Legislature(1995 - 1996)

03/13/1996 01:45 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HOUSE BILL 192                                                               
                                                                               
       "An  Act  relating to  housing  programs of  the Alaska                 
       Housing   Finance   Corporation,    the   corporation's                 
       supplemental  housing  development  grants to  regional                 
       housing  authorities,  and   to  housing  programs   of                 
       regional housing authorities,  and permitting  regional                 
       housing  authorities to  make,  originate, and  service                 
       loans for the  purchase and development of  residential                 
       housing."                                                               
                                                                               
  Co-Chair  Foster  MOVED  to adopt  work  draft  #9-LS0463\U,                 
  Chenoweth,  3/08/96, as  the  version before  the Committee.                 
  Representative Brown OBJECTED for purposes of discussing the                 
  changes.                                                                     
                                                                               
  BRYCE  EDGMON, AID,  REPRESENTATIVE  RICHARD FOSTER,  stated                 
  that the legislation before the Committee addresses existing                 
  programs within  Alaska Housing  Finance Corporation  (AHFC)                 
  and  would  also  provide  for  individual  regional housing                 
  authorities to investigate rural areas of the State in order                 
  to provide additional financing tools to make home mortgages                 
  more  available.    He  provided  Committee members  with  a                 
  sectional  analysis  of the  proposed  committee substitute.                 
  [Copy on file].   Mr.  Edgmon presented an  overview of  the                 
  sectional analysis.                                                          
                                                                               
  Representative  Brown  questioned  the relationship  between                 
  regional  housing  authorities and  AHFC.   She  asked which                 
  agency would determine who would receive the loans.                          
                                                                               
  JOHN  BITNEY, LEGISLATIVE  LIAISON,  ALASKA HOUSING  FINANCE                 
  CORPORATION  (AHFC),  ANCHORAGE,  responded,   the  regional                 
                                                                               
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  housing  authorities are restricted to  who they can grant a                 
  loan to.  Currently, statute allows loans made only to those                 
  areas  defined   as  "rural"  communities.     The  proposed                 
  legislation would expand the authority to make loans outside                 
  of rural communities.                                                        
                                                                               
  The  types  of  loans made  would  continue  to  be tied  to                 
  interest rates.   Mr. Bitney concluded that  statutes define                 
  regional  housing  authority   boundaries  as  identical  to                 
  regional corporation boundaries.                                             
                                                                               
  JACQUELINE  C.  JOHNSON,  EXECUTIVE DIRECTOR,  TLINGIT-HAIDA                 
  REGIONAL   HOUSING   AUTHORITY,  JUNEAU,   in   response  to                 
  Representative Martin's  concern, replied that  matching the                 
  supplemental grant program to the AHFC loan program does not                 
  exist at present.   Instead, the supplemental  housing grant                 
  funds match  the U.S.  Housing and  Urban Development  (HUD)                 
  appropriated dollars.   She  stressed that this  would be  a                 
  separate  issue  from mortgage  lending.   She  pointed out,                 
  also, that the  dollars primarily used for  regional housing                 
  authority had been allocated to  low income rentals.   "Real                 
  loan" programs began years ago as a result of not many loans                 
  being generated to the rural communities.                                    
                                                                               
  Ms. Johnson continued,  a problem arose because  the statute                 
  does not allow  regional housing authorities to  provide the                 
  loan  service.    The  proposed  legislation  requests  that                 
  change.  Representative  Martin asked how  small of an  area                 
  could qualify.   Ms. Johnson advised that  because the State                 
  had concerns with the rural  sized communities, they created                 
  fourteen regional housing authorities.  Each one is required                 
  to  come back  for  Legislative approval,  thus  prohibiting                 
  small villages from creating their own housing authority.                    
                                                                               
  Representative Martin  asked if  there was  anything in  the                 
  legislation that  could treat  urban areas differently  from                 
  rural  areas.    Mr. Bitney  explained  that  the authorized                 
  projects listed on Page  3, would tie areas to  the projects                 
  being constructed by  the regional  housing authority.   The                 
  legislation would not  authorize AHFC to go  "outside" those                 
  projects.                                                                    
                                                                               
  He noted that  the statute allows AHFC to authorize up to an                 
  eight-plex unit without  any type  of determination.   There                 
  must  be a feasibility  study and an  evaluation provided by                 
  AHFC.  The statute  allows AHFC to go beyond  an eight-plex,                 
  although  a special  determination must  first be  provided.                 
  The interest rate on the program would remain the same as it                 
  currently  is.    The legislation  would  only  "modify" the                 
  existing program.   Mr. Bitney indicated that  no preference                 
  would be created.                                                            
                                                                               
                                                                               
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  Representative Martin  inquired if  more than one  authority                 
  could exist in an urban area  to encourage competition.  Mr.                 
  Bitney suggested that beyond a regional housing authority, a                 
  party could rely  on banks.   Mrs. Johnson  added that  each                 
  housing authority does have public housing offered, and that                 
  development  corporations  do  exist  that  deal  with  only                 
  housing services.  She concluded,  in urban areas, different                 
  needs exist as do different funding source mechanisms.                       
                                                                               
