§1423a — Title 48 Territories and Insular Possessions | U.S. Code

Summary

Guam’s government can make laws on local matters and can tax things like property, sales, licenses, and royalties. The Guam Legislature may issue bonds when it needs money, but total public debt cannot be more than 10 percent of Guam’s total property tax value. Bonds paid only from a project’s own revenues do not count toward that 10 percent limit. Bonds issued by Guam are free from taxes on their principal and interest by the U.S., Guam, any state or territory, any local government, or the District of Columbia. The Secretary of the Interior may guarantee the Federal Financing Bank buying Guam Power Authority (GPA) bonds that mature by December 31, 1978 to refinance short-term notes due or existing on June 1, 1976 and other non-bond debt, up to $36,000,000. The Bank may buy those obligations. The interest rate must be at least the rate the Secretary of the Treasury sets: the current average market yield on similar U.S. marketable securities, rounded to the nearest one-eighth of one percent, plus 1 percent per year. The Secretary (with the Treasury’s agreement) can extend that guarantee to December 31, 1980. If GPA cannot refinance on reasonable terms by December 31, 1980, the Secretary (with Treasury) may guarantee refinancing obligations that must mature by December 31, 1990 and bear interest under section 2285 of title 12. If GPA’s board asks for a second refinancing, and the Government of Guam approves under Guam law and creates an independent rate-making authority, the Secretary may guarantee a purchase by the Bank on or before December 31, 1984 under an agreement that requires equal semiannual payments, maturity no later than December 31, 2004, gives the Secretary the right (after 60 days’ notice of violation) to remove and replace the GPA board or general manager or to hire outside management, and sets a simple annual interest rate of 7 percent.

Title 48, §1423a

Territories and Insular Possessions — Source: USLM XML via OLRC

The legislative power of Guam shall extend to all rightful subjects of legislation not inconsistent with the provisions of this chapter and the laws of the United States applicable to Guam. Taxes and assessments on property, internal revenues, sales, license fees, and royalties for franchises, privileges, and concessions may be imposed for purposes of the government of Guam as may be uniformly provided by the Legislature of Guam, and when necessary to anticipate taxes and revenues, bonds and other obligations may be issued by the government of Guam: Provided, however, That no public indebtedness of Guam shall be authorized or allowed in excess of 10 per centum of the aggregate tax valuation of the property in Guam. Bonds or other obligations of the government of Guam payable solely from revenues derived from any public improvement or undertaking shall not be considered public indebtedness of Guam within the meaning of this section. All bonds issued by the government of Guam or by its authority shall be exempt, as to principal and interest, from taxation by the Government of the United States or by the government of Guam, or by any State or Territory or any political subdivision thereof, or by the District of Columbia. The Secretary of the Interior (hereafter in this section referred to as “Secretary”) is authorized to guarantee for purchase by the Federal Financing Bank bonds or other obligations of the Guam Power Authority maturing on or before December 31, 1978, which shall be issued in order to refinance short-term notes due or existing on June 1, 1976 and other indebtedness not evidenced by bonds or notes in an aggregate amount of not more than $36 million, and such bank, in addition to its other powers, is authorized to purchase, receive or otherwise acquire these same. The interest rate on obligations purchased by the Federal Financing Bank shall be not less than a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States of comparable maturities, adjusted to the nearest one-eighth of 1 per centum, plus 1 per centum per annum. The Secretary, with the concurrence of the Secretary of the Treasury, may extend the guarantee provision of the previous sentence until December 31, 1980. The Secretary, upon determining that the Guam Power Authority is unable to refinance on reasonable terms the obligations purchased by the Federal Financing Bank under the fifth sentence of this section by December 31, 1980, may, with the concurrence of the Secretary of the Treasury, guarantee for purchase by the Federal Financing Bank; and such bank is authorized to purchase, obligations of the Guam Power Authority issued to refinance the principal amount of the obligations guaranteed under the fifth sentence of this section. The obligations that refinance such principal amount shall mature not later than December 31, 1990, and shall bear interest at a rate determined in accordance with section 2285 of title 12. At the request of the Board of Directors of the Guam Power Authority for a second refinancing agreement and conditioned on the approval of the Government of Guam pursuant to the law of Guam, and conditioned on the establishment of an independent rate-making authority by the Government of Guam, the Secretary may guarantee for purchase by the Federal Financing Bank, on or before December 31, 1984, according to an agreement that shall provide for— (a)

(b)maturity of obligations no later than December 31, 2004;

(c)authority for the Secretary, should there be a violation of a provision of this legislation, or covenants or stipulations contained in the refinancing document and after giving sixty days notice of such violation to the Guam Power Authority and the Governor of Guam, to dismiss members of the Board of Directors or the general manager of the Guam Power Authority, and (1) appoint in their place members or a general manager who shall serve at the pleasure of the Secretary, or (2) contract for the management of the Guam Power Authority; and

(d)an annual simple interest rate of seven per centum; and

Notes & Related Subsidiaries

Editorial Notes

Codification “section 3713(a) of title 31” substituted in text for “section 3466 of the Revised Statutes (31 U.S.C. 191)” on authority of Pub. L. 97–258, § 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which enacted Title 31, Money and Finance.

Amendments

1998—Pub. L. 105–291 substituted “rightful subjects of legislation” for “subjects of legislation of local application” in first sentence. 1984—Pub. L. 98–454 inserted provisions relating to authority of Secretary to guarantee for purchase by the Federal Financing Bank, obligations of the Guam Power Authority to be used for a second refinancing of the principal amount due to mature on December 31, 1990. 1980—Pub. L. 96–205 substituted provisions relating to guarantees by the Secretary of the purchase by the Federal Financing Bank of the refinancing obligations of the Guam Power Authority where such refinancing obligations remain outstanding by Dec. 31, 1980, for provisions relating to payment of interest and default on maturity of guaranteed bonds or other obligations issued prior to Dec. 31, 1980. 1976—Pub. L. 94–395 inserted provisions relating to authority of Secretary of the Interior to guarantee for purchase by the Federal Financing Bank bonds or other obligations of the Guam Power Authority maturing on or before Dec. 31, 1978.

§1423a Power of legislature; limitation on indebtedness of Guam; bond issues; guarantees for purchase by Federal Financing Bank of Guam Power Authority bonds or other obligations; interest rates; default

Summary

Title 48, §1423a

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata