03/03/2022 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB309 | |
| HB227 | |
| SB143 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 227 | TELECONFERENCED | |
| += | SB 143 | TELECONFERENCED | |
| *+ | HB 309 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 3, 2022
8:03 a.m.
MEMBERS PRESENT
Representative Sara Hannan, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Josiah Patkotak, Vice Chair
Representative Harriet Drummond
Representative Mike Prax
Representative Ken McCarty
Representative Kevin McCabe
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 309
"An Act exempting candidates for municipal office and municipal
office holders in municipalities with a population of 15,000 or
less from financial or business interest reporting requirements;
relating to campaign finance reporting by certain groups; and
providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 227
"An Act relating to municipal energy and resilience improvement
assessment programs; and providing for an effective date."
- MOVED HB 227 OUT OF COMMITTEE
SENATE BILL NO. 143
"An Act relating to horizontal property regimes and common
interest communities; and relating to mortgages, deeds of trust,
and other property liens."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 309
SHORT TITLE: APOC; CAMPAIGN CONTRIBUTIONS/REPORTING
SPONSOR(s): REPRESENTATIVE(s) KREISS-TOMKINS
02/07/22 (H) READ THE FIRST TIME - REFERRALS
02/07/22 (H) CRA, STA
03/03/22 (H) CRA AT 8:00 AM BARNES 124
BILL: HB 227
SHORT TITLE: MUNI ENERGY IMPROVEMNT ASSESSMENT PROGRAM
SPONSOR(s): REPRESENTATIVE(s) SCHRAGE
01/18/22 (H) PREFILE RELEASED 1/7/22
01/18/22 (H) READ THE FIRST TIME - REFERRALS
01/18/22 (H) ENE, CRA
01/20/22 (H) ENE AT 10:15 AM ADAMS 519
01/20/22 (H) Heard & Held
01/20/22 (H) MINUTE(ENE)
01/27/22 (H) ENE AT 10:15 AM ADAMS 519
01/27/22 (H) Moved HB 227 Out of Committee
01/27/22 (H) MINUTE(ENE)
01/31/22 (H) ENE RPT 4DP 2NR
01/31/22 (H) DP: ZULKOSKY, CLAMAN, FIELDS, SCHRAGE
01/31/22 (H) NR: KAUFMAN, RAUSCHER
03/01/22 (H) CRA AT 8:00 AM BARNES 124
03/01/22 (H) Heard & Held
03/01/22 (H) MINUTE(CRA)
03/03/22 (H) CRA AT 8:00 AM BARNES 124
BILL: SB 143
SHORT TITLE: COMMON INTEREST COMMUNITIES; LIENS
SPONSOR(s): SENATOR(s) REVAK
01/18/22 (S) PREFILE RELEASED 1/7/22
01/18/22 (S) READ THE FIRST TIME - REFERRALS
01/18/22 (S) L&C
02/09/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/09/22 (S) Moved SB 143 Out of Committee
02/09/22 (S) MINUTE(L&C)
02/11/22 (S) L&C RPT 3DP
02/11/22 (S) DP: STEVENS, MICCICHE, GRAY-JACKSON
02/16/22 (S) TRANSMITTED TO (H)
02/16/22 (S) VERSION: SB 143
02/17/22 (H) READ THE FIRST TIME - REFERRALS
02/17/22 (H) L&C
02/17/22 (H) CRA REFERRAL ADDED BEFORE L&C
03/01/22 (H) CRA AT 8:00 AM BARNES 124
03/01/22 (H) Heard & Held
03/01/22 (H) MINUTE(CRA)
03/03/22 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
CLAIRE GROSS, Staff
Representative Jonathan Kreiss-Tomkins
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 309 on behalf of
Representative Kreiss-Tomkins, prime sponsor.
HEATHER HEBDON, Executive Director
Alaska Public Offices Commission (APOC)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
309.
RYAN JOHNSTON, Staff
Representative Calvin Schrage
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information during the hearing on
HB 227 on behalf of Representative Schrage, prime sponsor.
SHAINA KILCOYNE, Energy and Sustainability Manager
Solid Waste Services
Municipality of Anchorage
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
227.
ANNA BRAWLEY, President
Edgewater Villa HOA Board
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 143.
DEBORAH BOROLLINI, representing self
No address provided
POSITION STATEMENT: Testified in opposition to SB 143.
JASON HENNINGS, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 143.
CINDY LENTINE, President
Commodore Park HOA
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 143.
EMMA TORGERSON, Staff
Senator Josh Revak
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered a question during the hearing on
SB 143 on behalf of Senator Revak, prime sponsor.
ACTION NARRATIVE
8:03:43 AM
CO-CHAIR SARA HANNAN called the House Community and Regional
Affairs Standing Committee meeting to order at 8:03 a.m.
Representatives Drummond, McCabe, Patkotak, Schrage, and Hannan
were present at the call to order. Representatives McCarty and
Prax arrived as the meeting was in progress.
HB 309-APOC; CAMPAIGN CONTRIBUTIONS/REPORTING
8:04:15 AM
CO-CHAIR HANNAN announced that the first order of business would
be HOUSE BILL NO. 309, "An Act exempting candidates for
municipal office and municipal office holders in municipalities
with a population of 15,000 or less from financial or business
interest reporting requirements; relating to campaign finance
reporting by certain groups; and providing for an effective
date."
