Chapter 58a

5 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 1 CHAPTER 58A Ma Kåhat Act of 2008 SOURCE: This entire chapter was added by P.L. 29-114:2 (Oc t. 10, 2008) and amended as indicated herein. 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. § 58A101. Title. § 58A102. Legislative Findings and Policies. § 58A103. Definitions. § 58A104. Authorization to Enter into Long-Term Lea ses. § 58A105. Procurement. § 58A106. Responsibilities of Contractor. § 58A107. Assignments. § 58A108. Use of Tax-Exempt Bonds for Financing. § 58A109. Pledge of Section 30 Revenue. § 58A110. Utilities and Routine Maintenance and Rep air. § 58A111. Maintenance Fund. § 58A112. Rules, Regulations and Restrictions. § 58A113. Severability. § 58A114. Approval of 2020 Certificates. § 58A101. Title. This Act shall be known and shall be cited as 'Ma Kåhat Act of 2008' . § 58A102. Legislative Findings and Policies. I Liheslaturan Guåhan finds that there is a critical shortage of public school facilities on Guam.

be known and shall be cited as 'Ma Kåhat Act of 2008' . § 58A102. Legislative Findings and Policies. I Liheslaturan Guåhan finds that there is a critical shortage of public school facilities on Guam. Many existing fa cilities are antiquated and are not fit for the purpose of public education. The Depa rtment of Education is in need of at least three (3) new publ ic schools with all the related civil and structural facilities and ameniti es customarily associated with a first rate public education facility. Speci fically, there is an immediate need to replace the John F. Kennedy (JFK) High School in Tumon, Guam and to build a modern facility on the s ite of the existing school. In an effort to overcome these financing h urdles and to provide for the educational needs of the students of Guam, I Liheslaturan COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 2 Guåhan desires to authorize the government of Guam to ente r into contracts for the financing, design, construction a nd long-term capital maintenance of the John F. Kennedy High School with private sector contractors who can provide long-term financing obt ained through tax- exempt obligations or other

nstruction a nd long-term capital maintenance of the John F. Kennedy High School with private sector contractors who can provide long-term financing obt ained through tax- exempt obligations or other competitive alternative financing based on long-term lease-backs to the government of Guam. T hese projects will constitute the first phase of a capital improvement plan approved by I Liheslaturan Guåhan to address Guam’s long term education, health, public safety and governmental needs. To facilitat e the financing, design, construction and maintenance of the facilit ies envisioned by this Act, the government of Guam will be authorized to l ease for up to thirty (30) years government of Guam property on which the facilities will be constructed. The lease of the government property will be to the contractor, who will design and construct the facil ities in accordance with specifications approved by Department of Educa tion, and provide funding for the design and construction through the use of tax-exempt obligations or other competitive alternative funding sources. Th e facilities and land will be leased back to the gove rnment of Guam for a period not to exceed the initial ground

e use of tax-exempt obligations or other competitive alternative funding sources. Th e facilities and land will be leased back to the gove rnment of Guam for a period not to exceed the initial ground lease to the contractor over wh ich time the government of Guam will amortize, as lease payments to the contractor, the cost of the financing, design, cons truction and related expenses of the facilities. The annual commitment of Section 30 Revenues auth or ized in the Act is based on the sum of Section 30 Revenue available after the final payment on the Go vernment of Guam Limited Obligation (Section 30) Bonds, Series 2001A . The contract or will also be responsible for the capital maintenan ce of the public school facilities constructed under t his Act, which costs shall be paid by the government of Guam as provided for under this Act. At the expiration of the Lease-Back Period, the gov ernment of Guam real property and the public facilities constructed on t he government of Guam real property will revert to the government of Guam with no further obligations to the Contractor. § 58A103. Definitions .

al property and the public facilities constructed on t he government of Guam real property will revert to the government of Guam with no further obligations to the Contractor. § 58A103. Definitions . For purposes of this Chapter and unless otherwise specified, the following w or ds and phrases are defined to mean: (a) 'Act' means Chapter 58A of Title of the Guam Co de Annotated, known as the 'Ma Kåhat Act of 2008.' COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 3 (b) 'Contract' shall mean the design, construction and financing contract entered into by and between the Education Agency and the Contractor following negotiations on the response to the Request for Proposal. (c) '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 deems approp riate to provide for the financing, design, construction or maintenance of the public school facilities envisioned by this Act .

