CS FOR HOUSE BILL NO. 50(FIN) "An Act authorizing the Alaska Housing Finance Corporation to allow certain commercial uses in a multi-unit residential housing development owned or financed by the corporation and limiting the Alcoholic Beverage Control Board's issuance of certain licenses to premises in the residential housing development." 9:50:49 AM JOSH WALTON, STAFF, REPRESENTATIVE MIA COSTELLO, introduced HB 50. He stated that the bill spoke to the national trend towards multi-use, multi-unit residential housing. He related that the bill would give the Alaska Housing Finance Corporation (AHFC) the ability to participate in financing and owning properties that had an authorized commercial use space connected to the multi-use property. This would give AHFC the ability to participate in the residential real estate market and expanded opportunity for commercial real estate. He relayed that because the mandate for AHFC was residential housing, several sideboards had been incorporated into the legislation in an attempt to keep the focus on the residential market. He explained that particular types of businesses would be excluded per the sideboards: adult entertainment establishments, liquor stores, bars, substance abuse treatment centers, and businesses selling primarily cigarette and tobacco products. He specified that not all establishments with licenses to serve alcohol would be prohibited; restaurants, for example, would be allowed. 9:54:44 AM Co-Chair Meyer wondered if the legislation stemmed from AHFC wanting to incorporate businesses into and already planned housing development. Mr. Walton referred questions about specific projects to AHFC. 9:55:25 AM Vice-Chair Fairclough asked if AHFC was attempting to purchase Inlet Towers, which had a restaurant on the first floor of the building, for affordable housing. Mr. Walton understood that that was correct. 9:56:21 AM STACEY SCHUBERT, DIRECTOR, GOVERNMENTAL RELATIONS AND PUBLIC AFFAIRS, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, commented that the bill was the most important piece of legislation to the corporation this session. She stated that as an independent state agency. AHFC had worked with the private sector to lead the way in quality construction, including energy efficiency and providing home mortgage loans to qualified Alaskan's. She relayed that the bill would allow AHFC to proceed with commercial space and that there were existing in-state interest in AHFC financing commercial/residential projects. She responded to the question about Inlet Towers. She said that AHFC had already financed the project. She explained that there was a restaurant on the ground floor with market rate apartments above. She shared that questions about whether the property was operating within the terms of the loan agreement had arisen and were being investigated. She urged committee support for the legislation. 9:58:34 AM Senator Dunleavy understood that under the legislation AHFC could establish different project models in the future that would be specific to the needs of building residents. Ms. Schubert replied in the affirmative. 9:59:18 AM Co-Chair Meyer queried whether the legislation was in compliance with Title 21. Ms. Schubert replied no, she added that AHFC worked very closely with community on land use issues. 9:59:42 AM Vice-Chair Fairclough inquired if the federal loan guarantee had any stipulations concerning the proximity of the sale of alcohol. Ms. Schubert responded that the intent of the corporation was to have developers request money directly from AHFC, any concerns about the restriction of federal funds based on the projects merits would be discussed. 10:01:33 AM Senator Hoffman noted that the sponsor statement spoke to addressing affordable housing and the statewide housing shortage. He wondered what the interest rates under the legislation were when compared to existing rates that could be refinanced. Ms. Schubert responded that the interest rates on multi- family projects were established weekly by the corporation. She stated that the taxable loan amount for over $1 million the current week was 6.375 percent. She said that the advantage to a developer who may want to refinance with AHFC was that the projects no longer had to pencil out independently. 10:03:38 AM Co-Chair Meyer OPENED public testimony. Co-Chair Meyer CLOSED public testimony. 10:04:14 AM Senator Dunleavy noted that there were certain parts of the state where land was expensive and that the legislation could be useful in using a single building for multiple uses, therefore reducing cost for all parties involved. 10:04:47 AM Vice-Chair Fairclough MOVED to REPORT HB 50 out of committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 50(FIN) was REPORTED out of committee with a "do pass" recommendation and with a previously published zero fiscal note: FN1(REV). 10:05:18 AM