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\par The Education Facilities Construction Initiatives Act of 2001}{\insrsid7499891 , Opinion
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\fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\insrsid2774313\charrsid10312329 IN THE SUPREME COURT OF GUAM}{\b\fs24\insrsid10312329\charrsid10312329 
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\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid2774313\charrsid10312329 In re REQUEST OF GOVERNOR FELIX P. CAMACHO RELATIVE TO THE }{\b\fs24\insrsid8726669 
\par }{\b\fs24\insrsid2774313\charrsid10312329 INTERPRETATION OF SECTION 11 OF THE ORGANIC ACT OF GUAM AND THE }{\b\fs24\insrsid8726669 
\par }{\b\fs24\insrsid2774313\charrsid10312329 EDUCATION FACILITIES CONSTRUCTION INITIATIVES ACT OF 2001
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid1725151\charrsid10312329 
\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid2774313\charrsid10312329 Governor Fe}{\b\fs24\insrsid1725151\charrsid10312329 lix P. Camacho
\par }{\fs24\insrsid2774313\charrsid10312329 Petitioner.
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid1725151\charrsid16267566 
\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid1725151\charrsid10312329 Supreme Court Case No.:}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid1725151\charrsid10312329 CRQ05-002}{
\fs24\insrsid10312329\charrsid10312329 
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\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid2774313\charrsid10312329 OPINION}{\b\fs24\insrsid10312329\charrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid3303456\charrsid10312329 Filed:}{\b\fs24\insrsid10312329\charrsid10312329  }{\b\fs24\insrsid5399177 March 21, 2006}{\b\fs24\insrsid10312329\charrsid10312329 
\par }{\b\fs24\insrsid2774313\charrsid10312329 Cite as: 2006 Guam }{\b\fs24\insrsid3874614\charrsid10312329 5}{\b\fs24\insrsid10312329\charrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid1725151\charrsid10312329 Request for D}{\fs24\insrsid10312329 eclaratory Judgment pursuant to}{\fs24\insrsid1725151\charrsid10312329 
\par Section 4104 of Title 7 of the Guam Code Annotated}{\fs24\insrsid2774313\charrsid10312329 
\par Argued and submitted on February 21, 2006
\par Hag\'e5t\'f1a, Guam}{\fs24\insrsid10312329\charrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }\pard \ql \li720\ri0\widctlpar\faauto\rin0\lin720\itap0\pararsid8726669 {\fs24\ul\insrsid2774313\charrsid10312329 Appearing for Petitioner:}{\fs24\insrsid2774313\charrsid10312329 
\par }{\fs24\insrsid1725151\charrsid10312329 Shannon Taitano, }{\i\fs24\insrsid1725151\charrsid10312329 Esq}{\i\fs24\insrsid2774313\charrsid10312329 .}{\fs24\insrsid2774313\charrsid10312329 
\par Office of the Governor of Guam
\par P.O. Box 2950
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\fs24\insrsid13457243\charrsid10312329 2}{\fs24\insrsid10312329 
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\par }{\caps\fs24\insrsid2774313\charrsid10312329 Before}{\fs24\insrsid2774313\charrsid10312329 : F. PHILIP CARBULLIDO, Chief Justice; FRANCES M. TYDINGCO-GATEWOOD, Associate Justice; }{\fs24\insrsid15356043\charrsid10312329 RICHARD H. BENSON}{
\fs24\insrsid2774313\charrsid10312329 , Justice}{\fs24\insrsid15356043\charrsid10312329  }{\i\fs24\insrsid15356043\charrsid10312329 Pro Tempore}{\fs24\insrsid2774313\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329 
\par 
\par }{\b\fs24\insrsid2774313\charrsid10312329 CARBULLIDO, C. J.:}{\fs24\insrsid2774313\charrsid10312329 
\par 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid16538935\charrsid10312329 [1]}{\fs24\insrsid2774313\charrsid10312329 \tab 
This matter comes before the court as a result of a request for declaratory judgment filed by the Governor of Guam, Felix P. Camacho (\'93the Governor\'94), pursuant to Title 7 GCA section 4104.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid2774313\charrsid10312329 The Governor requests that this court declare that (1) multi-year obligations, such as the financing lease contemplated by the Education Facilities Construction Initiative Act of 2001, as amended (\'93the Act\'94
), which are payable solely from a special fund}{\fs24\insrsid12921916\charrsid10312329 , are out}{\fs24\insrsid2774313\charrsid10312329 side the definition of \'93indebtedness\'94 under Section 11 of the Organic Act of Guam (codified at 48 U.S.C. \'a7
 1423a}{\fs24\insrsid14117265\charrsid10312329  (Westlaw through P. L 109-2, 2005}{\fs24\insrsid2774313\charrsid10312329 
) and that (2) a pledge of federal grant revenues made by a sitting governor can bind future governors for the purpose of making lease payments under the Act.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16538935\charrsid10312329 [2]\tab }{\fs24\insrsid11030142\charrsid10312329 Because we cannot anticipate every possible difficulty which might be contained in similar 
multi-year obligations under the Act, we limit our holding to the financing Lease Agreement before us.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid4330409\charrsid10312329 
We hold that the financing Lease Agreement entered into between the Guam Educati}{\fs24\insrsid222815\charrsid10312329 on Financing Foundation}{\fs24\insrsid4330409\charrsid10312329  and the Guam Public School System}{
\cs18\fs24\super\insrsid4330409\charrsid10312329 \chftn {\footnote \pard\plain \s17\qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8463459 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs18\super\insrsid7499891 \chftn }{
\insrsid7499891   The Lease Ag
reement, dated May 25, 2005, lists the parties as Guam Education Financing Foundation and the Guam Department of Education, Government of Guam.  However, pursuant to Public Law 28-45, the Department of Education is now known as the Guam Public School Syst
em.  }{\i\insrsid7499891 See}{\insrsid7499891  Guam Pub. L. 28-45:10 (June 6, 2005).}}}{\fs24\insrsid4330409\charrsid10312329  does not constitute \'93indebtedness\'94 within the meaning of Section 11 of the Organic Act of Guam.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid4330409\charrsid10312329 Secondly, }{\fs24\insrsid11030142\charrsid10312329 we h
old that the Governor may bind future governors with respect to the allocation and pledge of Compact Impact Funds for lease payments, as provided by Section 4.03 of the Lease Agreement. }{\fs24\insrsid10312329 
\par 
\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid358372\charrsid10312329 I.}{\fs24\insrsid10312329 
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\par }{\b\fs24\insrsid10313120\charrsid10312329 [3]}{\fs24\insrsid12921916\charrsid10312329 \tab The Legislature enacted the Act }{\fs24\insrsid358372\charrsid10312329 in 2001 and amended }{\fs24\insrsid12921916\charrsid10312329 it in 2005 in order}{
\fs24\insrsid358372\charrsid10312329  to facilitate the financing of the design, construction, and maintenance of educational facilities.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11361649\charrsid10312329 5 }{
\fs24\insrsid12387260\charrsid10312329 GCA \'a7 58104 (2005).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid358372\charrsid10312329 The Act, codified at Chapter 58 of Title 5 of the Guam Code Annotated, }{\fs24\insrsid12387260\charrsid10312329 
empowers the }{\fs24\insrsid9983219\charrsid10312329 g}{\fs24\insrsid12387260\charrsid10312329 overnment of Guam or an Education Agency}{\cs18\fs24\super\insrsid1388989\charrsid10312329 \chftn {\footnote \pard\plain 
\s17\qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid16527524 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs18\super\insrsid7499891 \chftn }{\insrsid7499891   The Act states that Education Agency \'93
shall mean the Guam Public School System, the University of Guam, or the Guam Community College.\'94  5 GCA \'a7 58103(d) (2005).  }}}{\fs24\insrsid12387260\charrsid10312329  to employ a financing mechanism kno}{\fs24\insrsid12921916\charrsid10312329 
wn as lease-back financing, }{\fs24\insrsid12387260\charrsid10312329 or}{\fs24\insrsid12921916\charrsid10312329  alternatively as}{\fs24\insrsid12387260\charrsid10312329  a financing lease.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid12387260\charrsid10312329 See}{\fs24\insrsid12387260\charrsid10312329  }{\i\fs24\insrsid8463459\charrsid10312329 i}{\i\fs24\insrsid12387260\charrsid10312329 d.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid12387260\charrsid10312329 Specifically, the Act authorizes the }{\fs24\insrsid9983219\charrsid10312329 g}{\fs24\insrsid12387260\charrsid10312329 overnment of Guam or the Education Agency to }{\fs24\insrsid11361649\charrsid10312329 
execute a ground }{\fs24\insrsid12387260\charrsid10312329 lease, subject to legislative approval, to the contractor on which the contractor will construct, convert, or rehabilitate educational facilities.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid12387260\charrsid10312329 Id.}{\i\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid4471339\charrsid10312329 In return, the contractor shall}{\fs24\insrsid12387260\charrsid10312329 
 finance the design, construction, and maintenance of educational facilities, the cost of which will be amortized over a period, during which the contractor will lease back the }{\fs24\insrsid14906938\charrsid10312329 property and}{
\fs24\insrsid9983219\charrsid10312329  educat}{\fs24\insrsid16276597\charrsid10312329 ional facilities to the }{\fs24\insrsid14906938\charrsid10312329 Education Agency.}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid14906938\charrsid10312329 
Id.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11361649\charrsid10312329 Upon the expiration of the ground lease and the financing lease agreement, the property and the educational facilities become the property of }{
\fs24\insrsid2959143\charrsid10312329 the }{\fs24\insrsid11361649\charrsid10312329 Education Agency and the rights and interests of the contractor with respect to the property are extinguished.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid11361649\charrsid10312329 Id}{\i\fs24\insrsid4471339\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid4471339\charrsid10312329 Under the Act, the }{\fs24\insrsid3162189\charrsid10312329 financing }{
\fs24\insrsid4471339\charrsid10312329 lease may contain a provision obligating the Education Agency to vacate the educational facility in the event that sufficient funds are not available for the payme}{\fs24\insrsid529224\charrsid10312329 
nt of rent under the agreement.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid529224\charrsid10312329 5 GCA \'a7 58106}{\fs24\insrsid222815\charrsid10312329  (2005)}{\fs24\insrsid529224\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329 
 }{\fs24\insrsid529224\charrsid10312329 To minimize the cost to the Education Agency, the Act mandates the use of tax-exempt bonds, if possible, and authorizes the pledge of Compact Impact Funds or other federal grant revenues.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid529224\charrsid10312329 5 GCA \'a7 58108}{\fs24\insrsid222815\charrsid10312329  (2005)}{\fs24\insrsid529224\charrsid10312329 .}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [4]}{\fs24\insrsid11343628\charrsid10312329 \tab Pursuant to the Act, the Governor d}{\fs24\insrsid12921916\charrsid10312329 eveloped a financing lease plan}{\fs24\insrsid11343628\charrsid10312329 
 which included a pledge of Compact Impact Funds}{\fs24\insrsid8463459\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid8463459\charrsid10312329 In accordance with the Act, t}{\fs24\insrsid11343628\charrsid10312329 
he Department of Public Works issued a Request for Proposal (\'93RFP\'94) seeking qualified proposals for the financing, design and construction of public school facilities.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5525981\charrsid10312329 
The Pacific Daily News published notices announcing the RFP on April 14, 2004 and May 8, 2004.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5525981\charrsid10312329 
Three qualified proposals were received by the Department of Public Works prior to the closing date of the RFP.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5525981\charrsid10312329 
A committee evaluated all three proposals according to the criteria established in the RFP and ultimately recommended the selection of GEFF.}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [5]}{\fs24\insrsid5525981\charrsid10312329 \tab }{\fs24\insrsid5518650\charrsid10312329 On May 25, 2005, the Guam Education Financing Foundation}{\fs24\insrsid222815\charrsid10312329  (\'93GEFF\'94)}{
\fs24\insrsid5518650\charrsid10312329  and the Gu}{\fs24\insrsid11274470\charrsid10312329 am Public School System}{\fs24\insrsid222815\charrsid10312329  (\'93GPSS\'94)}{\fs24\insrsid5518650\charrsid10312329 , entered into a }{
\fs24\insrsid11274470\charrsid10312329 financing }{\fs24\insrsid5518650\charrsid10312329 lease agreement (the \'93Lease}{\fs24\insrsid11274470\charrsid10312329  Agreement}{\fs24\insrsid5518650\charrsid10312329 \'94).}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5518650\charrsid10312329 The Le}{\fs24\insrsid9983219\charrsid10312329 ase }{\fs24\insrsid12921916\charrsid10312329 Agreement }{\fs24\insrsid9983219\charrsid10312329 provides that GPSS, or the g}{
\fs24\insrsid5518650\charrsid10312329 overnment of Guam, will execute a ground lease under which five parcels of land will be leased to the }{\fs24\insrsid222815\charrsid10312329 GEFF}{\fs24\insrsid5518650\charrsid10312329 , a non-profit corporation.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5518650\charrsid10312329 In return, GEFF will }{\fs24\insrsid11274470\charrsid10312329 finance, design, construct and maintain school facilities on the land}{\fs24\insrsid5518650\charrsid10312329  }{
\fs24\insrsid11274470\charrsid10312329 and lease-back the improved parcels }{\fs24\insrsid5518650\charrsid10312329 to GPS}{\fs24\insrsid2170066\charrsid10312329 S.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid2170066\charrsid10312329 The effec
tive date for the L}{\fs24\insrsid5518650\charrsid10312329 ease }{\fs24\insrsid2170066\charrsid10312329 Agreement }{\fs24\insrsid5518650\charrsid10312329 is October 1, 2006.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5518650\charrsid10312329 
In consideration for entering into the Lease}{\fs24\insrsid2170066\charrsid10312329  Agreement}{\fs24\insrsid5518650\charrsid10312329 , payments totaling $12,200,000}{\fs24\insrsid222815\charrsid10312329 .00}{\fs24\insrsid5518650\charrsid10312329 
 were to be made from Compact Impact Funds to fund the project initially, prio}{\fs24\insrsid2170066\charrsid10312329 r to its}{\fs24\insrsid5518650\charrsid10312329  commencement.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid5518650\charrsid10312329 In addition to these provisions, the Lease }{\fs24\insrsid2170066\charrsid10312329 Agreement }{\fs24\insrsid5518650\charrsid10312329 
contains an automatic renewal clause which provides for consecutive one-year renewal terms}{\fs24\insrsid2170066\charrsid10312329 , in order to create a term of twenty years at minimum}{\fs24\insrsid5518650\charrsid10312329 .}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5518650\charrsid10312329 Lease payments are to be made from Compact Impact Funds}{\fs24\insrsid16276597\charrsid10312329  or other federal}{\fs24\insrsid5518650\charrsid10312329  }{
\fs24\insrsid16276597\charrsid10312329 grant revenues }{\fs24\insrsid5518650\charrsid10312329 pledged by the Governor of Guam or any funds appropriated or made available by the Guam Legislature.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid5518650\charrsid10312329 The Lease }{\fs24\insrsid2170066\charrsid10312329 Agreement }{\fs24\insrsid5518650\charrsid10312329 was signed by all parties involved, including GEFF, GPSS, and the Governor of Guam.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5518650\charrsid10312329 In addition, the Attorney General of Guam}{\fs24\insrsid2170066\charrsid10312329  approved the Lease Agreement as to form and legality}{\fs24\insrsid5518650\charrsid10312329 .