8:05:24 AM
CO-CHAIR SCHRAGE moved to adopt the proposed committee
substitute (CS) for HB 309, Version 32-LS0540\G, Bullard,
2/24/22, as a working document. There being no objection,
Version G was before the committee.
8:05:50 AM
The committee took an at-ease from 8:05 a.m. to 8:06 a.m.
8:06:50 AM
CLAIRE GROSS, Staff, Representative Jonathan Kreiss-Tomkins,
Alaska State Legislature, presented HB 309 on behalf of
Representative Kreiss-Tomkins, prime sponsor. She paraphrased
the sponsor statement [hard copy included in the committee
file], which read as follows [original punctuation provided]:
HB 309 seeks to remedy two issues that will make the
Alaska Public Offices Commission more effective.
HB 309 provides a campaign disclosure reporting
exemption for smaller groups who don't intend to raise
or spend more than $2,500 in a calendar year ($5,000
during an 18 month election cycle). The bill also
exempts these groups from the electronic filing
requirement for these reports. This is beneficial as
smaller groups generally require much more APOC staff
time and interaction because they are usually novices
who are only interested in a single topic on a ballot,
unlike ongoing groups that participate every year. A
similar exemption already exists for judicial
retention candidates and municipal candidates.
HB 309 would also exempt smaller communities
(population of 15,000 or less), from Public Official
Financial Disclosure (POFD) reporting requirements.
There is already a minimum population exemption for
campaign disclosures, but none for a POFD filing. Many
of the smaller communities who struggle with clerk
turnover, connectivity, and regular mail service often
find themselves at a disadvantage when it comes to
timely notifications and filing. This results in
disproportionate civil penalties for these rural areas
where most, if not all, of their municipal officers
are serving in a volunteer capacity.
MS. GROSS pointed to conforming language in the bill and the
effective date of January 1, 2023.
8:09:44 AM
CO-CHAIR HANNAN noted the following individuals were available
for questions: Heather Hebdon, Executive Director, Alaska
Public Offices Commission; and Alpheus Bullard, the bill drafter
from Legislative Legal Services.
8:10:00 AM
REPRESENTATIVE MCCABE asked how many municipalities in Anchorage
have populations under 15,000.
8:10:32 AM
HEATHER HEBDON, Executive Director, Alaska Public Offices
Commission (APOC), answered that although she did not have the
exact figure available at that moment, her estimate would be 25
communities. In response to a follow-up question regarding the
need for HB 309, she explained that the smaller communities that
struggle with "clerk turnover, connectivity issues, and mail
service" are at a distinct disadvantage compared to those in
urban issues that do not struggle with those issues. In these
smaller communities, the vast majority are submitting forms
manually and are serving in a volunteer capacity, and APOC finds
it is continually penalizing them "for many things that are
beyond their control."
8:12:47 AM
REPRESENTATIVE DRUMMOND asked how the bill sponsor determined
the number should be 15,000, and she named some [municipalities]
that would qualify but would not be considered small or "without
robust Internet."
MS. GROSS answered that the number was derived as a result of
talks with Ms. Hebdon, to whom she deferred.
8:14:01 AM
MS. HEBDON proffered that the minimum threshold that exists
under campaign disclosure currently is [municipalities] of 1,000
or more. She said the 15,000 captures [municipalities] that
APOC was not necessarily concerned about, but it exists in
statute in terms of [municipalities of 15,000 and up] that are
required to file electronically.
REPRESENTATIVE DRUMMOND told Co-Chair Hannan that she would like
a list of [municipalities] with populations of 15,000 or less.
8:15:35 AM
REPRESENTATIVE MCCARTY questioned what "community" could
encompass.
MS. GROSS noted that she may have used the term "community" but
what is being discussed are municipalities, which are defined
under statute.
8:17:28 AM
REPRESENTATIVE MCCABE observed he saw only five municipalities
listed that are greater than 15,000, and he said he, too, would
like a list.
CO-CHAIR HANNAN clarified that the committee needs more
information on who is impacted and what the bill is trying to
fix, because there is concern by members not to make the bill
too broad. She then point out that one of the exemptions
created under HB 309 states that the municipalities under 15,000
in population would still be allowed to file electronically;
they would not be required to do so.
8:19:07 AM
REPRESENTATIVE DRUMMOND noted that the Alaska Municipal League
has a directory of all the municipalities in Alaska, which
includes population. She then asked if the provisions under the
bill would apply to first-class cities or only to
municipalities.
CO-CHAIR HANNAN asked whether the legislation addressed regional
educational attendance area (REAA) elections.
8:20:33 AM
MS. HEBDON answered that the REAA elections are not regulated by
APOC. She noted that currently municipalities are able to
exempt themselves from POFD, and a vast majority have done so
going back to approximately 1975. She offered her understanding
that currently there are 30 municipalities and boroughs that
fall under POFD regulations. Of those, 5 are over 15,000, so HB
309 would impact approximately 25 municipalities.
CO-CHAIR HANNAN suggested Ms. Hebdon could provide how many of
those municipalities that are "covered by it" and which ones
"already exempted themselves from the disclosure law."
MS. HEBDON said she would be happy to do that.
8:22:09 AM
CO-CHAIR SCHRAGE asked about the motivation for the $2,500 cap.
He asked if there are a lot of groups that raise less than that
amount involved in elections.
MS. HEBDON answered that the $2,500 was identified through
currently existing statute related to municipal and judicial
candidates that agree to raise less than $5,000 during a
campaign cycle of 18 months or two years. She said, "So, this
was an effort to try to make ... it equal for these smaller
groups." She said APOC finds there are smaller groups that are
interested in one election, one candidate or issue, and do not
have major expenditures, and APOC spends considerable time
assisting those groups because they are novices requiring a lot
of attention.
8:23:40 AM
REPRESENTATIVE PATKOTAK commented that his district, the North
Slope Borough, has a population under 15,000, and he filed a
POFD when he ran for assembly and had no issue doing so. He
said the borough does not experience turnover of clerks. He
asked where the language was in HB 309 which allows the option
of continuing to file POFDs. He then pointed to the sponsor
statement and noted that there is already "a minimum population
exemption for campaign disclosures." He asked, "Are we
mirroring that number with that 15,000 mark or is that a
different number?"
MS. GROSS deferred to Ms. Hebdon.
8:25:15 AM
MS. HEBDON asked Representative Patkotak to confirm his first
question as being whether municipalities exempted out of POFD
under APOC could elect to "manage it themselves" and "require
that their officials file POFDs or something similar."
REPRESENTATIVE PATKOTAK responded yes.
MS. HEBDON confirmed that is correct. She said she knew a few
municipalities already doing so. Regarding Representative
Patkotak's second question, she said the campaign disclosure
threshold is a population of less than 1,000.
REPRESENTATIVE PATKOTAK, regarding the idea of municipal office
holders following POFD filing, asked whether, under HB 309, and
considering the responsibility of APOC, that would "still be
able to be something that could be accomplished on line." He
added that he wanted to know whether that is something "that
still can be accomplished with the way the bill is written, as
far as online filing, if we do self-elect, and we do fall under
that population threshold."
MS. HEBDON said she does not know the answer and would have to
think about the question further.
REPRESENTATIVE PATKOTAK emphasized the importance of proper
disclosure.
8:29:06 AM
CO-CHAIR HANNAN announced that HB 309 was held over.
8:29:16 AM
The committee took an at-ease from 8:29 a.m. to 8:32 a.m.
HB 227-MUNI ENERGY IMPROVEMNT ASSESSMENT PROGRAM
8:32:03 AM
CO-CHAIR HANNAN announced that the next order of business would
be HOUSE BILL NO. 227, "An Act relating to municipal energy and
resilience improvement assessment programs; and providing for an
effective date.
8:32:31 AM
CO-CHAIR SCHRAGE, as prime sponsor of HB 227, reminded committee
members that [the resilience improvement assessment programs]
are a new financing mechanism that has spread throughout the
U.S. He noted that HB 227 would expand the property assessed
financing mechanism set in place under House Bill 80 [passed
during the Thirtieth Alaska State Legislature] and loosen some
of the restrictions, which should benefit quite a few
communities with taxing authority.
CO-CHAIR HANNAN noted that six amendments had been submitted for
consideration.
8:33:46 AM
REPRESENTATIVE MCCARTY moved to adopt Amendment 1 to HB 227,
labeled 32-LS1028\I.3, Dunmire, 3/2/22, which read as follows:
Page 1, line 1, following "programs":
Insert "for commercial buildings"
8:33:48 AM
CO-CHAIR HANNAN objected for the purpose of discussion.
8:34:20 AM
The committee took an at-ease from 8:34 a.m. to 8:36 a.m.
8:36:11 AM
REPRESENTATIVE MCCARTY spoke to Amendment 1, explaining that it
would limit the provisions under HB 227 to commercial buildings.
8:36:59 AM
CO-CHAIR SCHRAGE said while he appreciated the intent behind
Amendment 1, there are provisions of HB 227 that "apply to other
projects than just commercial buildings." He said changing the
title of the bill would make it inconsistent with the content of
the bill and, thus, constitutionally invalid. He said the
proper way to address the issue would be to "amend the
corresponding sections of the bill that would need those
changes."
8:38:06 AM
REPRESENTATIVE MCCABE agreed with the bill sponsor that the
corresponding language would need to be changed, and he
concurred with Representative McCarty regarding the need to
limit the bill to commercial buildings. He questioned how wide
open the bill would be.
CO-CHAIR SCHRAGE deferred to his staff.
8:39:14 AM
RYAN JOHNSTON, Staff, Representative Calvin Schrage, Alaska
State Legislature, on behalf of Representative Schrage, prime
sponsor of HB 227, pointed out where in statute the provision is
limited to industrial and commercial properties only: AS
29.55.100(a)(1), which read as follows:
(a) A municipality may establish an energy
improvement assessment program under AS 29.55.100 -
29.55.165 to finance the installation or modification
of permanent improvements that are
(1) fixed to existing privately owned commercial
or industrial property; and
REPRESENTATIVE MCCABE concluded that Amendment 1 would "more
conform" the proposed legislation to statute.
