Chapter 58

5 GCA GOVERNMENT OPERATIONS CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 1 CHAPTER 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 SOURCE: This entire chapter was added by P.L. 26-061:2 (De c. 22, 2001). 2009 NOTE: P.L. 28-045:10 (June 6, 2005) changed the name of the Department of Education to the Guam Public School S ystem. P.L. 30-050:2 (July 14, 2009) reverted the name of the Guam Publi c School System to the Department of Education. § 58101. Title. § 58102. Legislative Findings and Policy. [Repeale d] § 58103. Definitions. § 58104. Authorization to Enter into Long-Term Leas es. § 58105. Procurement. § 58106. Responsibilities of Contractor. § 58107. Assignments. § 58108. Use of Tax-Exempt Bonds for Financing. § 58109. Utilities and Routine Maintenance and Repa ir. § 58110. Contractor Responsible for Capital Mainten ance. § 58111. Rules, Regulations and Restrictions. § 58112. Severability. § 58101. Title. This Act shall be known and shall be cited as The Education Facilities Construction Initiative Act of 2001. § 58102. Legislative Findings and Policy. [Repealed.] SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), and repe aled by P.L.

be cited as The Education Facilities Construction Initiative Act of 2001. § 58102. Legislative Findings and Policy. [Repealed.] SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), and repe aled by P.L. 28-047:1 (June 10, 2005). § 58103. Definitions . For purposes of this Chapter and unless otherwise s pecified, the following words and phrases are defined to mean: (a) ‘Act’ means Chapter 58 of Title 5 of the Guam Code Annotated, known as ‘The Education Facilities Const ruction Initiative Act of 2001.’ COL2920175 GCA GOVERNMENT OPERATIONS CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 2 (b) ‘Contractor’ shall mean the authorized entity which shall be the signatory on the Contract and shall be fully responsible for carrying out the design, construction, financing an d maintenance of the Education Facility. The Contractor may coopera te with another entity or entities in any manner the Contractor dee ms appropriate to provide for the financing, design, construction and maintenance of the public school facilities envisioned by this Cha pter. (c) ‘Contract’ shall mean the design, construction, financing and maintenance contract entered into by and betwee n the

on and maintenance of the public school facilities envisioned by this Cha pter. (c) ‘Contract’ shall mean the design, construction, financing and maintenance contract entered into by and betwee n the Education Agency and the Contractor, following nego tiations on the response to the Request for Proposal. (d) ‘Education Agency’ shall mean the Department of Education, the University of Guam or the Guam Commu nity College. (e) ‘Education Facility’ shall mean any structure or structures, together with all ancillary facilities, including p arking facilities, utilities, infrastructure and equipment associated with providing the educational or related services required by an Educ ation Agency. ‘Education Facility’ may include an existing facili ty being converted or rehabilitated by the Contractor. (f) ‘Lease’ shall mean a ground or site lease of the property from an Education Agency, the Chamorro Land Trust C ommission, or other government land, as applicable, to the Con tractor. (g) ‘Lease-Back’ shall mean the facilities lease or other lease of the property from the Contractor back to the Educat ion Agency, over the term of which the costs of the design, co nstruction, financing and

se-Back’ shall mean the facilities lease or other lease of the property from the Contractor back to the Educat ion Agency, over the term of which the costs of the design, co nstruction, financing and maintenance of an Education Facility are amortized according to the terms agreed to between the govern ment of Guam and the Contractor. (h) ‘Property’ shall mean any property on which an Education Facility is located.' SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), and amend ed by P.L. 28-047:2 (June 10, 2005). Subsection (g) amended by P.L. 29- 069:2 (Apr. 29, 2008). § 58104. Authorization to Enter into Long-Term Leas es . COL2920175 GCA GOVERNMENT OPERATIONS CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 3 (a) For the purpose of facilitating the refinancing of the design, construction and maintenance of an existing Educati on Facility or existing Education Facilities encompassed by this A ct, the government of Guam or an Education Agency, as the case may be, is authorized to lease under existing contracts and/or existing amendments thereto, if required, to the Contractor, subject to legislative approval, sufficient government of Guam real property, to include,