  Representative Brown asked for further information regarding                 
  the "unfavorable"  report on the  Interior Regional  Housing                 
  Authority.                                                                   
                                                                               
  DAN  FAUSKE, EXECUTIVE  DIRECTOR,  ALASKA HOUSING  AUTHORITY                 
  (AHFC),  ANCHORAGE, stated,  last spring  when  the incident                 
  occurred, AHFC  immediately froze  that account  and sent  a                 
  team to work  with the new management.  At that time, a duel                 
  signatory  was  put   into  effect.    No  new   funds  were                 
  transferred until  the money  concern was  sorted out.   The                 
  issue has been resolved at this time.                                        
                                                                               
  Representative  Brown  WITHDREW  the OBJECTION  to  move the                 
  committee substitute.  There being NO further OBJECTION, the                 
  work  draft, #9-LS0463\U,  Chenoweth, 3/08/96,  was adopted.                 
  Mr.  Bitney  stated that  with  the version  adopted  by the                 
  Committee, the fiscal impact would be reduced to zero.                       
                                                                               
  Representative Kohring MOVED  to adopt Amendment #1.   [Copy                 
  on file].   The amendment would lower  the qualification age                 
  from   60   years   to   55   years  for   senior   housing.                 
  Representative  Martin  OBJECTED  for  discussion  purposes.                 
  Representative Kohring  explained that  the amendment  would                 
  allow people under the age of 60 years to be eligible  to be                 
  considered for senior  housing loans.   He  felt that  there                 
  existed a  housing demand among  those persons who  have not                 
  yet reached the  age of 60, assuming that  they have met the                 
  other criteria.                                                              
                                                                               
  Representative Martin stated that AHFC currently has a large                 
  demand for senior housing.  If the age limit is lowered, the                 
  problem  will   become  maximized.     Representative  Brown                 
  questioned the fiscal impact of the amendment.                               
                                                                               
  KAY MURPHY,  DIRECTOR, MORTGAGE  OPERATIONS, ALASKA  HOUSING                 
  FINANCE  CORPORATION  (AHFC),  ANCHORAGE,  stated  that  the                 
  senior  housing  loan  program  was  not  used  very  often.                 
  Borrowers seem  to fit  into the  "special needs"  category.                 
  She did not feel  that there would be a  tremendous increase                 
  in   activity    through   passage    of   the    amendment.                 
  Representative  Martin  asked  how  many  seniors  currently                 
  receive aid.  Ms. Murphy  replied that the senior population                 
  is the fastest growing  population in Alaska.   Lowering the                 
                                                                               
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  age to 55 years would encompass a  larger group of people.                   
                                                                               
                                                                               
  Ms. Johnson pointed  out that  currently, there are  subsidy                 
  programs within the federal government using the 55 year old                 
  category.    Through  adoption of  the  amendment,  a senior                 
  person would be able to tap into both  the federal and state                 
  level funding.                                                               
                                                                               
  (Tape Change, HFC 96-74, Side 2).                                            
                                                                               
  Co-Chair  Hanley expressed  concern  that  lowering the  age                 
  would place an increasing demand  on programs that currently                 
  exist.   Ms. Murphy  noted that  on the  federal level,  the                 
  possibility  exists of  decreasing  the  age  even  further.                 
  Allowances are made in the  guidelines for partnerships when                 
  only one member of the couple  is 60 years of age or  older.                 
  The other partner can  stay at the residence as  an eligible                 
  resident.  The guidelines are established as a loan program,                 
  and are available to seniors, 60 years of age or older.                      
                                                                               
  A roll call was taken on the MOTION to adopt the amendment.                  
                                                                               
       IN FAVOR:      Therriault,   Brown,   Kelly,   Kohring,                 
                      Mulder, Foster.                                          
       OPPOSED:       Martin, Hanley.                                          
                                                                               
  Representatives Parnell,  Grussendorf and  Navarre were  not                 
  present for the vote.                                                        
                                                                               
  The MOTION PASSED (6-2).                                                     
                                                                               
  Co-Chair  Foster  MOVED to  report CS  HB  192 (FIN)  out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal note.  There being NO OBJECTION,  it was                 
  so ordered.                                                                  
                                                                               
  Representative Brown  asked AHFC authorities if  there would                 
  be fiscal  impact  through adoption  of Amendment  #1.   Mr.                 
  Fauske replied,  the result  would be  adjusted through  the                 
  loan  process.   AHFC provides  estimates each year  for the                 
  anticipated loan costs.  The legislation could increase that                 
  estimate, although he assumed it would be small.  If the cap                 
  was exceeded, AHFC would request supplemental funding.                       
                                                                               
  CS  HB  192   was  reported  out   of  Committee  with   "no                 
  recommendations" and with  a zero fiscal note  by the Alaska                 
  Housing Finance Corporation (AHFC).                                          

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