CHAIR SCHRAGE responded no. He offered his understanding as
follows:
The issue is that the amendment specifically deals
with sections that also apply to other statutes; ...
however, this C-PACE program is limited -- there's a
reason it's called C-PACE: "Commercial Property
Assessed Clean Energy" is what it was called. We're
talking more of the first three letters here, but
again, it's restricted just to those commercial and
industrial properties.
8:40:34 AM
REPRESENTATIVE DRUMMOND remarked on the restrictions in what
could be commercial, such as between an apartment building
versus a condominium.
CO-CHAIR SCHRAGE said he thinks Representative Drummond was
correct that it would be "restricted in that way."
REPRESENTATIVE DRUMMOND asked whether there is a program that
would apply to a condominium project that is similar in
structure to a mixed-use development but wherein the apartments
are separately owned.
CO-CHAIR SCHRAGE offered his understanding that there is not
such a program currently. He said there has been initial
restriction to those structures "that we have the most
confidence in," but other states have expanded beyond that, and
that is something that Alaska could consider in the future.
8:42:33 AM
REPRESENTATIVE PATKOTAK directed attention to language on page
3, in Section 5, subsection (a), [paragraphs] (1) and (2), and
said he thinks "that's where you start to see the scope broaden
beyond commercial and industrial property." He offered his
understanding that by removing [paragraph] (2) and allowing
Legislative Legal Services to make conforming changes, "that's
how the title would change."
8:43:36 AM
CO-CHAIR SCHRAGE pointed to language on page 3, beginning on
line [13], which read: "new construction or existing privately
owned commercial or industrial property [;] and that", and he
explained that [paragraphs] (1) and (2) ensue. He clarified
that [paragraph] (2) expands the types of projects that would
qualify for this financing mechanism, but the projects have to
be for a commercial or industrial property.
REPRESENTATIVE PATKOTAK noted that the last sentence of a
memorandum from Legislative Legal Services [included in the
committee packet] read, "The scope of [AS]29.55.100(a) is not
clearly limited to commercial buildings."
8:44:45 AM
CO-CHAIR HANNAN asked for confirmation that [Amendment 1] is
specifying the actual physical building, not the property that
surrounds it.
REPRESENTATIVE MCCARTY answered that's correct.
8:45:29 AM
MR. JOHNSTON noted that changing the bill title as proposed in
Amendment 1 would "nullify the industrial side of the bill."
Regarding the intent to address structures only, he pointed out
that commercial construction would be on land zoned for
commercial or industrial use. He said, "So, that would also
conflict with the intent of the bill to allow new construction
to be utilizing C-PACE programs."
[AN UNIDENTIFIED SPEAKER] said, "Correct."
8:46:38 AM
REPRESENTATIVE MCCABE said he still "sees this as an issue." He
opined that "it still needs to be focused on buildings." He
said, "If you're going to construct a new building, this would
apply, because it's in here; it says construction of new
buildings." He expressed concern regarding "the green agenda,"
and continued as follows:
I could have a[n] industrial or commercially zoned
property on the corner of 20th and Muldoon, and I
could put in a charging farm with nothing but charging
stations under this bill, get a huge tax financing
break, and make a pile of money on the commuters that
are leaving Anchorage that forgot to charge their cars
on the way out.
REPRESENTATIVE MCCABE said he does not think that is the intent
of HB 227; the intent is to provide resilience following
earthquakes, floods, and high winds, so that commercial
buildings can continue to operate quickly. Resiliency is
tightly defined and is not needed for a piece of property, he
posited.
8:48:02 AM
CO-CHAIR SCHRAGE said Representative McCabe brought forward
valid concerns. He then clarified how the bill "might actually
work in application." He talked about a co-housing unit in his
district. He mentioned solar panels that could be put up in the
parking area, not on the building itself. Then he said [the
proposed legislation] is not offering a financial break but
rather a financial mechanism that allows the obligation to be
placed on the property instead of the individual owner, which
allows for a more secure line of credit with longer terms and
lower interest rates. He specified there is no subsidy from the
government. Finally, he said whether or not [committee members]
think [the bill] should be limited to commercial buildings,
Amendment 1 does not limit the bill "in any way whatsoever." He
reiterated that there is a way to make changes to the bill
itself, but "this amendment is not that."
8:50:04 AM
REPRESENTATIVE DRUMMOND said she could see many places where
"storm water management, for example, would be smart to manage
for the building that you own on that property." She gave an
example. She concluded that she does not see "why it should be
limited only to the building."
8:51:11 AM
A roll call vote was taken. Representatives McCarty and McCabe
voted in favor of Amendment 1 to HB 227. Representatives
Drummond, Patkotak, Prax, Schrage, and Hannan voted against it.
Therefore, Amendment failed by a vote of 2-5.
8:52:10 AM
REPRESENTATIVE MCCARTY moved to adopt Amendment 2 to HB 227,
labeled 32-LS1028\I.4, Dunmire, 3/2/22, which read as follows:
Page 6, lines 22 - 25:
Delete all material.
Renumber the following bill sections accordingly.
8:52:12 AM
CO-CHAIR HANNAN and REPRESENTATIVE DRUMMOND objected.
8:53:26 AM
CO-CHAIR SCHRAGE compared this to refinancing, as this would
provide a financing mechanism that is a great benefit to
commercial and industrial property owners. He said, "Instead of
exchanging a mortgage for a mortgage, they would be exchanging a
mortgage for a property." He said this could "free up capital"
that then could be invested in the community.
REPRESENTATIVE MCCABE asked whether those people who have had to
remodel their businesses but did not do any "resiliency"
projects would get nothing from this.
CO-CHAIR SCHRAGE gave the example of a property owner who has
made improvements for a drainage issue and, under the proposed
legislation, rather than take on the debt alone, could "attach
that lien to the property." That could increase the value of
the property.
REPRESENTATIVE MCCABE asked about the limit of two years for
retroactivity.
CO-CHAIR SCHRAGE responded that he would support an amendment
extending that period.
8:57:23 AM
REPRESENTATIVE MCCARTY spoke about someone getting a loan to
purchase property and then flipping the debt on the new owner.
He said beyond helping with energy and resiliency in
construction, there would also be the ability for owners to use
the funding for other purposes, which he said raises a red flag.
CO-CHAIR SCHRAGE described a hypothetical situation in which he
bought property for $50,000 and then sold it for $100,000. If
he used the property lien assessment, then when he sold the
property, he would sell it for $50,000, because the buyer would
recognize that the property was encumbered by $50,000;
therefore, it would not be worth $100,000. He clarified, "All
of this is going to be disclosed in the purchase process."
Addressing Representative McCarty's red flag concern, he said
that if he were to get a conventional loan for $100,000 and an 8
percent interest rate, the value of that loan is going to be
higher than if he were to get that same $100,000 loan at a 6
percent interest rate. He described the banks having a higher
level of faith that the loan will get repaid on the assessed
property; therefore, they can offer the lower interest rate,
which frees up capital on the project that could be further
invested in the property or community or other developments. He
said these proposed transactions would be vetted by the
financial institutions.
REPRESENTATIVE MCCARTY stated concern about a loan being used
for other purposes than originally intended. He mentioned the
risk of being a lender. He acknowledged that with the program
proposed under HB 227, the risk to the lender is reduced
"because property is seized." With the retroactive proposal of
Amendment 2, there could be properties that have already gone
through the loan process, "and now we're going to come in and
allow them to ... seize money," and he said he is concerned if
that "goes back to 1964."
9:02:19 AM
CO-CHAIR SCHRAGE explained that if he took out a loan for
improvement of property, only those improvements that fit the
definition of HB 227 could be refinanced through the
commercially assessed property mechanism. He said with
refinancing, it is likely the money has already been invested in
the projects, and when refinancing as a property lien, the
lender and municipality would make sure that the money is
associated with clean energy projects. He pointed out that both
commercial property owners and lenders have sent letters of
support for HB 227. He concluded, "It's a good way for us to
... make more secure loans, ... on a longer term, at a lower
cost of capital for the property owner, and allows them to
further invest in their community."
9:03:35 AM
REPRESENTATIVE PATKOTAK asked about taxing and the possibility
of there being a higher rate on the assessed value.
CO-CHAIR SCHRAGE responded that someone who made the investment
to his/her property would likely have a higher assessed value
and thus be paying higher property taxes. He offered his
understanding that anyone who made an investment would be made
aware of the tax implications.
9:05:43 AM
REPRESENTATIVE DRUMMOND maintained her objection to the motion
to adopt Amendment 2.
9:05:49 AM
A roll call vote was taken. Representatives Patkotak, McCarty,
and McCabe voted in favor of Amendment 2. Representatives
Drummond, Schrage, and Hannan voted against it. Therefore,
Amendment 2 failed by a vote of 3-3.
9:07:02 AM
REPRESENTATIVE MCCARTY moved to adopt Amendment 3 to HB 227,
labeled 32-LS1028\I.5, Dunmire, 3/2/22, which read as follows:
Page 7, line 8, following "of":
Insert "commercial building"
9:07:06 AM
CO-CHAIR HANNAN objected and noted there was a legal memorandum
("memo") to distribute [from Andrew Dunmire, Legal Counsel,
Legislative Legal Services, dated 3/2/22, subsequently included
in the committee packet].
9:07:15 AM
The committee took a brief at-ease at 9:07 a.m. to distribute
the memo.
9:07:58 AM
REPRESENTATIVE MCCARTY spoke to Amendment 3, which he said would
specify the type of construction being done as pertaining to
commercial buildings.
9:08:29 AM
CO-CHAIR SCHRAGE again noted that the underlying statute, as
well as HB 227, are already restricted to commercial and
industrial properties. He referred to the legal memo, which
notes that [Amendment 3] would be inconsistent in that it does
not reference industrial properties. He said the limitation to
only buildings could be problematic. He said this section
addresses reports required, not types of investments that
qualify; therefore, it seems inconsistent to allow a wider scope
for the types of investments allowed while restricting the
reporting to just investments on commercial buildings and not
commercial or industrial properties.
9:09:59 AM
A roll call vote was taken. Representatives McCarty and McCabe
voted in favor of Amendment 3. Representatives Drummond,
Patkotak, Schrage, and Hannan voted against it. Therefore,
Amendment 3 failed by a vote of 2-3.
