Authorization to Issue Bonds for Revenue Anticipation Financing

(a)Authorization of Issuance of Bonds. I Maga’hågan/Maga’låhen Guåhan is authorized to issue four

(4)series of bonds of the government of Guam, as provided in this Section, in an aggregate principal amount not to exceed Three Hundred Forty-Three Million Seven Hundred Thousand Dollars ($343,700,000) plus such principal amount as may be necessary for the purposes of the refunding of Government of Guam General Obligation Bonds, 1993 Series A, as provided in and subject to the conditions of Paragraph

(3)of this Subsection (a), and plus such principal amount as may be necessary for the purposes of the refunding of Government of Guam General Obligation Bonds, 2007 Series A and Government of Guam General Obligation Bonds, 2009 Series A, as provided in and subject to the conditions of Paragraph

(4)of this Subsection (a), to provide the following:

(1)For the first bond series, in the following order of priority:

(A)up to One Hundred Ninety-Eight Million Dollars ($198,000,000) for payment of unpaid income tax refunds plus interest to include for 2010 and prior; CH. 1 OFFICE OF I MAGA’HÅGA/MAGA’LÅHI [THE GOVERNOR]

(i)Set-aside for Tax Refunds for Humanitarian Purposes. Of the total amount of proceeds available to issue tax refund payments, the sum of Twenty Million Dollars ($20,000,000) shall be set aside and appropriated to the Department of Revenue and Taxation for the purpose of paying tax refunds for humanitarian purposes. The provisions of this Section shall supplement other guiding provisions of law regarding the processing of emergency tax refund payments. Requests submitted for the following humanitarian purposes shall qualify to be processed from this Twenty Million Dollars ($20,000,000) setaside:

(aa)off-island medical treatment, inclusive of the need to purchase medication; or death of a family member, within two

(2)degrees of consanguinity;

(bb)delinquent billing payments owed to the Guam Power Authority, the Guam Waterworks Authority, the Guam Housing and Urban Renewal Authority, and the Judiciary of Guam, which have become delinquent due to financial hardships;

(cc)delinquent loan payments owed to the Guam Housing and Urban Renewal Authority, which have become delinquent due to financial hardships; and

(dd)delinquent loan payments owed to legally qualified and licensed lenders, which have become delinquent due to financial hardships. For the purposes of this Section, a request for tax refunds shall be submitted by the taxpayer to the Director of Revenue and Taxation. All such requests are subject to the review and approval of the Director.

(ii)Twenty Million Dollars ($20,000,000) for the payment of cost of living allowance to certain retired government of Guam employees pursuant to the case known as Rios v. Camacho;

(iii)Twenty-Six Million Four Hundred Thousand Dollars ($26,400,000) for payments owed to the Government of Guam Retirement Fund for the Guam Department of Education and the Guam Memorial Hospital Authority principal and interest pursuant to Public Law 28-038, as amended by Public Law 31-074; and

(iv)if no alternate source of funding is available, for the payment of health insurance premiums for Fiscal Year 2012.

(2)For the second bond series:

(A)no less than Twenty-Five Million One Hundred Thousand Dollars ($25,100,000) for payments owed to the Government of Guam Retirement Fund for the Guam Department of Education, the Guam Memorial Hospital Authority, and the Health Insurance Bailout Agreement of FY 2011 principal and interest pursuant to Public Law 28-038, as amended by Public Law 31074, such that the sums owed to the GGRF by the government of Guam pursuant to Public Law 28-038, as amended, shall be extinguished in its entirety;

(B)the remaining balance of bond proceeds such that the debt to the GGRF identified in Item (2)(A) of this Subsection

(a)is paid, shall be used, in any amount, for any of the following:

(i)the design, construction, re-construction, rehabilitation, maintenance, renovation of government of Guam or Guam Department of Education-owned school facilities, and/or the procurement and preventive maintenance of school buses. A “school facility” shall mean school campus facilities, including any structure or structures, together with all ancillary facilities, including parking facilities, utilities, infrastructure and equipment associated with CH. 1 OFFICE OF I MAGA’HÅGA/MAGA’LÅHI [THE GOVERNOR] providing the educational or related services required by the Guam Department of Education, and may include an existing school facility being rehabilitated; and/or

(ii)the payment of unpaid income tax refunds for tax year 2011; and/or

(iii)if no alternate source of funding is available, the payment of health insurance premiums for Fiscal Year 2012.

