
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 48USC1423a]

 
              TITLE 48--TERRITORIES AND INSULAR POSSESSIONS
 
                            CHAPTER 8A--GUAM
 
                     SUBCHAPTER III--THE LEGISLATURE
 
Sec. 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
        
    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) substantially equal semiannual installments of principal and 
    interest;
        (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

the Federal Financing Bank shall purchase such Guam Power Authority 
obligations if such Guam Power Authority obligations are issued to 
refinance the principal amount scheduled to mature on December 31, 1990. 
Should such second refinancing occur, (1) the independent rate-making 
authority to be established by the Government of Guam, or in its 
absence, the Board of Directors of the Guam Power Authority, shall 
establish rates sufficient to satisfy all financial obligations and 
future capital investment needs of the Guam Power Authority that shall 
be consistent with generally accepted rate-making practices of public 
utilities, and (2) the Government of Guam shall not modify the 
requirements of such refinancing agreement without agreement of the 
Secretary. There are authorized to be appropriated to the Secretary of 
the Interior for payment to the Federal Financing Bank such sums as are 
necessary to pay (1) the repurchase payment required under the fifth 
paragraph of the December 31, 1980, note from the Guam Power Authority 
to the Federal Financing Bank and any subsequent repurchase payments 
required under the second refinancing agreement, and (2) the interest 
rate differential between the seven per centum to be paid by the Guam 
Power Authority and the second refinancing agreement and the interest 
rate that would otherwise be determined in accordance with the above 
cited section 2285 of title 12. Should the Guam Power Authority fail to 
pay in full any installment of interest or principal when due on the 
bonds or other obligations guaranteed under this section, the Secretary 
of the Treasury, upon notice from the Secretary shall deduct and pay to 
the Federal Financing Bank or the Secretary, according to their 
respective interests, such unpaid amounts from sums collected and 
payable pursuant to section 1421h of this title. Notwithstanding any 
other provision of law, Acts making appropriations may provide for the 
withholding of any payments from the United States to the government of 
Guam which may be or may become due pursuant to any law and offset the 
amount of such withheld payments against any claim the United States may 
have against the government of Guam or the Guam Power Authority pursuant 
to this guarantee. For the purpose of this chapter, under section 
3713(a) of title 31 the term ``person'' includes the government of Guam 
and the Guam Power Authority. The Secretary may place such stipulations 
as he deems appropriate on the bonds or other obligations he guarantees.

(Aug. 1, 1950, ch. 512, Sec. 11, 64 Stat. 387; Pub. L. 94-395, Sept. 3, 
1976, 90 Stat. 1199; Pub. L. 96-205, title III, Sec. 303, Mar. 12, 1980, 
94 Stat. 88; Pub. L. 98-454, title II, Sec. 203, Oct. 5, 1984, 98 Stat. 
1733; Pub. L. 105-291, Sec. 4, Oct. 27, 1998, 112 Stat. 2786.)

                          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, Sec. 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.
