue.

ayable solely from the same sources as debt servic e on the issue is payable, and any such advance, if necessar y, shall be treated as creating a reimbursement obligation issu ed to refund the issue. (n) No employee or elected official of the governme nt of Guam shall be individually or personally liable for the payment of any amounts due on any bonds issued unde r this Chapter, or for any other liability arising in conn ection with the bonds; provided, however, that nothing in this Chapter shall relieve any employee or elected official from the performance of any ministerial duty required by law . (o) 5 GCA § 50103(k) provides that agencies and instrumentalities of the government of Guam shall i ssue bonds and other obligations only by means of and th rough the agency of the GEDA. No issue of bonds authoriz ed by this Chapter shall be sold until the Board of Direc tors of GEDA has adopted a resolution approving the sale of such issue. (p) 5 GCA § 50103(k) also provides that GEDA shall not sell any bonds without approval by I Liheslatur an Guåhan COL1/11/202212 GCA AUTONOMOUS AGENCIES CH.

esolution approving the sale of such issue. (p) 5 GCA § 50103(k) also provides that GEDA shall not sell any bonds without approval by I Liheslatur an Guåhan COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 7 [Guam Legislature] of the terms and conditions of t he issuance of the bonds. I Liheslaturan Guåhan [Guam Legislature] hereby approves the issuance, terms an d conditions of the bonds authorized by this Chapter. SOURCE : Subsection (e) amended by P.L. 26-59:1 to correc t errors in the original. Subsection (l) amended by P.L. 26-59: 2 to correct errors. § 51103. Approval of Issuance, Terms and Condition s of Bonds of Agencies, Authorities and Instrumentalitie s of the Government for the Sole Purpose of Achieving Debt S ervice Savings. Section 50103(k) of Title 12 of the Guam Code Annot ated, authorities and instrumentalities of the government of Guam shall issue bonds only by means of and through the agency of GEDA and that GEDA shall not sell any bond without appro val by I Liheslaturan Guåhan [Guam Legislature] of the terms and conditions of the issuance of the bonds.

y means of and through the agency of GEDA and that GEDA shall not sell any bond without appro val by I Liheslaturan Guåhan [Guam Legislature] of the terms and conditions of the issuance of the bonds. I Lihesla turan Guåhan [Guam Legislature] hereby approves the issuance, te rms and conditions of refunding bonds to be issued by any a gency, authority and instrumentality of the government of Guam, subject to the following requirements, limitations, terms a nd conditions, which shall apply separately to each such issue of refunding bonds: (a) The issuance of the refunding bonds shall not c ause a violation of the debt limitation provisions of 48 USC 1423a (§11 of the Organic Act of Guam). (b) All obligations of the agency, authority or instrumentality to pay debt service on, and the red emption price of, the prior bonds shall be discharged concu rrently with the issuance of the refunding bonds. Thereaft er, the prior bonds shall be payable solely from and secure d solely by an escrow established for such purpose. (c) The debt service savings resulting from the iss uance of the refunding bonds shall be not less than two p ercent (2%).

e solely from and secure d solely by an escrow established for such purpose. (c) The debt service savings resulting from the iss uance of the refunding bonds shall be not less than two p ercent (2%). (d) The aggregate amount of scheduled debt service on the refunding bonds in each year to and including t he final maturity of the refunding bonds shall be less than or equal to COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 8 the maximum annual debt service on the prior bonds, and the final scheduled maturity date of such refunding bon ds shall be not more than five (5) years after the final sch eduled maturity date of the prior bonds. (e) The proceeds of the refunding bonds may be used to fund a bond reserve only if and to the extent that moneys from any bond reserve for the prior issue are trans ferred to the escrow from which the prior bonds will be paid. (f) The terms and conditions of the refunding bonds shall be consistent with this Section, and shall in clude substantially the same additional bond tests, rate covenants and other covenants as were applicable with respect to the prior bonds.

