(a) Legislative Findings and Intent. I Liheslaturan Guåhan
hereby finds as follows:

(1) Federal law authorizes states and territories to issue Grant Anticipation Revenue Vehicle (GARVEE) bonds, which are payable from expected Title 23 Federal-aid grants from the U.S. Department of Transportation.

(2) Utilizing GARVEE bonds to finance highway construction projects eligible for Title 23 funding from the Federal Highway Administration (FHWA) can result in significant cost savings since projects can be completed at present-day costs, allows Guam to maintain its local highway construction capability by keeping it actively employed, and enables Guam to avoid the potential cost inflation that may accompany the military build-up.

(3) Funding transportation projects with grant anticipation bonds will also enable completion of highway construction projects, or preliminary components thereof, during this lull prior to the military build-up.

(4) The borrowing rates for grant anticipation bonds are near their all-time historical lows, presenting Guam with a unique opportunity to fund its transportation projects at a favorable cost of capital.

(5) Bonds to be repaid solely with the proceeds of special purpose federal grants are not “”public indebtedness”” within the meaning of the debt limitation provisions of the Guam Organic Act, 48 U.S.C. § 1423a.

(6) Therefore, it is in the best interest of Guam to develop these innovative methods for funding and accelerating critical transportation infrastructure projects.

(b) Grant Anticipation Revenue Vehicle (GARVEE) Bonds for Highways.

(1) Authorization of Issuance of GARVEE Bonds. The Governor of Guam is authorized to issue one or more series of grant anticipation notes or bonds of the government of

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Guam in an aggregate principal amount not to exceed Seventy-Five Million Dollars ($75,000,000) for the purpose of implementing the Capital Improvement Highway Projects described in Subsection (11) of this Section, funding debt service reserves and paying expenses incurred in connection with the issuance of such bonds; provided, however, that the issuance of the notes or bonds shall not cause a violation of the debt limitation provisions of 48 U.S.C. § 1423a.

(2) Terms and Conditions Determined by Indenture. As hereafter used in this Section, the term “”bonds”” includes notes, bonds and other evidences of indebtedness. The terms and conditions of the bonds shall be as determined by the Governor by the execution of an indenture securing the bonds upon or prior to the issuance of the bonds. The indenture shall contain such terms and conditions as are consistent with this Section.

(3) Valid and Binding Obligation. Any bonds authorized by this Section shall constitute the valid and legally binding limited obligations of the government of Guam payable solely from and secured by a pledge of the revenues pledged pursuant to Subsection (4) of this Section. The validity of any such bonds shall not be affected by the validity or regularity of any proceedings for the implementation of Capital Improvement Highway Projects funded by the new bonds.

(4) Pledge of Grant Revenues; Not a General Obligation. All or any part of amounts apportioned to the government of Guam by the United States Department of Transportation or its successor may be pledged to secure the repayment of any bonds issued under this Section and to pay costs incurred in connection with the issuance or administration of the bonds. Pledged revenues may include, but are not limited to, amounts paid to the government of Guam pursuant to Chapter 1 of Title 23, United States Code, Highways, as amended and supplemented from time to time (Title 23), any successor to or replacement of Title 23, and any other provision of federal law authorizing federal funding of highways in Guam. Any pledge made to secure

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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 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 indenture or agreement by which such pledge is created need not be recorded. All such revenues, to the extent so pledged, are hereby continuously appropriated for such purpose. The bonds shall not be, and shall state on their face that they are not, general obligations of the government of Guam.

(5) Authorization of Memorandum of Understanding. Maga’lahen Guåhan may enter into one (1) or more memoranda of understanding on behalf of the government with the Federal Highway Administration, which would, among other things, identify the projects to be financed with proceeds of the bonds and set forth the procedures for calculation, request and payment of pledged revenues to the trustee, depository or custodian.

(6) Waiver of Immunity. Notwithstanding any substantive or procedural provision of Chapter 6 of Title 5 of the Guam Code Annotated, the government of Guam waives immunity from any suit or action in contract on the bonds, but does not waive sovereign immunity as to the personal liability of elected officials and employees of the government of Guam.

(7) 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 administration of grant programs and the handling of

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revenues, shall be as specified in the indenture approved by the Governor, authorizing the issuance of the bonds. The indenture may appoint one or more trustees or other fiduciaries authorized to receive and hold in trust the proceeds of the bonds and revenues relating thereto, to protect the rights of bondholders and to perform such other duties as may be specified in the indenture. The Governor is also authorized to execute, on behalf of the government of Guam, any appropriate agreements, certificates or other instruments relating to the bonds and the sale thereof.

(8) Authorization for Credit Enhancement. The Governor is authorized to enter into such contracts or agreements with such banks, insurance companies or other financial institutions as he determines are necessary or desirable to improve the security and marketability of the bonds issued under this Section. Such contracts or agreements may contain an obligation to reimburse, with interest, any such banks, insurance companies or other financial institutions for advances used to pay principal or interest on the bonds. Any such reimbursement obligation shall be payable solely from, and may be secured by a pledge of, the revenues described in Subsection (4) of this Section.

(9) Use of Proceeds from the Sale of the Bonds. Proceeds from the sale of the bonds shall be used solely to implement the Capital Improvement Highway Projects described in Subsection (11) of this Section, to fund a debt service reserve fund, if any, 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, if any, underwriting, legal and accounting fees and charges, costs of credit ratings and other costs, charges and fees in connection with the issuance, sale and delivery of the bonds. Any earnings derived from the investment of bond proceeds, and any bond proceeds not required for the completion of the Capital Improvement Highway Projects may be used by the Department of Public Works to purchase equipment and supplies to maintain Guam’s highways.

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(10) 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 any ministerial duty required by law.

(11) Expenditure of Proceeds.

(A) Project Groups. The 2030 Guam Transportation Plan (GTP) identifies highway projects that need to be undertaken to improve Guam’s highway infrastructure. Highway projects to be funded under this Chapter are categorized into two (2) groups: Group 1 and Group 2.

(i) Group 1: eligible highway projects identified in the 2030 GTP that are deemed high priority and require funding immediately. (The projects are listed in alphanumeric order as a matter of form, and the Group 1 list is not to be construed as an order of implementation priority).

(ii) Group 2: eligible highway projects identified in the 2030 GTP that may be undertaken using:

(aa) excess fund balances from completed Group 1 projects and not needed or insufficient for the completion of remaining Group 1 project(s), or

(bb) funds reprogrammed from a Group
1 project that cannot be completed within a reasonable time due to technical or regulatory constraints.

(B) The proceeds shall be expended for the following Capital Improvement Highway Projects:

GROUP 1

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(i) Route 14B (Ypao Road) – Reconstruction and Widening:

(aa) Phase 1, From Rte-1 to Carmen
Memorial Drive (near SDA),

(bb) Phase 2, from Carmen Memorial
Drive to Rte-14B/Rte-14 (San Vitores Road).

(ii) Route 27 (aka Adrian Sanchez Rd or Hamburger Rd) – Reconstruction, Widening, and Drainage Improvements from Rte-1 to Rte 16, and signalization at Rte-1/Rte-27 intersection.

(iii) Tiyan Parkway – Construction, Phase 1 (from old GPD Headquarters, westward to Rte-8 vic. Cars Plus).

GROUP 2

(i) Route 10A (Airport Road) – Reconstruction and Widening.

(ii) Route 14 (Chalan San Antonio, Rte-1 to
Archbishop Felixberto Flores Circle) – Resurfacing

(iii) Route 17 (Cross-island Road) – Rehabilitation and widening, Phase 2B (Rte-5/Rte-
17 to Rte-17/Rte•4A intersections).

(iv) Route 26 (Macheche Hill) – Reconstruction and Widening from Rte-1 to Rte
15.

(v) Mass transit improvements.

In the event that one (1) or more of the Capital Improvement Highway Projects listed in Group 1 or Group 2 of this Subsection (11) is completed at a cost that is lower than current estimates, or that logistics in construction or other events cause one (1) or more other Capital Improvement Highway Projects to be ready for construction prior to the Capital Improvement Highway Projects listed above in Group 1 or Group 2 of this Subsection (11), then the proceeds of the bonds may also be expended on such other or

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additional Capital Improvement Highway Projects as are approved by the Federal Highway Administration for financing with proceeds of the bonds pursuant to a new or amended memorandum of understanding (as described in Subsection (5) of this Section) with I Maga’lahen Guåhan. Any earnings derived from the investment of bond proceeds, and any bond proceeds not required for the completion of all of the Capital Improvement Highway Projects, shall be used as required or permitted by federal law on transportation related projects, subject to an appropriation by the Legislature.

(12) Approval by Guam Economic Development Authority. Subsection (k) of § 50103 of Title 12 of the Guam Code Annotated provides that agencies and instrumentalities of the Government shall issue bonds and other obligations only by means of and through the agency of the Guam Economic Development Authority (GEDA). No issue of bonds authorized by this Section shall be sold until the Board of Directors of GEDA has adopted a resolution approving the sale of such issue.

(13) Approval by Legislature of Government of Guam Grant Anticipation Bonds. I Liheslaturan Guåhan, pursuant to Subsection (k) of § 50103 of Title 12 of the Guam Code Annotated, hereby approves the issuance and sale by the government of Guam of bonds pursuant to this Section in one or more series or issues; provided that such notes or bonds shall have an aggregate principal amount not to exceed Seventy-Five Million Dollars ($75,000,000), shall have a final maturity not later than twenty (20) years from their date of initial issuance, shall bear interest at such rate or rates and shall be sold for such price or prices as shall result in a net yield to the bondholders not exceeding seven percent (7.0%) per annum, shall be issued and sold in the manner, for the purposes and subject to the requirements and limitations provided in this Section. Net yield to the bondholders shall be calculated by subtracting interest subsidy amounts, if any, to be received from the United States in connection with such bonds from the amount of interest to be paid to bondholders.

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SOURCE: Added by P.L. 31-233:XII:26 (Sept. 7, 2012).

2012 NOTE: In maintaining the general codification scheme of the GCA the Compiler changed the hierarchy of subsections beginning with: “”Lowercase Roman Numerals”” to “”Uppercase Letters””; “”Lowercase Letters”” to “”Lowercase Roman Numerals””; and “”Lowercase Roman Numerals”” to “”Double Lowercase Letters”” in subsection (b)(11).