SENATE BILL NO. 289                                                                                                           
                                                                                                                                
     An Act relating to home energy conservation and                                                                            
     weatherization for purposes of certain programs of the                                                                     
     Alaska Housing and Finance Corporation.                                                                                    
                                                                                                                                
1:54:02 PM                                                                                                                    
                                                                                                                                
Representative Kelly asked how the $300 million would be                                                                        
spent in the first years of the project.                                                                                        
                                                                                                                                
DAN FAUSKE,  CEO/EXECUTIVE DIRECTOR,  ALASKA HOUSING  FINANCE                                                                   
CORPORATION,  DEPARTMENT OF REVENUE,  thought $20-40  million                                                                   
would be  spent the first  year. He said  the goal is  to get                                                                   
people involved as soon as possible.                                                                                            
                                                                                                                                
BOB BREAN, ALASKA HOUSING FINANCE  CORPORATION, DEPARTMENT OF                                                                   
REVENUE  (testified  via  teleconference),   emphasized  that                                                                   
there  would  be a  ramping  up  period. The  Alaska  Housing                                                                   
Finance   Corporation   (AHFC)    was   looking   at   twenty                                                                   
contractors. Mr.  Fauske added that he had  spoken to vendors                                                                   
and wanted to  take into consideration the barge  schedule to                                                                   
remote areas.                                                                                                                   
                                                                                                                                
1:56:28 PM                                                                                                                    
                                                                                                                                
Representative Thomas asked if  there was a cap on the grant.                                                                   
Mr. Fauske responded  that the loan amount would  be $30,000.                                                                   
People would borrow money and  there would be a rebate at the                                                                   
$5,000  level. Representative  Thomas asked  about the  grant                                                                   
portion.                                                                                                                        
                                                                                                                                
BRYAN BUTCHER,  LEGISLATIVE LIAISON,  ALASKA HOUSING  FINANCE                                                                   
CORPORATION, said  the rebate program would be  capped at the                                                                   
number  that would  give incentives  to Alaskans  to use  the                                                                   
program.  The $5,000  amount  is flexible.  In  terms of  the                                                                   
weatherization, AHFC  is looking at an average  amount. Funds                                                                   
are limited,  so the average  would around $4,000.  With more                                                                   
funding, the program  could do more in individual  homes, but                                                                   
the average would still only be around $8,000.                                                                                  
                                                                                                                                
Representative Thomas asked if  there were restrictions since                                                                   
the  value  of the  house  would  be increased.  Mr.  Butcher                                                                   
answered that the goal of the  program is to make houses more                                                                   
energy  efficient. If  the  person sold  the  home, it  would                                                                   
still  be   more  energy  efficient.  Representative   Thomas                                                                   
reiterated  concerns about  people  taking  advantage of  the                                                                   
program to increase the re-sale  value of homes. He suggested                                                                   
a restriction  such as not  being able  to sell the  home for                                                                   
two years.                                                                                                                      
                                                                                                                                
Mr.  Brean  said  that  in the  early  days,  there  were  no                                                                   
restrictions  and  people  took  advantage  of  loopholes  to                                                                   
install solariums  and hot tubs. A lot was  learned. The uses                                                                   
of the money have been reconfigured  to focus more accurately                                                                   
on energy efficiency.  There are no restrictions  on the sale                                                                   
of the  home. The value  is the return  on investment  to the                                                                   
State. Energy efficient  homes benefit the State  as a whole.                                                                   
This could be adjusted if there were strong concerns.                                                                           
                                                                                                                                
2:00:53 PM                                                                                                                    
                                                                                                                                
Representative  Thomas wanted  the issue to  be looked  at so                                                                   
that  people could  not take  advantage of  the program.  Mr.                                                                   
Fauske  thought a  pre-payment  penalty on  a  loan could  be                                                                   
built into the regulations.                                                                                                     
                                                                                                                                
Representative  Kelly thought  that it would  help to  have a                                                                   
list  of  all  the  programs   that  provide  assistance  for                                                                   
heating,  listing  the  number  of people  impacted.  He  was                                                                   
concerned about fraud.                                                                                                          
                                                                                                                                
PUBLIC TESTIMONY CLOSED.                                                                                                        
                                                                                                                                
SB  289 was  HEARD  and HELD  by  the Committee  for  further                                                                   
consideration.