(3)For the third bond series, to fund an escrow to pay principal, interest and redemption price of Government of Guam General Obligation Bonds, 1993 Series A and to 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, feasibility, 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; provided, however, that bonds may not be issued for this purpose unless

(A)all obligation of the government to pay debt service on, and the redemption price of, the bonds being refunded shall be discharged concurrently with the issuance of the refunding bonds;

(B)thereafter, the refunded bonds shall be payable solely from and secured solely by the escrow established for such purpose;

(C)the present value of debt service on the refunding bonds shall be at least two percent (2%) less than the present value of debt service on the bonds being refunded, inclusive of all fees, for bond counsel and bond underwriters and other costs of issuance; and

(D)the issuance of the refunding bonds shall not result in any increase in the aggregate amount of the government’s outstanding “public indebtedness” as that term is used in 48 U.S.C. §1423a (§ 11 of the Organic Act of Guam).

(4)For the fourth bond series, to fund an escrow or otherwise to pay principal, interest and redemption price of all or a portion of the Government of Guam General Obligation Bonds, 2007 Series A and the Government of Guam General Obligation Bonds, 2009 Series A, to capitalize interest on the refunding Business Privilege Tax Bonds in an amount to ensure the General Fund is made whole in the current or following fiscal year due to timing of debt service requirements but in an amount not to exceed one percent (1%) of refunding proceeds, and to 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, feasibility, 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; provided, however, that bonds may not be issued for this purpose unless

(A)all obligation of the government to pay debt service on, and the redemption price of, the bonds being refunded shall be discharged concurrently with the issuance of the refunding bonds;

(B)thereafter, the refunded bonds shall be payable solely from and secured solely by the escrow established for such purpose; and

(C)the present value of debt service on the refunding bonds shall be at least two percent (2%) less than the present value of debt service on the bonds being refunded, inclusive of all fees, for bond counsel and bond underwriters and other costs of issuance.

(5)For the first and second bond series, such amount as may be needed to capitalize and pay from bond proceeds interest on the bonds due, accruing or required to be set aside in Fiscal Years 2012 and 2013. CH. 1 OFFICE OF I MAGA’HÅGA/MAGA’LÅHI [THE GOVERNOR]

(6)Expenses incurred in connection with the issuance of such bonds not already included in an existing appropriation for or the regular budget of any government agency or instrumentality or public corporation providing any service in connection with the issuance of such bonds; provided, however, that bonds may not be issued in an amount that would cause a violation of the debt limitation provisions of 48 U.S.C. §1423a (§ 11 of the Organic Act of Guam).

(7)I Maga’hågan/Maga’låhen Guåhan shall utilize the 2011 Real Property Tax Assessment Roll as certified by the Board of Equalization in accordance with § 24518 of Chapter 24, Title 11, Guam Code Annotated, in calculating the amount available for future debt obligation under the Debt Limit (Ceiling) for the bond issuance authorized in this Subsection.

(b)Terms and Conditions Determined by Certificate or Indenture. The terms and conditions of the bonds shall be as approved by I Liheslaturan Guåhan, and as determined by I Maga’hågan/Maga’låhen Guåhan by the execution of a certificate or indenture authorizing the issuance of the bonds, prior to the issuance of the bonds; provided, however, that such terms and conditions shall be consistent with this Section; that the first and second series of the bonds shall mature not later than thirty-five

(35)years after their date of issuance, shall bear interest at such rates and be sold for such price or prices as shall result in a yield to the bondholders that does not exceed six and one half percent (6.5%) per annum, shall require interest only payments for Fiscal Years 2012, 2013 and 2014, and shall not require bond principal payments until after such fiscal years; that the third series of the bonds shall mature not later than December 31, 2018, and shall bear interest at such rates and be sold for such price or prices as shall result in the present value of debt service on the third series of the bonds being at least two percent (2%) less than the present value of debt service on the bonds being refunded, using the yield on the third series of the bonds as the discount rate; and that the fourth series of the bonds shall mature not later than November 15, 2039, shall not be used to fund any new money projects, and shall bear interest at such rates and be sold for such price or prices as shall result in the present value of debt service on the fourth series of the bonds being at least two percent (2%) less than the present value of debt service on the bonds being refunded, using the yield on the fourth series of the bonds as the discount rate.

(1)Use of Funds Saved From Fourth Series. Beginning Fiscal Year 2016, the savings achieved by the government of Guam to the General Fund at or above the target referenced in Subsection

(a)due to the refunding of the Government of Guam General Obligation Bonds, 2007 Series A and the Government of Guam General Obligation Bonds, 2009 Series A by the fourth series of bonds, an amount equal to the resulting reduction in debt service payments relating to the refunded Government of Guam General Obligation Bonds, 2007 Series A and the Government of Guam General Obligation Bonds, 2009 Series A, shall, to the extent practical, be allocated from the General Fund and subject to an appropriation by I Liheslaturan Guåhan toward capital improvements relating to the Guam Memorial Hospital Authority and other health related matters. The Bureau of Budget and Management Research

(BBMR)shall be tasked to track and manage the savings achieved by this fourth series refunding and allocate such savings pursuant to this Subsection, and reflect the savings and allocation in the executive branch submission of its budget request to I Liheslaturan Guåhan each fiscal year. The funds allocated herein shall be in addition to the annual budget allocation and budgeted appropriation levels provided to the Guam Memorial Hospital Authority.

(c)Valid and Binding General or Limited Obligations. The certificate or indenture pursuant to which the bonds authorized by this Section are issued shall provide that the bonds constitute the valid and legally binding general or limited obligations of the government of Guam payable from the sources described in the certificate or indenture. If and to the extent that the bonds are general obligation bonds,

(1)the government of Guam pledges its full faith and credit for the punctual payment of both principal of and interest on the bonds and covenants that there shall be collected annually in the same CH. 1 OFFICE OF I MAGA’HÅGA/MAGA’LÅHI [THE GOVERNOR] manner and at the same time as government revenue for other purposes is collected, such sum as is required to pay the principal of and interest on the bonds; and

(2)there are hereby appropriated from the General Fund such sums as may be necessary in each year, in addition to the amounts appropriated under Subsection (d)(2) of this Section to equal the amount of money necessary to pay the principal and interest on such bonds. All officers charged by law with any duty in the collection of the revenues of the government from which debt service on the bonds will be payable shall do every lawful thing necessary to collect such sum. The validity of any such bonds shall not be affected by the validity or regularity of any proceedings for the payment of the expenses paid or to be paid with the proceeds of the bonds.

(d)Cost-Benefit Analysis.

(1)I Maga’håga/Maga’låhi Authorized to Pledge Revenues. I Maga’håga/Maga’låhi shall perform or cause to be performed expert independent financial and cost-benefit analysis to determine the more favorable financing for the government using the pledge, either business privilege tax revenues or General Obligation full faith and credit, for the repayment of the bond of which she/he is authorized to pledge. Such financial and cost-benefit analysis shall be performed by an independent, external party that does not have any financial interest in the bond financing or any connection to any party who may have a financial interest in the bond financing. The analysis shall include, but not be limited to, the following:

(A)impact upon existing General Obligation bondholders and/or lines of credit;

(B)cost of funds differential between a General Obligation and a Limited Obligation bond structure;

(C)likelihood of investment grade rating on a Limited Obligation bond structure;

(D)ability to issue future General Obligation debt in the capital markets;

(E)indenture provisions that may limit government of Guam flexibility; and

(F)additional security requirements that may impact or reduce net proceeds or affect government of Guam liquidity (i.e. reserve funds, coverage requirements, other covenants) I Maga’hågan/Maga’låhen Guåhan shall first consult with the University of Guam to identify finance and economics professionals (professors or researchers), if any, within the University of Guam School of Business and Public Administration that hold the relevant experience and expertise necessary to perform the independent financial and cost-benefit analysis, to conduct the said analysis before seeking other potential providers. The University of Guam shall disclose the name(s) of all the faculty, staff or contracted individuals involved in the independent financial and cost-benefit analysis. The University of Guam shall have ten

(10)days from the enactment of this Act, to inform I Maga’hågan/Maga’låhen Guåhan whether it agrees to provide the analysis. Before any marketing of Limited Obligation bonds backed by a pledge of business privilege tax or General Obligation bonds can occur, the expert independent financial and cost-benefit analysis required in this Subsection shall be provided to the Speaker of I Liheslaturan Guåhan. Up to Twenty-Five Thousand Dollars ($25,000) is appropriated from the operating fund balance, or its equivalent, of the Guam Economic Development Authority for the independent financial and cost-benefit analysis required in accordance with this Subsection.

