The Senate Community & Regional Affairs Committee was called to order by Chairman Randy Phillips at 9:05 a.m. He introduced HB 467 7 (AHFC HOUSING LOANS) as the first order of business. DAVID HARDING, staff to Representative Eileen MacLean, explained the legislation makes changes to the Rural Loan Program of the Alaska Housing Finance Corporation. The bill has three goals that will contribute to greater investment in rural housing. The first goal is to allow all the regional housing authorities to sell and service AHFC loans. Most of these regional authorities are already handling AHFC loans, but six of them are prohibited simply because they are located in communities where there is an AHFC office. The regional authorities already work with the smaller communities, primarily on HUD projects; they know the rural areas; and they have the lending expertise. AHFC would like to see these regional authorities have the same lending powers as their counterparts in other parts of the state. The second goal of the bill is to encourage more private investment in multi-unit housing by doubling the size of complexes that are eligible for loans under AHFC and by allowing owners to live in one of these units to allow closer monitoring and better maintenance of the complex. The third goal is to increase the limit of AHFC's participation in water and sewer hookups to eligible housing projects. This funding is dependent on federal support, and any increase in AHFC's participation will not reduce the federal contribution. Mr. Harding said the changes made in HB 467 will lead to more housing construction in remote areas, greater availability in rental units and better servicing of AHFC loans. Number 030 WILBER JOE, Executive Director of the Copper River Basin Regional Housing Authority and testifying from Glennallen, stated support for HB 467. He said the law needs to be amended, particularly for the outlining areas in Nome, Bethel, Dillingham and Kotzebue where water and sewer seems to be a problem. It will make more services allowable for areas in Alaska with higher sewer and water costs by increasing AHFC's ability to match HUD housing projects contributions from 20 percent to 30 percent, which will help rural Alaska meet the higher costs of water and sewer. Further, housing authorities usually have a better understanding of local conditions and problems in remote areas. Number 070 SENATOR ADAMS asked if the Copper River Housing Authority has a problem with titles to land that hampers obtaining loans. WILBER JOE answered that the land that is put up for the housing in their area is sponsored by the regional corporation, so the land is put up by the people as an investment in the housing project. Number 090 BRUCE KOVARIK, Executive Director of the Bering Straits Regional Housing Authority and testifying from Nome, voiced their support for HB 467. He said the attractiveness of the bill is that it allows them, as a tool, to participate in the rural loan program throughout the region. Although the Bering Straits Regional Housing Authority is not currently doing that, it is an option for the future in terms of assisting families in achieving the goal of home ownership. Also, the matching funds with the supplemental housing program will help them to accommodate the additional costs of sewer and water as new housing projects are being built. Number 140 JACKIE JOHNSON, President of the Alaska Association of Housing Authorities, and Executive Director of Tlingit Haida Regional Housing Authority, stated support for HB 467. Ms. Johnson said one of the things that concerned the association at the time of the merger of Alaska Housing Finance Corporation and the Rural Loan Program was the equitable balance between the loans that AHFC was servicing with the primary critical need of the rural communities where they felt the greatest need of housing was. They believe this is a good step in the direction that AHFC has taken in trying to find better service to rural communities in addressing their housing needs. She noted that currently, HUD is still the primary funder of housing, and she stressed the need for local residents to be able to access these types of programs. Ms. Johnson also spoke to the importance of the increase in the percentage of supplemental funds for the much needed water and sewer in the rural areas. Number 220 There being no further testimony on HB 467, SENATOR RANDY PHILLIPS asked for the pleasure of the committee. SENATOR ADAMS moved that HB 467 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered.