HB 370-GUARANTEED REVENUE BONDS FOR VETERANS CHAIR CHENAULT announced the final order of business, HOUSE BILL NO. 370, "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." He noted that online from the Alaska Housing Finance Corporation (AHFC) were Judith DeSpain and John Bitney. Number 0098 JUDITH DeSPAIN, Deputy Executive Director, Alaska Housing Finance Corporation, Department of Revenue, testified via teleconference in support of HB 370. She explained, "Over the years, the veterans' mortgage program and the ability to issue these tax-exempt bonds [have] given a lot of veterans some lower-cost-interest home loans. There's no difference in the program, and it's been how we've delivered this in the program." She stated total support for the bill. Number 0144 REPRESENTATIVE MURKOWSKI referred to the transmittal letter from Governor Knowles, dated January 29, 2002, which says this is the fifth such bond approval. She surmised, based on Ms. DeSpain's testimony, that this is "the same as we have approved in the prior four separate elections on these veterans bonds." MS. DeSPAIN concurred. Number 0190 REPRESENTATIVE GREEN voiced support for the bill. He asked how the default rate compares generally to that for "the average loan." MS. DeSPAIN said she didn't know that she'd looked at that data specifically regarding veterans, but offered, "I would say it's about the same. ... Our default rate right now is very low. It's about 3 percent." Number 0274 REPRESENTATIVE HAYES noted that the [governor's transmittal letter] says the federal government might be looking at expanding this program beyond [those who served in the military before] January 1, 1977. He asked whether Ms. DeSpain or Mr. Bitney had information about that. MS. DeSPAIN explained: When the federal legislation went through in the early '80s, there were five states that went out, under the IRS [Internal Revenue Service] code, and created mortgage programs that took advantage of tax-exempt bonds. ... About three years later, then, the IRS changed its mind but grandfathered in the five states, which Alaska is one of. And the "qualified veteran" definition is that you had to have been in the service prior to 1977 [and] out of the service no more than 30 years. So basically, without having a sunset date, by the definition it does sunset. So we're working hard right now, in Congress, to get the support for doing away with that definition and allowing all of those people that were part of wars or [Desert Storm] ... and others, so that they could take advantage of these bonds. Number 0525 REPRESENTATIVE HAYES moved to report HB 370 from committee with individual recommendations and the attached fiscal notes. There being no objection, HB 370 was moved out of the House Special Committee on Military and Veterans' Affairs.