05/07/1998 04:30 PM House FIN

SENATE BILL NO. 223                                                            
                                                                               
"An Act lowering the age requirement from 60 years to                          
55 years for purposes of senior housing programs; and                          
repealing a provision relating to the interest rate on                         
senior housing loans made by the Alaska Housing Finance                        
Corporation."                                                                  
                                                                               
BEN BROWN, STAFF, SENATOR KELLY spoke in support of SB 223,                    
on behalf of Senator Kelly, sponsor.  He maintained that SB
 improves Alaska senior housing programs in Title 18.  He                   
explained that the Senior Housing Revolving Fund was created                   
in the Department of Community and Regional Affairs with the                   
goal of creating senior housing projects.  The Senior                          
Housing Revolving Fund (SHRF) has only been used once due to                   
the merger of the state's programs into the Alaska Housing                     
Finance Corporation (AHFC).  The Senior Housing Revolving                      
Fund could not compete with AHFC programs.  Of the 9 senior                    
housing projects only the Chester Park project in Anchorage                    
has been financed by the Senior Housing Revolving Fund.                        
Chester Park is also a cooperative ownership senior housing                    
facility.  The other projects are nonprofit rental                             
facilities.  He observed that SB 223 would allow the AHFC                      
Board to reduce the eligibility age from 60 to 55 years of                     
age on a case by case basis.  The average age of senior                        
housing occupants is 76 years of age. The original program                     
was in the Department of Community and Regional Affairs.                       
Since bonds were handled by AHFC, proceeds from were                           
deposited into a bond account and periodically transferred                     
to the SHRF account.  Now that the program is in AHFC the                      
bond account is not needed.  The legislation streamlines the                   
program by eliminating the bond account in AHFC. The SHRF                      
will be the depository of future bond sale proceeds and                        
repayments of principles and loans.  The legislation                           
eliminates a surcharge of either 2 points (for construction                    
loans) or half a point (permanent loans) that was needed to                    
pay for the administrative cost.                                               
                                                                               
Representative Kelly asked if sections 4 and 5 are the only                    
sections that relate to age qualifications.  Mr. Brown                         
observed that section 6 deletes the statutory age of 60 for                    
the Senior Citizens Development Fund.  Grants are made from                    
this program.  The removal of the limitation will not open                     
up the grant fund to the issuance of loans.  The grant fund                    
contains separate language that governs the age of                             
eligibility.                                                                   
                                                                               
JOHN BITNEY, LEGISLATIVE LIAISON, ALASKA HOUSING FINANCE                       
CORPORATION, DEPARTMENT OF REVENUE provided the Committee                      
with information regarding SB 223.  He observed that                           
sections 4, 5 and 6 pertain to the age requirements.  The                      
legislation originally defined senior housing at age 55.                       
There is an exemption under the federal Fair Housing Act,                      
that allows exclusion of admission to individuals that are                     
age 60 years and above.  There is a provision that allows                      
admission to individuals 55 years of age and above if 80                       
percent of the occupants are 60 years or above.  There are                     
two programs at AHFC.  The SHRF provides housing for                           
individuals that would not qualify as low income.  He                          
clarified that Chester Park was developed under SHRF.  All                     
other senior housing developments were financed under a                        
program called the Special Needs Multi-family program.                         
                                                                               
(Tape Change, HFC 98 - 161, Side 2)                                            
                                                                               
Mr. Bitney explained that the staff at AHFC put out a                          
proposal to lower the age to 55 years of age.  Concerns were                   
raised regarding lowering to a blanket age 55.  The Alaska                     
Housing Finance Corporation adopted regulations that                           
retained that age 60 limitation but allowed an exemption.                      
Developments under economic distress can apply on an                           
individual basis, for limited amount of time, to lower the                     
age to 55 years.  The current version of SB 223 adopts the                     
age proposals by AHFC. The only reference to age is in                         
section 4.  The Alaska Housing Finance Corporation is given                    
regulation authority in section 4 to establish any age.                        
                                                                               
In response to a question by Representative Davies, Mr.                        
Brown clarified that there is already criteria that governs                    
the allocation of funds from the Housing Development Fund                      
for low income housing.  Mr. Bitney observed that the                          
regulations outlined in section 4 would cover any loan from                    
the revolving fund.  The legislation does not make reference                   
to the age limit under AS 18.56.800.  Representative Davies                    
asked if it would be desirable to extend the provision to AS                   
18.56.800.  Mr. Bitney agreed that it would clarify the                        
legislation.                                                                   
                                                                               
Representative Davies suggested that AS 18.56.799 be changed                   
to AS 18.56.800.  Mr. Brown suggested that change include AS                   
18.56.810.  He pointed out that this would capture both                        
sections that deal with the Housing Development Fund.                          
                                                                               
Representative Davies MOVED to ADOPT to delete "AS                             
18.56.799" and insert "AS 18.56.810".  Mr. Bitney spoke in                     
support of the amendment.  He explained that the subsidy                       
grant represents the difference between the total cost of                      
construction and what the financing piece will be able to                      
afford through the rent structure.  By extending the                           
legislation to AS 18.56.810 the subsidy grant would have the                   
same definition as the loan program.  One current project                      
would be covered.  He did not know how it would affect                         
retroactive grants.                                                            
                                                                               
Representative Martin expressed concern that lowering the                      
age would increase competition for housing among those 60                      
years of age.  He observed that there is more need for                         
senior housing than is being met.                                              
                                                                               
Representative Davies stressed that the legislation would                      
allow the Department the ability to adopt regulation to                        
establish under what circumstance the age could be lowered                     
from 60 to 55 years.  The circumstances would not necessary                    
be the same.  Representative Mulder pointed out that the age                   
could be changed to any number between 55 years or older.                      
                                                                               
Mr. Brown stated that the amendment might not be necessary.                    
He pointed out that AS 18.56.810 states that "senior citizen                   
housing" has the meaning given senior housing in AS                            
18.56.799.  He explained that the age 55 floor is only                         
referred to in the regulatory authority section.  He                           
recommended that the legislation state "senior housing"                        
means construction or improvement undertaken primarily to                      
provide dwelling accommodations for persons 55 years of age                    
or older.                                                                      
                                                                               
Mr. Bitney stated that if the status quo remains that AHFC                     
would adopt the same regulations for the grant fund as for                     
the loan program.                                                              
                                                                               
Representative Davies WITHDREW the MOTION.                                     
                                                                               
Representative Kelly MOVED to report CSSB 223 (FIN)am out of                   
Committee with the accompanying fiscal note.                                   
                                                                               
CSSB 223 (FIN) am was REPORTED out of Committee with "no                       
recommendation" and with a zero fiscal note by the                             
Department of Revenue, dated 1/28/98.