(a) Authorization of Issuance of Water System Revenue Debt. The Governor of Guam is authorized to create a debt or debts of the government of Guam in aggregate principal amount not to exceed Fifty-Three Million Dollars ($53,000,000) for a maximum term of twenty (20) years for the purpose of implementing the Water System Projects enumerated in subsection (k) of this § 1508; provided, however, that

(1) the terms and conditions of the debt or debts shall be approved by the Legislature by statute; and

(2) any debt or debts shall not cause a violation of the debt limitation provisions of 48 U.S.C. § 1423a.

(b) Certificate of Governor. The terms and conditions of the debt or debts shall be as determined by the Governor by the execution of one or more certificates upon or prior to the issuance of the debt or debts. Any such certificate may also authorize persons so designated to execute, on behalf of the government of Guam, any appropriate agreements or other documents relating to the debt or debts and the sale of the debt or debts. The certificates shall contain such terms and conditions as are consistent with this
§ 1508.

(c) Valid and Binding Obligation. To the extent that the debt limitation provisions of 48 U.S.C. § 1423a are not violated, any debt or debts authorized by this § 1508 shall constitute the valid and legally binding limited obligation of the government of Guam payable from and secured by a pledge of the revenues described in subsections (d) and (e) of this § 1508. The validity of any such debt or debts shall not be affected by the validity or regularity of any proceedings for the implementation of Water System Projects funded by the debt or debts.

(d) Pledge of Water and Sewer System Revenues. All or any part of the revenues received or receivable by the government of Guam from the ownership or operation of any part of the water and sewer systems operated by the Public Utility Agency of Guam

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shall be deposited in the Public Utility Agency of Guam Fund pursuant to § 21208 of the Government Code, and shall be pledged subject to any prior or parity pledge to secure the repayment of any debt or debts created under this § 1508 and pay costs incurred in the creation of such debt or debts. Any pledge made to secure the debt or debts 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 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, such trustee, depository or custodian, irrespective of whether the parties have notice thereof. The certificate by which such pledges are created need not be recorded. Revenues for debt service pledged are hereby continuously appropriated for such purpose.

(e) Pledge of Section 30 Revenues. All or any part of the revenues derived by the government of Guam under Section 30 of the Organic Act may be pledged to secure the repayment of any debt or debts created under this § 1508 and pay costs incurred in the creation of such debts, subject to any previously created lien on or pledge of such revenues. Any pledge made to secure the debt or debts 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 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, such trustee, depository or custodian, irrespective of whether the parties have notice thereof. The certificate by which such pledge is created need not be recorded. All revenues pledged are hereby continuously appropriated for the purpose for which they have been pledged.

(f) Appropriation to Public Utility Agency of Guam. The Legislature shall continue to enact a budget for the operation of the Public Utility Agency of Guam at any level which the

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Legislature deems appropriate for the term of the debt prescribed in Section 4 of this Act.

(g) Waiver of Immunity. Notwithstanding any substantive or procedural provision of Chapter VI of Title VII of the Government Code, the government of Guam waives immunity from any suit or action in contract on such debt or debts, but does not waive sovereign immunity as to the personal liability of elected officials and full-time employees of the government of Guam.

(h) Form of Debt or Debts; Covenants; Appointment of Trustee. The technical form and language of the debt or debts, including provisions for execution, exchange, transfer, registration, paying agency, lost or mutilated bonds, negotiability, cancellation and other terms and conditions not inconsistent with this § 1508, including covenants relating to the maintenance and operation of the water and sewer systems operated by the Public Utility Agency of Guam, shall be as specified in a certificate approved by the Governor, authorizing the issuance of the debt or debts. The certificate may appoint a trustee authorized to receive and hold in trust the proceeds of the debt or debts and revenues related thereto, to protect the rights of debt holders and to perform such other duties as may be specified in the certificate. The Governor is also authorized to execute, on behalf of the government of Guam, any appropriate agreements, certificates or other instruments relating to the debt or debts and the sale of the debt or debts.