}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 Furthermore, the legislature approved the ground lease between the government of Guam}{\fs24\insrsid222815\charrsid10312329  and GEFF for the sites of}{
\fs24\insrsid14558334\charrsid10312329  the new school facilities.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 Guam Pub. L.}{\fs24\insrsid222815\charrsid10312329  28-68 }{\fs24\insrsid15953909\charrsid10312329 
(Sept. 2}{\fs24\insrsid14558334\charrsid10312329 0, 2005).}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [6]}{\fs24\insrsid10313120\charrsid10312329 \tab }{\fs24\insrsid11274470\charrsid10312329 On September 20, 2005, }{\fs24\insrsid16276597\charrsid10312329 the }{\fs24\insrsid11274470\charrsid10312329 
Governor filed a Request for Declaratory Judgment with this court, asking whether the financing agreement outlined in the }{\fs24\insrsid222815\charrsid10312329 Act}{\fs24\insrsid11274470\charrsid10312329  constitutes \'93indebtedness\'94
 under Section 11 of the Organic Act.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11274470\charrsid10312329 Furthermore, the Governor asks whether or not a future governor would be bound }{\fs24\insrsid12921916\charrsid10312329 
by the pledge of Compact Impact Funds}{\fs24\insrsid11274470\charrsid10312329  authorized by the Act that is codified, as amended, as Chapter 58 of Title 5 of the Guam Code Annotated.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid11274470\charrsid10312329 Though the Attorney General initially opposed the exercise of jurisdiction in the instant case, he later filed a Statement of No Position with regards to the two questions posed by the Governor\rquote s request}{
\fs24\insrsid10312329 .
\par 
\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid11274470\charrsid10312329 II.}{\b\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [7]}{\fs24\insrsid11274470\charrsid10312329 \tab This court has jurisdiction over requests for declaratory judgment pursuant to Title 7 GCA \'a7 4104 (2005).}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid11274470\charrsid10312329 See also In re Request of}{\i\fs24\insrsid222815\charrsid10312329  Governor Felix P. }{\i\fs24\insrsid11274470\charrsid10312329 Camacho}{\i\fs24\insrsid222815\charrsid10312329 
 Relative to the Interpretation and Application of Sections 6 and 9 of the Organic Act of Guam}{\fs24\insrsid10312329 , 2004 Guam 10 \'b6 17.
\par 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [8]\tab }{\fs24\insrsid11274470\charrsid10312329 In order to invoke this court\rquote s }{\fs24\insrsid16276597\charrsid10312329 jurisdiction pursuant to 7 GCA section}{\fs24\insrsid11274470\charrsid10312329 
 4104, a party seeking declaratory judgment must satisfy the following three requirements:}{\fs24\insrsid10312329 
\par 
\par {\listtext\pard\plain\insrsid11274470\charrsid10312329 \hich\af0\dbch\af0\loch\f0 (1)\tab}}\pard \ql \li720\ri0\widctlpar\jclisttab\tx1080\faauto\ls1\rin0\lin720\itap0\pararsid8726669 {\fs24\insrsid11274470\charrsid10312329 
the subject matter of the inquiry must be appropriate for section 4104 review;}{\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329 
\par {\listtext\pard\plain\insrsid2959143\charrsid10312329 \hich\af0\dbch\af0\loch\f0 (2)\tab}}\pard \ql \li720\ri720\widctlpar\jclisttab\tx1080\faauto\ls1\rin720\lin720\itap0\pararsid8726669 {\fs24\insrsid2959143\charrsid10312329 the issue raised must}{
\fs24\insrsid11274470\charrsid10312329  be a matter of great public importance; and }{\fs24\insrsid10312329 
\par }\pard \ql \li0\ri720\widctlpar\faauto\rin720\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329 
\par {\listtext\pard\plain\insrsid15953909\charrsid10312329 \hich\af0\dbch\af0\loch\f0 (3)\tab}}\pard \ql \li720\ri720\widctlpar\jclisttab\tx1080\faauto\ls1\rin720\lin720\itap0\pararsid8726669 {\fs24\insrsid15953909\charrsid10312329 the }{
\fs24\insrsid11274470\charrsid10312329 issue must be such that its resolution through the normal process of law is inappropriate as it would cause undue delay.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par }\pard \ql \li0\ri720\widctlpar\faauto\rin720\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\i\fs24\insrsid11274470\charrsid10312329 See In re }{\i\fs24\insrsid222815\charrsid10312329 Request of }{\i\fs24\insrsid11957844\charrsid10312329 Governor }{
\i\fs24\insrsid222815\charrsid10312329 Carl T.C. }{\i\fs24\insrsid11274470\charrsid10312329 Gutierrez}{\i\fs24\insrsid11957844\charrsid10312329  Relative to the Or}{\i\fs24\insrsid222815\charrsid10312329 ganicity and Constitutionality}{
\i\fs24\insrsid11957844\charrsid10312329  of Public Law 26-35}{\fs24\insrsid11274470\charrsid10312329 , 2002 Guam 1 \'b6 9 (citing 7 GCA \'a7 4104).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11274470\charrsid10312329 
After requesting briefing on the issue of jurisdiction, this court held }{\fs24\insrsid15953909\charrsid10312329 that }{\fs24\insrsid11274470\charrsid10312329 the Governor\rquote 
s request for declaratory judgment satisfies the jurisdictional standard set forth in 7 GCA}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16276597\charrsid10312329 section }{\fs24\insrsid11274470\charrsid10312329 4104.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11274470\charrsid10312329 First}{\fs24\insrsid2959143\charrsid10312329 ,}{\fs24\insrsid11274470\charrsid10312329  the Governor\rquote 
s request requires an interpretation of local and federal law which relates to the duties of the Governor and the operation of the executive branch.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11274470\charrsid10312329 
Though the Governor suggests that the declaratory judgment of this court is necessary to provide bond counsel with an unqualified legal opinion regarding the validity of bonds}{\fs24\insrsid12921916\charrsid10312329 , the real question with regard}{
\fs24\insrsid11274470\charrsid10312329  to the first issue }{\fs24\insrsid12921916\charrsid10312329 in the Governor\rquote s request }{\fs24\insrsid11274470\charrsid10312329 is whether the financing scheme contemplated by the Act constitutes \'93
indebtedness\'94 under Section 11 of the Organic Act.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11274470\charrsid10312329 The second issue }{\fs24\insrsid12921916\charrsid10312329 in the Governor\rquote s request }{
\fs24\insrsid11274470\charrsid10312329 affects the powers and duties of the Governor and the operation of the executive branch with regard to his ability to bind future governors.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid11274470\charrsid10312329 Thus, both questions concern matters which may properly be reviewed by this court under 7 GCA}{\fs24\insrsid16276597\charrsid10312329  section}{\fs24\insrsid11274470\charrsid10312329  4104.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [9]\tab }{\fs24\insrsid11274470\charrsid10312329 The second prong of the jurisdictional analysis requires \'93
an importance of the issue to the body politic, the community, in the sense that the operations of the government may be substantially affected one way or the other by the issue\rquote s resolution.\'94}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid11274470\charrsid10312329 In re Request of Gutierrez}{\fs24\insrsid11274470\charrsid10312329 , 2002 Guam 1 \'b6 26 (citation omitted).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11274470\charrsid10312329 
The issues presented in the Governor\rquote s request affect the government\rquote s ability to finance the construction and rehabilitation of public school facilities.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11274470\charrsid10312329 
As noted previously by this court, GPSS \'93is one of the largest departments in Guam\rquote s Government and has a mission that directly impacts on nearly every family on the island.\'94}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid11274470\charrsid10312329 In re Request of }{\i\fs24\insrsid11957844\charrsid10312329 Governor Carl T.C. }{\i\fs24\insrsid11274470\charrsid10312329 Gutierrez}{\i\fs24\insrsid11957844\charrsid10312329  for a Declaratory Judgment }{
\i\fs24\insrsid8016986\charrsid10312329 as to the Organicity of Guam Public Law 22-42}{\fs24\insrsid11274470\charrsid10312329 , 1996 Guam 4 \'b6 5}{\fs24\insrsid13525600\charrsid10312329  (published order, CRQ96-001}{
\fs24\insrsid11737353\charrsid10312329 ,}{\fs24\insrsid13525600\charrsid10312329  issued Oct. 24, 1996)}{\fs24\insrsid11274470\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11274470\charrsid10312329 Furthermore}{
\fs24\insrsid16276597\charrsid10312329 ,}{\fs24\insrsid11274470\charrsid10312329  the Attorney General concedes that the request involves a matter of great public interest.}{\cs18\fs24\super\insrsid11274470\charrsid10312329 \chftn {\footnote \pard\plain 
\s17\qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid15953909 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs18\super\insrsid7499891 \chftn }{\insrsid7499891 
  Prior to accepting briefs on the subject matter of the request for declaratory judgment, we requested the input of several public officials regarding the exercise of jurisdiction with respect to the instant request.  Attorney General Douglas B. Moylan w
a
s the only one to respond.  Although Attorney General Moylan opposed the exercise of jurisdiction, he conceded that the request satisfied both the first and second prongs of the jurisdictional test applied here.  In addition, he filed a Statement of No Po
sition with regards to the two questions posed by the Governor in his request.