9:10:55 AM
REPRESENTATIVE MCCARTY moved to adopt Amendment 4 to HB 227,
labeled 32-LS1028\I.6, Dunmire, 3/2/22, which read as follows:
Page 9, lines 2 - 3:
Delete "[FROM AN INDEPENDENT, THIRD-PARTY
QUALIFIED ENERGY AUDITOR THE FOLLOWING:]"
Insert "from an independent, third-party qualified
energy auditor the following:"
9:10:59 AM
REPRESENTATIVE DRUMMOND objected.
9:11:21 AM
REPRESENTATIVE MCCARTY spoke to Amendment 4. He said he did not
know why the third-party auditor was being removed, and
Amendment 4 would reinstate that language in HB 227.
9:12:05 AM
CO-CHAIR SCHRAGE responded that the reason the third-party
auditor is being removed is because there has been the addition
of projects to the scope of the financing mechanism that do not
have anything to do with energy, for example, seismic or storm
water improvements. Further, he said he does not know anyone
that would loan money without vetting the proposed project.
9:13:31 AM
CO-CHAIR HANNAN stated her understanding that HB 227 expands
existing [statute], thus an auditor can direct for construction
of "XYZ," and improvements on which financing is based can be
met. However, with new construction, "you couldn't audit
something that does not exist, but you could design it to be
more energy efficient." She added, "So, requiring audit of it
sort of is contrary to allowing new construction."
CO-CHAIR SCHRAGE confirmed Co-Chair Hannan is correct. The
property assessed financing mechanisms were introduced only for
projects that would result in a positive cash flow via energy
savings. However, some projects may not result in savings of
money but may increase the value of the property, he said.
9:15:36 AM
REPRESENTATIVE MCCABE moved to adopt Conceptual Amendment 1 to
Amendment 4, to insert "appraiser, or licensed home inspector,"
following "auditor".
9:16:17 AM
REPRESENTATIVE DRUMMOND objected to question the use of "home"
when this is commercial property. She then pointed out that
there are already companies dedicated to doing "construction
estimating."
REPRESENTATIVE MCCABE explained that his intent was "to expand
the definition from energy auditors," and he expressed
willingness to change the language to "architect" or
"construction estimator". He explained his concern that
"there's too much opportunity for nefarious activity ... between
banks and good buddy commercial property owners," and he opined
there needs to be a third party to verify the work is being
done.
9:18:41 AM
CO-CHAIR HANNAN suggested Representative McCabe withdraw
Conceptual Amendment 1 to Amendment 4.
9:18:53 AM
CO-CHAIR SCHRAGE suggested that if an amendment were necessary,
it could be to require an independent third party, but he said
he is struggling to come up with the right language and is
concerned about legislating "on the fly."
9:19:57 AM
CO-CHAIR HANNAN noted those on line, who could weigh in on the
issue.
9:20:54 AM
SHAINA KILCOYNE, Energy and Sustainability Manager, Solid Waste
Services, Municipality of Anchorage, said it is difficult to
pinpoint which kind of auditor to require, and typically other
states' statutes are "leaving that up to the handbook where we
have all of the details of the program within it."
9:22:18 AM
REPRESENTATIVE MCCABE withdrew the motion to adopt Conceptual
Amendment 1 to Amendment 4.
9:22:36 AM
CO-CHAIR HANNAN noted that the lenders could speak to the issue
but were not currently available on line.
9:22:55 AM
REPRESENTATIVE MCCABE said he would discuss the issue with a
former testifier for the purpose of offering an amendment on the
House floor.
9:23:05 AM
REPRESENTATIVE MCCARTY concluded that more information was
needed to make an informed decision; therefore, he withdrew the
motion to adopt Amendment 4.
9:24:43 AM
REPRESENTATIVE MCCABE moved to adopt Amendment 5 to HB 227,
labeled 32-LS1028\I.2, Dunmire, 3/2/22, which read as follows:
Page 6, line 16:
Delete "market"
Page 6, lines 17 - 18:
Delete "or completion of the proposed energy or
resilience improvement project"
9:24:49 AM
CO-CHAIR HANNAN objected for the purpose of discussion.
REPRESENTATIVE MCCABE spoke to Amendment 5. He expressed
concern that without Amendment 5, the legislation would allow
people "to overreach."
9:26:28 AM
CO-CHAIR SCHRAGE said he understood Representative McCabe's
concern. He highlighted that the changes proposed under HB 227
are modeled after programs in other states, and lenders are
supporting these changes because they do not result in high
risk. He talked again about opening markets and infusing
communities with investments made.
9:28:16 AM
REPRESENTATIVE DRUMMOND noted that the bill would remove the
word "assess", which she said makes sense. She pointed out that
it is more difficult to assess a commercial property, as
compared to a home; therefore, she does not think the word
"market" needs to be deleted from the bill. She added that she
does not agree with the second part of Amendment 5.
9:29:44 AM
REPRESENTATIVE PATKOTAK said he is inclined to support Amendment
5 based on the intent of the maker of the amendment; however, he
questioned what the benchmark of value would be if "market" was
removed.
REPRESENTATIVE MCCABE explained the intent was to "remove the
change that inserts 'market' instead of 'assessed'," thus
leaving "assessed value" in the bill language.