ng bonds shall be consistent with this Section, and shall in clude substantially the same additional bond tests, rate covenants and other covenants as were applicable with respect to the prior bonds. (g) No issue of bonds approved by this ‘shall be so ld until the Board of Directors of GEDA has adopted a resolution approving the sale of such issue. § 51104. Permitted Investments. The proceeds of bonds issued by the government or a ny agency, authority or instrumentality thereof under this Chapter, and any revenues relating to such bonds, may be inv ested in, but only in, the types of investments permitted by the certificate or indenture pursuant to which such bonds are issued. § 51105. Financial Contracts to Achieve Savings. Any agency, authority or instrumentality of the gov ernment and I Maga =lahen Guåhan [Governor of Guam] on behalf of the government of Guam, in connection with, or incident al to, the issuance of bonds under this Chapter, or the carryi ng of any investment or program of investment under this Chap ter, may enter into any contracts which GEDA determines to b e necessary or appropriate to place the obligation or investmen t of the agency, authority or

ent or program of investment under this Chap ter, may enter into any contracts which GEDA determines to b e necessary or appropriate to place the obligation or investmen t of the agency, authority or instrumentality of the government, as represented by the bonds, investment or program of investment and the contract or contracts, in whole or in part, on the interest rate, currency, cash-flow, or other basis desired by GEDA in the fu rtherance of the purposes of this Chapter, including, without li mitation, contracts commonly known as interest rate swap agre ements, COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 9 currency swap agreements, forward payment conversio n agreements, futures, or contracts providing for pay ments based on levels of, or changes in, interest rates, currency exchange rates, or contracts to exchange cash flows or a series of pay ments, or contracts, including, without limitation, interest rate floors or caps, options, put or call to hedge payment, curren cy, rate, spread, or similar exposure. These contracts or arrangemen ts may also be entered into by GEDA in connection with, or inciden tal to, entering

options, put or call to hedge payment, curren cy, rate, spread, or similar exposure. These contracts or arrangemen ts may also be entered into by GEDA in connection with, or inciden tal to, entering into or maintaining any agreement which se cures bonds. These contracts and arrangements shall be entered i nto with the parties, selected by the means, and contain the pay ment, security, default, remedy, and other terms and conditions, de termined by GEDA, after giving due consideration for the credit worthiness of the counterparties, where applicable, including any rating by a nationally recognized rating agency or any other cr iteria as may be appropriate. § 51106. Local Sale of Bonds. GEDA shall undertake its best efforts to cause a po rtion of any bonds issued pursuant to this Chapter, to be of fered for sale in Guam, as well as in other jurisdictions, if and to the extent that such offer and any sales resulting from such offer do not increase the cost to the government of Guam of issuing and r epaying such bonds. § 51107. Education Facilities Fund. [Repealed.] SOURCE: Added by P.L. 26-058:2 (Nov. 20, 2001). Repealed b y P.L. 36- 071:24 (Dec. 27, 2021).

e government of Guam of issuing and r epaying such bonds. § 51107. Education Facilities Fund. [Repealed.] SOURCE: Added by P.L. 26-058:2 (Nov. 20, 2001). Repealed b y P.L. 36- 071:24 (Dec. 27, 2021). 2022 NOTE: Prior to its repeal, this provision stated: There is hereby created an Education Facilities Fun d (the >Fund =). The Fund shall be a special fund of the governm ent of Guam and shall be used for the sole purpose of construct ing or renovating education facilities. Expenditures from the Fund s hall be by appropriation of I Liheslaturan Guåhan [Guam Legisl ature]. The Fund shall initially be funded in an amount not to exceed Two Million Three Hundred Thousand Dollars ($2,300,000) at the time or times and to the extent that amount constitutes revenues derived by the government under 48 U.S.C. §1421h (§30 of th e Organic Act of Guam) and previously deposited in a debt service fund with respect to prior bonds are made available by the re funding of such COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 10 prior bonds pursuant to this Chapter.

prior bonds are made available by the re funding of such COL1/11/202212 GCA AUTONOMOUS AGENCIES CH. 51 AUTHORIZATION TO REFUND OBLIGATIONS TO ACHIEVE SAVINGS 10 prior bonds pursuant to this Chapter. Thereafter, the Fund shall be funded by appropriation of I Liheslaturan Guåhan [G uam Legislature]. The Fund shall be managed by the Gua m Economic Development Authority. Investment income on the as sets of the Fund shall be deposited in the Fund. ---------- COL1/11/2022