12 GCA § 8113.4: PUC Authorization; Tax-Free.

(a) Such funds as GPA may borrow to implement the requirements of this Act, shall be borrowed upon such terms and conditions as shall be authorized by PUC pursuant to its regulatory authority ensuring that any rates resulting to consumers are reasonable as provided by 12 GCA § 12004.

(b) The amount and terms for both interim and long-term debt authorized by the Act shall be as set by PUC, not to exceed the limits set by this Act. All interest on the debt and all costs of financing and all associated costs for new generation shall be capitalized so there are no associated demands on GPA cash and no impact on rates until construction and installation of the respective generators are complete and the generators concerned are on line and providing power, revenue and benefits to GPA and the people of Guam. On behalf of the government of Guam, I Maga’håga/Maga’låhi may guarantee the repayment of the interim debt. The term of the interim debt allowed by this Act shall be repaid not later than September 1, 1993, during which period long-term financing to pay off this debt shall be obtained by GPA. The interim debt terms shall allow for an early payoff with no prepayment penalty after two (2) months, and the interest rate thereon shall not exceed a reasonable rate to GPA (taking into account non-2taxability to the lender of the interest), not to exceed an annual actual percentage rate of 10%. The appropriateness, terms, conditions, fees, and interest rates of the debt (interim and long-term) shall be approved by the PUC. All expenses and costs involved in the origination of the debt shall be the responsibility of GPA, to be paid from the proceeds of said debt.

(c) Interest paid by GPA on long-term and interim financing, if any, shall be free of income and business privilege taxation from the government of Guam.