\par }}}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11274470\charrsid10312329 We agree.}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [10]\tab }{\fs24\insrsid11274470\charrsid10312329 Finally, }{\fs24\insrsid12921916\charrsid10312329 the anticipated delay}{\fs24\insrsid11274470\charrsid10312329 
 in pursuing resolution through the normal process of law, rather than through review under section 4104, must be \'93excessive or inappropriate.\'94}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid11274470\charrsid10312329 
In re Request of Gutierrez}{\fs24\insrsid11274470\charrsid10312329 , 2002 Guam 1 \'b6 29}{\fs24\insrsid11737353\charrsid10312329  (citation omitted)}{\fs24\insrsid11274470\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid11274470\charrsid10312329 The intent of }{\fs24\insrsid16276597\charrsid10312329 Title }{\fs24\insrsid11274470\charrsid10312329 7 GCA}{\fs24\insrsid8205112\charrsid10312329  section 4104}{\fs24\insrsid11274470\charrsid10312329 
 was to provide a mechanism by which resolution of important issues of law could be obtained without requiring parties to litigate in the inferior court, a potentially lengthy process.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid11274470\charrsid10312329 In re Request of Gutierrez}{\fs24\insrsid11274470\charrsid10312329 , 1996 Guam}{\fs24\insrsid16276597\charrsid10312329  4 \'b6 8.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16276597\charrsid10312329 
Although}{\fs24\insrsid11274470\charrsid10312329  the exigencies of the public school system may have been created by the government itself, it is in the interest of the territory to expedite the process.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid11274470\charrsid10312329 Therefore, we find }{\fs24\insrsid16276597\charrsid10312329 that }{\fs24\insrsid11274470\charrsid10312329 the current needs of GPSS require a speedy resolution of these questions.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [11]\tab }{\fs24\insrsid11274470\charrsid10312329 For the abovementioned reasons, we find that the Governor\rquote s request satisfies the standards set forth in Title 7 GCA \'a7 4104.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid11274470\charrsid10312329 III.}{\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [12]\tab }{\fs24\insrsid11274470\charrsid10312329 For cases brought before this court pursuant to our original jurisdiction, all issues are determined in the first instance.}{
\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid11274470\charrsid10312329 In re Request of Gutierrez}{\fs24\insrsid11274470\charrsid10312329 , 2002 Guam 1 \'b6 8; }{\i\fs24\insrsid11274470\charrsid10312329 In re Request of Camacho}{
\fs24\insrsid11274470\charrsid10312329 , 2003 Guam 16 \'b6 8. }{\cs18\fs24\super\insrsid11274470\charrsid10312329 \chftn {\footnote \pard\plain \s17\qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid2965461 
\fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs18\super\insrsid7499891 \chftn }{\insrsid7499891   On March 6, 2006, the Ninth Circuit dismissed an appeal of }{\i\insrsid7499891 In re Request of Camacho}{\insrsid7499891 
, 2003 Guam 16, for lack of jurisdiction, citing their recent decision in }{\i\insrsid7499891 Santos v. Guam}{\insrsid7499891 , 436 F.3d 1051 (9th Cir. 2006).  }{\i\insrsid7499891 Moylan v. Camacho}{\insrsid7499891 , No. 03-72836 (9th Cir. Mar. 6,
 2006) (unpublished order dismissing case for lack of jurisdiction).}}}{\fs24\insrsid10312329 
\par 
\par }\pard \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid467704\charrsid10312329 IV.}{\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329 
\par }{\b\fs24\insrsid10313120\charrsid10312329 [13]\tab }{\fs24\insrsid6628989\charrsid10312329 The questions posed by the Governor in his request for declaratory judgm}{\fs24\insrsid8457552\charrsid10312329 ent require us to determine whether}{
\fs24\insrsid6628989\charrsid10312329  the Lease Agreement before u}{\fs24\insrsid8457552\charrsid10312329 s constitutes indebtedness and}{\fs24\insrsid6628989\charrsid10312329  whether the Governor\rquote 
s pledge of Compact Impact Funds will have a binding effect on future governors.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid6628989\charrsid10312329 We shall address both issues separately.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 A.}{\b\fs24\insrsid10312329\charrsid10312329  }{\b\fs24\insrsid5575748\charrsid10312329 \'93Indebtedness\'94}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [14]\tab }{\fs24\insrsid5575748\charrsid10312329 The first issue we address is whether the Lease Agreement entered into by GEFF and GPSS constitutes indebtedness under Section 11 of the Organic Act.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [15]\tab }{\fs24\insrsid5575748\charrsid10312329 The Organic Act states, in relevant part, that \'93no 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.\'94}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 48 U.S.C. \'a7 1423a}{\fs24\insrsid15953909\charrsid10312329 
 (Westlaw through P}{\fs24\insrsid5575748\charrsid10312329 .}{\fs24\insrsid15953909\charrsid10312329  L 109-2, 2005).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 This portion of the Organic Act operates as \'93
a statutory limitation upon government borrowing, commonly referred to as a debt-limitation provision.\'94}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid5575748\charrsid10312329 In re Request of Camacho}{\fs24\insrsid5575748\charrsid10312329 
, 2003 Guam 16 \'b610}{\fs24\insrsid8016986\charrsid10312329  (citation omitted)}{\fs24\insrsid5575748\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 \'93Debt-limitation provisions are generally}{
\fs24\insrsid8602850\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 applicable to obligations which must be paid directly or indirectly by resort to taxation.\'94 15 McQuillin, }{\i\fs24\insrsid5575748\charrsid10312329 The
 Law of Municipal Corporations}{\fs24\insrsid8016986\charrsid10312329  \'a7 41.17 (3d e}{\fs24\insrsid5575748\charrsid10312329 d.}{\fs24\insrsid10319508\charrsid10312329  1987}{\fs24\insrsid5575748\charrsid10312329 )}{
\fs24\insrsid16270544\charrsid10312329  (footnote omitted)}{\fs24\insrsid5575748\charrsid10312329 .}{\cs18\fs24\super\insrsid5575748\charrsid10312329 \chftn {\footnote \pard\plain \s17\qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid16527524 
\fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs18\super\insrsid7499891 \chftn }{\insrsid7499891   Though }{\i\insrsid7499891 The Law of Municipal Corporations}{\insrsid7499891 
 discusses debt-limitation provisions in the context of state constitutions, this court has recognized that the Organic Act of Guam operates in a similar manner, despite it being a federal statute.  }{\i\insrsid7499891 In re Request of Camacho}{
\insrsid7499891 , 2003 Guam 16 \'b6 15 n. 5.  }}}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [16]\tab }{\fs24\insrsid5575748\charrsid10312329 In }{\i\fs24\insrsid5575748\charrsid10312329 In re Request of Camacho}{\fs24\insrsid5575748\charrsid10312329 
, 2003 Guam 16, this court directly addressed the meaning of \'93indebtedness\'94 in Section 11 of the Organic Act.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 
In interpreting debt with respect to Section 11, this court noted that \'93[a] debt is understood to mean an unconditional promise to pay a fixed sum at some specified time, and is quite different from a contract to be performed in the future}{
\fs24\insrsid15953909\charrsid10312329 ,}{\fs24\insrsid5575748\charrsid10312329  depending upon a condition precedent, which may never be performed, and which cannot ripen into a debt until performed.\'94}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid5575748\charrsid10312329 In re Request of Camacho}{\fs24\insrsid5575748\charrsid10312329 , 2003 Guam}{\fs24\insrsid16270544\charrsid10312329  16 \'b6 47}{\fs24\insrsid5575748\charrsid10312329  (quoting }{
\i\fs24\insrsid5575748\charrsid10312329 Knowlton v. Ripley County Mem\rquote l Hosp.}{\fs24\insrsid5575748\charrsid10312329 , 743 S.W.2d 132, 136 (Mo. Ct. App. 1998)).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 
Furthermore, it is recognized that constitutional debt-limitation provisions contemplate a debt which pledges the full faith and credit of the state.}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid5575748\charrsid10312329 
In re Request of Camacho}{\fs24\insrsid5575748\charrsid10312329 , 2003 Guam}{\fs24\insrsid15953909\charrsid10312329  16 \'b6 47}{\fs24\insrsid5575748\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 \'93
Finally to constitute a debt, the obligation \lquote must be an absolute undertaking; if the municipality may avoid its obligation or if there remains conditions precedent }{\fs24\insrsid5309087\charrsid10312329 to it, there is no indebtedness}{
\fs24\insrsid5575748\charrsid10312329 .}{\fs24\insrsid5309087\charrsid10312329 \rquote }{\fs24\insrsid5575748\charrsid10312329 \'94}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid5575748\charrsid10312329 Id.}{
\fs24\insrsid5575748\charrsid10312329  (quoting }{\i\fs24\insrsid5575748\charrsid10312329 City of Hartford v. Kirley}{\fs24\insrsid5575748\charrsid10312329 , 493 N.W.2d 45, 51 n. 13 (Wis. 1992)).}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [17]\tab }{\fs24\insrsid14561010\charrsid10312329 The Governor argues that the financing Lease Agreement before us does not constitute \'93indebtedness\'94
 because it falls within the widely recognized special fund exception.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14561010\charrsid10312329 
The Governor argues that the special fund exception applies because the funds pledged are not from the general fund and the obligations under the Lease Agreement are not backed by the full faith and credit of }{\fs24\insrsid3610081\charrsid10312329 the }{
\fs24\insrsid14561010\charrsid10312329 government of Guam.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }\pard \ql \li720\ri0\widctlpar\faauto\rin0\lin720\itap0\pararsid8726669 {\b\fs24\insrsid14561010\charrsid10312329 1.}{\b\fs24\insrsid10312329\charrsid10312329  }{\b\fs24\insrsid14561010\charrsid10312329 Special Fund Exception}{\b\fs24\insrsid10312329 

\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [18]\tab }{\fs24\insrsid5575748\charrsid10312329 
One generally recognized doctrine holds that municipal debts payable from a special fund do not constitute debts with respect to debt-limitation provisions similar to the one contained in Section 11.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid5575748\charrsid10312329 See}{\fs24\insrsid5575748\charrsid10312329  15 McQuillin \'a7 41.31 }{\fs24\insrsid10319508\charrsid10312329 (3d ed. 1987) }{\fs24\insrsid5575748\charrsid10312329 (\'93If an obligatio
n is payable out of a special fund only, and the municipality is not otherwise liable, it is generally held that there is no indebtedness.\'94)}{\fs24\insrsid3610081\charrsid10312329 .}{\fs24\insrsid5575748\charrsid10312329 
 The Organic Act, itself, enumerates an exception to the definition of indebt}{\fs24\insrsid3162189\charrsid10312329 edness:}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 \'93[b]onds 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.\'94}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid5575748\charrsid10312329 48 U.S.C. \'a7 1423a.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 Consistent with the purpose of this listed exception to the definition of \'93indebtedness,\'94
 we have held other debts of the government to be outside the definition of \'93indebtedness\'94 when they are payable from a special fund as long as it will not burden the gen}{\fs24\insrsid8205112\charrsid10312329 eral fund in the future, such as}{
\fs24\insrsid5575748\charrsid10312329  bonds secured by tobacco settlement money.}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid5575748\charrsid10312329 In re Request of Camacho}{\fs24\insrsid5575748\charrsid10312329 , 2003 Guam}{
\fs24\insrsid9529297\charrsid10312329  16 \'b6 52; }{\i\fs24\insrsid9529297\charrsid10312329 see also Guam Telephone Auth. }{\i\fs24\insrsid6818791\charrsid10312329 v}{\i\fs24\insrsid9529297\charrsid10312329 . Rivera}{
\fs24\insrsid9529297\charrsid10312329 , 416 F.Supp. 283, 285 (D. Guam }{\fs24\insrsid6818791\charrsid10312329 1976) }{\fs24\insrsid9529297\charrsid10312329 (finding that there is no debt created when the government of Guam does not \'93
guarantee to make up any deficiency\'94 of the special fund).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [19]\tab }{\fs24\insrsid5575748\charrsid10312329 Finding the special fund doctrine to be recognized in our jurisdiction, we }{\fs24\insrsid8205112\charrsid10312329 now }{\fs24\insrsid5575748\charrsid10312329 
turn to the Lease Agreement to determine whether this exception is applicable in the instant case.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par {\listtext\pard\plain\b\insrsid16657835\charrsid10312329 \hich\af0\dbch\af0\loch\f0 a.\tab}}\pard \ql \li1440\ri0\widctlpar\jclisttab\tx1440\faauto\ls6\rin0\lin1440\itap0\pararsid8726669 {\b\fs24\insrsid16657835\charrsid10312329  }{
\b\fs24\insrsid14561010\charrsid10312329 Special Fund}{\b\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [20]\tab }{\fs24\insrsid1073786\charrsid10312329 As discussed previously, obligations which are payable from revenues derived from a public undertaking are not considered to be public indebtedness.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid1073786\charrsid10312329 However, this court has held that a ple}{\fs24\insrsid14025530\charrsid10312329 dge of any specific tax revenue}{\fs24\insrsid1073786\charrsid10312329 
 does not suffice for the establishment of a special fund.}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid1073786\charrsid10312329 In re Request of Camacho}{\fs24\insrsid1073786\charrsid10312329 , 2003 Guam 16 \'b6 53.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid1073786\charrsid10312329 In order for the special fund exception to apply, the funds pledged cannot be a part of the general fund; otherwise, the debt-limitation provision would be meaningless.}{
\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid1073786\charrsid10312329 Id.}{\i\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [21]\tab }{\fs24\insrsid5575748\charrsid10312329 The Lease Agreement in the instant case contains numerous provisions regarding the rights and obligations of both the }{\fs24\insrsid9983219\charrsid10312329 g}{
\fs24\insrsid5575748\charrsid10312329 overnment of Guam and GEFF.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 Article 1, Section 1.01 defines \'93Available Funds\'94 as:}{\fs24\insrsid10312329 
\par 
\par }\pard \ql \li720\ri720\widctlpar\faauto\rin720\lin720\itap0\pararsid8726669 {\fs24\insrsid5575748\charrsid10312329 [C]ollectively, Compact Impact Funds in an amount equal to $6,100,000 per Fiscal Year or such large}{\fs24\insrsid3610081\charrsid10312329 
r}{\fs24\insrsid5575748\charrsid10312329  amount as may be made available by the Governor in his sole and absolute discretion, any amounts available to pay amounts due under this Lease and held in the fund}{\fs24\insrsid1796297\charrsid10312329 s}{
\fs24\insrsid5575748\charrsid10312329  and accounts established pursuant to the Indenture, and any funds appropriated or otherwise made available for said purpose from time to time by the Guam Legislature.}{\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329 
\par }{\fs24\insrsid5575748\charrsid10312329 Decl}{\fs24\insrsid1796297\charrsid10312329 . of Shannon Taitano in Supp. of Req. for Declaratory J.}{\fs24\insrsid5575748\charrsid10312329 , Ex. A }{\fs24\insrsid1796297\charrsid10312329 at}{
\fs24\insrsid5575748\charrsid10312329  2.}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [22]\tab }{\fs24\insrsid14558334\charrsid10312329 Compact Impact Funds are federal grants designed to defray costs associated with the residence of certain qualified nonimmigrants.}{
\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid14558334\charrsid10312329 See}{\fs24\insrsid14558334\charrsid10312329  48 U.S.C. \'a7 1921c(e)}{\fs24\insrsid3610081\charrsid10312329  (Westlaw through P. L 109-2, 2005)}{
\fs24\insrsid14558334\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 In furtherance of this purpose, Congress \'93authorized and appropr
iated to the Secretary of the Interior, out of any funds in the Treasury not otherwise appropriated, to remain available until expended, for each fiscal year from 2004 to 2023, $30,000,000}{\fs24\insrsid1796297\charrsid10312329 .00}{
\fs24\insrsid14558334\charrsid10312329  for grants to affected jurisdictions.\'94}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 48 U.S.C. \'a7 1921c(e)(3)}{\fs24\insrsid3610081\charrsid10312329  (
Westlaw through P. L 109-2, 2005)}{\fs24\insrsid14558334\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 The statute}{\fs24\insrsid3610081\charrsid10312329  defines \'93affected jurisdiction\'94}{
\fs24\insrsid14558334\charrsid10312329  to mean American Samoa, Guam, the Commonwealth of the Northern Marianas, or the State of Hawaii.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 48 U.S.C.A. \'a7 1921c(e)(2)}{
\fs24\insrsid3610081\charrsid10312329  (Westlaw through P. L 109-2, 2005)}{\fs24\insrsid14558334\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 For each of these 
affected jurisdictions, the Secretary of the Interior will conduct periodic enumerati}{\fs24\insrsid3610081\charrsid10312329 on of qualified nonimmigrants,}{\fs24\insrsid14558334\charrsid10312329  person}{\fs24\insrsid3610081\charrsid10312329 
s admitted to or }{\fs24\insrsid14558334\charrsid10312329 resi}{\fs24\insrsid3610081\charrsid10312329 de}{\fs24\insrsid14558334\charrsid10312329 nt}{\fs24\insrsid3610081\charrsid10312329 s}{\fs24\insrsid14558334\charrsid10312329 
 of one of the affected jurisdictions pursuant to the compact between the United States and any one of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid14558334\charrsid10312329 48 U.S.C. \'a7 1921c(e)(4)}{\fs24\insrsid3610081\charrsid10312329  (Westlaw through P. L 109-2, 2005)}{\fs24\insrsid14558334\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid14558334\charrsid10312329 The Secretary of the Interior shall allocate the grants to the affected jurisdictions based on those periodic enumerations.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 48 U.S.C. 