(2)Pledge of Business Privilege Tax Revenues. The certificate or indenture pursuant to which the bonds authorized by this Section are issued may provide that the tax revenues derived from the CH. 1 OFFICE OF I MAGA’HÅGA/MAGA’LÅHI [THE GOVERNOR] levy of up to three

(3)percentage points, out of the total number of percentage points levied from time to time, of the business privilege tax levied pursuant to Article 2 of Chapter 26 of Title 11, Guam Code Annotated, or any successor thereto, are pledged to secure the repayment of any bonds issued under this Section and to pay costs incurred in the issuance or administration of the bonds and any required reserves. Any such pledge made to secure the bonds shall be valid and binding from the time the pledge is made. 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 entitled the “RAF Revenue Fund” 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. The certificate or indenture by which such pledge is created need not be recorded, and shall direct the distribution and disbursement of revenues from the RAF Revenue Fund following their deposit therein. All such taxes to the extent so pledged are hereby continuously appropriated for such purpose. So long as any bonds issued pursuant to § 1512.3, Title 5, Guam Code Annotated, remain outstanding, the government of Guam may not reduce the rate of levy and collection of the pledged business privilege tax below three percent (3%), nor may the government of Guam reduce the services, products or activities to which the pledged business privilege tax applies, nor may the government of Guam upwardly adjust any exception or exclusion to, or otherwise impair, the pledged business privilege tax.

(3)In the event the independent financial and cost-benefit analysis conclude that the pledge of the more favorable financing option for the repayment of the bond is credit-negative to any and all existing or authorized General Obligation bonds or lines of credit, the authorization of the bond issue shall be contingent upon final legislative approval of the financing terms including, but not limited to, the bond structure, security, indenture and covenants. I Maga’håga/Maga’låhi shall request such approval from I Liheslaturan Guåhan prior to the sale of bonds in the market but after the credit rating on the bonds is secured and affirmation of the current General Obligation rating and outlook is received.

(e)Additional Bonds. This Section does not prohibit the government of Guam from issuing, after appropriate enabling legislation, other obligations of the government that are general obligations of the government. This Section does not prohibit the government of Guam from issuing, after appropriate enabling legislation, other obligations of the government that are secured by pledged business privilege tax revenues on a parity with or subordinate to the bonds authorized by this Section on such terms as are provided by the certificate or indenture pursuant to which the bonds are issued. Such certificate or indenture may also provide that the aggregate principal amount of all bonds outstanding on a parity with the bonds authorized pursuant to this Section with respect to pledged business privilege tax revenues shall not exceed Three Hundred Forty Three Million Seven Hundred Thousand Dollars ($343,700,000). Notwithstanding anything to the contrary in this Subsection (e), the certificate or indenture pursuant to which the bonds are issued shall provide that such limitation shall not apply to additional bonds issued for the sole purpose of refunding outstanding bonds authorized under by this Section, paying costs of issuance and funding any required debt service reserves associated therewith, and may otherwise provide for the raising of such limitation under such circumstances as may be specified therein.

(f)Waiver of Immunity; Submission to Jurisdiction. Notwithstanding any substantive or procedural provision of Chapter 6 of Title 5, Guam Code Annotated, the government of Guam waives immunity from any suit or action in contract on the bonds or any other agreement or facility entered into in connection with the bonds, but does not waive immunity as to the personal liability of elected officials and employees of the government of Guam. Any such suit or action shall be brought in the District Court of Guam. CH. 1 OFFICE OF I MAGA’HÅGA/MAGA’LÅHI [THE GOVERNOR]

(g)No Personal Liability. No employee or elected official of the government of Guam shall be individually or personally liable for the payment of any amounts due on any bonds issued under this Section, or for any other liability arising in connection with the bonds; provided, however, that nothing in this Section shall relieve 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 and application of revenues, shall be as specified in the certificate or indenture executed by I Maga’hågan/Maga’låhen Guåhan authorizing issuance of the bonds. Said certificate or indenture shall appoint one or more trustees, co-trustees or other fiduciaries 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 in the indenture. I Maga’hågan/Maga’låhen Guåhan is also authorized to execute any appropriate agreements, certificates or other instruments relating to the bonds and the sale of bonds.

