•• r"-----

•- ~,

OFFICE OF THE GOVERNCSTATE OF CHUUK

Federated States of MicronesiaPO BOX 849

WENO, 3T ATE OF CHUUKF.S,M. 96942

WESLEY W. SIMIHAGOVERNOR

JOHNSON ELlM.oLT. GOVERNOR

TEL (691) 330-2230/4239FAX: (691) 330-2233

June 1,2006

The Honorable Detor SantosPresident,House of SenateEighth Chuuk State legislatureP.O. Box 1050State ofChuuk, FSM 96942

AND The Honorable Florencio HarperSpeaker,House of RepresentativesEighth Chuuk State LegislatureP.O. Box 1050State of Chuuk, FSM 96942

BEl C.S.L. 8-06-0'KACT NO ..6-23)

Dear President Santos and Speaker Harper:

I am honored and indeed pleased to transmit to the Legislature Act No. 8-23 that Ihave reviewed and signed into law and designated as Chuuk State Law No. 8-06-08.This new law authorizes the Governor of the State of Chuuk to borrow an approximatesum or sums thereof in the equivalent of Asian Development Bank Special DrawingRight of 2,983,000 from the National Government for the purpose of funding BasicSocial Services projects in the state of Chuuk and further appropriate the proceed of theloan for such purpose.

I am thankful to the members of both Houses and congratulate you all for the hardwork and unwavering support that had let to the successful passage of this important Act.

With warm personal regards.

Sincerely,

cc: Acting Chief Justice, CSSCActing Attorney General

• •r-~~~:-----------------------------------------~~------------------EIGHTH CHUUK STATE LEGISLATURETHE HOUSE OF REPRESENTATIVES

P. O. Box 27Weno lsiand, Chuuk State

Federated States of Micronesia

May 30, 2006

The Honorable Wesley W. SiminaGovernorState of ChuukOffice of the GovernorChuuk State, FSM 96942

Dear Governor Simina:

I have the honor to transmit to you Act No. 8-23, entitled,"To authorize the Governor of State of Chuuk to borrow anapproximate sum or sums thereof in the equivalent of AsianDevelopment Bank Special Drawing Rate (SDR) of $2,983;000from the National Government for the purpose of funding BasicSocial Services Projects in the State; to appropriate certainloan proceeds; to establish a Multi-Loan Disbursing Fund, andfor other purposes", which passed by both Houses of the 8thChuuk State Legislature, Second Regular Session, 2006.

Thank you.

Respectfully,

Geft~Herter E. SorimChief Clerk

Enclosure: Act No. 8-23

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•

EIGHTH LEGISLA TURf OF THE STATE OF CHUUK CHUUK STATE LAW No. 8-06-08

SECOND REGULAR SESSION. APRIL 20{)6 ACT NO 8-13

AN ACT

To authorize the Governor of the State ofChuuk to borrow an approximate sum or sumsthereof in the equivalent of Asian Development Bank Special Drawing Right (SDR) of52,9.83,000 from the National Government for the purpose of funding Basic SocialServices Projects in the State; to appropriate certain loan proceeds: to establish a Multi-Loan Disbursing Fund, and for other purposes.

Be It enacted by the Chuuk State Legisiature:

Section I Authorization. The Governor is hereby authorized to borrow money

from the National Government of the Federated States of Micronesia ("fSM") for the

,.1 purpose of funding Basic Social Services Projects as provided hereinafter. The

borrowing shall be by wav of a project loan and which. respectfully, constitute pan of the

proceeds of a Basic Social Services project loan from the Asian Development Bank (the

"Bank ") to the fSM

Section 2 Amounts. The total amount to borrowed by the State is the equivalent

in SDRs (Special Drawing Rights) of the Bank, as of such point in time as the Bank and

the President of the FSM shall agree, of up to 52,983,000 SDR

"I) Section 3, Financial Terms

II (11 The loan to the State shall

12 (a) provide for disbursement in two separate draw down in

I; accordance with the phases of the project, or "rranches":

",-, (b) have an 8 year grace period for the repayment of principal.

lS (c) bear interest at the rate of l~'o per annum during the grace

period and l5% per annum thereafter: and

,: (d) provide for repayment of the principal over a l o-year period

l8 commencing at the end of the grace period

InI"

Section 4 Use of Proceeds. The loan will be for the purpose of funding the Basic

20 ~Jal Services pt-:-ojectsareas of health, education and law reforms sect-or in the State.