REPRESENTATIVE PATKOTAK suggested adding "assessed" back through
a conceptual amendment to Amendment 5.
9:31:45 AM
The committee took an at-ease from 9:31 a.m. to 9:32 a.m.
9:32:51 AM
REPRESENTATIVE MCCABE moved Conceptual Amendment 1 to Amendment
5 to insert "assessed" where "market" had been removed.
REPRESENTATIVE DRUMMOND objected, and she referred to her
previous comment about assessed valuations of commercial
property.
9:34:15 AM
CO-CHAIR SCHRAGE said either "assessed" or "market" needed to be
left in the bill. He said the Municipality of Anchorage would
prefer "market value" as a better metric to use in terms of
"what the market is going to pay for the property." He said it
would be "a tremendous limitation" on developers or those who
want to invest in communities by "putting in a development" if
they are allowed to utilize only existing assets for the lien,
and "the value that would be created by the loan has no
consideration by the lender." He added, "If we are to remove
the ability to take in that future value that would be created,
'market' would be the preferable phrase."
REPRESENTATIVE MCCABE stated his problem with "market value" is
that it is a nebulous term because "it's not defined who sets
the market value." He suggested it could be set by a licensed
commercial property appraiser. He concluded, "And with that, I
think I'll withdraw this and do it on the floor."
9:37:13 AM
REPRESENTATIVE PRAX proffered that the municipally assessed
value is supposed to be the market value, and "that is the
official determination on other property tax payments or
assessments, and this is kind of attached to the tax." He
added, "So, it would seem like we should stick with what is
legally in there."
9:38:06 AM
CO-CHAIR SCHRAGE asked for clarification as to whether
Representative McCabe had withdrawn just Conceptual Amendment 1
to Amendment 5 or the underlying Amendment [5].
REPRESENTATIVE MCCABE responded, "I withdraw both the conceptual
amendment and Amendment 5." In response to Co-Chair Hannan, he
noted that he would not be offering Amendment 6, as previously
planned, at this time.
9:39:13 AM
REPRESENTATIVE DRUMMOND moved to report HB 227, as amended, out
of committee with individual recommendations and the
accompanying fiscal notes.
CO-CHAIR HANNAN noted there had been no amendments adopted;
therefore, she asked Representative Drummond to restate the
motion.
9:39:36 AM
REPRESENTATIVE DRUMMOND moved to report HB 227 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 227 was reported out of the
House Community and Regional Affairs Standing Committee.
9:40:04 AM
The committee took an at-ease from 9:40 a.m. to 9:45 a.m.
SB 143-COMMON INTEREST COMMUNITIES; LIENS
9:45:00 AM
CO-CHAIR HANNAN announced that the final order of business would
be SENATE BILL NO. 143, "An Act relating to horizontal property
regimes and common interest communities; and relating to
mortgages, deeds of trust, and other property liens."
9:45:27 AM
CO-CHAIR HANNAN opened public testimony on SB 143.
9:45:48 AM
ANNA BRAWLEY, President, Edgewater Villa HOA Board, referred to
a letter of support from the Edgewater Villa Home Owner's
Association Board, "in a prior committee." She emphasized the
financial impact of one financial delinquency from one unit on
all the other units. She said SB 143 addresses this issue. She
described a situation in which the HOA, incorporated prior to
1986, did not have first priority on a lien and was unable to
collect an unpaid assessment, and this resulted in costly legal
fees. She said the HOA has considered changing its bylaws to
address this problem, but there would be cost to mitigate the
risk. She indicated that SB 143 also addresses this issue. She
strongly urged the committee to pass SB 143. In response to
Representative Drummond, she confirmed she is the chair of the
Turnagain Community Council.
9:50:01 AM
DEBORAH BOROLLINI, representing self, testified in opposition to
SB 143. She said the committee should have heard testimony from
the Alaska Housing Finance Corporation (AHFC), which she said is
the property owner of several pre-1986 condominiums. She spoke
about law suits and the effects of them on homeowners. She
mentioned the notice requirement and pointed out the length of
time it takes for mail to be delivered, including when mailed
from out of state. She said she is a former paralegal. She
warned that condominium association boards can "go rouge" and
"have taken unlawful actions against homeowners in the past."
She talked about the trauma faced by homeowners, and she said it
is not uncommon for HOA board members to not understand
financial records and federal and state laws. She related that
the majority of those who have reached out to her for assistance
have been Alaska Native minorities and first-time home buyers
who do not have the money to hire lawyers. Sharing her own
story, Ms. Borollini expressed that if she had not reached out
to AHFC directly, she would have lost her own home. She
indicated a desire to see legislation that will protect
homeowners, most especially those who own condominium
properties.
9:55:06 AM
JASON HENNINGS, representing self, stated that he has worked
with HOAs on and off for ten years and supports SB 143. He said
of two condominiums he has managed, the one built in 1986 had a
delinquency rate of 5 percent, while the one built in 1985 had a
delinquency rate of 24 percent. He talked about going directly
to the bank when there is a delinquency and working out a plan
to avoid foreclosures. He emphasized getting everything "on the
same playing field" by giving those HOAs formed prior to 1986
the same rights as those formed in 1986 and later. He said he
thinks "this process" will help HOAs in Alaska and "make
everything fair."
