Legislature(1993 - 1994)

03/25/1994 08:35 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HB 467    An Act relating to housing  programs of the Alaska                 
            Housing  Finance  Corporation   and  of   regional                 
            housing  authorities,   and  permitting   regional                 
            housing  authorities  to   make,  originate,   and                 
            service loans for the  purchase and development of                 
            residential   housing   in   the   state's   small                 
            communities.                                                       
                                                                               
            HB 467 was  reported out of  Committee with a  "do                 
            pass" recommendation and with a fiscal note by the                 
            Department of Revenue dated 3/16/94.                               
  HOUSE BILL 467                                                               
                                                                               
       "An  Act  relating to  housing  programs of  the Alaska                 
       Housing  Finance Corporation  and  of regional  housing                 
       authorities,    and    permitting    regional   housing                 
       authorities to make,  originate, and service loans  for                 
       the purchase  and development of residential housing in                 
       the state's small communities."                                         
                                                                               
  Co-Chair MacLean explained that HB 467 would make changes to                 
  the  Rural  Loan  Program  of  the  Alaska  Housing  Finance                 
  Corporation (AHFC) in order to  increase the availability of                 
  loan  services  and to  encourage  more investment  in rural                 
  housing.   She added that current law  does not specifically                 
  authorize  regional  housing  authorities  to  originate  or                 
  service loans  in areas  where AHFC  has a  regional office.                 
  This  action  prevents  housing  authorities  in  Fairbanks,                 
  Kotzebue,   Nome,  Bethel,   Dillingham   and  Juneau   from                 
  generating and servicing loans for AHFC.                                     
                                                                               
  Co-Chair  MacLean advised  that  the  bill  would  encourage                 
  greater  investment  in  rural  housing  by allowing  owner-                 
  occupants  to finance up to  four units in  a complex and by                 
  allowing owners  to inhabit larger rental complexes.  HB 467                 
  would  also  allow  AHFC to  increase  its  participation in                 
  projects  with unusually  high water and  sewer installation                 
  costs   without   reducing  the   amount   of   the  federal                 
  contribution to such projects.                                               
                                                                               
  ROBERT  BREAN,  (TESTIFIED  VIA  TELECONFERENCE),  DIRECTOR,                 
  RURAL   HOUSING,   ALASKA   HOUSING   FINANCE   CORPORATION,                 
  ANCHORAGE, commented  that AHFC supports HB 467  and sees it                 
  as  a  positive  pro-active  bill  that  would  provide  for                 
  flexibility and consideration of the  rural housing programs                 
  providing service to rural Alaska.   He pointed out the main                 
  points of the legislation:  [Copy on file].                                  
                                                                               
       1.   The regional housing  authorities statewide  would                 
            be  authorized through  HB  467  to originate  and                 
            service residential loans  in small communities in                 
            their respective regions.   The provision  further                 
            empowers  the  regional  housing   authorities  to                 
            provide  service in their  region with the support                 
            of AHFC.                                                           
                                                                               
                                4                                              
                                                                               
                                                                               
       2.   AHFC's Rural Housing Programs would be  authorized                 
            through HB 467 to increase  the allowable match of                 
            the Housing  and Urban Development  Grants to  the                 
            Regional Housing Authorities from 20%  to 30% on a                 
            case by case  basis.  Presently,  the Supplemental                 
            Housing Grant Program provides 20%  match to HUD's                 
            total development cost of  housing units in  rural                 
            Alaska.   This provision of the bill would allow a                 
            match to go up to 30% on  a case by case basis for                 
            water and sewer features.                                          
                                                                               
       3.   AHFC's Rural Housing Programs  would be authorized                 
            through HB 467 to expand the definition of "rental                 
            housing"  from eight  units to  sixteen  units and                 
            allow the owner to occupy the  complex in order to                 
            provide  for on  site  operation, maintenance  and                 
            protection   of   the   development  opportunities                 
            throughout rural Alaska.                                           
                                                                               
       4.   AHFC's Rural Housing  Programs would be authorized                 
            through  HB   467  to  expand  the  definition  of                 
            "housing" to mean a dwelling containing up to four                 
            units as opposed  to a  dwelling containing up  to                 
            two  units.     The  definition   allows  for  the                 
            enhancement   of   local    economic   development                 
            opportunities throughout rural Alaska.                             
                                                                               
  Mr.  Brean  stated that  the program  would  not be  a grant                 
  program, but  would establish  a loan  program.   Discussion                 
  followed among House Finance Committee members regarding the                 
  program and modifications of the word "rental", Page 4, Line                 
  18.  Mr.  Brean stated that  definition changes would be  to                 
  rural residential housing and owner occupied housing.                        
                                                                               
  Representative Martin noted his concern with the low quality                 
  of the  HUD homes built elsewhere in the United States.  Mr.                 
  Brean  advised  that  AHFC's Rural  Loan  Program  must meet                 
  specific conditions as established by the national  building                 
  code standards and added, that thermal standards must be met                 
  by any loan provided through AHFC.                                           
                                                                               
  Discussion  followed  regarding  "ownership"  of large  unit                 
  complexes and  where that owner  would be  required to  live                 
  during the owner occupied program.                                           
                                                                               
  Representative Brown asked for  further clarification of the                 
  "housing"   language   and  the   effect   it  would   have.                 
  Representative Hanley pointed  out that  language would  not                 
  include residence unless  the residence  is occupied by  the                 
  owner.                                                                       
                                                                               
                                                                               
                                5                                              
                                                                               
                                                                               
  Representative Martin questioned why  it would be  necessary                 
  to by-pass the  traditional lender in favor  of the regional                 
  housing authority.  Mr. Brean responded that  AHFC will work                 
  through local banks, however, there are some rural locations                 
  where banks are reluctant to build.  He emphasized that AHFC                 
  is involved in  all areas and there would not  be a conflict                 
  between the banks and AHFC financing.                                        
                                                                               
  (Tape Change, HFC 94-87, Side 1).                                            
                                                                               
  Representative  Hoffman  MOVED  to  report  HB  467  out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal note.  Representative Martin OBJECTED.                   
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Parnell,   Therriault,  Brown,   Foster,                 
                      Grussendorf,  Hanley, Hoffman,  MacLean,                 
                      Larson.                                                  
       OPPOSED:       Martin.                                                  
                                                                               
  Representative Navarre was not present for the vote.                         
                                                                               
  The MOTION PASSED (9-1).                                                     
                                                                               
  HB  467  was reported  out  of  Committee with  a  "do pass"                 
  recommendation and with  a fiscal note by the  Department of                 
  Revenue dated 3/16/94.                                                       

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