(i) 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 debt or debts created under this § 1508. 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 debt or debts. Any such reimbursement obligation may be secured by a pledge of the revenues described in subsections (d) and (e) of this § 1508.

(j) Use of Proceeds from the Sale of Debt or Debts. All Water
System Projects to be funded from the provisions of this § 1508

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must be reviewed and approved by the Governor prior to their implementation. Proceeds from the sale of the debt or debts shall be used solely to pay and are hereby appropriated to pay the costs of the Water System Projects described in subsection (k) of this § 1508, and to pay expenses related to the authorization, sale and issuance of the debt or debts, including without limitation,
printing costs, costs of reproducing documents, bond insurance
premiums, underwriting, legal and accounting fees and charges, fees paid to banks or other financial institutions providing credit
enhancement, costs of credit ratings, fees and charges for
execution, transportation and safekeeping of bonds and other costs, charges and fees in connection with the issuance, sale and delivery of the debt or debts.

(k) Water System Projects. The following projects shall be funded as follows:

(1) Yigo/Dededo Source and
Storage System Improvement 10,592,312

(2) Replacement of Water
Distribution Lines in Agat/Santa
Rita 5,311,288

(3) Agat/Santa Rita Sewer
System, Part of Phase I and Total
of Phase II 4,640,634

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(4) Finegayan/Tumon Waterline- Water Transmission Line from Y- Sengsong Intersection South along Route 3, West along Route 1 past Harmon Loop Reservoir to
Intersection with 14″” Water Main 4,277,190

(5) Barrigada/Toto Waterline- Water Transmission Line along Route 8 from Route 10
Intersection to Canada-Toto Road 1,885,646

(6) Tumon/Tamuning Waterline- Water Transmission Line from Intersection of Route 1 and 14″” Water Main (near Haruna Restaurant) South Westerly along Route 1 to Camp Watkins Road
Intersection 2,431,184

(7) Agana/Asan/Piti Water
System Improvement 7,140,000

(8) Agat/Umatac Water System
Improvement 4,005,826 (9) Dededo Reservoir 3,484,540
(10) Macheche/Adacao Water
Distribution Lines, Phase I 2,715,376

(11) Northern Treatment Plant Improvements, including Digestors and Effluent Line (land
segment) 2,800,000

(12) Chaot Wastewater
Improvements 979,073 (13) BPM, Mangilao 642,649 (14) Lalo, Mangilao 340,000
(15) Carlos Heights -0-

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(16) Fujita Pump Station 1,000,000

(l) The Agat/Umatac Water System Improvement project shall incorporate the elimination of the bottleneck that currently exists in the transmission line before entering Umatac from Merizo and within the village.

(m) It is the policy and intent of the Legislature to ensure that all projects enumerated in subsection (k) are completed. In this respect, the Legislature gives its consent and authorization to allow the transfer of funds from such a project, which has a surplus, to a project with a shortfall, provided, however, that the Legislature be informed in writing prior to any transfer. If a project or projects are placed on hold by the Chief Officer of the Public Utility Agency of Guam due to an unanticipated circumstance, a transfer of funds from the project or projects enumerated in subsection (k) on hold to another project with a shortfall is authorized by the Legislature; provided, that prior to any transfer the Legislature be informed in writing [of] the reasons why such a project so enumerated in subsection (k) is on hold. This subsection shall take effect on January 3, 1995.

(n) Refunding Obligations. The Governor of Guam is authorized, with the specific authorization by statute of the Legislature, to create a debt or debts for the sole purpose of refunding all or a portion of the debt or debts authorized by subsection (a) of this § 1508.

SOURCE: Added by P.L. 20-013:2 (June 8, 1989) and GC § 6132. Subsection (m) repealed/reenacted by P.L. 22-141 (Dec. 14, 1994). Subsection (k) repealed and reenacted by P.L. 23-097:1(a) (June 4, 1996).

2013 NOTE: Pursuant to the authority granted by 1 Guam Code Ann. § 1606, numbers and/or letters in subsection (a) were altered to adhere to the Compiler’s alpha-numeric scheme.