horized to lease under existing contracts and/or existing amendments thereto, if required, to the Contractor, subject to legislative approval, sufficient government of Guam real property, to include, but not be limit ed to, Chamorro Land Trust Commission property and Guam Ancestral Lands Commission property, on which to construct, convert or rehabil itate an Education Facility; provided, such property is in the invento ry of the Education Agency. The location of the property may be at the site of an existing Education Facility under the control of an Educatio n Agency, which may be converted, rehabilitated or demolished and rebui lt under the provisions of this Act. (b) Any lease of property pursuant to this Act will be for a period mutually agreed upon between the Education Agency a nd the Contractor as may be reasonably necessary to amortize over the Lease-Back period of the Contract, the costs associated with the fina ncing, design, construction and maintenance of the Education Facil ity, and in no event shall such period exceed thirty (30) years from the date of commencement of the Lease-Back period; and provided further, that with respect to leases of property for the sole

acil ity, and in no event shall such period exceed thirty (30) years from the date of commencement of the Lease-Back period; and provided further, that with respect to leases of property for the sole purpose of refinancing the prior design, construction and maintenance of an existing Education Facility or existing Education Facilities: (1) any leases and/or amendments to such leases ent ered into for such purposes shall not extend the original Lea se-Back period relating to such prior design, construction and mai ntenance of an existing Education Facility or existing Education F acilities of any original leases applied to finance such prior desig n, construction and maintenance of an existing Education Facility or ex isting Education Facilities; (2) with respect to any existing leases and/or exis ting amendments to leases that have the effect of refina ncing the government’s obligations with respect to the Guam E ducation Financing Foundation Certificates of Participation Series 2006 and 2008 (2006 and 2008 Certificates), all obligations of the government to pay debt service with respect to the 2006 and 2008 COL2920175 GCA GOVERNMENT OPERATIONS CH.

es of Participation Series 2006 and 2008 (2006 and 2008 Certificates), all obligations of the government to pay debt service with respect to the 2006 and 2008 COL2920175 GCA GOVERNMENT OPERATIONS CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 4 Certificates being refinanced shall be discharged c oncurrently with the execution of the leases and/or amendments to le ases entered into for such refinancing purpose, and thereafter any re maining debt service on the refunded 2006 and 2008 Certificates shall be payable solely from and secured solely by a refunding escro w established for such purpose; (3) the present value in the aggregate of debt serv ice with respect to the government’s obligations with respec t to such new leases or amendments to leases shall be at least tw o percent (2%) less than the present value in the aggregate of deb t service on the refunded 2006 and 2008 Certificates, using the yiel d on the refunding bonds as the discount rate; and (4) no increase in the amount of outstanding 'publi c indebtedness' as that term is used in 48 USC 1423a (§11 of the Organic Act of Guam) shall result from the executio n of any such existing leases and/or

increase in the amount of outstanding 'publi c indebtedness' as that term is used in 48 USC 1423a (§11 of the Organic Act of Guam) shall result from the executio n of any such existing leases and/or existing amendments to lease s. (c) The Contractor shall lease back to the Educatio n Agency the property for the Lease-Back period. Upon the expira tion of the Lease and the Lease-Back periods and the fulfillment of the t erms and conditions of the Lease-Back by the Education Agency, the propert y and the existing Education Facility or existing Education Facilities shall become the property of the Education Agency, and the Contracto r shall have no further right, title or interest in the property or the existing Education Facility or existing Education Facilities. SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), amended b y P.L. 28-047:3 (June 10, 2005), P.L. 29-069:3 (Apr. 29, 2008), P. L. 33-094:2 (Nov. 9, 2015), and P.L. 33-118:1 (Feb. 3, 2016). 2016 NOTE: Subsection designations were added to adhere to the Compiler’s alpha-numeric scheme in accordance with the authori ty granted by 1 GCA § 1606. § 58105. Procurement .

