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Public Utilities Equipment Upgrade and Maintenance Act, RPPL 7-21 2006

SEVENTH OLBIIL ERA KELULAU RPPL NO. 7-21
(Intro. as H.B. No. 7-120-13S, HD3, SD1, CD1)
Thirteenth Special Session, May 2006

AN ACT

To approve, authorize, and ratify the authority of the President of the Republic of Palau to Guaranty, on behalf of the Republic of Palau, borrowing by the Palau Public Utilities Corporation, and for other related purposes.

THE PEOPLE OF PALAU REPRESENTED IN THE OLBIIL ERA KELULAU DO ENACT AS FOLLOWS:

Section 1. Short title. This Act may be cited as the "Public Utilities Equipment Upgrade and Maintenance Act".

Section 2. Legislative findings. The Olbiil Era Kelulau fords that the Palau Public Utilities Corporation "PPUC" requires financing to purchase portable generators, crankshaft assembly, and other necessary equipment to facilitate the overhaul of its aging generators, which must be shut down to repair and maintain. Because of the importance of maintaining reliable power in the Republic of Palau for the health and safety of our people, and to attract substantial investors, it is appropriate for the Republic of Palau to assist the PPUC to obtain this necessary financing of approximately $7,000,000, by agreeing to guaranty the debt.

Section 3. Authorization to guaranty PPUC borrowing. The President of the Republic of Palau is hereby authorized to negotiate, execute, and deliver, on behalf of the Republic of Palau, a Guaranty for a loan between a government, agency, or a financial institution, and the Palau Public Utilities Corporation ("PPUC"), as well as negotiate and execute related documentation as may be required by the Lender, with respect to said Guaranty. The President, on behalf of the Republic of Palau, shall also be authorized to guaranty such a loan for the PPUC, in an amount not to exceed $7,000,000 in principal. The loan entered into by the PPUC shall be repayable over a period of up to twenty (20) years. All costs of closing of the loan, costs relating to the Guaranty, fees or expenses relating to the obtaining of the financing, and the repayment of the loan, shall be the primary responsibility of the PPUC. If the PPUC is in default of repaying the loan, or if the Republic of Palau is required to pay funds related to any aspect of the PPUC's possible or actual default, the PPUC shall indemnify the Republic of Palau for all such payments made by the Republic of Palau. The PPUC shall, at all times, remain liable to the Republic of Palau for any payment made by the Republic of Palau on the loan, even if the loan is fully discharged.

Section 4. Purpose of loan to PPUC. The loan to PPUC, as provided for by this Act, shall be used to purchase new portable generators, with warranties. The remainder of the proceeds of the loan to PPUC, after the purchase of new portable generators, as needed, shall be used for the crankshaft assembly, and other necessary equipment to facilitate the overhaul of its aging generators.

Section 5. Effective date. This Act shall take effect upon its approval by the President of the Republic of Palau, or upon its becoming law without such approval.

PASSED: August 22, 2006
Approved this 23rd day of August , 2006.
__________________/s/
Tommy E. Remengesau, Jr.
President, Republic of Palau