\'a7 1921c(e)(5)}{\fs24\insrsid3610081\charrsid10312329  (Westlaw through P. L 109-2, 2005)}{\fs24\insrsid14558334\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 
The grants received are to be used only for \'93health}{\fs24\insrsid11291579\charrsid10312329 ,}{\fs24\insrsid14558334\charrsid10312329 
 educational, social, or public safety services, or infrastructure related to such services, specifically affected by qualified nonimmigrants.\'94}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14558334\charrsid10312329 48 U.S.C. \'a7
 1921c(e)(3)(B)}{\fs24\insrsid3610081\charrsid10312329  (Westlaw through P. L 109-2, 2005)}{\fs24\insrsid14558334\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid13595169\charrsid10312329 
The nature of Compact Impact Funds is similar to that of the tobacco settlement money discussed }{\i\fs24\insrsid13595169\charrsid10312329 supra}{\fs24\insrsid13595169\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid13595169\charrsid10312329 The federal grants are designed for a specific purpose and to be used in limited circumstances.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid13595169\charrsid10312329 
Therefore, the Compact Impact Funds are not }{\fs24\insrsid1073786\charrsid10312329 part of the}{\fs24\insrsid8602850\charrsid10312329  general fund.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par {\listtext\pard\plain\b\insrsid16657835\charrsid10312329 \hich\af0\dbch\af0\loch\f0 b.\tab}}\pard \ql \li1440\ri0\widctlpar\jclisttab\tx1440\faauto\ls6\rin0\lin1440\itap0\pararsid8726669 {\b\fs24\insrsid16657835\charrsid10312329  }{
\b\fs24\insrsid1073786\charrsid10312329 Liability Under the Lease Agreement}{\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [23]\tab }{\fs24\insrsid1073786\charrsid10312329 
Though the Lease Agreement purports to avoid the creation of a debt within the limitation of Section 11 of the Organic Act, and the language in the Lease Agreement appears to have been crafted in an attempt to fall within the special fund doctrine, our in
quiry does not end there.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid1073786\charrsid10312329 We must examine what result the insufficiency of the special fund would have on the government of Guam.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid1073786\charrsid10312329 Some courts have held obligations void for being in excess of the debt limitation provision, notwithstanding the creation of a 
special fund when the contracts have been framed as to create a general liability on the part of the municipality.}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid1073786\charrsid10312329 See}{\fs24\insrsid1073786\charrsid10312329  15 McQuillin 
\'a7 41.31}{\fs24\insrsid10319508\charrsid10312329  (3d ed. 1987)}{\fs24\insrsid1073786\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [24]\tab }{\fs24\insrsid1073786\charrsid10312329 T}{\fs24\insrsid5575748\charrsid10312329 he Lease Agreement}{\fs24\insrsid12797858\charrsid10312329 , in a section entitled \'93Limitations on Liability,\'94}{
\fs24\insrsid5575748\charrsid10312329  states that \'93[n]othing herein shall be construed to require the Government of Guam or the Guam Legislature, to appropriate any money, other }{\fs24\insrsid7040965\charrsid10312329 than the amounts pledged under S}
{\fs24\insrsid5575748\charrsid10312329 ection 4.03(a) to pay}{\fs24\insrsid3104539\charrsid10312329  any Rentals hereunder.\'94}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid3104539\charrsid10312329 Decl.}{\fs24\insrsid1796297\charrsid10312329 
 of Taitano, Ex. A, at}{\fs24\insrsid5575748\charrsid10312329  14.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 Read together}{\fs24\insrsid8602850\charrsid10312329  with Article 1, Section 1.01}{
\fs24\insrsid5575748\charrsid10312329 ,}{\fs24\insrsid12797858\charrsid10312329  which defines \'93available funds,\'94}{\fs24\insrsid5575748\charrsid10312329 
 these two sections of the Lease Agreement demonstrate that the parties intended to create a special fund for the project separate and distinct}{\fs24\insrsid9983219\charrsid10312329  from the general funds of the g}{\fs24\insrsid5575748\charrsid10312329 
overnment of Guam.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 Furthermore, the Lease Agreement explicitly states}{\fs24\insrsid7040965\charrsid10312329 , under Section 4.04}{\fs24\insrsid12797858\charrsid10312329 (b),
}{\fs24\insrsid3104539\charrsid10312329  that \'93[n]o provision hereof}{\fs24\insrsid5575748\charrsid10312329 
 shall be construed or interpreted as creating a general obligation or other indebtedness of the Lessee, the Lessor, the Government of Guam, or any political subdivision of the Government of Guam, within the meaning of any Organic Act or statutor}{
\fs24\insrsid1796297\charrsid10312329 y debt limitation.\'94}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid1796297\charrsid10312329 Decl. of Taitano, Ex. A, at}{\fs24\insrsid5575748\charrsid10312329  14.}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 [25]\tab }{\fs24\insrsid5575748\charrsid10312329 In the instant case, the Lease Agreement attempts to avoid the creation of }{\fs24\insrsid9983219\charrsid10312329 any general obligation for the g}{
\fs24\insrsid5575748\charrsid10312329 overnment of Guam.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 In addition to the limited sources of repayment, contained in Article 1, Section 1.01 discussed }{
\i\fs24\insrsid5575748\charrsid10312329 supra}{\fs24\insrsid5575748\charrsid10312329 , the Lease Agreement explicitly limits the liability of the }{\fs24\insrsid9983219\charrsid10312329 g}{\fs24\insrsid5575748\charrsid10312329 
overnment of Guam in sections 4.04 and 4.09.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 Section 4.04 limits the liability of }{\fs24\insrsid7040965\charrsid10312329 the government of }{
\fs24\insrsid5575748\charrsid10312329 
Guam to the last rental period in which there was an appropriation made for the project; furthermore, it provides that should there be insufficient funds, the Government may quit the project, vacate the premises, and be protected
 from any judgment against it for failure to pay future rentals for which it has not yet }{\fs24\insrsid1796297\charrsid10312329 incurred liability.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid1796297\charrsid10312329 
Decl. of Taitano, Ex. A, at}{\fs24\insrsid5575748\charrsid10312329  14.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 
Section 4.09 outlines the obligations and liabilities in the event of nonappropriation, when sufficient \'93available funds\'94 are not appropriated and are not otherwise legally avail}{\fs24\insrsid14025530\charrsid10312329 able.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid14025530\charrsid10312329 Obligations of GPSS}{\fs24\insrsid5575748\charrsid10312329 
 to pay terminate at the end of the construction period, the initial term, or the renewal term, during which the nonappropriation e}{\fs24\insrsid14025530\charrsid10312329 vent occurs.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid14025530\charrsid10312329 At that time, GPSS}{\fs24\insrsid5575748\charrsid10312329  may term}{\fs24\insrsid3998248\charrsid10312329 inate the Lease Agreement at its}{\fs24\insrsid5575748\charrsid10312329  discretion without penalty.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 D}{\fs24\insrsid1796297\charrsid10312329 ecl. of Taitano, Ex. A, at}{\fs24\insrsid5575748\charrsid10312329  16.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid5575748\charrsid10312329 The}{\fs24\insrsid14025530\charrsid10312329 se provisions prevent GEFF}{\fs24\insrsid5575748\charrsid10312329  from looking to}{\fs24\insrsid9983219\charrsid10312329  the revenue of the g}{
\fs24\insrsid5575748\charrsid10312329 overnment of Guam should there be an event of non-appropriation or default.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 
Therefore, the Lease Agreement sufficiently restricts the obligations of the Government to the special fund created in the instant case.}{\fs24\insrsid10312329 
\par 
\par }\pard\plain \s17\ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\insrsid16657835\charrsid10312329 [26]\tab }{\fs24\insrsid11291579\charrsid10312329 
A minority of jurisdictions have held contracts constitute debt within the meaning }{\fs24\insrsid10696648\charrsid10312329 of }{\fs24\insrsid11291579\charrsid10312329 \'93indebtedness\'94 when they creat}{\fs24\insrsid14503963\charrsid10312329 
e a moral obligation to pay or }{\fs24\insrsid11291579\charrsid10312329 have consequences that may compel a legislature to appropriate funds in the event the special fund is insufficient.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid11291579\charrsid10312329 See}{\fs24\insrsid11291579\charrsid10312329  }{\i\fs24\insrsid10948192\charrsid10312329 Bd. o}{\i\fs24\insrsid11291579\charrsid10312329 f State Harbor Comm\rquote r}{\i\fs24\insrsid10948192\charrsid10312329 s}{
\i\fs24\insrsid11291579\charrsid10312329  v. Dean}{\fs24\insrsid11291579\charrsid10312329 , 258 P.2d 590, 634 (Cal. Dist.Ct. App. 1953); }{\i\fs24\insrsid11291579\charrsid10312329 see also}{\fs24\insrsid11291579\charrsid10312329  }{
\i\fs24\insrsid11291579\charrsid10312329 Montano v. Gabaldon}{\fs24\insrsid11291579\charrsid10312329 , 766 P.2d 1328 (N.M. 1989).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid11291579\charrsid10312329 
However, we decline to extend the meaning of }{\fs24\insrsid14025530\charrsid10312329 in}{\fs24\insrsid11291579\charrsid10312329 debt}{\fs24\insrsid14025530\charrsid10312329 edness}{\fs24\insrsid11291579\charrsid10312329 
 to debts which do not involve a legal obligation to pay; this is consistent with the rationale of }{\i\fs24\insrsid11291579\charrsid10312329 In re Request of Camacho}{\fs24\insrsid11291579\charrsid10312329 , 2003 Guam 16 \'b6 51, that a debt was no
t created where \'93the municipality can walk away from the obligation none the poorer.\'94}{\fs24\insrsid10312329 
\par 
\par }\pard\plain \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\insrsid16657835\charrsid10312329 [27]\tab }{\fs24\insrsid5575748\charrsid10312329 
In conclusion, we find that the Lease Agreement is n}{\fs24\insrsid9983219\charrsid10312329 ot a general obligation of the g}{\fs24\insrsid5575748\charrsid10312329 overnment of Guam.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid5575748\charrsid10312329 We find that the provisions contained in the Lease }{\fs24\insrsid7040965\charrsid10312329 Agreement }{\fs24\insrsid5575748\charrsid10312329 
are sufficient to create a special fund and protect the general revenues of Guam.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid5575748\charrsid10312329 Therefore, }{\fs24\insrsid3162189\charrsid10312329 we hold that }{
\fs24\insrsid5575748\charrsid10312329 the Lease Agreement in the instant case does not constitute \'93indebtedness\'94 within the meaning of Section 11 of the Organic Act of Guam.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16657835\charrsid10312329 B.}{\b\fs24\insrsid10312329\charrsid10312329  }{\b\fs24\insrsid10254132\charrsid10312329 Binding Effect on Future Governors}{\fs24\insrsid10312329 
\par 
\par }\pard\plain \s19\ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\insrsid16657835\charrsid10312329 [28]\tab }{\insrsid10254132\charrsid10312329 
The second issue presented in the Governor\rquote s request is whether a sitting governor can bind future governors with respect to the allocation and pledge of Compact Impact Funds for lease payments, as provided by Section 4.03 of the L}{