21 l.oan proceeds may be used only as provided In the loan agreements between the FSM

and the Bank

CHUUK STATE LAW NO. 8-06-08AeTNO: 8-23

Section 5. Loan Conditions. The loans to the State snatt be the subject of the

2 project Re-lending Agreements between the National Government and the State which,

3 taken together:

4 (1) Place the foreign exchange risk on the State until the estimation and

5 transfer process called for in subsection (c) and on the National

Government thereafter;

~/ (2) Amend provisions relating to the Trust Account created in the name of

8 the State pursuant to the Existing Financing Agreement between the

9 National Government and the State with respect to the ADB Public

10 Sector Reform Program so as to pennit and require that Trust Account

1 ! . to be used, in conjunction with the External Debt Management Fund

12 created or to be created by the National Government, for repayment of

not just the Public Sector Reform Program Loan but also these loans

14- and possibly other loans to the State;

15 (3) Provide for annual estimation of the amount conservatively estimated

]6 to be needed as a banking funds for repayments of all Joan proceeds

]7 advanced to the State since the last such estimate, followed by

18 transfer of the amount as estimated-from the Trust Account to the

19 External Debt Management Fund. Such funds may not be obligated

20 until received from or made available by the National Government.

21 {4) Proceeds of the program loan to the state shaH be sttbject to

22 appropriation taws by the Legislature of the State in one or more

separate appropriation acts.

24 Section 6. Appropriation. The sum or sums thereof which is the equivalent of the

25 sum of $2,983,000 in SDR Of so much thereof as may be necessary and have been made

26 available by the National Government under the program loan to the State, is hereby

27 appropriated for the following purposes: To assist the Government of Chuuk State in

28 designing and introducing essential reforms in health and education to develop the human

29 resources of the State of Chuuk in a sustainable

ANNUKUN CHUUK NAMAPA 8-06-08

i I i Chuuk CP\\C canm sckinmu met osukosukcn kCSI\\JnIIl

pochok unan m woorueu rnun fonufan (foreign exchange : tor:

.net cwe National Government cpwe angei fit: pwungun

subsecuon (C) me non c! annuk

(] \ !'\bsiw!n porousan aupew fan itan ewe Trust Account \111

foriia fan nan Chuuk fiti pwungun ewe Financial :'\grccmcIll

nefinan eWe ;\(jliunai Government me ChUUh f'-lfl Il'-ifl eWe'

'E •. " :'\D8 Public Sectur Reform Program an cpwc tongern mutate

an ewe Trust Account epwe nounou. fIll pwungun ewe

Fxternal Debt Management Fund ewe a fen Iorita rka env ..·,'

torua seni e\\c: National Government. fan itan kamosefarnn

esap chok e: Publ ic Sector Reform Program Loan P" c ep\\ <:

tongeru pwal tan itan ekewe ekkoch loan an Chuuk

,(:: i.3 i /\ wora aurouran 1I011ew lef e\ve ukuk un rm \\ esewcsen kuu].

P\VC q)\\(' wor osupwangen nounoun an ep"'\.' c\\ l1anklll~'

funds fen karnosefanin ewe loan a fen kawor ngem Chuuk Sel11

,'; chok non ~\\2 S3111l!OnC){)ll kouk. 1\\2 1I1\\IIil1 euwene transrC:- .

e\\e uk uk un 1111kou], seru c\VC Trust Account I1~C!11 C\\('

External Debt Management Fund. Ukukun ei rnwooni esap

tongem nounouno tori an titito me kawore sent ewe MWUI1LiP

(4) [we mwoom epvve kawor seni ei loan ngeru Chuuk epw.:

kawor nounoun non c\\ ika fiuu annukun 110U110Ufi.

-.~ T etten 6 Kaworen noul1oun 111\\'00111Ewe ika eke we uk uk un rru nne epwc: 110111)U

..::, n!:!~nl ~\V~ uk uk un S2,98.3.000 non SDR i k a Iiuc uk uk un cpwe auchea ik a epwe k aw or

',:ni \."\\t Nauonal Government me fan pwungun tl loan program ngenl Chuuk. }\."I a

ekcwe auchean kokkot sctall ill ockin anuansen nioinu me sukun an epwe 2\\'Of2~ ~ - ~ ~ I

=~ k,\\\u[ fall uan ek kc: p\\opun An ep\\c JfllSI ,-,we Mun Chuuk State an cpwc awora

ANNUKUN CIIUUK NAMPA 8-06-08

N-'\MOPVv'UNC NO 8-:::-;

:ur,chiil cfc.Icitan nonnomwun arararnas me f11\\OOni non fansoun nangatam [0\\\.' uwan

.unurunono: k atouran ant!angcn pekin asuk un 111": oioing mi rnurinno ngeni neru me neru.

.; me CP\\l: awor a angang me arunrns mi mur mno me rnokuk k un esernpa rnurinonon ang,H1~

,11,-' aprchokuna an ararnas rcpwe pachenoru, me eteneki nonornwochuk ekewe imwan me

~\!~ef..l!l!llllP non nemcr ke\\e arnurunonon iumunun pekin angangen asukun me ploln~

nor: health SCClOr. ika angangen pekin pioing

Tettcn 7 Multi-Loan Disbursinu Fund

:~.

