01/27/1998 03:30 PM Senate STA

                                                                               
                     SB 223 - SENIOR HOUSING                                   
                                                                               
CHAIRMAN GREEN called the Senate State Affairs Committee to order              
at 3:43 p.m., and brought SB 223 before the committee as the only              
order of business.                                                             
                                                                               
MR. BEN BROWN, staff to Senator Kelly, the prime sponsor of the                
bill said the bill has two basic provisions. The first thing the               
bill would do is lower the definition of senior in the statute that            
governs a program known as the senior housing revolving fund. The              
term would then apply to a person 55 years of age, previously it               
was 60. The second provision of the bill would eliminate an                    
unnecessary interest rate surcharge for this same program according            
to Mr. Brown. He says the Alaska Housing Finance Corporation (AHFC)            
no longer wants to impose this surcharge. He clarified he had been             
referring to two programs: both the senior housing revolving fund              
and special needs multi-family housing program. He noted the                   
presence of John Bittney and Kay Murphy from AHFC who would be                 
available for further questions.                                               
                                                                               
CHAIRMAN GREEN asked if the second part of the bill was the section            
for the repeal and Mr. Brown affirmed it was the repealer,                     
mandating the repeal of the surcharge. He said the repeal of the               
surcharge was allowable with the overhead of AHFC and the manner in            
which they calculate their bonds.                                              
                                                                               
CHAIRMAN GREEN asked if there might be any negative aspect to                  
lowering the age to 55. Mr. Brown was not aware of any and AHFC has            
some discretion if it created too much demand for certain programs.            
                                                                               
Number 090                                                                     
                                                                               
SENATOR MACKIE asked if it is possible that if there were                      
competition for units that a younger person might be awarded the               
unit rather than an older Alaskan. Mr. Brown supposed it might be              
possible but currently demand was low and units were unoccupied.               
                                                                               
SENATOR WARD said that it was his understanding once a project                 
filled up, financing would be made available for another one.                  
                                                                               
MR. JOHN BITTNEY, representing AHFC, said AHFC has been involved in            
senior housing since 1992 and they have provided better rates and              
financing terms than previously available. They considered reducing            
the age through regulation but were concerned it may be too far                
reaching so they were hoping to be given discretion. He does not               
foresee the majority of 55 year old people gravitating immediately             
toward these projects. He said overall AHFC supports the bill.                 
                                                                               
SENATOR MACKIE made a motion to move SB 223 out of committee with              
individual recommendations and zero fiscal notes.  Without                     
objection, it was so ordered and CHAIRMAN GREEN adjourned the                  
meeting at 3:53 p.m.