-118:1 (Feb. 3, 2016). 2016 NOTE: Subsection designations were added to adhere to the Compiler’s alpha-numeric scheme in accordance with the authori ty granted by 1 GCA § 1606. § 58105. Procurement . (a) Subject to the approval of I Liheslaturan Guåhan , the government of Guam or an Education Agency may solicit Requests for Proposals (‘RFP’) through the Department of Public Works, in compliance with the Guam Procurement Law, for the f inancing, design and construction of the Education Facility, togethe r with maintenance of COL2920175 GCA GOVERNMENT OPERATIONS CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 5 the Education Facility over the term of the Lease-B ack, according to the needs of the Education Agency and consistent with t his Chapter. (b) Notwithstanding the foregoing, in connection wi th any amendments to an existing Lease or Lease-Back, the Contractor with respect to such amendments shall be the Contractor with respect to the existing Lease or Lease-Back. SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), amended b y P.L. 28-047:4 (June 10, 2005), and P.L. 29-069:4 (Apr. 29, 2008).

hall be the Contractor with respect to the existing Lease or Lease-Back. SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), amended b y P.L. 28-047:4 (June 10, 2005), and P.L. 29-069:4 (Apr. 29, 2008). 2016 NOTE: Subsection designations were added to adhere to the Compiler’s alpha-numeric scheme in accordance with the authori ty granted by 1 GCA § 1606. § 58106. Responsibilities of Contractor . (a) The Contract shall require that the Contractor be responsible for all costs, expenses and fees of any kind or nature, associated with the design, civil improvements, on-site infrastructure, construction, permits and financing associated with the completion of an Education Facility. The Contractor shall also be responsible for the ca pital maintenance and upkeep of the schools during the Lease-Back term. (b) The costs of the design, construction and fina ncing for an Education Facility shall be paid in periodic instal lments over the term of the Lease-Back period, which shall be mutually dete rmined by the Education Agency and the Contractor, but which will not exceed thirty (30) years. (c) The Lease and Lease-Back may provide that if s ufficient funds are not appropriated or otherwise

te rmined by the Education Agency and the Contractor, but which will not exceed thirty (30) years. (c) The Lease and Lease-Back may provide that if s ufficient funds are not appropriated or otherwise available for the payment of such installments, the Education Agency will have the ob ligation to vacate the Education Facility, and the Contractor shall have t he right of use and occupancy of the Education Facility for the remaind er of the term of the Lease, unless new mutually satisfactory terms are e ntered into. For this purpose, the Lease may provide that its term shall be extended for a period not to exceed the shorter of ten (10) years beyond the original term of the Lease-Back or such period of time as is necessary to repay in full any financing arranged pursuant to Section 581 08. (d) The capital maintenance, repair and upkeep cos ts shall be paid on a periodic basis as incurred by the Contractor o n terms to be agreed to in the Contract for each Education Facility. COL2920175 GCA GOVERNMENT OPERATIONS CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 6 SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), and amend ed by P.L. 28-047:5 (June 10, 2005).

2920175 GCA GOVERNMENT OPERATIONS CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 6 SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), and amend ed by P.L. 28-047:5 (June 10, 2005). 2015 NOTE: Subsection designations were added to adhere to the Compiler’s alpha-numeric scheme in accordance with the authori ty granted by 1 GCA § 1606. § 58107. Assignments . To facilitate the purposes of this Chapter and to p rovide security for the bondholders, the Contractor may assign, without the need of the consent of the Education Agency, the Contract, the Lease and the Lease- Back to any trustee, underwriter or other appropria te party as may be necessary to facilitate the issuance of the tax-exe mpt bonds or other financial instruments to provide the financing for the Education Facility. SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), and amend ed by P.L. 28-047:6 (June 10, 2005). § 58108. Use of Tax-Exempt Bonds for Financing. (a) To minimize the financing cost to the Educatio n Agency, all financing utilized by the Contractor to fund the de sign, construction and maintenance of an Education Facility shall be throu gh tax-exempt bonds or other financial instruments, if a