( i I lei a torua c Multi-Loan Disbursing lund. unuscru ewe

General Fund me rneirusm ekkewe mwoonian ewe State

Chuuk

(:?) Popun ei Fund tan iran epwe wisen angel me atou eWe Im\ uuil!

scn: el...kwe loan a mumuta me fan pwunuun ci annuk me

ek ewe ekkoch loan ngenl ei State Chuuk C\ve epwe affa: me

non annukun Mun Chuuk. ekkewe rnutata e\ve loan

(3) Lxve I11W(){H1I epwe ununo angangen turnunun taropwcn

.c. uan I11\\00l113n -:1 loan. epwe chok tongeru karou fan itan

ekewe popun mi aflar non ekkewe taropv v·en loan

(4) Ewe rnwoorn a kawor scni ei loan cpwe nom fan tumunucn

~we Director non ewe Administrative Services tit! p\\ ungun

annuk. ekkewe taropwen e\ve loan fill enlenn pwungun

angangcn accounting: me

...• ::. -'\ccount rnunn nimu rcr nuen: ewe Mun Chuuk me rnur m '-l

wcs ino kamosclunin cwe loan a pwan kawor nounoun me nun

l'! annuk fan iran an enwe chok pwan nounouno ngeni l'\\l'

project ika program us un a fen kawor porousan me non ewe

project Re-lendme Azreement nefinan ewe National

ANNUK~ CHUUK NAMPA 8-06-08

NAMOPWUNG NO 8-23

Mun Chuuk Stale fan iran ponuetan rnasowen tl Idten fan uan

i (1) ei project loan EWe loan epwe nounouno fill p\\'ungun cwr

Chuuk State FInancial Management Act .

Tetten is. Kefinnan.

t I) Non an ew~ Governor epwe chok fitipachci angangen me \\ur

esinesm ngenl won porousan ewe mwoom, a tongern pwan

ngern

i a) ewe DIrector non ewe Department Adrrunistr auve

ServIces. ewe pochokun an epwc porous me sain won

ewe Re-Iending Agreement me ekkewe ekkoch taropwe

fan iran ewe Mun Chuuk: me

(b \ ekkoch kewe nOU\\IS .;we Governor a mef pwe repwe

annomu tumunu fisiochun ekkoch kewe angang a

kawor mwoonian seni ei loan

.4 (2) [VVl: pochokun e\V kewe angang ngeni ernon ararnas pachenong

ewe pochokun an epwe apwunguno ponuochutan och angang

me murrn an a fen tIS

Tenen 9 Kaworan anounoun the mwoom sem e\ve loan.

'l> ( t 1 lka O\,,~ me. p\Varl auchea an eo-we kawor non annuk meinisin kewe rnwooni, ,

a kawor sern ewe loan ngeni Chuuk iei ra kawor non ei annuk fan itan

mwoonian ewe project me programs usun a affat me non ewe Re-lcnding

Agreement nefinan ewe National Government me ewe Mun Chuuk fiti

pwungun ponuetan nounoun mWOO11l3Jlmun Ewe mwooni enwe kawor sent

-:i loan CPV\L' wor lumunun tirj pwungun ewe Chuuk Slate Financia)

vtanaaernent An

ANNU ..JN CHUUK NAMPA.. 8-06-08

NAMOPWUNC NO 8-23

'lenen 10. Meinisin mwoorn a kawor me fan pwungun el annuk epwe allotted

n~cnL l.awor tumunun titi pwungun meinisin ekkcwe annukun turnunun mwooruen mun.

pachenong nge esap chok rnuchuno me won ewe Financial Management Act an MUD

-t \..-'liUU:'; :-'tat<::.Ewe allottee CP\\C an sckining an cP\YC annu pwe rneinisin ckkc: mwoorn.

ra kawor me non ei annuk repwe chok nounou ngeni met kewe popun a affat me non ei

"j annuk fengen me ar repwe chok aukukun mwooni a kawor me non el annuk Ewe

uk ukukun rnwoon: a kawor me non ci annuk resap niv v m sdan pwe repvve chok nonnorn

Ferren 11. Poplitan pochokunan Fi annuk epwe poputa pochok uan fansoun a

kapwunguno meren ewe Governor, ika met chok a pwism winit: annuk won winikapan

-~;(6hHerter Sorim. Chief ClerkUtter. RepresentativesAnepwungun Mun Chuuk

-vnneiata

f Clerk

HB NO 8-55HSCR NO NoneSS CR. NO None

Singkoro Harper. SpeakerUrten RepresentativesAnepwungun Mun Chuu\':'

P",mn maram ": J/) ZAf..Pr

Sain sem ~ ~Detor Santos. PresidentSenate. Anepwungun Mun ChUUh