(i)Authorization for Credit Enhancement. I Maga’hågan/Maga’låhen Guåhan is authorized to enter into such contracts or agreements with such banks, insurance companies or other financial institutions as she/he determines are necessary or desirable to improve the security and marketability of the bonds issued under this Section. Such contracts or agreements may obligate the government to reimburse, with interest, any such banks, insurance companies or other financial institutions for advances they make to pay principal of or interest on the bonds and to indemnify any such banks, insurance companies or other financial institutions for costs and expenses incurred in connection with any such advance. Any such reimbursement obligation and any other obligations of the government of Guam under such contracts or agreements shall be limited obligations of the government of Guam payable from and secured by the revenues as provided by the certificate or indenture. Any such reimbursement obligation and any other obligations of the government of Guam under such contracts or agreements shall be treated, under § 11 of the Organic Act, as creating an obligation issued to refund the bonds.

(j)Use of Proceeds from the Sale of the Bonds.

(1)The proceeds from the sale of the first bond series shall be used and are hereby appropriated to

(A)pay unpaid income tax refunds and pay cost of living allowance to certain retired government of Guam employees pursuant to the case known as Rios v. Camacho; payments owed to the government of Guam Retirement Fund for the Guam Department of Education and the Guam Memorial Hospital Authority principal and interest pursuant to Public Law 28-038, as amended by Public Law 31-074; and, if no alternate source of funding is available, pay health insurance premiums for Fiscal Year 2012;

(B)fund capitalized interest due, accruing or required to be set aside on the bonds prior to the end of Fiscal Year 2013; and

(C)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, feasibility, 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.

(2)The proceeds from the sale of the second bond series shall be used and are hereby appropriated to CH. 1 OFFICE OF I MAGA’HÅGA/MAGA’LÅHI [THE GOVERNOR]

(A)pay monies owed to the government of Guam Retirement Fund for the Guam Department of Education, the Guam Memorial Hospital Authority, and the Health Insurance Bailout Agreement of FY 2011 principal and interest pursuant to Public Law 28-038, as amended by Public Law 31-074, such that the sums owed to the GGRF by the government of Guam pursuant to Public Law 28-038, as amended, shall be extinguished in its entirety; pay for the design, construction, re-construction, rehabilitation, maintenance of School Facilities, and/or procurement and preventive maintenance of school buses; pay unpaid income tax refunds for tax year 2011; and/or, if no alternate source of funding is available, pay health insurance premiums for Fiscal Year 2012;

(B)fund capitalized interest due, accruing or required to be set aside on the bonds prior to the end of Fiscal Year 2012, 2013, and 2014; and

(C)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, feasibility, 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.

(3)The proceeds from the sale of the third bond series shall be used and are hereby appropriated to

(A)fund an escrow to pay principal, interest and redemption price of Government of Guam General Obligation Bonds, 1993 Series A; and

(B)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, feasibility, 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.

(4)The proceeds from the sale of the fourth bond series shall be used and are hereby appropriated to

(A)fund an escrow to pay principal, interest and redemption price of Government of Guam General Obligation Bonds, 2007 Series A and Government of Guam General Obligation Bonds, 2009 Series A, or otherwise to pay in full such 2007 Bonds and 2009 Bonds;

(B)fund capitalized interest on the refunding Business Privilege Tax Bonds in an amount to ensure the General Fund is made whole in the current or following fiscal year due to timing of debt service requirements, but in an amount not to exceed one percent (1%) of refunding proceeds; and

(C)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, feasibility, 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. The Guam Economic Development Authority

(GEDA)shall receive no more than Four Hundred Thousand Dollars ($400,000) as a bond service fee relative to the issuance of the bonds authorized by this Section. The fee to be paid to GEDA shall be from the savings made available to the General Fund resulting from the refunding of the Government of Guam General Obligation Bonds, 2007 Series A and the Government of Guam General Obligation Bonds, 2009 Series A. CH. 1 OFFICE OF I MAGA’HÅGA/MAGA’LÅHI [THE GOVERNOR]

(k)Permitted Investments. The bond proceeds and any revenues pledged to secure the payment of the bonds are authorized to be, and shall only be, invested in those investments permitted by the certificate or indenture pursuant to which such bonds are issued. Permitted investments shall include investment agreements, forward purchase agreements or similar structured contracts as further described in the certificate or indenture authorizing the issuance of the bonds.