o n Agency, all financing utilized by the Contractor to fund the de sign, construction and maintenance of an Education Facility shall be throu gh tax-exempt bonds or other financial instruments, if a mechanism to d o so is available. The purpose for this requirement is to assure the Educa tion Agency pays the lowest possible interest rate so that the cost of f inancing the design, construction and maintenance of an Education Facili ty to the Education Agency, amortized through the Lease-Back payments f rom the Education Agency to the Contractor, will be lower t han regular commercial rates. (b) The Lease and the Lease-Back may include a ple dge of compact impact funds or other federal grant revenues that a re 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 fur ther act, and the lien of such pledge shall be valid and binding against a ll parties

account and shall be immediately subject to the lien of such pledge without any physical delivery thereof or fur ther act, and the lien of such pledge shall be valid and binding against a ll parties having claims of any kind in tort, contract or otherwise a gainst the government of Guam or such trustee, depository or custodian, i rrespective of whether the parties have notice thereof. COL2920175 GCA GOVERNMENT OPERATIONS CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 7 (d) The instrument by which such pledge is created need not be recorded. SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), and amend ed by P.L. 28-047:7 (June 10, 2005). 2015 NOTE: Subsection designations were added to adhere to the Compiler’s alpha-numeric scheme in accordance with the authori ty granted by 1 GCA § 1606. § 58109. Utilities and Routine Maintenance and Repa ir. The Education Agency shall be responsible for the c onnection and payment of all utilities, including, without limita tion, power, water, sewer, telephone and cable of the Education Facilit y. Capital maintenance and repair shall be performed by the Co ntractor as provided for in 5 GCA § 58110.

uding, without limita tion, power, water, sewer, telephone and cable of the Education Facilit y. Capital maintenance and repair shall be performed by the Co ntractor as provided for in 5 GCA § 58110. Routine maintenance, repair and upkeep shall be the responsibility of the Education Agency and/or t he Contractor, as provided by the terms of the Contract. SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), and amend ed by P.L. 28-047:8 (June 10, 2005). § 58110. Contractor Responsible for Capital Mainten ance. (a) The Contract with the Contractor, and the Leas e-Back, shall provide that all capital maintenance and repair of the Education Facility be performed by the Contractor as a separate cost; provided, however, that said documents may, at the discretion of the E ducation Agency, provide that capital maintenance and repair with re spect to equipment (including collateral equipment), onsite utility co nstruction, offsite utility connections, access roads, and other similar improv ements to the Education Facility need not be performed by the Contractor. The terms by which the Contractor is to perform such capital maintenance shall be determined as a part of the bid process and shall

to the Education Facility need not be performed by the Contractor. The terms by which the Contractor is to perform such capital maintenance shall be determined as a part of the bid process and shall be part of the conditions of the Contract. (b) The Contract shall provide initial funding for the first five (5) years after the completion of the Education Facilit y. SOURCE : Added by P.L. 26-061:2 (Dec. 22, 2001), amended b y P.L. 28-047:9 (June 10, 2005), and amended by P.L. 29-069:5 (Apr . 29, 2008). 2015 NOTE: Subsection designations were added to adhere to the Compiler’s alpha-numeric scheme in accordance with the authori ty granted by 1 GCA § 1606. § 58111. Rules, Regulations and Restrictions . COL2920175 GCA GOVERNMENT OPERATIONS CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001 8 The Department of Public Works may promulgate rules and regulations pursuant to Guam law necessary to imple ment the provisions of this Chapter. § 58112. Severability . If any provision of this Chapter or its application to any person or circumstance is found to be invalid or contrary to law, such invalidity shall not affect other provisions or applications o f this Chapter which

on of this Chapter or its application to any person or circumstance is found to be invalid or contrary to law, such invalidity shall not affect other provisions or applications o f this Chapter which can be given effect without the invalid provisions or a pplication, and to this end the provisions of this Chapter are severable. ---------- COL292017