ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                         March 3, 2022                                                                                          
                           8:03 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sara Hannan, Co-Chair                                                                                            
Representative Calvin Schrage, Co-Chair                                                                                         
Representative Josiah Patkotak, Vice Chair                                                                                      
Representative Harriet Drummond                                                                                                 
Representative Mike Prax                                                                                                        
Representative Ken McCarty                                                                                                      
Representative Kevin McCabe                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 309                                                                                                              
"An Act  exempting candidates for municipal  office and municipal                                                               
office holders in  municipalities with a population  of 15,000 or                                                               
less from financial or  business interest reporting requirements;                                                               
relating  to campaign  finance reporting  by certain  groups; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 227                                                                                                              
"An Act  relating to municipal energy  and resilience improvement                                                               
assessment programs; and providing for an effective date."                                                                      
                                                                                                                                
     - MOVED HB 227 OUT OF COMMITTEE                                                                                            
                                                                                                                                
SENATE BILL NO. 143                                                                                                             
"An  Act  relating  to horizontal  property  regimes  and  common                                                               
interest communities; and relating  to mortgages, deeds of trust,                                                               
and other property liens."                                                                                                      
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 309                                                                                                                  
SHORT TITLE: APOC; CAMPAIGN CONTRIBUTIONS/REPORTING                                                                             
SPONSOR(s): REPRESENTATIVE(s) KREISS-TOMKINS                                                                                    
                                                                                                                                
02/07/22       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/07/22       (H)       CRA, STA                                                                                               
03/03/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
                                                                                                                                
BILL: HB 227                                                                                                                  
SHORT TITLE: MUNI ENERGY IMPROVEMNT ASSESSMENT PROGRAM                                                                          
SPONSOR(s): REPRESENTATIVE(s) SCHRAGE                                                                                           
                                                                                                                                
01/18/22       (H)       PREFILE RELEASED 1/7/22                                                                                
01/18/22       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/22       (H)       ENE, CRA                                                                                               
01/20/22       (H)       ENE AT 10:15 AM ADAMS 519                                                                              
01/20/22       (H)       Heard & Held                                                                                           
01/20/22       (H)       MINUTE(ENE)                                                                                            
01/27/22       (H)       ENE AT 10:15 AM ADAMS 519                                                                              
01/27/22       (H)       Moved HB 227 Out of Committee                                                                          
01/27/22       (H)       MINUTE(ENE)                                                                                            
01/31/22       (H)       ENE RPT 4DP 2NR                                                                                        
01/31/22       (H)       DP: ZULKOSKY, CLAMAN, FIELDS, SCHRAGE                                                                  
01/31/22       (H)       NR: KAUFMAN, RAUSCHER                                                                                  
03/01/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
03/01/22       (H)       Heard & Held                                                                                           
03/01/22       (H)       MINUTE(CRA)                                                                                            
03/03/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
                                                                                                                                
BILL: SB 143                                                                                                                  
SHORT TITLE: COMMON INTEREST COMMUNITIES; LIENS                                                                                 
SPONSOR(s): SENATOR(s) REVAK                                                                                                    
                                                                                                                                
01/18/22       (S)       PREFILE RELEASED 1/7/22                                                                                
01/18/22       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/22       (S)       L&C                                                                                                    
02/09/22       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/09/22       (S)       Moved SB 143 Out of Committee                                                                          
02/09/22       (S)       MINUTE(L&C)                                                                                            
02/11/22       (S)       L&C RPT  3DP                                                                                           
02/11/22       (S)       DP: STEVENS, MICCICHE, GRAY-JACKSON                                                                    
02/16/22       (S)       TRANSMITTED TO (H)                                                                                     
02/16/22       (S)       VERSION: SB 143                                                                                        
02/17/22       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/17/22       (H)       L&C                                                                                                    
02/17/22       (H)       CRA REFERRAL ADDED BEFORE L&C                                                                          
03/01/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
03/01/22       (H)       Heard & Held                                                                                           
03/01/22       (H)       MINUTE(CRA)                                                                                            
03/03/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CLAIRE GROSS, Staff                                                                                                             
Representative Jonathan Kreiss-Tomkins                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 309 on behalf of                                                                            
Representative Kreiss-Tomkins, prime sponsor.                                                                                   
                                                                                                                                
HEATHER HEBDON, Executive Director                                                                                              
Alaska Public Offices Commission (APOC)                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
309.                                                                                                                            
                                                                                                                                
RYAN JOHNSTON, Staff                                                                                                            
Representative Calvin Schrage                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information during the hearing on                                                               
HB 227 on behalf of Representative Schrage, prime sponsor.                                                                      
                                                                                                                                
SHAINA KILCOYNE, Energy and Sustainability Manager                                                                              
Solid Waste Services                                                                                                            
Municipality of Anchorage                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
227.                                                                                                                            
                                                                                                                                
ANNA BRAWLEY, President                                                                                                         
Edgewater Villa HOA Board                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 143.                                                                          
                                                                                                                                