9:56:43 AM
CINDY LENTINE, President, Commodore Park HOA, testified in
support of SB 143. She described the condominiums and the
variety of residents, indicating some are on fixed incomes. She
said there have been multiple occasions in which some owners
have not paid, and the other owners "must meet the cost when
this happens." Meanwhile, the bank gets the benefit of the HOA
interest without contributing to the cost. She said SB 143 will
solve this problem by treating pre-1986 properties the same as
post-1986 properties in regard to the liens. She said Commodore
Park has one or two amended governing documents but has not been
able to get response from the bank to get lienholder approval in
writing a requirement. The proposed legislation solves this
problem.
9:58:38 AM
CO-CHAIR HANNAN asked Emma Torgerson whether the bill sponsor
had heard from AHFC.
9:59:06 AM
EMMA TORGERSON, Staff, Senator Josh Revak, Alaska State
Legislature, on behalf of Senator Revak, prime sponsor of SB
143, stated that the sponsor's office had not heard from AHFC
regarding the proposed legislation.
9:59:29 AM
CO-CHAIR HANNAN, after ascertaining there was no one else who
wished to testify, closed public testimony on SB 143.
CO-CHAIR HANNAN stated her intention to have the committee send
a formal request to AHFC "to weigh in on the bill."
[SB 143 was held over.]
10:00:33 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 10:00 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 227 MOA CPACE Presentation 1.20.22.pdf |
HCRA 3/3/2022 8:00:00 AM HENE 1/20/2022 10:15:00 AM |
HB 227 |
| HB 227 Version I.PDF |
HCRA 3/3/2022 8:00:00 AM HENE 1/20/2022 10:15:00 AM |
HB 227 |
| HB 227 Sponsor Statement 1.20.22.pdf |
HCRA 3/3/2022 8:00:00 AM HENE 1/20/2022 10:15:00 AM |
HB 227 |
| HB 227 DCCED CRA Fiscal Note.pdf |
HCRA 3/3/2022 8:00:00 AM HENE 1/20/2022 10:15:00 AM |
HB 227 |
| HB 227 CPACE Sectional 1.20.22.pdf |
HCRA 3/3/2022 8:00:00 AM HENE 1/20/2022 10:15:00 AM |
HB 227 |
| HB 227 DCCED CRA Fiscal Note 1.27.22.pdf |
HCRA 3/1/2022 8:00:00 AM HCRA 3/3/2022 8:00:00 AM |
HB 227 |
| HB 227 Letters of Support 2.24.22.pdf |
HCRA 3/1/2022 8:00:00 AM HCRA 3/3/2022 8:00:00 AM |
HB 227 |
| HB 227 Sponsor Statement 1.27.22.pdf |
HCRA 3/1/2022 8:00:00 AM HCRA 3/3/2022 8:00:00 AM |
HB 227 |
| HB 309 CS version G.pdf |
HCRA 3/3/2022 8:00:00 AM HCRA 3/8/2022 8:00:00 AM |
HB 309 |
| HB 309 Sectional Analysis ver G.pdf |
HCRA 3/3/2022 8:00:00 AM HCRA 3/8/2022 8:00:00 AM |
HB 309 |
| HB 309 Sponsor Statement ver G.pdf |
HCRA 3/3/2022 8:00:00 AM HCRA 3/8/2022 8:00:00 AM |
HB 309 |
| SB 143 Fiscal Note 0 - Various Depts.pdf |
HCRA 3/3/2022 8:00:00 AM |
SB 143 |
| SB 143 Letter of Support - Matthew Widmer.pdf |
HCRA 3/3/2022 8:00:00 AM |
SB 143 |
| SB 143 Sectional Analysis version I.pdf |
HCRA 3/3/2022 8:00:00 AM HCRA 3/8/2022 8:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Support Document 1 - Sarah Badten.PDF |
HCRA 3/3/2022 8:00:00 AM HL&C 3/14/2022 3:15:00 PM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Support Document 2 - Pre-1986 Home-Condominium Owners Associations.pdf |
HCRA 3/3/2022 8:00:00 AM HL&C 3/14/2022 3:15:00 PM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Support Document 3 - Post-1986 Home-Condominium Owners Associations.pdf |
HCRA 3/3/2022 8:00:00 AM HL&C 3/14/2022 3:15:00 PM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Statement of Zero Fiscal Impact.pdf |
HCRA 3/3/2022 8:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 143 |
| SB 143 Bill Version I.PDF |
HCRA 3/1/2022 8:00:00 AM HCRA 3/3/2022 8:00:00 AM HCRA 3/8/2022 8:00:00 AM HL&C 3/14/2022 3:15:00 PM |
SB 143 |
| SB 143 Fiscal Note 2.5.22.pdf |
HCRA 3/1/2022 8:00:00 AM HCRA 3/3/2022 8:00:00 AM |
SB 143 |
| HB 243 – Letter of opposition_Redacted 3.1.22.pdf |
HCRA 3/3/2022 8:00:00 AM |
HB 243 |
| HB 227 Amendments (1-6) 3.2.22.pdf |
HCRA 3/3/2022 8:00:00 AM |
HB 227 |