Palau Sessional Legislation
SEVENTH OLBIIL ERA KELULAU
RPPL No. 7-31
Twenty-sixth Special Session, June 2007 (Re: as Senate Bill No. 7-195, SD1)
To approve, authorize and ratify the authority of the President of the Republic of Palau to amend loan documentation on the Palau International Airport Upgrade Loan to reduce the total authorized borrowing, and for 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 "Palau International Airport Loan Revision Ratification Act."
Section 2. Findings. The Olbiil Era Kelulau finds that the Republic of Palau was authorized to borrow $15 million from International Commercial Bank of China, Ltd., now known as Mega International Commercial Bank, Ltd. ("Mega Bank") for improvements and upgrades to the Palau International Airport under the Palau International Airport Upgrade Loan Approval Act (RPPL No. 6-45). Since that time, the United States of America provided grants, funding 95% of the cost for substantial portions of that project. In addition, $7,000,000 of this credit was needed for the Palau Public Utilities Corporation ("PPUC") to purchase generators and parts, and that borrowing was approved in RPPL No. 7-21. Before the lender, Mega Bank, would agree to loan $7,000,000 to PPUC, it required ROP to reduce its maximum borrowings for the airport purposes to $8,000,000. Before additional money can be drawn from that maximum line of credit, Mega Bank requires legislation approving the revision of the documents to confirm authorized borrowing and ratify documents.
Section 3. Authorization to amend Ratification of Amended Terms and Conditions of Loan for Improvements at Palau International Airport. The Olbiil Era Kelulau authorizes, approves and ratifies the authority of the President, on behalf of the Republic of Palau, to execute, deliver and perform the terms of Amendment No. 1 to the $15,000,000 Loan Agreement and the corresponding $8,000,000 Promissory Note, dated as of September 4, 2006, payable to Mega Bank, and to use the proceeds and any or all of the Advances to pay for the costs, expenses and other amounts of, or related to, the Project, which is the repair, improvement and maintenance of the Palau International Airport and surrounding areas, including, without limitation, the purchase or lease of related equipment. Future advances under said Amendment No. 1 to the Loan Agreement (Loan #070026) shall be used for upgrades and improvements to the Palau International Airport, including but not limited to, providing 5% matching funds to match grant proceeds from the United States relating to improvements and repairs at the PIA. The President is authorized to request an advance or advances for the specific projects as listed on Exhibit "1" hereto and in accordance with said Amendment No. 1.
Section 4. Additional Documentation. The President is hereby authorized to execute and deliver, on behalf of the Republic of Palau, any other instruments and/or documents as may be required to be executed and/or delivered by the Republic of Palau from time to time to obtain advances or otherwise comply with the terms of Amendment No. 1 to Loan #070026, and the President is also authorized, as necessary, to enter into additional modifications of the Loan Agreement to assure advance of an additional $8,000,000 for the purposes specified.
Section 5. Appropriation of Funds and Loan Payments. The sum of $8,000,000 is hereby authorized to be appropriated and is appropriated for the purposes specified above. The source of funds for this appropriation shall be proceeds of the loan under the Amendment No. 1 to Loan #070026. The appropriation shall be apportioned and allotted at the direction of the President. Any unexpended or unobligated balance of this appropriation shall not lapse. Payments of interest and principal shall be appropriated annually in accordance with the annual national budget procedures.
Section 6. Effective date. This Act shall take effect upon its approval by the President, or upon its becoming law without such approval.
PASSED: July 23, 2007
Approved this 23rd day of July , 2007.
Tommy E. Remengesau, Jr.
President of the Republic