DEBORAH BOROLLINI, representing self                                                                                            
No address provided                                                                                                             
POSITION STATEMENT:  Testified in opposition to SB 143.                                                                       
                                                                                                                                
JASON HENNINGS, representing self                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 143.                                                                          
                                                                                                                                
CINDY LENTINE, President                                                                                                        
Commodore Park HOA                                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 143.                                                                          
                                                                                                                                
EMMA TORGERSON, Staff                                                                                                           
Senator Josh Revak                                                                                                              
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Answered a  question during the  hearing on                                                             
SB 143 on behalf of Senator Revak, prime sponsor.                                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:03:43 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SARA HANNAN  called the  House  Community and  Regional                                                             
Affairs  Standing  Committee  meeting   to  order  at  8:03  a.m.                                                               
Representatives Drummond,  McCabe, Patkotak, Schrage,  and Hannan                                                               
were present at  the call to order.   Representatives McCarty and                                                               
Prax arrived as the meeting was in progress.                                                                                    
                                                                                                                                
         HB 309-APOC; CAMPAIGN CONTRIBUTIONS/REPORTING                                                                      
                                                                                                                                
8:04:15 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN announced that the  first order of business would                                                               
be  HOUSE  BILL  NO.  309,   "An  Act  exempting  candidates  for                                                               
municipal office  and municipal office holders  in municipalities                                                               
with a  population of 15,000  or less from financial  or business                                                               
interest  reporting requirements;  relating  to campaign  finance                                                               
reporting  by  certain groups;  and  providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
8:05:24 AM                                                                                                                    
                                                                                                                                
CO-CHAIR   SCHRAGE  moved   to  adopt   the  proposed   committee                                                               
substitute  (CS)  for  HB   309,  Version  32-LS0540\G,  Bullard,                                                               
2/24/22,  as  a working  document.    There being  no  objection,                                                               
Version G was before the committee.                                                                                             
                                                                                                                                
8:05:50 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 8:05 a.m. to 8:06 a.m.                                                                       
                                                                                                                                
8:06:50 AM                                                                                                                    
                                                                                                                                
CLAIRE  GROSS,  Staff,  Representative  Jonathan  Kreiss-Tomkins,                                                               
Alaska  State   Legislature,  presented  HB  309   on  behalf  of                                                               
Representative  Kreiss-Tomkins, prime  sponsor.   She paraphrased                                                               
the  sponsor  statement  [hard copy  included  in  the  committee                                                               
file], which read as follows [original punctuation provided]:                                                                   
                                                                                                                                
     HB 309  seeks to remedy  two issues that will  make the                                                                    
     Alaska Public Offices Commission more effective.                                                                           
                                                                                                                                
     HB  309   provides  a  campaign   disclosure  reporting                                                                    
     exemption for smaller groups who  don't intend to raise                                                                    
     or spend  more than $2,500  in a calendar  year ($5,000                                                                    
     during  an  18 month  election  cycle).  The bill  also                                                                    
     exempts  these   groups  from  the   electronic  filing                                                                    
     requirement for  these reports.  This is  beneficial as                                                                    
     smaller groups  generally require much more  APOC staff                                                                    
     time and  interaction because they are  usually novices                                                                    
     who are only interested in  a single topic on a ballot,                                                                    
     unlike ongoing  groups that  participate every  year. A                                                                    
     similar   exemption   already   exists   for   judicial                                                                    
     retention candidates and municipal candidates.                                                                             
                                                                                                                                
     HB   309   would   also  exempt   smaller   communities                                                                    
     (population of  15,000 or  less), from  Public Official                                                                    
     Financial  Disclosure  (POFD)  reporting  requirements.                                                                    
     There  is already  a minimum  population exemption  for                                                                    
     campaign disclosures, but none  for a POFD filing. Many                                                                    
     of  the smaller  communities  who  struggle with  clerk                                                                    
     turnover, connectivity, and  regular mail service often                                                                    
     find  themselves at  a disadvantage  when  it comes  to                                                                    
     timely  notifications  and   filing.  This  results  in                                                                    
     disproportionate civil penalties  for these rural areas                                                                    
     where  most, if  not all,  of their  municipal officers                                                                    
     are serving in a volunteer capacity.                                                                                       
                                                                                                                                
MS.  GROSS pointed  to conforming  language in  the bill  and the                                                               
effective date of January 1, 2023.                                                                                              
                                                                                                                                
8:09:44 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN  noted the  following individuals  were available                                                               
for  questions:    Heather  Hebdon,  Executive  Director,  Alaska                                                               
Public Offices Commission; and Alpheus  Bullard, the bill drafter                                                               
from Legislative Legal Services.                                                                                                
                                                                                                                                
8:10:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE asked how  many municipalities in Anchorage                                                               
have populations under 15,000.                                                                                                  
                                                                                                                                
