03/27/2024 01:30 PM Senate LABOR & COMMERCE

           SB 239-AIDEA WORKFORCE HOUSING DEVELOPMENT                                                                       
                                                                                                                                
1:38:22 PM                                                                                                                    
CHAIR  BJORKMAN   reconvened  the   meeting  and   announced  the                                                               
consideration of  SENATE BILL  NO. 239, "An  Act relating  to the                                                               
Alaska Industrial Development and  Export Authority; and relating                                                               
to workforce housing development projects."                                                                                     
                                                                                                                                
1:38:43 PM                                                                                                                    
SENATOR  FORREST DUNBAR,  District J,  Alaska State  Legislature,                                                               
Juneau, Alaska,  sponsor of SB  239, informed the  committee that                                                               
those  testifying  by invitation  were  not  able to  attend  the                                                               
meeting  and offered  a  brief overview  of  the legislation.  He                                                               
briefly explained  genesis of  SB 239,  which would  allow Alaska                                                               
Industrial Development and Export  Authority (AIDEA) to engage in                                                               
financing for housing construction.  He emphasized the importance                                                               
of  building more  housing in  the  state. He  stated that  AIDEA                                                               
agrees  that  housing  for  workers   is  a  part  of  industrial                                                               
development  and building  value-added industrial  industries. He                                                               
noted  that  AIDEA did  take  part  in housing  construction  and                                                               
financing in  the early  1980s; however,  a housing  market crash                                                               
ended   this  practice.   He  explained   that  while   AIDEA  is                                                               
technically able to use their  current resources to fund housing,                                                               
the intention behind  SB 239 is to make this  explicit. He stated                                                               
that this  is not creating  a mandate  but states that  AIDEA has                                                               
the legal  authority to finance  housing construction.  He stated                                                               
that   "multi-family  workforce   housing"  is   highlighted.  He                                                               
explained that the Bankers' Association  was not comfortable with                                                               
potentially competing with AIDEA for certain kinds of loans.                                                                    
                                                                                                                                
SENATOR  DUNBAR said  there are  very few  multi-family workforce                                                               
housing  projects currently  under construction.  He stated  that                                                               
the only projects  he is aware of in Anchorage  are funded by the                                                               
Cook Inlet Housing  Authority and he expressed the  desire to see                                                               
more private builders taking on  these kinds of projects. He said                                                               
he  is  hopeful that  AIDEA  would  provide additional  financing                                                               
mechanisms.   He  reiterated   that  this   legislation  is   not                                                               
prescriptive and leaves it to  AIDEA to determine what this would                                                               
look like  in practice and  added that AIDEA is  comfortable with                                                               
this  insofar as  no mandate  is  included. He  said that  Alaska                                                               
Housing Finance Corporation (AHFC) does not oppose SB 239.                                                                      
                                                                                                                                
1:42:35 PM                                                                                                                    
JAMES  HOLZENBERG, Staff,  Senator Forrest  Dunbar, Alaska  State                                                               
Legislature,  Juneau, Alaska,  presented  the sectional  analysis                                                               
for SB 239.                                                                                                                     
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
                       SECTIONAL ANALYSIS                                                                                     
          SB 239: AIDEA WORKFORCE HOUSING DEVELOPMENT                                                                           
                                                                                                                                
     Section 1:  AS 44.88.070: Adds  new subsection 7  to AS                                                                    
     44.88.070 stating  the purpose  of the  authority. Part                                                                    
     of the mission of the  authority will now be to provide                                                                    
     financing and  the means  of financing  construction of                                                                    
     new  workforce housing  facilities  with  five or  more                                                                    
     units.                                                                                                                     
                                                                                                                                
     Section 2: AS  44.88.080: Adds new subsection  33 to AS                                                                    
     44.88.080, granting  AIDEA the  ability to  provide the                                                                    
     various  means   of  financing  and   facilitating  the                                                                    
     financing  of  construction  of new  workforce  housing                                                                    
     facilities with five or more dwelling units.                                                                               
                                                                                                                                
     Section  3:  AS   44.88.900(6):  Conforming  change  to                                                                    
     extend  the  definition  of  "development  project"  to                                                                    
     include workforce housing facilities  with five or more                                                                    
     dwelling units, as defined in the new section J.                                                                           
                                                                                                                                
     Section  5:  AS 44.88.900:  Adds  a  new section  J  to                                                                    
     define "workforce  housing". Workforce housing  will be                                                                    
     defined   as  residential   housing   that  costs   the                                                                    
     occupants  less than  30  percent of  the  income of  a                                                                    
     household with  120 percent of  the area  median family                                                                    
     income, as  determined by the United  States Department                                                                    
     of Housing and Urban Development.                                                                                          
                                                                                                                                
1:44:45 PM                                                                                                                    
SENATOR  MERRICK asked  if  Senator Dunbar  has  spoken with  any                                                               
private  contractors who  have  expressed  interest in  utilizing                                                               
this program.                                                                                                                   
                                                                                                                                
1:44:55 PM                                                                                                                    
SENATOR  DUNBAR said  that he  has  spoken with  a developer  who                                                               
expressed  interest;  however,  the   developer  does  not  build                                                               
workforce  housing  and  would  therefore not  be  able  to  take                                                               
advantage of this program.                                                                                                      
                                                                                                                                
1:46:14 PM                                                                                                                    
SENATOR  DUNBAR   asked  if  the  committee   would  hear  public                                                               
testimony at this time.                                                                                                         
                                                                                                                                
1:46:22 PM                                                                                                                    
CHAIR BJORKMAN replied that public  testimony was not noticed for                                                               
this  hearing;  however,  the committee  is  flexible  if  anyone                                                               
present wished to testify.                                                                                                      
                                                                                                                                
1:46:46 PM                                                                                                                    
SENATOR DUNBAR thanked the committee for hearing the bill.                                                                      
                                                                                                                                
1:46:57 PM                                                                                                                    
CHAIR BJORKMAN held SB 239 in committee.