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

Summary

Guam’s lawmakers can make laws on most local matters so long as they don’t conflict with federal law or this chapter. The Guam government can charge taxes and fees (like property, sales, license, and royalty taxes) and can sell bonds to get money ahead of taxes or revenues. Guam’s total public debt cannot be more than 10% of the total taxable property value on the island. Bonds paid only from the income of a specific public project do not count toward that 10% limit. All Guam government bonds are tax-free on both principal and interest for the United States, Guam, states, territories, local governments, and the District of Columbia. The Secretary of the Interior can guarantee that the Federal Financing Bank will buy Guam Power Authority (GPA) bonds or obligations due on or before December 31, 1978 to refinance short-term notes due or existing on June 1, 1976 and other non-bond debts, up to $36,000,000, and the Bank may buy them. The interest on Bank-purchased obligations must be at least a rate set by the Secretary of the Treasury based on comparable U.S. Treasury yields (rounded to the nearest one-eighth of 1%) plus 1% per year. The Secretary, with the Treasury’s agreement, may extend that guarantee to December 31, 1980. If GPA cannot refinance by then, the Secretary (with Treasury agreement) may guarantee Bank purchase of obligations that refinance the principal, maturing no later than December 31, 1990 and bearing interest under section 2285 of title 12. If the GPA board asks, the Government of Guam approves, and an independent rate-making body is set up, the Secretary may guarantee a second refinancing by December 31, 1984 under terms calling for equal semiannual payments, final maturity by December 31, 2004, the Secretary’s right to remove and replace managers or hire outside management after 60 days’ notice for violations, and a simple annual interest rate of 7%.

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