\insrsid1796297\charrsid10312329 ease Agreement.}{\insrsid10312329\charrsid10312329  }{\insrsid1796297\charrsid10312329 Decl. of Taitano, Ex. A, at}{\insrsid10254132\charrsid10312329  13.}{\insrsid10312329\charrsid10312329  }{\insrsid10312329 
\par 
\par }\pard\plain \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\lang4105\langfe1033\langnp4105\insrsid16657835\charrsid10312329 [29]\tab }{\fs24\insrsid10254132\charrsid10312329 
The general rule recognized by a majority of jurisdictions is that a governmental body \'93}{\fs24\cf1\insrsid10254132\charrsid10312329 may enter into contracts during [its] term of 
governance however, if the term of the contract extends beyond the term for which the [the governmental body] was elected[,] the ability . . . to bind subsequent [governmental bodies] is limited.\'94 }{\field{\*\fldinst {
\fs24\lang4105\langfe1033\langnp4105\insrsid10254132\charrsid10312329  SEQ CHAPTER \\h \\r 1}}{\fldrslt }}{\fs24\cf1\insrsid10254132\charrsid10312329 56 Am. Jur. 2d Municipal Corporations \'a7 135 (2005).}{\fs24\cf1\insrsid10312329\charrsid10312329  }{
\fs24\cf1\insrsid10254132\charrsid10312329 T}{\fs24\insrsid10254132\charrsid10312329 he policy behind such rule is also widely accepted:}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }\pard \ql \li720\ri720\widctlpar\faauto\rin720\lin720\itap0\pararsid8726669 {\fs24\cf1\insrsid10254132\charrsid10312329 The obvious purpose of the rule is to permit a newly appointed governmental body to function freely on behalf of the public and
 in response to the governmental power or body politic by which it {\*\bkmkstart sp_162_1290}{\*\bkmkstart SDU_1290}{\*\bkmkstart citeas_40__40_Cite_32_as_58__32_562_32_P}{\*\bkmkend sp_162_1290}{\*\bkmkend SDU_1290}
{\*\bkmkend citeas_40__40_Cite_32_as_58__32_562_32_P}was appointed or elected, unhampered by the policies of the predecessors who have since been replaced by the appointing or electing power. T}{\fs24\cf1\insrsid10948192\charrsid10312329 
o permit the outgoing body to \lquote hamstring\rquote }{\fs24\cf1\insrsid10254132\charrsid10312329  its successors by imposing upon them a policy[-]implementing and to some extent, policymaking}{\fs24\cf1\insrsid10948192\charrsid10312329  [sic]}{
\fs24\cf1\insrsid10254132\charrsid10312329  machinery, which is not attuned to the new body or its policies, would be to most effectively circumvent the rule.}{\fs24\cf1\insrsid10312329 
\par }\pard \ql \li0\ri720\widctlpar\faauto\rin720\lin0\itap0\pararsid8726669 {\fs24\cf1\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\i\fs24\cf1\insrsid10254132\charrsid10312329 Lobolito, Inc. v. North Pocono School Dist.}{\fs24\cf1\insrsid7884264\charrsid10312329 ,}{\fs24\cf1\insrsid10254132\charrsid10312329 
 755 A.2d 1287, 1289-90 (Pa. 2000)}{\fs24\cf1\insrsid10948192\charrsid10312329  (quoting }{\i\fs24\cf1\insrsid10948192\charrsid10312329 Mitchell v. Chester Hous. Auth.}{\fs24\cf1\insrsid10948192\charrsid10312329 , 132 A.2d 873,878 (Pa. 1957))}{
\fs24\cf1\insrsid7040965\charrsid10312329 ;}{\fs24\cf1\insrsid7884264\charrsid10312329  }{\i\fs24\cf1\insrsid7884264\charrsid10312329 see also}{\i\fs24\cf1\insrsid742595\charrsid10312329  }{\i\fs24\cf1\insrsid7884264\charrsid10312329 
Rhode Island Student Loan Auth. V. NELS, Inc.}{\fs24\cf1\insrsid7884264\charrsid10312329 ,}{\fs24\cf1\insrsid14447485\charrsid10312329  550 A.2d 624, 629 (R.I. 1988).}{\fs24\cf1\insrsid10312329 
\par 
\par }{\b\fs24\lang4105\langfe1033\langnp4105\insrsid16657835\charrsid10312329 [30]\tab }{\fs24\lang4105\langfe1033\langnp4105\insrsid10254132\charrsid10312329 The }{\fs24\cf1\insrsid10254132\charrsid10312329 
general rule which prohibits governmental bodies from binding successors has two exceptions.}{\fs24\cf1\insrsid10312329\charrsid10312329  }{\fs24\cf1\insrsid10254132\charrsid10312329 First, a governmental body may enter into a contract 
which extends beyond its term of office when specifically authorized by statute.}{\fs24\cf1\insrsid10312329\charrsid10312329  }{\fs24\insrsid10254132\charrsid10312329 10A McQuillin \'a7 29.101 }{\fs24\insrsid10319508\charrsid10312329 (3d ed. 1987) }{
\fs24\insrsid10254132\charrsid10312329 (\'93}{\field{\*\fldinst {\fs24\lang4105\langfe1033\langnp4105\insrsid10254132\charrsid10312329  SEQ CHAPTER \\h \\r 1}}{\fldrslt }}{\fs24\cf1\insrsid10254132\charrsid10312329 Statutes . . . sometimes authori
ze municipal boards to make contracts which will extend beyond their own official term, and the power of the legislature in this respect is well settled.\'94); }{\i\fs24\cf1\insrsid2435470\charrsid10312329 see also }{
\i\fs24\cf1\insrsid2049524\charrsid10312329 Program Admin. Serv}{\i\fs24\cf1\insrsid10254132\charrsid10312329 s}{\i\fs24\cf1\insrsid2049524\charrsid10312329 .}{\i\fs24\cf1\insrsid10948192\charrsid10312329 , Inc.}{
\i\fs24\cf1\insrsid2435470\charrsid10312329 ,}{\i\fs24\cf1\insrsid10948192\charrsid10312329  v. Dauphin County Gen.}{\i\fs24\cf1\insrsid10254132\charrsid10312329  Auth}{\i\fs24\cf1\insrsid10948192\charrsid10312329 .}{
\fs24\cf1\insrsid10948192\charrsid10312329 , 874 A.2d 722, 7}{\fs24\cf1\insrsid10254132\charrsid10312329 25 (Pa. 2005) (The general rule \'93
does not apply to classes of contracts specifically exempted by the legislature to permit governments to make and acquire long-term commitments when necessary for the public good.\'94).}{\fs24\cf1\insrsid10312329\charrsid10312329  }{
\fs24\cf1\insrsid10254132\charrsid10312329 Second, a governmental body may enter into a contract extending beyond its term when }{\fs24\cf1\insrsid2959143\charrsid10312329 the }{\fs24\cf1\insrsid10254132\charrsid10312329 
subject matter of the contract involves a proprietary, as opposed to a governmental, function.}{\fs24\cf1\insrsid10312329\charrsid10312329  }{\fs24\insrsid10254132\charrsid10312329 10A McQuillin \'a7 29.101 }{\fs24\insrsid10319508\charrsid10312329 
(3d ed. 1987) }{\fs24\insrsid10254132\charrsid10312329 (stating that while }{\fs24\insrsid10319508\charrsid10312329 \'93the }{\fs24\insrsid10254132\charrsid10312329 hands of successors cannot be tied by contract}{\fs24\insrsid10319508\charrsid10312329 s}{
\fs24\insrsid10254132\charrsid10312329  relating to governmental matters}{\fs24\insrsid7040965\charrsid10312329 ,}{\fs24\insrsid10254132\charrsid10312329 \'94 contracts relating to proprietary functions}{\fs24\insrsid2049524\charrsid10312329 
 may be binding on successors);}{\fs24\insrsid10254132\charrsid10312329  }{\i\fs24\cf1\insrsid2049524\charrsid10312329 Program Admin. Serv}{\i\fs24\cf1\insrsid10254132\charrsid10312329 s}{\i\fs24\cf1\insrsid2049524\charrsid10312329 .}{
\i\fs24\cf1\insrsid10254132\charrsid10312329 , Inc.}{\fs24\cf1\insrsid2435470\charrsid10312329 , 874 A.2d at }{\fs24\cf1\insrsid10254132\charrsid10312329 725}{\fs24\cf1\insrsid2435470\charrsid10312329  }{\fs24\cf1\insrsid10254132\charrsid10312329 
(stating that the prohibition \'93applies only to contracts involving the performance of}{\fs24\cf1\insrsid15798137\charrsid10312329  a governmental function . . .\'94}{\fs24\cf1\insrsid10254132\charrsid10312329 ).}{
\fs24\cf1\insrsid10312329\charrsid10312329  }{\fs24\cf1\insrsid10254132\charrsid10312329 We examine each exception in turn.}{\cs18\fs24\cf1\super\insrsid10254132\charrsid10312329 \chftn {\footnote \pard\plain 
\s17\qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid16657835 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs18\super\insrsid7499891 \chftn }{\insrsid7499891   We note that the Governor\rquote 
s request focuses only on the proprietary/governmental distinction and does not directly address the statutory authorization exception.  
\par }}}{\fs24\cf1\insrsid10312329\charrsid10312329  }{\fs24\cf1\insrsid10312329 
\par 
\par }\pard \ql \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\cf1\insrsid12064174\charrsid10312329 1.}{\b\fs24\cf1\insrsid10312329\charrsid10312329  }{\b\fs24\cf1\insrsid12064174\charrsid10312329 Exception:}{
\b\fs24\cf1\insrsid10312329\charrsid10312329  }{\b\fs24\cf1\insrsid12064174\charrsid10312329 Legislative A}{\b\fs24\cf1\insrsid12677033\charrsid10312329 uthorization}{\b\fs24\cf1\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\cf1\insrsid10312329 
\par }{\b\fs24\lang4105\langfe1033\langnp4105\insrsid16657835\charrsid10312329 [31]\tab }{\fs24\cf1\insrsid12204820\charrsid10312329 Section 1423a of the Organic Act, as amended by Congress in 1998, states that \'93
[t]he 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.\'94 48 U.S.C. \'a7 1423a}{
\fs24\insrsid7040965\charrsid10312329 (Westlaw through P. L 109-2, 2005)}{\fs24\cf1\insrsid12204820\charrsid10312329 .}{\fs24\cf1\insrsid10312329\charrsid10312329  }{\fs24\cf1\insrsid12204820\charrsid10312329 Section 1423a was amended in order to \'93
clarif}{\fs24\cf1\insrsid15798137\charrsid10312329 [y] the legislature's power[s] }{\fs24\cf1\insrsid12204820\charrsid10312329 to }{\fs24\cf1\insrsid15798137\charrsid10312329 \lquote }{\fs24\cf1\insrsid12204820\charrsid10312329 
provide Guam with a greater measure of self-government}{\fs24\cf1\insrsid6049476\charrsid10312329  }{\fs24\cf1\insrsid12204820\charrsid10312329 .}{\fs24\cf1\insrsid6049476\charrsid10312329  . . .}{\fs24\cf1\insrsid742595\charrsid10312329 \rquote }{
\fs24\cf1\insrsid12204820\charrsid10312329 \'94 }{\i\fs24\cf1\insrsid12204820\charrsid10312329 In re Request of Camacho, }{\fs24\cf1\insrsid12204820\charrsid10312329 2004 Guam 10, \'b6 33 (quoting H.R.}{\fs24\cf1\insrsid6049476\charrsid10312329  Rep. No}{
\fs24\cf1\insrsid12204820\charrsid10312329 . 105-742 (1998), 1998 WL 658802 at *3).}{\fs24\cf1\insrsid10312329\charrsid10312329  }{\fs24\cf1\insrsid12204820\charrsid10312329 This court has held that \'93}{
\fs24\lang4105\langfe1033\langnp4105\insrsid12204820\charrsid10312329 legislati}{\fs24\lang4105\langfe1033\langnp4105\insrsid12064174\charrsid10312329 ve enactments are}{\fs24\lang4105\langfe1033\langnp4105\insrsid12204820\charrsid10312329 
 presumed to be constitutional.\'94}{\cs18\fs24\super\insrsid12204820\charrsid10312329 \chftn {\footnote \pard\plain \qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid16657835 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {
\cs18\super\insrsid7499891 \chftn }{\insrsid7499891   In the Governor\rquote s Opening Brief, he states that \'93
[e]ven though the Legislature has authorized the Governor to pledge future federal grant funds for the purposes contemplated by the financing lease in question, the Governor in fact has the sole power to determine the use of such grant funds.\'94  G
overnor\rquote s Brief, p. 12 n. 4 (citing }{\i\insrsid7499891 In re Request of Camacho}{\insrsid7499891 , 2004 Guam 10 \'b6 1).  In }{\i\insrsid7499891 In re Request of Camacho}{\insrsid7499891 
, 2004 Guam 10, we held that Public Law 26-169 was in derogation of the Governor\rquote s powers as set forth in the Organic Act because it granted final 
authority over federal funding sources to a statutorily created body.  We did not address, as the Governor attempts to argue, whether the Governor has the }{\i\insrsid7499891\charrsid7161870 sole}{\i\insrsid7499891  }{\insrsid7499891 
authority over such federal funding sources.  Nor do we address such issue in this instance.  Th
e Governor does not claim that the Act is either in violation of the Organic Act, nor does he claim that it is in violation of any federal law.  As such, the presumption of organicity of statutes passed by the Guam Legislature remains undisturbed at this 
time.  
