SENATE BILL NO. 217 "An Act relating to the issuance of state-guaranteed revenue bonds by the Alaska Housing Finance Corporation to finance mortgages for qualifying veterans; and providing for an effective date." 10:14:08 AM BRYAN BUTCHER, DIRECTOR, GOVERNMENT AFFAIRS AND PUBLIC RELATIONS, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, stated that the house version of the bill (HB 291) was heard before the committee earlier this session. He explained that SB 217 would request the voters approve $600,000,000 in state guaranteed bonds in the 2010 general election, to be issued by the Alaska Housing Finance Corporation for the purchase of mortgage loans made to qualifying veterans. He added that federal law requires that general obligation bonds must be issued by the state for this loan program. The veteran's loan program is the highest performing loan program in the state. Alaska is one of five states that qualify for the program. Mr. Butcher furthered that the Senate added two provisions to SB 217 that were not included in HB 291. The Senate authorized the purchase of the building that the AHFC currently inhabits at 4300 Boniface parkway in Anchorage. The corporation would realize long-term savings to purchase instead of leasing the building. In addition, the Senate authorized the corporation to purchase or construct a Public Housing Intake Center. The current center located on International Boulevard in Anchorage is an aging, ill- equipped building with insufficient parking. The building is not located on a bus route which makes it a difficult location for public housing clients. The cost to bring the building up to code far exceeds the value of the building. Mr. Butcher reported that AHFC currently has $3.5 million in federal and corporate funds to pay for the building; no additional funding is required from the state. The corporation would relocate the center to the centrally located neighborhood of Mountain View. DAN FAUSKE, CEO/EXECUTIVE DIRECTOR, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE), interjected that AHFC had been fully authorized to proceed with the $3.5 million funding for the project for several years. He believed that it was the right project to expend the funds. Co-Chair Hawker reported that the same project was proposed last year. He asked for assurance that there was no increase in costs that occurred over a year. Mr. Fauske replied that no increase has occurred. He added that the project represents an economic gain for the corporation. 10:17:16 AM Representative Doogan inquired about the fiscal note, FN 3 (REV), analysis that estimates the 4300 Boniface Parkway purchase in the amount of $14.5 million. Mr. Fauske elaborated that AHFC presently owns land at 34th Ave. and Denali St.; the previous home to the AHFC. The Tatitlek Corporation owns the building at 4300 Boniface Parkway and wants to acquire the land at 34th Ave. and Denali St. Therefore, $5 million will represent a land exchange with the Tatitlek Corporation and the remaining $9.5 million will be from the sale of AHFC 25 year bonds to complete the purchase and rehabilitate the building. 10:18:45 AM Representative Joule referred to the sponsor statement (copy on file) that explained that a veteran must apply for the loan within 25 years of discharge from active duty to qualify for the program. He wondered what impact that had on the exclusion of veterans from the program. Mr. Butcher explained that the program was established in the early 1980's by congress. The initial requirements were that veterans had to have served prior to 1977 and discharged from service for no longer than 30 years. As the years passed the requirements reduced the number of veterans eligible for the program and did not include Gulf War veterans. AHFC lobbied to change the requirements over a 15 year period. The effort met with some resistance in Congress but resulted in the removal of the service prior to 1977 requirement and replaced that with the 25 year provision. Congress also limited the corporation or state to issue only $10 million in bonds which was subsequently increased to $100 million. He noted that AHFC was still working to get the 25 year qualification removed. Co-Chair Stoltze closed public testimony. 10:23:14 AM Representative Foster cited the definition of active duty from the sponsor statement, that service in a military academy may meet the qualifications to participate in the program. He asked what the military academy requirements were. LAURIE HOLTE, OFFICE OF RESIDENTIAL LENDING, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE,(via teleconference), explained that AHFC requests a copy of the veterans DD214 release document as evidence for qualification for the veterans mortgage program. The document indicates whether the veteran has been honorably discharged. She did not know if a cadet that leaves an academy before they graduate receives a DD214. 10:25:50 AM Vice-Chair Thomas MOVED to report CS SB 217(FIN) out of Committee with individual recommendations and the accompanying fiscal note. CS SB 217(FIN) was REPORTED out of Committee with a "do pass" recommendation and with previously published fiscal note: FN3 (REV) 10:26:41 AM RECESSED 10:29:57 AM RECONVENED