h another entity or entities in any manner the Contractor deems approp riate to provide for the financing, design, construction or maintenance of the public school facilities envisioned by this Act . (d) 'Education Agency' shall mean the Department of Education. (e) 'Education Facility' as used in this Act shall mean a replacement high school to be located on the existi ng site of John F. Kennedy High School in Tumon. (f) 'Lease' shall mean a lease from an Education Agency to the Contract or entered into at the time of the Contract for the Property. (g) 'Lease-Back' shall mean the lease from the Contractor to the Education Agency. (h) 'Lease-Back Period' shall mean the term of the lease from the Contractor to the Education Agency. (i) 'Property' shall mean any property on which an Education Facility is located. § 58A104. Authorization to Enter into Long-Term Le ases . For the purpose of facilitating the financing of th e design, construction and maintenance of an Education Facili ty encompassed by this Act, the government of Guam or an Education Agency, as the case may be, is authorized to lease, if required, to the Contractor sufficient government of Guam real property on which

encompassed by this Act, the government of Guam or an Education Agency, as the case may be, is authorized to lease, if required, to the Contractor sufficient government of Guam real property on which to constr uct, convert or rehabilitate an Education Facility; provided, such property is in the inventory of the Education Agency or the government of Guam. The property may be the site of an existing Education F acility under the control of an Education Agency, which existing faci lity may be COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 4 converted, rehabilitated or demolished and rebuilt under the provisions of this Act. The Education Agency is also authorized to lease ba ck from the Contractor the property for a period mutually agree d upon between the Education Agency and the Contractor as may be reaso nably necessary to amortize over the Lease-Back Period the costs assoc iated with the financing, design and construction of the Education Facility. In no event shall the end of such Lease-Back Period be later than the date thirty (30) years from the scheduled date of completion of the Education Facility.

d construction of the Education Facility. In no event shall the end of such Lease-Back Period be later than the date thirty (30) years from the scheduled date of completion of the Education Facility. The Lease-Back may be structured as an annually ren ewable lease with provision for automatic renewals to the extent that pledged revenue under Section 58A109 is available. The Lease-Back shall not be construed as a debt under any applicable debt limit ation under the Guam Organic Act or Guam law. § 58A105. Procurement . (a) Subject to the approval of I Liheslaturan Guåhan , the government of Guam or an Education Agency may solic it 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 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. Notwithstanding the foregoing, in connection with a ny amendments to an existing Lease or Lease-Back, the Contractor with respect to such amendments shall be the Contractor with respect to the existing Leas

standing the foregoing, in connection with a ny amendments to an existing Lease or Lease-Back, the Contractor with respect to such amendments shall be the Contractor with respect to the existing Leas e or Lease-Back. The RFP shall be issued within thirty (30) days of enactment of this Act for replacement of the John F . Kennedy High School Facility on the existing site; may include d emolition of such portions of the existing facility as necessary; and shall include a requirement that occupancy of the JFK facility take place no later than nine (9) months after execution of the Contract. (b) Upon the execution and delivery by the Educatio n Agency of the Contract, the Lease, the Lease-Back and any other a greements relating to the design, construction, maintenance and financing of the Education Facility, the Contract, Lease, Lease-Back and such other agreements shall be valid and binding obligations of the Education Agency, enforceable in accordance with their respective ter ms, and there shall be COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 5 no power to terminate or declare null and void the Contract, Lease, Lease-Back, or such other agreement pursuant

here shall be COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 5 no power to terminate or declare null and void the Contract, Lease, Lease-Back, or such other agreement pursuant to § 5 452 of Title 5, Guam Code Annotated. (c) The Contractor selected through Subsection (a) of this Section shall be deemed disqualified if funding is not secured within ninety (90) calendar days from the enactment of this Act that a dds this Subsection. If funding is not secured as required by this Subsection, the Depart ment of Public Works shall proceed as provided in § 3114 (l)(4) of Chapter 3 o f Division 4 of Title 2 of GAR. SOURCE: Added by P.L. 29-114:2 (Oct. 10, 2008). Amended by P.L. 30-178:2 (Aug. 3, 2010). § 58A106. Responsibilities of Contractor . 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 and off-site in frastructure, construction, permits, and financing associated wit h the completion of an Education Facility, including the financing of furn iture and equipment for the Education Facility, as and to the extent pr ovided by the Education

and financing associated wit h the completion of an Education Facility, including the financing of furn iture and equipment for the Education Facility, as and to the extent pr ovided by the Education Agency in the Request for Proposals. The Contracto r shall also be responsible for the capital maintenance of the scho ols during the Lease- Back Period, but shall not be responsible for the capital maintenance of the furniture and equipment. The Lease-Back may pr ovide that if sufficient funds are not appropriated or otherwise available for the payment of amounts due under the lease and any main tenance agreement, the Education Agency will have the oblig ation to vacate the Education Facility, and the Contractor shall have the 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 sh or ter 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 58A 108.

od not to exceed the sh or ter 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 58A 108. The capital maintenance costs shall be paid by the Education Agency on a periodic basis as incurred by the Contractor on terms to be agreed to in the Contract for each Education Facility. § 58A107. Assignments . To facilitate the purposes of this Act and to provi de security for the COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 6 holders of any financing instruments issued pursuan t to this Act, the Contractor may assign, without the need of the cons ent of the Education Agency, the Contract, the Lease and the Lease-Back to any underwriter, trustee or other party as appropriate to facilitate the issua nce of the tax- exempt obligations, other financial instruments or alternative financing for the Education Facility. § 58A108. Use of Tax-Exempt Bonds for Financing. To minimize the financing cost to the Education Age ncy, financing utilized by the Contractor to fund the design and c onstruction of an Education Facility shall be through tax-exempt obligations or

To minimize the financing cost to the Education Age ncy, financing utilized by the Contractor to fund the design and c onstruction of an Education Facility shall be through tax-exempt obligations or other financial instruments provided such financing is available at an interest rate of no more than eight and a half percent (8.50%). Alternatively, the Contractor may use an alternative method of financi ng, including, but not limited to , a short term debt, mortgage, loan, federally guar anteed loan or loan by an instrumentality of the United States of America if such financing will better serve the needs of the people of Guam. Such alternative financing shall be approved by I Liheslaturan Guåhan . The purpose for the requirements of this Section is to assure the Education Agency pays the lowest possible interest rate so th at the cost to the Education Agency of financing the design and constr uction of an Education Facility, amortized through the Lease-Bac k payments from the Education Agency to the Contractor, will be lower t han regular commercial rates. SOURCE: Amended by P.L. 30-178:4 (Aug. 3, 2010). § 58A109. Pledge of Section 30 Revenue.

ease-Bac k payments from the Education Agency to the Contractor, will be lower t han regular commercial rates. SOURCE: Amended by P.L. 30-178:4 (Aug. 3, 2010). § 58A109. Pledge of Section 30 Revenue. Rental payments under the Lease and the Lease-Back may be secured by a pledge or other reservation of revenue s received by or on behalf of the government of Guam from the United St ates of America pursuant to Section 30 of the Guam Organic Act (48 U.S.C.A. Section 1421h). Any pledge or reservation of Section 30 rev enues authorized by the Act shall be subordinate only to the existing lien securing the Government of Guam Limited Obligation (Section 30) Bonds, Series 2001A. Any such pledge or reservation authorized he reunder shall be valid and binding from the time the pledge or reser vation is made and shall be limited to Six Million Nine Hundred Thousand Do llars ($6,900,000) per year during the Lease-Back Period. The remainder of the funds from the existing lien, supra, shall be used for the expansion of COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 7 Okkodo High School to fund the expansion of classrooms to accommodate the overcrowding, restroom facilities

r the expansion of COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 7 Okkodo High School to fund the expansion of classrooms to accommodate the overcrowding, restroom facilities a t all outdoor sports fields, additional restrooms required by public hea lth due to the increase in student population, solar panels, the culinary a rts building, signalization, the track and field track with prope r turf, and other projects needed to facilitate the expansion to accommodate t he increase in student population. The Section 30 revenues pledged or rese rved and thereafter received by the government of Guam or by any truste e, depository or custodian shall be deposited in a separate account and shall be immediately subject to such reservation or the lien of such pledge without any physical delivery thereof or further ac t, and such reservation or the lien of such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or othe rwise against the government of Guam or such trustee, depository or c ustodian, irrespective of whether the parties have notice the reof.