\par }\pard\plain \s17\ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid12204820 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\insrsid7499891   }}}{\fs24\lang4105\langfe1033\langnp4105\insrsid10312329\charrsid10312329  }{
\i\fs24\cf1\insrsid12204820\charrsid10312329 In re Request of Gutierrez,}{\fs24\cf1\insrsid12204820\charrsid10312329  2002 Guam 1, \'b6 41; }{\i\fs24\cf1\insrsid2049524\charrsid10312329 A.B. Won Pat Guam Int\rquote l}{
\i\fs24\cf1\insrsid6049476\charrsid10312329  Airport Auth.}{\i\fs24\cf1\insrsid2049524\charrsid10312329  ex rel. B}{\i\fs24\cf1\insrsid12204820\charrsid10312329 d}{\i\fs24\cf1\insrsid2049524\charrsid10312329 .}{
\i\fs24\cf1\insrsid12204820\charrsid10312329  }{\i\fs24\cf1\insrsid2049524\charrsid10312329 of Dir}{\i\fs24\cf1\insrsid12204820\charrsid10312329 s}{\i\fs24\cf1\insrsid2049524\charrsid10312329 .}{\i\fs24\cf1\insrsid12204820\charrsid10312329  v. Moylan}{
\fs24\cf1\insrsid12204820\charrsid10312329 , 2005 Guam 5, \'b6 22, }{\i\fs24\cf1\insrsid12204820\charrsid10312329 cert. denied}{\fs24\cf1\insrsid6049476\charrsid10312329 ,}{\fs24\cf1\insrsid12204820\charrsid10312329  }{
\i\fs24\cf1\insrsid12204820\charrsid10312329 Moylan v. A.B. Won Pa}{\i\fs24\cf1\insrsid6049476\charrsid10312329 t Guam Intern. Airport Auth.}{\i\fs24\cf1\insrsid12204820\charrsid10312329  ex rel. Bd. of Directors}{
\fs24\cf1\insrsid12204820\charrsid10312329 , 126 S. Ct. 338 (2005).}{\fs24\cf1\insrsid10312329\charrsid10312329  }{\fs24\cf1\insrsid10312329 
\par 
\par }{\b\fs24\lang4105\langfe1033\langnp4105\insrsid16657835\charrsid10312329 [32]\tab }{\fs24\lang4105\langfe1033\langnp4105\insrsid12677033\charrsid10312329 \'93[T]}{\fs24\cf1\insrsid12677033\charrsid10312329 
here can be no question . . . as to the competency of a state legislature, unless prohibited by constitutional provisions, to authorize a [governmental bod
y] to contract . . . and so to bind during the specified period any [successors] from altering or in any way interfering with such contract.\'94}{\fs24\cf1\insrsid10312329\charrsid10312329  }{\i\fs24\cf1\insrsid12677033\charrsid10312329 
City of Detroit v. Detroit Citizens\rquote  St. Ry. Co.}{\fs24\cf1\insrsid12677033\charrsid10312329  184 U.S. 368, 382 (1902)}{\fs24\cf1\insrsid7698809\charrsid10312329  (citations omitted)}{\fs24\cf1\insrsid12677033\charrsid10312329 . Thus, courts }{
\fs24\lang4105\langfe1033\langnp4105\insrsid12677033\charrsid10312329 have held that where the }{\fs24\cf1\insrsid12677033\charrsid10312329 {\*\bkmkstart SDU_38}{\*\bkmkend SDU_38}
legislature authorizes a contract, the term of which will extend beyond the contracting party\rquote s governmental term, and such authorized contract is made, it is valid and binding for the period of the running of the contract up
on the successors of those entering into it.}{\fs24\cf1\insrsid10312329\charrsid10312329  }{\i\fs24\cf1\insrsid12677033\charrsid10312329 See}{\fs24\cf1\insrsid12677033\charrsid10312329  }{\i\fs24\cf1\insrsid12677033\charrsid10312329 State}{
\i\fs24\cf1\insrsid7698809\charrsid10312329  ex rel. Veeder v. State B}{\i\fs24\cf1\insrsid12677033\charrsid10312329 d}{\i\fs24\cf1\insrsid7698809\charrsid10312329 .}{\i\fs24\cf1\insrsid12677033\charrsid10312329  of Educ}{
\i\fs24\cf1\insrsid7698809\charrsid10312329 .}{\fs24\cf1\insrsid12677033\charrsid10312329 , 33 P.2d 516, 523 (Mont. 1934);}{\fs24\lang4105\langfe1033\langnp4105\insrsid12677033\charrsid10312329  }{\i\fs24\cf1\insrsid12677033\charrsid10312329 
Karpark Corp. v. Town of Graham}{\fs24\cf1\insrsid7698809\charrsid10312329 , 99 F.Supp. 124, 128 (M.D}{\fs24\cf1\insrsid12677033\charrsid10312329 .N.C. 1951); }{\i\fs24\cf1\insrsid12677033\charrsid10312329 Yovetich v. McClintock}{
\fs24\cf1\insrsid12677033\charrsid10312329 , 526 P.2d 999,1002-03 (Mont. 1974}{\fs24\cf1\insrsid8726669 )}{\fs24\lang4105\langfe1033\langnp4105\insrsid12677033\charrsid10312329 ; }{\i\fs24\cf1\insrsid12677033\charrsid10312329 
H. J. McNeel, Inc. v. Canyon County}{\fs24\cf1\insrsid7698809\charrsid10312329 , 277 P.2d 554, 557-58 (Idaho 1}{\fs24\cf1\insrsid12677033\charrsid10312329 954); }{\fs24\cf1\insrsid10312329 
\par 
\par }{\b\fs24\cf1\insrsid16657835\charrsid10312329 [33]\tab }{\fs24\cf1\insrsid7698809\charrsid10312329 Thus, we hold that}{\fs24\cf1\insrsid12677033\charrsid10312329  the }{\fs24\insrsid12677033\charrsid10312329 pledge of Compact }{
\fs24\insrsid11208893\charrsid10312329 Impact Funds as lease payments,}{\fs24\insrsid12677033\charrsid10312329  }{\fs24\insrsid11208893\charrsid10312329 which is }{\fs24\insrsid12677033\charrsid10312329 an obliga}{\fs24\insrsid11291579\charrsid10312329 
tion extending beyond }{\fs24\insrsid12677033\charrsid10312329 the sitting Governor\rquote s term pursuant to Secti}{\fs24\insrsid11208893\charrsid10312329 on 4.03 of the Lease Agreement, }{\fs24\insrsid12677033\charrsid10312329 is authorized by the G}{
\fs24\insrsid7698809\charrsid10312329 uam Legislature.}{\fs24\insrsid10312329 
\par 
\par }\pard \ql \li1440\ri0\widctlpar\faauto\rin0\lin1440\itap0\pararsid8726669 {\b\fs24\insrsid12677033\charrsid10312329 a.}{\b\fs24\insrsid10312329\charrsid10312329  }{\b\fs24\insrsid12677033\charrsid10312329 
Education Facilities Construction Initiative Act of 2001}{\b\fs24\insrsid10715074\charrsid10312329  }{\b\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [34]\tab }{\fs24\insrsid12677033\charrsid10312329 Particularly important to a determination of the issue before us is the legislative enactment of }{\fs24\insrsid3998248\charrsid10312329 T}{
\fs24\insrsid2049524\charrsid10312329 itle 5 GCA }{\fs24\insrsid12677033\charrsid10312329 section 58104, entitled \'93Authorization to Enter into Long-Term Leases.\'94 It provides in relevant part: }{\fs24\insrsid10312329 
\par 
\par }\pard \ql \li720\ri720\widctlpar\faauto\rin720\lin720\itap0\pararsid8726669 {\fs24\insrsid10715074\charrsid10312329 For the purpose of facilitating the financi
ng of the design, construction and maintenance of an Education Facility encompassed by this Act, the government of Guam or an Education Agency, as the case may be, is authorized to lease, if required, to the Contractor, subject to legislative approval, su
fficient government of Guam real property, to include, }{\i\fs24\insrsid10715074\charrsid10312329 but not be limited to}{\fs24\insrsid10715074\charrsid10312329 
, Chamorro Land Trust Commission property and Guam Ancestral Lands Commission property, on which to construct, convert or rehabilitate an Education Facility; provided, such property
 is in the inventory of the Education Agency. The location of the property may be at the site of an existing Education Facility under the control of an Education Agency, which may be converted, rehabilitated or demolished and rebuilt under the provisions 
of this Act.}{\fs24\insrsid10312329 
\par }\pard \ql \li0\ri720\widctlpar\faauto\rin720\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329 
\par }\pard \ql \li720\ri720\widctlpar\faauto\rin720\lin720\itap0\pararsid8726669 {\fs24\insrsid10715074\charrsid10312329 
Any lease of property pursuant to this Act will be for a period mutually agreed upon between the Education Agency and the Contractor as may be reasonably necessary to amortize over the Lease-Back period of the Contract, the costs associated wi
th the financing, design, construction and maintenance of the Education Facility, }{\i\fs24\insrsid10715074\charrsid10312329 and in no event shall such period be less than twenty (20) years, or exceed thirty (30) years from the date of commencement}{
\i\fs24\insrsid7698809\charrsid10312329  of the Lease-Back period.}{\i\fs24\insrsid10715074\charrsid10312329  }{\i\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }{\fs24\insrsid7698809\charrsid10312329 5 GCA \'a7 58104 }{\fs24\insrsid10715074\charrsid10312329 (emphasis added). }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [35]\tab }{\fs24\insrsid10715074\charrsid10312329 Also relevant to our analysis is section 58108, entitled \'93Use of Tax-Exempt Bonds for Financing,\'94 which authorizes a pledge of Compact Impact Funds.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10715074\charrsid10312329 Section 58108 provides in part:}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid7698809\charrsid10312329 \'93t}{\fs24\insrsid10715074\charrsid10312329 
he Lease and the Lease-Back may include a pledge of compact impact funds or other federal grant revenues that are legally available for such purpose. Any such pledge made hereunder shall be valid and binding from the time the pledge is made}{
\fs24\insrsid7698809\charrsid10312329 .\'94}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid7698809\charrsid10312329 5 GCA \'a7 58108}{\fs24\insrsid10715074\charrsid10312329 . }{\fs24\insrsid10312329 
\par 
\par }\pard \ql \li1440\ri0\widctlpar\faauto\rin0\lin1440\itap0\pararsid8726669 {\b\fs24\insrsid10715074\charrsid10312329 b.}{\b\fs24\insrsid10312329\charrsid10312329  }{\b\fs24\insrsid10715074\charrsid10312329 
Pledge of Compact Impact Funds Beyond Term of Sitting Governor}{\b\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [36]}{\fs24\insrsid10715074\charrsid10312329 \tab The Legislature has expressly authorized the government of Guam to enter into a long-term lease for a period of time that \'93may be reasonably necessary\'94
 to amortize the costs associated with the financing, design, construction and maintenance of the facilities.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid7698809\charrsid10312329 5 GCA \'a7 58104.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid10715074\charrsid10312329 Such lease period, according to section 58104, shall not be less than twenty years, nor exceed thirty years, from the date of the commencement of the lease-back period.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid10715074\charrsid10312329 In addition, and with respect to the financing cost, section 58108 authorizes the pledge of Compact Impact Funds that are legally available for such purpose, and where such a pledge is included in the lease, it \'93
shall be valid and binding\'94 from the time the pledge is made.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid7698809\charrsid10312329 5 GCA \'a7 58108.}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [37]}{\fs24\insrsid10715074\charrsid10312329 \tab The Lease Agreement her}{\fs24\insrsid15757841\charrsid10312329 ein provides that GPSS, or the g}{\fs24\insrsid10715074\charrsid10312329 
overnment of Guam, will execute a ground lease under which parcels of land will be leased to GEFF.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10715074\charrsid10312329 In return, GEFF will finance, design, construct and ma
intain school facilities on the land, and lease back the improved parcels to GPSS.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10715074\charrsid10312329 As consideration for the Lease Agreement, payments totaling $12,200,000}{
\fs24\insrsid2049524\charrsid10312329 .00}{\fs24\insrsid10715074\charrsid10312329  were to be made from Compact Impact Funds to fund the project initially, prior to the commencement of the Lease.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid10715074\charrsid10312329 In addition, lease payments are to be made from Compact Impact Funds}{\fs24\insrsid11208893\charrsid10312329  pledged by the Governor}{\fs24\insrsid10715074\charrsid10312329 
 or any funds appropriated or made available by the Guam Legislature. }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [38]}{\fs24\insrsid10715074\charrsid10312329 \tab As previously stated, as an exception to the general rule that }{\fs24\cf1\insrsid10715074\charrsid10312329 prohibits
 governmental bodies from binding successors, a governmental body may enter into a contract that extends beyond its term of office when specifically authorized by statute.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10715074\charrsid10312329 
We find that the Guam Legislature has expressly authorized the pledge of Compact Imp
act Funds to pay the costs of financing the design, construction and maintenance of the facilities, amortized through the lease-back period, which shall not be less than twenty years nor exceed thirty years.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid10715074\charrsid10312329 Accordingly, because the Guam Legislature has expressly aut}{\fs24\insrsid15757841\charrsid10312329 horized the Governor to pledge Compact Impact F}{\fs24\insrsid11208893\charrsid10312329 unds as contemplated in S}{
\fs24\insrsid10715074\charrsid10312329 ection 4.03 of the Lease Agreement, we hold that such}{\fs24\insrsid15757841\charrsid10312329  pledge is binding upon future g}{\fs24\insrsid10715074\charrsid10312329 overnors.}{
\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid10715074\charrsid10312329 See Murphy v. Erie County}{\fs24\insrsid16397225\charrsid10312329 , 34 A.D.2d 295, 298 }{\fs24\insrsid12064174\charrsid10312329 (N.Y.A.D. 1970) (\'93For the c}{
\fs24\insrsid10715074\charrsid10312329 ounty to exercise such authority, there must be (and there is) clearly expressed legislative intent to grant this power}{\fs24\insrsid12064174\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid12064174\charrsid10312329 In stating that the c}{\fs24\insrsid10715074\charrsid10312329 ounty}{\fs24\insrsid12064174\charrsid10312329  may enter into contracts \lquote }{\fs24\insrsid10715074\charrsid10312329 for such term of duratio}{
\fs24\insrsid12064174\charrsid10312329 n as may be agreed upon by the c}{\fs24\insrsid10715074\charrsid10312329 ounty and such person or persons}{\fs24\insrsid12064174\charrsid10312329 \rquote  }{\fs24\insrsid10715074\charrsid10312329 the Legislatu}{
\fs24\insrsid12064174\charrsid10312329 re has given such power to the c}{\fs24\insrsid10715074\charrsid10312329 ounty.\'94)}{\fs24\insrsid7698809\charrsid10312329 (}{\fs24\insrsid12064174\charrsid10312329 citations}{\fs24\insrsid7698809\charrsid10312329 
 omitted)}{\fs24\insrsid10715074\charrsid10312329 ;}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid10715074\charrsid10312329 State ex rel. Veeder}{\fs24\insrsid7698809\charrsid10312329 ,\~33 P.2d at }{\fs24\insrsid10715074\charrsid10312329 523
\~(holding that \'93the act under which the board proposes to pledge the student fees for the period of the bo}{\fs24\insrsid16714654\charrsid10312329 nds expressly provides therefor}{\fs24\insrsid10715074\charrsid10312329 \'94
 and thus, contract binding future boards was valid). }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [39]}{\fs24\insrsid10715074\charrsid10312329 \tab For these reasons, we answer in the affirmative the Governor\rquote s second c
ertified question of whether a sitting governor can bind future governors with respect to the allocation and pledge of federal grant revenues for lease payments under a financi}{\fs24\insrsid16397225\charrsid10312329 ng lease authorized by the Act}{
\fs24\insrsid10715074\charrsid10312329 .}{\fs24\insrsid10312329 
\par 
\par }\pard \ql \li720\ri0\widctlpar\faauto\rin0\lin720\itap0\pararsid8726669 {\b\fs24\insrsid15757841\charrsid10312329 2.}{\b\fs24\insrsid10312329\charrsid10312329  }{\b\fs24\insrsid15757841\charrsid10312329 Exception:}{
\b\fs24\insrsid10312329\charrsid10312329  }{\b\fs24\insrsid15757841\charrsid10312329 the Governmental/}{\b\fs24\insrsid16397225\charrsid10312329 Proprietary Distinction}{\b\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [40]\tab }{\fs24\insrsid15999567\charrsid10312329 T}{\fs24\insrsid16397225\charrsid10312329 
he Governor submits that the Lease Agreement was entered into in good faith, is reasonable, and involves proprietary, as opposed to governmenta}{\fs24\insrsid10319508\charrsid10312329 l, functions, and therefore the }{
\fs24\insrsid16397225\charrsid10312329 pledge of Compact Im}{\fs24\insrsid11208893\charrsid10312329 pact Funds pursuant to the Lease Agreement}{\fs24\insrsid16397225\charrsid10312329  is binding upon future governors.}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [41]\tab }{\fs24\insrsid16397225\charrsid10312329 The governmental/proprietary distinction and its use in determining whether a governmental body may bind a successor is explained in }{
\fs24\insrsid7698809\charrsid10312329 one treatise: }{\fs24\insrsid10312329 
\par 
\par }\pard\plain \s20\ql \li720\ri720\widctlpar\faauto\rin720\lin720\itap0\pararsid8726669 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\insrsid16397225\charrsid10312329 Thus, where the contract involved relates to governme
ntal or legislative functions of the council, or involves a matter of discretion to be exercised by the council unless the statute conferring power to contract clearly authorizes the council to make a contract extending beyond its own term, no power of th
e
 council so to do exists, since the power conferred upon municipal councils to exercise legislative or governmental functions is conferred to be exercised as often as may be found needful or politic, and the council presently holding such powers is vested
 with no discretion to circumscribe or limit or diminish their efficiency, but must transmit them unimpaired to their successors.}{\insrsid10312329\charrsid10312329  }{\insrsid16397225\charrsid10312329 
But in the exercise of the business powers of a municipal corporation, the municipality and its officers are controlled by no s
uch rule, and they may lawfully exercise these powers in the same way, and in their exercise the municipality will be governed by the same rules which control a private individual or a business corporation under like circumstances.}{\insrsid10312329 

\par }\pard \s20\ql \li0\ri720\widctlpar\faauto\rin720\lin0\itap0\pararsid8726669 {\insrsid10312329 
\par }{\i\insrsid9268191\charrsid10312329 City of Hazel Park v. Potter}{\insrsid9268191\charrsid10312329 , 426 N.W.2d 789, 792\~(Mich. Ct. App. 1988) (quoting 56 Am. Jur. 2d Munici}{\insrsid10312329 pal Corporations \'a7 154 (2005)).
