CS FOR SENATE BILL NO. 25(FIN) "An Act relating to the acquisition of teachers' housing by regional educational attendance areas and to teachers' housing loan programs in the Alaska Housing Finance Corporation; and providing for an effective date." SENATOR GARY WILKEN, SPONSOR provided information about the bill. He explained that the bill allow teachers to take out zero down payment loans under the Alaska Housing Finance (AFHC). He noted that this was in conjunction with programs such as the first time homebuyer program, with a similar interest rate through AHFC. He noted that a Senate bill passed, which allows REAA [Rural Educational Attendance Areas] school districts to construct, own and manage rental housing for teachers. He stated that public elementary or secondary school teachers would be eligible, including therapists, nurses and school librarians, who must possess a certificate from the Department of Education. Restrictions include using the program only once, and that the home must be owner occupied and be a single-family home, and agree with all AHFC credit criteria. The sponsor added a five- year sunset in order to evaluate the program's success. Senator Wilkins stated that the bill is about recruitment and retention, a tool to attract qualified teachers to the state. He pointed out that the Alaska Association of School Boards had written in support of the bill. He noted that Representative Bunde had written an editorial piece in October asking for relief for Alaska teachers' housing. The Anchorage school district requested legislation to provide housing relief, as well as The Alaska Statewide Educators' Supply and Demand Report highlighted the need for teacher housing. On a national basis, the "no dream denied" publication speaks of how districts across the nation are attracting good teachers by providing affordable housing. In regard to other state programs, Senator Wilkins highlighted these examples: Oregon is offering signing bonuses to retain teachers; California is offering large bonuses for advanced teachers; New Mexico is offering a signing bonus. He explained that the bill allows a teacher to come to Alaska and buy into the "American dream" of owning a home. He pointed out that registered nurses were added in the House and that he supports that amendment. Representative Hawker expressed his support for the bill. He asked why administrators were included in the bill. Senator Wilken speculated that school districts might need to hire administrators from other states and that this would be a way to attract quality administrators. Representative Hawker commented that administrators seemed to be plentiful. Senator Wilken noted that they had a difficult time looking for a Commissioner for the Department of Education and Early Development. Co-Chair Harris observed that the legislation was intended to make a home available to teachers with no down payment. He asked what happened if they ceased to teach, whether they kept the home. Senator Wilken speculated that they would keep their mortgage. Co-Chair Harris asked if the homes would be owned by an REAA. Senator Wilken referred to a previous bill that gave government entities and municipalities a way to build multi-family housing in rural Alaska. He explained that the current bill carried this to the REAA's as long as no state foundation monies are used and teachers qualify for an Alaska Housing Finance Corporation loan. BRYAN BUTCHER, LEGISLATIVE LIAISON, ALASKA HOUSING FINANCE CORPORATION confirmed that the main advantage to the initial purchase was the absence of a down payment. He explained that should the house be resold, it would then become a regular mortgage. In response to a question by Co-Chair Harris, Mr. Butcher confirmed that the mortgage would function as a regular loan through AHFC. Representative Croft asked how the fiscal note could be zero if there was a no down payment loan and potential defaults might then represent a cost to the State. Mr. Butcher conceded that there would be a minimal increased risk associated with no down payment. He also pointed out that the stability of teachers and mortgage insurance would mitigate the risk. In response to a question by Representative Croft, Mr. Butcher noted that if there were an unforeseen problem the program would be re-examined in five years at its sunset. MARY FRANCIS, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF SCHOOL ADMINISTRATORS testified in support of the bill. She explained that the Council represents all school administrators in the state. She pointed out that Alaska was facing a shortage in school administrators, in addition to teachers. She stated that the Council viewed the bill as a positive step toward providing incentives for professional educators to live and work in Alaska. She noted that other states had also provided benefits to attract educators, including exemption from state income taxes and singing bonuses. She maintained that Alaska must compete with these incentives at a time when fewer people were choosing the teaching profession. Representative Stoltze asked what the average salary of school superintendents was in Alaska. Ms. Francis responded that the administrators make more than $50 thousand per year, and offered to provide more specific information in the future. She indicated that it was difficult to hire school principles in the state. REPRESENTATIVE PEGGY WILSON spoke to the provision for nurses. She indicated that the nursing profession currently had an 11.5 percent vacancy rate. She stated that the health care industry was one of the state's fastest growing industries, projecting a need for 4,100 nurses in the next seven years. She stated that the bill would give nurses another incentive to move to Alaska, and thereby prevent a potential health care crisis in the state. She expressed her support of the bill. Representative Stoltze asked for a definition of nurses. He asked if home care providers would be eligible for this benefit. Representative Wilson explained that to qualify a nurse must be registered. In response to a question by Representative Stoltze, Representative Wilson speculated that the type of nurse or their job did not affect whether they qualified for the benefit. The state needs nurses of all types. Representative Foster MOVED to report HCS CSSB 25 (HES) out of Committee with the accompanying fiscal note. There being NO OBJECTION it was so ordered. HCS CSSB 25 (HES) was REPORTED out of Committee with a "do pass" recommendation and one zero fiscal note from the Department of Revenue.