l parties having claims of any kind in tort, contract or othe rwise against the government of Guam or such trustee, depository or c ustodian, irrespective of whether the parties have notice the reof. The instrument by which such pledge or reservation is created need not be recorded. SOURCE: Amended by P.L. 30-178:3 (Aug. 3, 2010). § 58A110. Utilities and Routine Maintenance and Re pair. The Education Agency shall be responsible for the connection and payment of all utilities, including without limitat ion, power, water, sewer, telephone and cable, and all routine interio r maintenance and repair and exterior grounds keeping and landscaping and upkeep of the Education Facility. § 58A111. Maintenance Fund. The Contract or a separate maintenance agreement with the Contract or , and the Lease-Back, shall provide that all capital maintenance of the Education Facility be performed by the Contractor as a separate cost, the terms of which, and the manner for establishing the amount of payment, shall be determined as a part of the request for proposal process; provided, however, that said docu ments may, at the discretion of the Education Agency, provide that ca pital maintenance with

ment, shall be determined as a part of the request for proposal process; provided, however, that said docu ments may, at the discretion of the Education Agency, provide that ca pital maintenance with respect to equipment (including collateral equ ipment), onsite utilities, offsite utilities, access roads and othe r similar improvements need not be performed by the Contractor. The Contract or agreement and the Lease-Back may provide for a separate maint enance reserve fund for this purpose with sufficient funds to pay the c osts of capital maintenance for a reasonable period not exceeding five (5) years. The COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 8 maintenance reserve fund shall be used exclusively for the purpose of capital maintenance and shall be an interest bearing account segregated from other funds of the Education Agency. § 58A112. Rules, Regulations and Restrictions . The Department of Public Works may promulgate rules and regulations pursuant to Guam law necessary to imple ment the provisions of this Act. § 58A113. Severability . If any provision of this Act or its application to any person or circumstance is found to be invalid or contrary

Guam law necessary to imple ment the provisions of this Act. § 58A113. Severability . If any provision of this Act 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 of this Act which can be given effect without the invalid provisions or application, and to this end the provisions of this Act are severable. § 58A114. Approval of 2020 Certificates. I Liheslaturan Guåhan , pursuant to § 50103(k) of Title 12, Guam Code Annotated, hereby approves the terms and condi tions of the execution and delivery of the 2020 Certificates of Participation (John F Kennedy High School Project) (2020 Certificates) fo r the purpose of (a) refunding all or a portion of the 2010A Certificate s of Participation (John F. Kennedy High School Project) (prior certificates ); (b) financing costs of issuance; (c) financing any debt service reserve funds, or other reserves, if applicable; (d) financing capitalized interest, if applicable, in accordance with the following requirements, limitat ions, terms and conditions; and (e) financing additional capital im provements to an Education Facility,

ng capitalized interest, if applicable, in accordance with the following requirements, limitat ions, terms and conditions; and (e) financing additional capital im provements to an Education Facility, including, but not limited to, solar installations, in accordance with the following requirements, limitat ions, terms and conditions: (a) all obligations of the government to pay debt s ervice with respect to, and the prepayment price of, the prior certificates refunded shall be discharged concurrently with the execution and delivery of the 2020 Certificates. Thereafter, such prior certificates shall be payable solely from and secured solely by an escrow established for such purpose in accordance with the existing trust agreement relating to the prior certificates; (b) the sale of the 2020 Certificates shall be appr oved by the Board of Directors of the Guam Economic Development Authority COL5/19/20215 GCA GOVERNMENT OPERATIONS CH. 58A - Ma Kåhat Act of 2008 9 (GEDA) as provided in Chapter 50, Title 12, Guam Co de Annotated; (c) solely with respect to the portion of the debt service relating to the refunding of the prior certificates , the present value in the aggregate of debt

Chapter 50, Title 12, Guam Co de Annotated; (c) solely with respect to the portion of the debt service relating to the refunding of the prior certificates , the present value in the aggregate of debt service of the government’s o bligations with respect to such new leases or amendments to leases shall be at least two percent (2%) less than the present value in the aggregate of debt service on the prior certificates, using the yield on the 2020 Certificates as the discount rate; and (d) no increase in the amount of outstanding 'publi c indebtedness' as that term is used in 48 U.S.C. § 1 423a (§ 11 of the Organic Act of Guam) shall result from the executio n of any such new leases or amendments to leases. SOURCE: Added by P.L. 35-099:XIV:1 (Sept. 15, 2020). 2021 NOTE: Subsection designations were altered by the Compil er pursuant to 1 GCA § 1606. ---------- COL5/19/2021