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Hawaii County Council August 1, 2007 Page 2 at least three times the principal amount of bonds issued for a district. Such a requirement is common in the special district legislation of many county or municipal governments. It will satisfy the underwriters of CFD bonds and will assure the legislators that the debt is reasonable relative to the value of the improved property. This proposed section of the Chapter also allows the Council to waive the three to one ratio requirement in special situations where the bonds are felt to have a significant public impact. Kamakoa at Waikoloa is an example of a project that might be exempted from having to meet the three to one ratio because of its unique land trust requirements, which reduce its value, and acknowledged public purpose. This bill also adds language to the section on levy of special taxes. This section currently provides that, if property owned by a public body is leased to a nonexempt person or entity, the special tax is levied on the lessee's interest. The proposed addition clarifies that this applies to direct or indirect leasing arrangements (including situations where the public body grants a master lease to another entity which then develops the property and leases individual parcels to the ultimate occupants). The proposed addition also allows for the special tax to be levied on the lessee's interest in situations where the owner of the property is a person or entity other than a public body Both of these changes are intended to enhance the usefulness of Chapter 32 and formation of Community Facilities Districts when they address a public need. Should you have additional questions, please don't hesitate to call or email Nancy Crawford. Sincerely, ~Zs~ William akaba Finance Director cc: Dixie Kaetsu, Managing Director Craig Masuda, Corporation Counsel