CSHB 192(FIN) am AHFC HOUSING LOANS  SENATOR TORGERSON brought CSHB 192(FIN) am before the committee as the next order of business. BRYCE EDGMON, staff to Representative Richard Foster who is prime sponsor of HB 192, said the legislation essentially brings statutes for rural areas into compliance with urban areas. He noted the bill is supported by the regional housing authorities, as well as the Alaska Housing Finance Corporation. The primary change made by the legislation will enable regional housing authorities to process loans and refinance applications within their jurisdictions instead of having to go through a loan examiner in Anchorage. The legislation also reduces the age of qualification for senior citizens from 60 to 55 for senior housing programs. Language was also added to ensure that regional housing authorities are restricted to making loans only in their areas of jurisdictions and that any AHFC loan programs must adhere to non- discrimination statutes. Mr. Edgmon also presented a section-by-section analysis of the bill and responded to committee members' questions. Number 270 SENATOR TORGERSON asked if a provision in the legislation puts the AHFC in the water and sewer business. KAY MURPHY, Mortgage Operations Director, Alaska Housing Finance Corporation, testifying via teleconference from Anchorage, answered that it does not. She explained the funds that Alaska Housing would be using to supplement Federal HUD funds would be used to pay for off-site water and sewer improvements, but AHFC would not take ownership of those utilities. Number 285 SENATOR KELLY commented that if a regional housing is doing one of these water and sewer projects, they can hook up to these individuals' homes and call that part of the project, but in developed areas, generally most homes have to assume that cost themselves. He observed AHFC is doing something for free that in most urban developments the homeowner pays for. Number 315 BRUCE KOVARIK, Executive Director, Bering Straits Regional Housing Authority and also representing the Association of Alaska Housing Authorities, testifying via teleconference from Nome, voiced their support for HB 192. The legislation will allow regional housing authorities to originate and service AHFC loans in rural areas; it adds the outside water and sewer capability; it will allow more activity for the supplemental housing grants; and it will provide clarification and improvement of AHFC loan programs which affect rural communities. Addressing Senator Kelly's concern with water and sewer projects, Mr. Kovarik said more and more regional housing authorities find themselves acting as private developers and being treated exactly as private developers by both the Public Health Service and the state of Alaska. The bill doesn't add any more money to the program, but it gives them the flexibility for making those connections and making those off-site ties that are not currently available with supplemental housing grants. Additionally, the authorities are limited by HUD with a total development cost for their projects. Number 342 SENATOR KELLY asked what AHFC's delinquency rate has been in the rural unincorporated areas. KAY MURPHY responded their regular rural loan program has averaged under 4 percent. The rural program has had delinquencies in the past, but the portfolio looks good now as do the urban loans. She said AHFC doesn't see them being any higher risk than they do with the urban loans if they are properly underwritten. SENATOR KELLY said he just wanted to get that point on the record because we continue to hear how the unorganized areas of the state can't afford to pay property taxes, to fund education, etc., and yet AHFC says they are having no problem paying their mortgages. Number 377 SENATOR TORGERSON noted Section 17 changes the age of seniors from 60 years of age to 55 years of age to qualify for these programs, and he asked why the age limit was being lowered. KAY MURPHY clarified that AHFC was not the party to institute that change, but they do not anticipate that the decrease in the age limit will add a lot of activity to their loan program or for the requests for grant funds. She also clarified to Senator Torgerson that the declaration of age applies to AHFC's senior housing loan program and its grant programs and doesn't distinguish between urban or rural. Number 418 JOHN BITNEY, representing Alaska Housing Finance Corporation, stated their support for HB 192. Number 422 SENATOR TORGERSON stated it was his intent to hold HB 192 in committee until its next meeting so that the committee could take a closer look at sections of the bill.