Legislature(1995 - 1996)

03/16/1995 01:05 PM House CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 HCRA - 03/16/95                                                               
 HB 192 - AHFC HOUSING LOANS                                                  
                                                                               
 CO-CHAIR IVAN asked for a motion to adopt the proposed committee             
 substitute for HB 192.                                                        
                                                                               
 Number 656                                                                    
                                                                               
 REPRESENTATIVE KOTT made the motion to adopt the committee                    
 substitute.                                                                   
                                                                               
 CO-CHAIR IVAN heard no objections and it was so ordered.  He                  
 invited Representative Foster to introduce HB 192.                            
                                                                               
 Number 658                                                                    
                                                                               
 REPRESENTATIVE RICHARD FOSTER expressed his appreciation at the               
 willingness of the committee to hear his bill.  He honored the                
 presence of all the veterans in the audience.  He stated HB 192               
 didn't change the Alaska Housing Finance Corporation's (AHFC) role            
 of retaining control of final approval of loans, but allows                   
 regional housing authorities the power to make, originate and                 
 service loans within their jurisdiction, making home mortgages                
 available for rural Alaskans.  HB 192 also changes the percentage             
 of matching amounts from 20 to 30 percent, and the amount of monies           
 available in the bush hasn't been enough to leverage the balance of           
 the federal monies.  In the current fiscal year, AHFC has                     
 contributed $8 million corporate funds to 11 regional housing                 
 authorities to leverage $48.8 million in HUD funds resulting in the           
 building of 259 homes in 19 villages.  He stated his staff aide,              
 Elizabeth Dronkert, would also be available to help answer                    
 questions.                                                                    
                                                                               
 Number 690                                                                    
                                                                               
 CO-CHAIR IVAN asked if committee members had any questions.                   
                                                                               
 Number 692                                                                    
                                                                               
 REPRESENTATIVE FOSTER stated that an identical bill passed through            
 the House, 38-1 last year, but HB 192 was in better form.                     
                                                                               
 Number 696                                                                    
                                                                               
 REPRESENTATIVE KOTT asked about Representative Foster's reference             
 to last year's `identical' bill.                                              
                                                                               
 Number 698                                                                    
                                                                               
 CO-CHAIR IVAN stated programs like AHFC are taken advantage of in             
 more urban areas.  Rural Alaskans find costs too high to                      
 participate in, but Co-Chair Ivan has received comments from rural            
 citizens interested in expanding this program and HB 192 encourages           
 more rural participation.  This bill provides the economy an                  
 improvement of lifestyle in the rural areas for well-meaning                  
 families pursuing housing from this program.                                  
                                                                               
 Number 710                                                                    
                                                                               
 REPRESENTATIVE KOTT asked if there was anyone signed up to testify            
 who could answer questions pertinent to HB 192.                               
                                                                               
 TAPE 95-7, SIDE B                                                             
 Number 002                                                                    
                                                                               
 ELIZABETH DRONKERT, Legislative Aide to Representative Foster,                
 stated  Mr. Don Fauske, the new Chief Executive Officer, Alaska               
 Housing Finance Corporation, was available to help answer any                 
 questions.                                                                    
                                                                               
 Number 006                                                                    
                                                                               
 CO-CHAIR IVAN invited Don Fauske to testify, but Les Cambell spoke            
 on his behalf as Mr. Fauske wasn't currently present.                         
                                                                               
 Number 024                                                                    
                                                                               
 LES CAMBELL, Budget Specialist, Alaska Housing Finance Corporation            
 (AHFC), supported, on behalf of AHFC, HB 192.  The AHFC believed it           
 would be beneficial for the state of Alaska if passed.                        
                                                                               
 Number 039                                                                    
                                                                               
 CO-CHAIR IVAN asked for questions from committee members.                     
                                                                               
