SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE March 24, 1999 1:34 p.m. MEMBERS PRESENT Senator Tim Kelly, Chair Senator Jerry Mackie, Vice Chair Senator Randy Phillips Senator Lyman Hoffman MEMBERS ABSENT Senator Jerry Ward COMMITTEE CALENDAR HOUSE BILL NO. 93 "An Act relating to the Alaska Housing Finance Corporation's rural assistance loan program and to the definition of 'housing' for purposes of the corporation's housing assistance loan program; and providing for an effective date." -MOVED HB 93 OUT OF COMMITTEE PREVIOUS SENATE COMMITTEE ACTION HB 93 - No previous Senate action. WITNESS REGISTER Representative Carl Morgan Alaska State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Sponsor of HB 93 John Bitney, Legislative Liaison Alaska Housing Finance Corporation 4300 Boniface Anchorage, AK 99510 POSITION STATEMENT: Supports HB 93 ACTION NARRATIVE TAPE 99-6, SIDE A Number 001 CHAIRMAN TIM KELLY called the Senate Community & Regional Affairs Committee meeting to order at 1:34 p.m. Present were Senators Phillips, Hoffman and Kelly, Chair. The committee took up HB 93. HB 93-RURAL ASSISTANCE HOUSING LOANS REPRESENTATIVE CARL MORGAN, sponsor of HB 93, explained the legislation makes two simple changes to the statute governing the Rural Mortgage Program. HB 93 will allow the program to refinance home loans in the same manner any conventional mortgage allows, and it will allow the program to finance tri-plexes and four- plexes. The current statute only allows financing of single family homes and owner occupied duplexes. The changes will resolve the issue of fairness to rural home buyers, be a good business practice for AHFC, and provide financing opportunities to assist the rural housing market. JOHN BITNEY, Legislative Liaison for AHFC, stated support for HB 93, and informed committee members Kay Murphy, AHFC Director of Mortgage Operations, was available to answer questions via teleconference. SENATOR PHILLIPS asked if urban homeowners with AHFC loans can refinance. MR. BITNEY said they can and clarified that the Rural Mortgage Program is laid out in statute and does not provide for refinancing, possibly because at the time the program was written into statute, no one anticipated that housing loan rates would decrease as much as they have. SENATOR PHILLIPS asked if HB 93 puts rural residents on an equal footing with urban homeowners in regard to refinancing. REPRESENTATIVE MORGAN said it will. CHAIRMAN KELLY asked if the rural program still has a 1 percent differential. MR. BITNEY said AS 18.56.470 provides that the interest rates on the rural program loans shall be 1 percent less than the taxable rate, which is the rate used for conventional mortgages. SENATOR PHILLIPS moved HB 93 to its next committee of referral. There being no objection, the motion carried. There being no further business to come before the committee, CHAIRMAN KELLY adjourned the meeting at 1:39 p.m.