\par 
\par }\pard\plain \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid8726669 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\insrsid16527524\charrsid10312329 [42]\tab }{\fs24\insrsid16397225\charrsid10312329 
Based on the above principles, if the Lease Agreement arises out of a business or proprietary function of a governmental body, then the pledge of Compact Impact Funds}{\fs24\insrsid3415162\charrsid10312329  may be binding upon successor g}{
\fs24\insrsid16397225\charrsid10312329 overnors.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 The converse of this is that if th}{\fs24\insrsid15757841\charrsid10312329 e Lease Agreement relates to a}{
\fs24\insrsid16397225\charrsid10312329  legislativ}{\fs24\insrsid2959143\charrsid10312329 e or governmental function (as }{\fs24\insrsid15757841\charrsid10312329 opposed to a proprietary function}{\fs24\insrsid16397225\charrsid10312329 
) of a governmental body, no action taken by the sitting Governor is binding upon his successors.}{\cs18\fs24\super\insrsid16397225\charrsid10312329 \chftn {\footnote \pard\plain \s17\qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid16527524 
\fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs18\super\insrsid7499891 \chftn }{\insrsid7499891   Again, authorization by statute to do otherwise would control, regardless of classification as governmental or proprietary.  }{
\i\insrsid7499891 See Tweed v. City of Cape Canaveral}{\insrsid7499891 , 373 So.2d 408, 409-10 (Fla. Dist. Ct.  App. 1979) (holding that where a statute authorizes the governmental body to enter into longer term }{\i\insrsid7499891 governmental function}{
\insrsid7499891  contracts with employees, the \'93statute governs over the cited case and city councils can enter into contracts for employment of persons performing governmental functions for periods of time extending beyond the term of office. . . .
\'94);  }{\i\insrsid7499891 Chichester School Dist. v. Chichester Educ. Ass'n.,}{\field\fldedit{\*\fldinst {\insrsid7499891  HYPERLINK "http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=162&FindType=Y&SerialNum=2000099204" }{\insrsid2909649 
{\*\datafield 
00d0c9ea79f9bace118c8200aa004ba90b0200000003000000e0c9ea79f9bace118c8200aa004ba90bbe00000068007400740070003a002f002f007700770077002e0077006500730074006c00610077002e0063006f006d002f00460069006e0064002f00440065006600610075006c0074002e0077006c003f0072007300
3d0064006600610031002e0030002600760072003d0032002e0030002600440042003d003100360032002600460069006e00640054007900700065003d0059002600530065007200690061006c004e0075006d003d0032003000300030003000390039003200300034000000000000}}}{\fldrslt {\insrsid7499891 
 750 A.2d 400 (Pa. Commw. 2000)}}}{\insrsid7499891 , }{\i\insrsid7499891 appeal denied,}{\insrsid7499891  568 Pa. 668, 795A.2d 980, }{\field\fldedit{\*\fldinst {\insrsid7499891 
 HYPERLINK "http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=0000999&FindType=Y&SerialNum=2000594777" }{\insrsid2909649 {\*\datafield 
00d0c9ea79f9bace118c8200aa004ba90b0200000003000000e0c9ea79f9bace118c8200aa004ba90bc600000068007400740070003a002f002f007700770077002e0077006500730074006c00610077002e0063006f006d002f00460069006e0064002f00440065006600610075006c0074002e0077006c003f0072007300
3d0064006600610031002e0030002600760072003d0032002e0030002600440042003d0030003000300030003900390039002600460069006e00640054007900700065003d0059002600530065007200690061006c004e0075006d003d0032003000300030003500390034003700370037000000000000}}}{\fldrslt {
\insrsid7499891 2000 WL 1634528 (No. 333 M.D. Alloc. Dkt.2000, filed Oct. 31, 2000)}}}{\insrsid7499891  (recognizing that the \'93
policy of preventing last-minute commitments by outgoing legislative boards was not implicated and that the contracts, although clearly governmental functions, were authorized by statute.\'94)   
\par }}}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 10A McQuillin \'a7 29.101}{\fs24\insrsid10319508\charrsid10312329  (3d ed. 1987)}{\fs24\insrsid10312329 .
\par 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\b\fs24\insrsid16527524\charrsid10312329 [43]\tab }{\fs24\insrsid16397225\charrsid10312329 
There exist some well-settled examples of governmental functions, such as those pertaining to the creation and enforcement of police regulations, the prevention of crime, and the preservation of public health.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid16397225\charrsid10312329 15 McQuillin}{\fs24\insrsid16714654\charrsid10312329  \'a7 53.30}{\fs24\insrsid10319508\charrsid10312329  (3d ed. 1987)}{\fs24\insrsid16397225\charrsid10312329 .}{\cs18\fs24\super\insrsid16397225\charrsid10312329 
\chftn {\footnote \pard\plain \s17\qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid16527524 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs18\super\insrsid7499891 \chftn }{\insrsid7499891 
  The establishment and maintenance of schools are also listed among the generally recognized governmental functions.  15 McQuillin \'a7 53.30.  However, as will be explained, we do not read this section to
 include the construction and rehabilitation of the facilities themselves.  }}}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 Furthermore, certain functions are generally viewed as proprietary, such as, \'93
the construction and maintenance of municipal water and light plants, . . . the constructions and operation of garages and parking facilities for motor vehicles, and generally the management of property owned by the municipality.\'94}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 15 McQuillin \'a7 53.30.10 }{\fs24\insrsid10319508\charrsid10312329 (3d ed. 1987) }{\fs24\insrsid16397225\charrsid10312329 (footnotes omitted).}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [44]\tab }{\fs24\insrsid16397225\charrsid10312329 
Particularly significant to the facts before us, it has been held that while the decision to build may be a governmental function, the actual construction performed is a proprietary function.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid16397225\charrsid10312329 See}{\fs24\insrsid16397225\charrsid10312329  }{\i\fs24\insrsid16714654\charrsid10312329 Unified Gov\rquote }{\i\fs24\insrsid16397225\charrsid10312329 t of Athens Clarke County v. North}{
\fs24\insrsid16714654\charrsid10312329 , 551 S.E.2d 798, }{\fs24\insrsid14572351\charrsid10312329 802-}{\fs24\insrsid16397225\charrsid10312329 803 (Ga. }{\fs24\insrsid16714654\charrsid10312329 Ct. }{\fs24\insrsid16397225\charrsid10312329 App. 2001) (\'93
The Unified Government's decision to commit to construct the access road was governmental, but once the commitment to build had been made the subsequent steps in completing the project can be viewed as within the proprieta
ry function of the Unified Government.\'94);}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid16397225\charrsid10312329 Jackson v. City of Rome,}{\fs24\insrsid16397225\charrsid10312329  187 S.E. 386}{\fs24\insrsid11291579\charrsid10312329 , 390}{
\fs24\insrsid16397225\charrsid10312329  (}{\fs24\insrsid11291579\charrsid10312329 Ga. }{\fs24\insrsid16397225\charrsid10312329 1936). }{\i\fs24\insrsid16397225\charrsid10312329 See also Town of Fort Oglethorpe v. Phillips,}{
\fs24\insrsid7557466\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 165 S.E.2d 141}{\fs24\insrsid7557466\charrsid10312329 , 143-4}{\fs24\insrsid16397225\charrsid10312329  (}{\fs24\insrsid7557466\charrsid10312329 Ga. }{
\fs24\insrsid16397225\charrsid10312329 1968) (the safe construction and maintenance of a street is within a municipality\rquote s corporate powers rather than its governmental powers)}{\fs24\insrsid16714654\charrsid10312329 .}{
\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid16714654\charrsid10312329 But see Altoona Hous.}{\i\fs24\insrsid16397225\charrsid10312329  Auth. v. City of Altoona}{\fs24\insrsid16397225\charrsid10312329 , 785 A.2d 1047, 1053-54 (finding that 
\'93the construction and operation of the [housing project], which were necessarily subject to agreements (including terms of financing) extending beyond the terms of the members of the board . . . were governmental as opposed to proprietary actions.\'94)
}{\fs24\insrsid16714654\charrsid10312329  (Pa. Commw. Ct. 2001)}{\fs24\insrsid16397225\charrsid10312329 . }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [45]\tab }{\fs24\insrsid16397225\charrsid10312329 In addition, at least one court has observed 
that where a statute authorizes the construction of a building, the costs associated with the authorized construction are binding upon future successors.}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid16397225\charrsid10312329 
H. J. McNeel, Inc.}{\fs24\insrsid16397225\charrsid10312329 , 277 P.2d }{\fs24\insrsid16714654\charrsid10312329 at}{\fs24\insrsid16397225\charrsid10312329  557-58 (stating that the authority to build a jail carries with it the
 power to pay all necessary costs regardless of when such costs accrue).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 
The same has been said regarding employment of a construction supervisor to oversee construction work, when law authorizes the construction itself.}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid16397225\charrsid10312329 
Gulf Bitulithic Co. v. Nueces County}{\fs24\insrsid16397225\charrsid10312329 ,\~11 S.W.2d 305, 313\~(Tex.}{\fs24\insrsid16714654\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 Com}{\fs24\insrsid16714654\charrsid10312329 m\rquote n }{
\fs24\insrsid16397225\charrsid10312329 App.}{\fs24\insrsid16714654\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 1928) (stating that where the county is authorized by law }{\fs24\insrsid11291579\charrsid10312329 to }{
\fs24\insrsid16397225\charrsid10312329 p}{\fs24\insrsid11291579\charrsid10312329 lan, design and build roads,}{\fs24\insrsid16397225\charrsid10312329  this included the right to employ }{\fs24\insrsid2959143\charrsid10312329 a }{
\fs24\insrsid16397225\charrsid10312329 construction supervisor to carry on the project until its final completion.)}{\fs24\insrsid11291579\charrsid10312329 .}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [46]\tab }{\fs24\insrsid16397225\charrsid10312329 
Similarly, it has been observed that the financing of a school construction project is a proprietary function, as opposed to the decision to build such school, which remains a governmental function.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid2782352\charrsid10312329 Program Admin. Serv}{\i\fs24\insrsid16397225\charrsid10312329 s}{\i\fs24\insrsid2782352\charrsid10312329 .}{\i\fs24\insrsid16397225\charrsid10312329 , Inc.}{\fs24\insrsid16714654\charrsid10312329 ,}{
\i\fs24\insrsid16397225\charrsid10312329  }{\fs24\insrsid16714654\charrsid10312329 874 A.2d at 728 }{\fs24\insrsid16397225\charrsid10312329 (\'93}{\fs24\insrsid16714654\charrsid10312329 [}{\fs24\insrsid16397225\charrsid10312329 T}{
\fs24\insrsid16714654\charrsid10312329 ]}{\fs24\insrsid16397225\charrsid10312329 he deci
sion whether to build a school building is a governmental function. . . . Here, however, the Authority does not purport to decide whether any school district should build a school; it serves only as a means of financing such projects if one does.\'94);}{
\i\fs24\insrsid16397225\charrsid10312329  St}{\i\fs24\insrsid3147078\charrsid10312329 ate ex rel. Veeder v. State B}{\i\fs24\insrsid16397225\charrsid10312329 d}{\i\fs24\insrsid3147078\charrsid10312329 . }{\i\fs24\insrsid16397225\charrsid10312329 of Educ}{
\i\fs24\insrsid3147078\charrsid10312329 .}{\fs24\insrsid16397225\charrsid10312329 ,\~33 P.2d 516, 523\~(Mont. 1934) (\'93the board in arranging for the financing o}{\fs24\insrsid2782352\charrsid10312329 f the erection of the building . . .}{
\fs24\insrsid16397225\charrsid10312329  act[s] in its capacity as business manager of the institution and not in its governmental or legislative capacity.\'94)}{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [47]\tab }{\fs24\insrsid16397225\charrsid10312329 