 Number 045                                                                    
                                                                               
 REPRESENTATIVE KOTT asked about the provision in Section 3 which              
 increased the percentage from 20 to 30, the amount dispersed in               
 developing a unit and what effects it would have on the overall               
 program as far as spreading the money evenly around categories                
 within the AHFC.  He also asked if the AHFC had the actual money.             
                                                                               
 Number 061                                                                    
                                                                               
 MR. CAMBELL stated that the AHFC had the corporate receipts to                
 provide funding for the assets added into the capital budget.  The            
 AHFC has currently submitted a request for 30 percent funds as the            
 federal funds are declining and this would leverage more state                
 funds toward the federal funds in order to bring it into the state.           
 He noted Don Foske's presence in the audience.                                
                                                                               
 Number 081                                                                    
                                                                               
 DAN FAUSKE, Chief Executive Officer, Alaska Housing Finance                   
 Corporation, said the fiscal amount was estimated to be around a $5           
 million change by moving from the 20 to the 30 percent contribution           
 level coming from corporate receipts, cash of the corporation from            
 programs managed in the past.  He said there were witnesses on                
 teleconference from Anchorage wishing to testify.  He stated to get           
 into more detail, he would need the information supplied by those             
 hooked onto the teleconference line.  The AHFC did discuss the                
 language in Section 1, subsections 1 and 2, where it has been                 
 changed.  The AHFC was concerned about the original wording of the            
 bill.                                                                         
                                                                               
 Number 091                                                                    
                                                                               
 CO-CHAIR IVAN stated there were several on-line waiting to testify.           
                                                                               
 Number 123                                                                    
                                                                               
 JUDY DESPAIN, Director, Operations, Alaska Housing Finance                    
 Corporation, testified via teleconference that Kay Murphy and Duane           
 White were on-line to help answer any questions.                              
                                                                               
 Number 125                                                                    
                                                                               
 MR. FAUSKE stated the language needed to be changed and came up               
 with an agreement between the AHFC employees and rural housing                
 authorities.  Originally, the bill would have created a situation             
 where loans could be initiated at 1 percent below market rate in              
 all areas and the AHFC wanted to change the wording to state in the           
 rural areas.  This was the AHFC's main concern with HB 192.                   
                                                                               
 Number 142                                                                    
                                                                               
 CO-CHAIR IVAN asked if there were any questions for Mr. Fauske.  He           
 invited Jacqueline Johnson to testify.                                        
                                                                               
 Number 156                                                                    
                                                                               
 JACQUELINE JOHNSON, Executive Director, Tlingit and Haida Regional            
 Authority, supported HB 192.  She explained the necessity of the              
 proposed increase.  The 20 percent was set up a long time ago, but            
 regional housing authorities develop a whole community upon the               
 development of housing.  The flexibility between 20 to 30 percent             
 is necessary to make a project work at a particular site which was            
 unable to be developed before.  She used the example in Craig,                
 where she waited three years to come up with additional funding               
 sources through different entities, during which citizens were                
 without money and the cost of construction rose.  She believed the            
 flexibility would help a rural community meet some of the public              
 responsibilities such as providing safe water and sewer services.             
 She mentioned another portion of the bill which addressed the                 
 ability for housing authorities seller services of the AHFCs loans.           
 Currently, several housing authorities are able to run a rural loan           
 program which used to be under Community and Regional Affairs                 
 before it merged with the AHFC.  Some other regional housing                  
 authorities aren't able to service the rural loan program because             
 the statutes state if there is an AHFC office within that area,               
 loans can't be serviced.  She said that by becoming a seller                  
 servicer for the AHFC loans, it is not in competition with banks              
 because the program markets to a different class of people.  The              
 AHFC markets toward those programs not profitable for a bank and in           
 many cases, the AHFC looks toward the reduction of Housing and                
 Urban Development (HUD) funds and potential lost HUD funds.  She              
 stated the AHFC was looking at other ways to leverage their money             
 to be able to meet their mandate of providing housing to low income           
 people.  She said it wasn't directed toward the Native Alaskan but            
 the AHFC had a public responsibility to the whole region.  To meet            
 this mandate, this program needs the flexibility to use equity                
 funds within the housing authority or use other public or private             
 funds to make loans happen and even be creative with the developing           
 to reduce the cost to smaller groups of people.  She stated                   
 requesting the flexibility was a reason to ensure the rural housing           
 authorities had the ability and right to utilize future programs              
 instigated by the AHFC.                                                       
                                                                               