(l)Approval by Guam Economic Development Authority. No bonds authorized by this Section shall be sold until the Board of Directors of GEDA has approved the sale by resolution.

(m)Approval of Voters Not Required. The issuance of bonds pursuant to this Section shall not be subject to the approval of the voters of Guam.

(n)Approval of Bonds. I Liheslaturan Guåhan, pursuant to Subsection

(b)of this section and § 50103(k), Title 12, Guam Code Annotated, hereby approves the issuance and sale by the government of Guam of the bonds for the purposes and in the aggregate principal amount authorized by § 1512.3, Title 5, Guam Code Annotated; provided that such bonds are issued and sold subject to the terms, conditions, requirements and limitations mandated therein.

(o)Deposit of Bond Proceeds to:

(1)Pay Income Tax Refunds. The portion of the bond proceeds authorized by this Section to pay income tax refunds shall be transferred immediately after receipt thereof by the bond trustee into the Income Tax Reserve Fund and shall be considered separate and apart from any required deposits in Title 11, Guam Code Annotated, Chapters 50 and 51, and shall not be credited toward any required deposits in Title 11, Guam Code Annotated, Chapters 50 and 51.

(2)Pay for any Design, Construction, Repair, Renovation, Rehabilitation, Maintenance for any School Facility and/or procurement and preventive maintenance of school buses. The portion of the bond proceeds authorized by this Section to pay for any Design, Construction, Repair, Renovation, Rehabilitation, Maintenance for any School Facility and/or procurement and preventive maintenance of school buses shall be transferred immediately after receipt thereof by the bond trustee into the Adequate Education Trust Account created in Public Law 31-040. Notwithstanding any other provision of law, the bond proceeds deposited into the Adequate Education Trust Account shall be available to pay for the Design, Construction, Repair, Renovation, Rehabilitation, Maintenance for any School Facility and/or procurement and preventive maintenance of school buses as approved by the Guam Education Board.

(p)Bond Proceeds Not Subject to Transfer Authority. The proceeds of the bonds authorized by this Section shall not be subject to any transfer authority of I Maga’hågan/Maga’låhen Guåhan.

(q)Conflicts Prohibited. No Covered Person, as such term is defined below, shall be eligible to provide or be paid for, in whole or in part, any services related to the authorization, sale and issuance of the bonds, including, without limitation, printing costs, costs of reproducing documents, credit enhancement fees, underwriting, legal, feasibility, 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 authorized in this Act and for any design, construction, repair, renovation, rehabilitation, maintenance contracts for any School Facility and/or procurement and preventive maintenance of school buses; that are authorized to be paid for with the bond proceeds in this Act. For the purposes of this Section, the term “Covered Person” shall mean any:

(1)elected or appointed official of the government of Guam, unclassified managers of the Guam Economic Development Authority (GEDA), members of the GEDA Board of Directors, and members CH. 1 OFFICE OF I MAGA’HÅGA/MAGA’LÅHI [THE GOVERNOR] of I Liheslaturan Guåhan who hold office at the time of the approval and issuance of the bonds and bond indentures authorized by this Act;

(2)advisors or consultants of I Liheslaturan Guåhan who are advising or working with I Liheslaturan Guåhan with respect to the approval and issuance of the bonds and bond indentures authorized by this Act;

(3)person or spouse of such person related by consanguinity of the third degree, which for the purposes of this Act shall include spouses, all children, parents, grandchildren, siblings, grandparents, great-grandchildren, nieces, nephews, uncles, aunts, and great- grandparents, to any person described in Subsections

(a)and

(b)of this Section.

(r)Reporting Requirements by all appointed trustees, co-trustees or other fiduciaries. For the second bond series proceeds, the Department of Administration

(DOA)shall submit a written request to withdraw bond proceeds to all appointed trustees, co-trustees or other fiduciaries (trustee). The written request shall unequivocally state the purpose of said withdrawal specific to the authorized use mandated or selected pursuant to § 1512.3(a)(2) of Article 5, Chapter 1, Title 5, Guam Code Annotated. The trustee shall provide a copy of all documents submitted by the DOA to withdraw funds to I Maga’hågan/Maga’låhen Guåhan and to the Speaker of I Liheslaturan Guåhan five

(5)days prior to the disbursement of request funds.