(a) Authorization for issuance of General Obligation Bonds; Terms of Bonds. For the purpose of satisfying the obligation to the Retirement Fund from the General Fund, the Governor of Guam is authorized to issue one or more series of general obligation bonds of the government in an aggregate principal amount not to exceed Forty-five Million Dollars ($45,000,000); provided, that the bonds shall not be issued without any unqualified opinion of bond counsel that the interest on the bonds would be tax-exempt. The bonds shall mature at such times not later than July 1, 1996, shall bear interest at such rates not exceeding ten percent (10%) per annum payable at least semiannually on such dates commencing not later than one year after the date of issuance of the bonds, shall be in such denominations, shall be subject to redemption at such times and upon payment of such premium not exceeding four percent (4%) of the principal amount thereof and shall be sold at public or private sale for such price not less than ninety-six percent (96%) of the principal amount thereof plus accrued interest, all as determined by the Governor by execution of one or more certificates upon or prior to the issuance of the bonds.

(b) 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. 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 of or interest on the bonds. Any such reimbursement obligation may be secured by a pledge of the fullfaith and credit of the government of Guam and the revenues described in Subsection (i) of this Section.

(c) Use of Proceeds from Sale of Bonds. Proceeds from the sale of the bonds shall be used solely to satisfy the obligation to the Retirement Fund from the General Fund and to pay expenses related to the authorization, sale and issuance of the bonds, 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 bonds.

(d) Pledge of Full Faith and Credit; Authorization to Collect Revenues. The bonds shall constitute valid and legally binding general obligations of the government of Guam. The government of Guam pledges its full faith and credit for the punctual payment of both principal and interest on the bonds. There shall be collected annually in the same manner and at the same time as government revenue for other purposes is collected, such sum as is required to pay the principal and interest on the bonds. All officers charged bylaw with any duty in the collection of the government revenues shall do every lawful thing necessary to collect such sum.

(e) Appropriation from General Fund. There are appropriated from the General Fund such sums as will, together with any pledged revenues, equal in each year the amount of money necessary to pay the principal and interest on such bonds.

(f) Additional Parity Bonds. The government of Guam, after appropriate enabling legislation, may issue other general obligations of the government secured on a parity with such bonds by the general obligation of the government.

(g) Waiver of Immunity. Notwithstanding any substantive or procedural provision of Chapter 6 of this Title, the government of Guam waives immunity from any suit or action in contract on such bonds.

(h) Certificate of Governor. 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 Subsection (a) of this Section shall be as specified in a certificate of authorization approved by the Governor, authorizing the issuance of the bonds. The Governor may appoint a trustee authorized to receive and hold in trust the proceeds of the bonds and revenues related thereto, to protect the rights of bondholders and to perform such other duties as may be specified in the certificate. The same or another such certificate may also authorize persons so designated to execute, on behalf of the government of Guam, any appropriate documents relating to the bonds and the sale of the bonds.

(i) 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 the bonds. Any pledge made to secure bonds shall be made by the certificate of authorization delivered pursuant to Subsection (h) of this Section and 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 appointed pursuant to Subsection (h) of this Section. The revenues shall, upon receipt by or on behalf of the government of Guam, immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any 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, irrespective of whether the parties have notice thereof. All such taxes, fees and penalties, to the extent so pledged, are hereby continuously appropriated for such purposes.

SOURCE: GC § 6128 added by P.L. 18-41:1.