 Number 229                                                                    
                                                                               
 CO-CHAIR IVAN asked committee members if they had questions or                
 comments.  He invited Bruce Kovarik from Nome to testify.                     
                                                                               
 Number 236                                                                    
                                                                               
 BRUCE KOVARIK, Executive Director, Bering Straits Regional Housing            
 Authority, testified via teleconference from Nome in support of HB
 192.  His housing authority serves 17 communities including Nome.             
 He stated the loan program providing federal funds for new housing            
 is not sufficient to meet the needs for housing in rural Alaska.              
 Alternative means for developing and financing new housing needed             
 to be found with substantial rehabilitation of existing substandard           
 housing.  He listed two provisions of HB 192 to help in this                  
 regard.  First, in terms of participation in the AHFC's loan                  
 programs, several currently available programs are severely under             
 utilized in rural Alaska.  The reason is village economics and the            
 lack of village access to information and basic mechanics of the              
 loan program.  He stated there were moderate income families who              
 could benefit from these programs and achieve their goals of home             
 ownership.  An accessible home loan would require more effort in              
 rural areas than in an urban community.  HB 192 would help                    
 regionalize the loan program and offer familiar faces to families             
 trying to participate in the loan programs.  Second, the expansion            
 of the supplemental housing grant program including all site sewer,           
 water and infrastructure facilities would benefit those in rural              
 communities.  He said that in every program they are promoting, the           
 housing authority was also developing the community.  Mr. Kovarik             
 believed the authorization of offsite sewer/water facilities in the           
 supplemental housing grant program would be helpful, but he would             
 still try to remain active in supporting the needs of the village             
 and village housing.                                                          
                                                                               
 Number 292                                                                    
                                                                               
 CO-CHAIR IVAN asked for questions from the committee.  He asked               
 whether there were others signed up to testify regarding HB 192.              
                                                                               
 Number 303                                                                    
                                                                               
 REPRESENTATIVE KOTT referred to page 3, which called for the AHFC             
 to establish a party system for the allocation of monies in advance           
 to pay the offsite water/sewer facility improvements authorized by            
 the statute.  He asked how the AHFC anticipated prioritizing the              
 projects.  He also mentioned the fiscal note didn't require                   
 additional personnel to be hired to work the projects.                        
                                                                               
 Number 318                                                                    
                                                                               
 MR. FAUSKE called on the staff who worked on this to answer the               
 question.                                                                     
                                                                               
 Number 326                                                                    
                                                                               
 MS. DESPAIN stated she understood it established the prime release            
 system and the job could be done with existing staff.                         
                                                                               
 Number 329                                                                    
                                                                               
 REPRESENTATIVE KOTT asked if Ms. DeSpain could give him a basic               
 idea on how a priority system would be set up for the allocation of           
 grant monies for the purpose of offsite sewer/water facility                  
 improvements.                                                                 
                                                                               
 Number 335                                                                    
                                                                               
 MS. DESPAIN stated the first priority considered would be the funds           
 available.  The allocation would be on a first come, first served             
 basis depending on the accessible funds.                                      
                                                                               
 Number 347                                                                    
                                                                               
 CO-CHAIR IVAN welcomed other questions or comments from the                   
 committee.  He asked the desire of the committee concerning HB 192.           
                                                                               
 Number 350                                                                    
                                                                               
 REPRESENTATIVE KOTT made a motion to pass CSHB 192(CRA) out of                
 committee with individual recommendations.                                    
                                                                               
 Number 354                                                                    
                                                                               
 CO-CHAIR IVAN heard no objections and it was so ordered.                      
                                                                               

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