Legislature(1997 - 1998)
05/07/1998 04:30 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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 223 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.
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