I Maga’låhen Guåhan, (the Governor) on behalf of the government of Guam, is authorized to arrange a line of credit not to exceed Twenty Million Dollars ($20,000,000) with any bank or commercial lending institution licensed on Guam for the payment of general operations of the government when the funding of the deposits for income tax refunds result in a shortfall of cash required to pay for appropriations for operations in the Annual Appropriations Act. The terms of the line of credit shall include the following:
(a) the line of credit shall be used by I Maga’låhen Guåhan to pay for general operations in cases where a cash shortage is eminent and a strong likelihood exists that the shortage could hamper governmental operations;

(b) prepaid charges shall not be levied by the bank or trust department for opening the line of credit;

(c) the interest rate shall be subject to competitive negotiations between I Maga’låhen Guåhan (the Governor) and the banks; such interest rate shall be computed on a monthly average and based on the actual amounts extended to the government;

(d) interest earned by the financial institution providing the proceeds for the line of credit shall be exempt from taxation by the government of Guam;

(e) all terms of the line of credit agreement not specifically defined in the foregoing shall be negotiated by I Maga’låhen Guåhan [the Governor] in the best interests of the people of Guam;

(f) funds necessary for such repayment of interest and principal on loans authorized by this Section of this Article are appropriated from the General Fund and any pledge revenues; the duration for repayment of the loan shall be negotiated by I Maga’låhen Guåhan [the Governor] which shall not extend beyond two fiscal years;

(g) funds necessary for the repayment of interest and principal on loans authorized by this Section and (§ 22414 of this Article are appropriated from the revenue derived from the tax increase contained in P.L. No. 17-4, and, to the extent necessary, from other revenues of the government of Guam and the General Fund; any excess funds from the tax increases contained in P.L. No. 17-4 shall be used to retire said debt instruments as additional principal payments and for no other purposes;

(h) notwithstanding the first Paragraph of this Section, or any other provision of law, the terms of the line of credit arranged by I Maga’låhen Guåhan [the Governor] as
provided by this Section, may permit the bank or commercial lending institution licensed on Guam with which such line of credit is arranged to grant participation in such line of credit, at such times and in such amounts and upon such terms and conditions as such bank or lending institution licensed in Guam shall determine, to other banks, or commercial lending institutions, including those not licensed on Guam, or to any other persons, associations, or corporations; the exemption from taxation by the government of Guam of the interest derived from the line of credit shall be preserved to any such participant; such participation shall be made by public offering;

(i) the loan may be secured by pledge of funds or a guaranty of the government of Guam, including the revenues derived by the government of Guam under §30 of the Organic Act of Guam; and

(j) notwithstanding any substantive or procedural provision of Chapter 6 of Title 5 of the Guam Code Annotated, the government of Guam hereby waives immunity from any suit or action in contract on the line of credit but does not waive sovereign immunity of elected or appointed officials and employees of the government of Guam.

SOURCE: GC § 6120 15-53:1, amended by P.L. 17-4:1. Subsection (g) added by P.L. 17-53:22. Amended by P.L. 17-59:4. Subsection (h) added by P.L. 17-28:8. Amended by P.L. 26-122:13, P.L. 31-077:XII:42 (Sept.
20, 2011).

NOTE: Govt. Code § 6121, imposing fiscal austerity, was passed by P.L.
17-53. By its own terms, this law expired on September 30, 1985. Even though codified, it will not be placed here as it is no longer in force.