Despite the application of the governmental/proprietary test by many courts, the distinction has received much criticism and has been regarded as difficult, if not impossible, to apply.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid16397225\charrsid10312329 See, e.g., City of Lafayette v. Louisiana Power & Light Co}{\fs24\insrsid16397225\charrsid10312329 ., 435 U.S. 389, 433 (1978); }{\i\fs24\insrsid16397225\charrsid10312329 Indian Towing Co. v. United States}{
\fs24\insrsid16397225\charrsid10312329 , 350 U.S. 61, 65 (1955); }{\i\fs24\insrsid6178971\charrsid10312329 Nw.}{\i\fs24\insrsid16397225\charrsid10312329  Natural Gas Co. v. City of Portland}{\fs24\insrsid16397225\charrsid10312329 , }{
\fs24\insrsid6178971\charrsid10312329 711 P.2d 119, 123-}{\fs24\insrsid16397225\charrsid10312329 26 (}{\fs24\insrsid6178971\charrsid10312329 Or. }{\fs24\insrsid16397225\charrsid10312329 1985); }{\i\fs24\insrsid16397225\charrsid10312329 
State ex rel. Ass'n for Preservation of Tenn. Antiquities v. City of Jackson}{\fs24\insrsid16397225\charrsid10312329 , 573 S.W. 2d 750, 753 (Tenn. 1978).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 
We are also faced with the reality that \'93[t]he governmental/proprietary test does not consist of a single criterion. Rather it is a collection of rules, each of which dictates that the presence of a certain factor will 
cause an activity of a public entity to be either \lquote public\rquote  or \lquote private\rquote  in nature.\'94}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid6178971\charrsid10312329 Janice C. Griffith, Local Government Contracts:}{
\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid6178971\charrsid10312329 Escaping from the Governmental/Proprietary Maze, }{\fs24\insrsid16397225\charrsid10312329 75 Iowa L. Rev. 277}{\fs24\insrsid7941523\charrsid10312329  }{
\fs24\insrsid6178971\charrsid10312329 (1990)}{\fs24\insrsid16397225\charrsid10312329 . }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [48]\tab }{\fs24\insrsid16397225\charrsid10312329 The governmental/proprietary test was applied in the Ninth Circuit case of }{\i\fs24\insrsid16397225\charrsid10312329 Telford v. Clackamas}{
\fs24\insrsid16397225\charrsid10312329 , 710 F.2d 567 (9th Cir. 1983).}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 The distinction drawn by the }{\i\fs24\insrsid16397225\charrsid10312329 Telford}{
\fs24\insrsid16397225\charrsid10312329  court between governmental and proprietary functions focuses on the }{\i\fs24\insrsid16397225\charrsid10312329 nature}{\fs24\insrsid16397225\charrsid10312329  of the services to be provided under the contract.}{
\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid16397225\charrsid10312329 Telford}{\fs24\insrsid16397225\charrsid10312329 
 analyzed the validity of an employment contract, under which Mr. Telford was to serve as the Executive Director and Secretary-Treasurer of the Clackamas County Housing Authority.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid6178971\charrsid10312329 Id.}{\fs24\insrsid6178971\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 at 568.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 
In finding the services under the contract to be proprietary in nature, the court noted that \'93Telford\rquote s specific contractual duties were identical to those that would be provided by a private corporation or a private landlord.\'94}{
\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid16397225\charrsid10312329 Id. }{\fs24\insrsid16397225\charrsid10312329 at 571.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 
Furthermore, the court found that the employee\rquote s contractual duties \'93did not fall within the class of governmental functions in any substantial part\'94 as he lacked the authority to create policy.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid16397225\charrsid10312329 Id.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [49]\tab }{\fs24\insrsid16397225\charrsid10312329 Upon finding that the contract encompassed proprietary, versus governmental, functions, the court in }{\i\fs24\insrsid16397225\charrsid10312329 Telford}{
\fs24\insrsid6178971\charrsid10312329  went further and stated that }{\fs24\insrsid16397225\charrsid10312329 a }{\fs24\insrsid12064174\charrsid10312329 \'93}{\fs24\insrsid16397225\charrsid10312329 
public body may not enter a contract for governmental functions extending beyond its own term}{\fs24\insrsid2782352\charrsid10312329  }{\fs24\insrsid12064174\charrsid10312329 . . . }{\fs24\insrsid10319508\charrsid10312329 .}{
\fs24\insrsid12064174\charrsid10312329 [but the}{\fs24\insrsid16397225\charrsid10312329  ability] to contract with one to perform proprietary functions . . . is limited only by}{\fs24\insrsid6178971\charrsid10312329  \lquote reasonableness and good faith}
{\fs24\insrsid16397225\charrsid10312329 .\'94}{\fs24\insrsid10312329\charrsid10312329  }{\i\fs24\insrsid16397225\charrsid10312329 Id.}{\fs24\insrsid16397225\charrsid10312329  at 570}{\fs24\insrsid6178971\charrsid10312329  (citation omitted)}{
\fs24\insrsid16397225\charrsid10312329 .}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 The distinction articulated by the }{\i\fs24\insrsid16397225\charrsid10312329 Telford}{\fs24\insrsid16397225\charrsid10312329 
 court has been recognized and applied in at least one instance}{\fs24\insrsid14572351\charrsid10312329  by the District Court of Guam}{\fs24\insrsid16397225\charrsid10312329  Appellate Division.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid16397225\charrsid10312329 Relying on other jurisdictions while noticing the absence of Guam law on point,
 the Appellate Division found an agreement involving proprietary functions would be binding on future Governors if the contract is reasonable and entered into in good faith.}{\fs24\insrsid10312329\charrsid10312329  }{
\i\fs24\insrsid6178971\charrsid10312329 Gov\rquote t of }{\i\fs24\insrsid16397225\charrsid10312329 Guam v. FHP, Inc.,}{\fs24\insrsid16397225\charrsid10312329  }{\fs24\insrsid6178971\charrsid10312329 Civ. Nos. 90-00014A, }{
\fs24\insrsid2782352\charrsid10312329 90-000206A, }{\fs24\insrsid6178971\charrsid10312329 90-00040A}{\fs24\insrsid2782352\charrsid10312329 , 1991 WL 275584 }{\fs24\insrsid6178971\charrsid10312329 (D. Guam App. Div. July 10,}{
\fs24\insrsid7941523\charrsid10312329  }{\fs24\insrsid6178971\charrsid10312329 1991). }{\fs24\insrsid10312329 
\par 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [50]\tab }{\fs24\insrsid16397225\charrsid10312329 With the caveat that the governmental/proprietary distinction is by no means a clear concept with bright line rules, we nonetheless conclude}{
\fs24\insrsid7941523\charrsid10312329 ,}{\fs24\insrsid16397225\charrsid10312329  based on the cases cited above}{\fs24\insrsid7941523\charrsid10312329 ,}{\fs24\insrsid16397225\charrsid10312329  that the functions encompassed in t
he Lease Agreement are proprietary in}{\fs24\insrsid10319508\charrsid10312329  nature, and not governmental.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 
The services to be provided under the Lease Agreement by GEFF are the financing, design, construction, and maintenance of facilities to be used for public education.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 
GEFF is not responsible for creating any policy with regards t}{\fs24\insrsid15757841\charrsid10312329 o public education, and in fact,}{\fs24\insrsid16397225\charrsid10312329 
 it did not and will not make the decision to construct or rehabilitate a public school facility.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 Rather, GEFF\rquote s duties}{\fs24\insrsid10319508\charrsid10312329  are}{
\fs24\insrsid16397225\charrsid10312329  based }{\fs24\insrsid6178971\charrsid10312329 purely }{\fs24\insrsid16397225\charrsid10312329 on the needs of the territory and their priorities as determined by GPSS.}{\fs24\insrsid10312329\charrsid10312329  }{
\fs24\insrsid10312329 
\par 
\par }\pard\plain \s21\ql \li0\ri0\sa120\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\insrsid16527524\charrsid10312329 [51]\tab }{\fs24\insrsid16397225\charrsid10312329 
While we hold that the Lease Agreement involves proprietary functions, we do not reach the issue of whether the Lease Agreement is reasonable, nor do we decide whether it was entered into in good faith, as required by }{
\i\fs24\insrsid16397225\charrsid10312329 Telford }{\fs24\insrsid16397225\charrsid10312329 and }{\i\fs24\insrsid16397225\charrsid10312329 FHP}{\fs24\insrsid16397225\charrsid10312329 .}{\cs18\fs24\super\insrsid16397225\charrsid10312329 \chftn {\footnote 
\pard\plain \qj \fi720\li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid7941523 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs18\super\insrsid7499891 \chftn }{\insrsid7499891   As stated in our earlier case of }{\i\insrsid7499891 
People v. Quenga}{\insrsid7499891\charrsid6178971 ,}{\insrsid7499891  1997 Guam 6 \'b6 13 n.4:  \'93Precedent [from the Appellate Division of the District Court of Guam] that was extant when we became operational conti
nues unless and until we address the issues discussed there. We will not divert from such precedents unless reason supports such deviation.\'94  As we did in }{\i\insrsid7499891 Quenga}{\insrsid7499891 , we choose herein to let the law as announced in}{
\i\insrsid7499891  Guam v. FHP }{\insrsid7499891 stand, \'93without our reaching the merits of the issue presented, because we see no reason to reconsider its conclusions\'94 at this time.  }{\i\insrsid7499891\charrsid6178971 Quenga}{\insrsid7499891 
, 1997 Guam 6 n.4. 
\par }}}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 This is because our holding with respect to the legislative authorization exception makes such an analy}{\fs24\insrsid3147078\charrsid10312329 sis unnecessary at this
 time.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16397225\charrsid10312329 
Rather, we conclude only that unless otherwise authorized by the Guam Legislature, where the term of a contract entered into by a governmental body extends beyond the term of its governmental office, such contract is valid only where the nature of d
uties in such contract substantially involve proprietary functions, and further, only where the contract is reasonable and i}{\fs24\insrsid3147078\charrsid10312329 s entered into in good faith.}{\fs24\insrsid10312329 
\par 
\par }\pard\plain \qc \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\insrsid2581535\charrsid10312329 V.}{\b\fs24\insrsid10312329 
\par }\pard \ql \li0\ri0\widctlpar\faauto\rin0\lin0\itap0\pararsid8726669 {\fs24\insrsid10312329\charrsid10312329 
\par }{\b\fs24\insrsid16527524\charrsid10312329 [52]}{\fs24\insrsid16527524\charrsid10312329 \tab }{\fs24\insrsid2581535\charrsid10312329 We hold that the Lease Agreement between GEFF and GPSS does not constitute \'93indebtedness\'94
 within the meaning of Section 11 of the Organic Act of Guam.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid2581535\charrsid10312329 Furthermore, we hold that the Governor\rquote 
s pledge of Compact Impact Funds will have a binding effect on future governors.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid2581535\charrsid10312329 Though the Lease Agreement might be valid under the governmental-proprietary distinction}{
\fs24\insrsid16345569\charrsid10312329  analysis, we find such analysis unnecessary}{\fs24\insrsid2581535\charrsid10312329  given the statutory authorization to }{\fs24\insrsid16345569\charrsid10312329 enter into long-term leases and }{
\fs24\insrsid7941523\charrsid10312329 to }{\fs24\insrsid16345569\charrsid10312329 pledge Compact Impact Funds.}{\fs24\insrsid10312329\charrsid10312329  }{\fs24\insrsid16345569\charrsid10312329 
Therefore, we hold that the pledge of Compact Impact Funds as payment for rent under the Lease Agreement to be binding against future governors because the Act contains specific legislative authorization to e}{\fs24\insrsid10312329 
nter into the Lease Agreement.
\par }}