8:10:32 AM                                                                                                                    
                                                                                                                                
HEATHER  HEBDON,   Executive  Director,  Alaska   Public  Offices                                                               
Commission (APOC),  answered that although  she did not  have the                                                               
exact figure available  at that moment, her estimate  would be 25                                                               
communities.  In  response to a follow-up  question regarding the                                                               
need for HB 309, she  explained that the smaller communities that                                                               
struggle  with "clerk  turnover,  connectivity  issues, and  mail                                                               
service"  are at  a distinct  disadvantage compared  to those  in                                                               
urban issues  that do not struggle  with those issues.   In these                                                               
smaller  communities,  the  vast majority  are  submitting  forms                                                               
manually and are serving in  a volunteer capacity, and APOC finds                                                               
it  is continually  penalizing  them "for  many  things that  are                                                               
beyond their control."                                                                                                          
                                                                                                                                
8:12:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND asked  how the  bill sponsor  determined                                                               
the number should be 15,000,  and she named some [municipalities]                                                               
that would qualify but would  not be considered small or "without                                                               
robust Internet."                                                                                                               
                                                                                                                                
MS. GROSS  answered that the  number was  derived as a  result of                                                               
talks with Ms. Hebdon, to whom she deferred.                                                                                    
                                                                                                                                
8:14:01 AM                                                                                                                    
                                                                                                                                
MS.  HEBDON  proffered that  the  minimum  threshold that  exists                                                               
under campaign disclosure currently  is [municipalities] of 1,000                                                               
or  more.   She said  the 15,000  captures [municipalities]  that                                                               
APOC  was  not necessarily  concerned  about,  but it  exists  in                                                               
statute in  terms of [municipalities  of 15,000 and up]  that are                                                               
required to file electronically.                                                                                                
                                                                                                                                
REPRESENTATIVE DRUMMOND told Co-Chair  Hannan that she would like                                                               
a list of [municipalities] with populations of 15,000 or less.                                                                  
                                                                                                                                
8:15:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   MCCARTY   questioned  what   "community"   could                                                               
encompass.                                                                                                                      
                                                                                                                                
MS. GROSS noted  that she may have used the  term "community" but                                                               
what  is being  discussed are  municipalities, which  are defined                                                               
under statute.                                                                                                                  
                                                                                                                                
8:17:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE  observed he  saw only  five municipalities                                                               
listed that are  greater than 15,000, and he said  he, too, would                                                               
like a list.                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN   clarified  that   the  committee   needs  more                                                               
information on  who is impacted  and what  the bill is  trying to                                                               
fix, because  there is concern  by members  not to make  the bill                                                               
too  broad.   She  then  point out  that  one  of the  exemptions                                                               
created under HB 309 states  that the municipalities under 15,000                                                               
in  population would  still be  allowed  to file  electronically;                                                               
they would not be required to do so.                                                                                            
                                                                                                                                
8:19:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  noted that  the Alaska  Municipal League                                                               
has  a  directory of  all  the  municipalities in  Alaska,  which                                                               
includes population.  She then  asked if the provisions under the                                                               
bill   would   apply   to   first-class   cities   or   only   to                                                               
municipalities.                                                                                                                 
                                                                                                                                
CO-CHAIR HANNAN asked whether  the legislation addressed regional                                                               
educational attendance area (REAA) elections.                                                                                   
                                                                                                                                
8:20:33 AM                                                                                                                    
                                                                                                                                
MS. HEBDON answered that the  REAA elections are not regulated by                                                               
APOC.    She noted  that  currently  municipalities are  able  to                                                               
exempt themselves  from POFD,  and a vast  majority have  done so                                                               
going back to approximately 1975.   She offered her understanding                                                               
that  currently there  are 30  municipalities  and boroughs  that                                                               
fall under POFD regulations.  Of  those, 5 are over 15,000, so HB                                                               
309 would impact approximately 25 municipalities.                                                                               
                                                                                                                                
CO-CHAIR HANNAN  suggested Ms. Hebdon  could provide how  many of                                                               
those  municipalities that  are "covered  by it"  and which  ones                                                               
"already exempted themselves from the disclosure law."                                                                          
                                                                                                                                
MS. HEBDON said she would be happy to do that.                                                                                  
                                                                                                                                
8:22:09 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SCHRAGE asked  about the motivation for  the $2,500 cap.                                                               
He asked if there  are a lot of groups that  raise less than that                                                               
amount involved in elections.                                                                                                   
                                                                                                                                
MS.  HEBDON  answered  that the  $2,500  was  identified  through                                                               
currently  existing statute  related  to  municipal and  judicial                                                               
candidates  that  agree  to  raise  less  than  $5,000  during  a                                                               
campaign cycle  of 18 months or  two years.  She  said, "So, this                                                               
was  an effort  to try  to make  ... it  equal for  these smaller                                                               
groups."  She  said APOC finds there are smaller  groups that are                                                               
interested in  one election, one  candidate or issue, and  do not                                                               
have  major  expenditures,  and  APOC  spends  considerable  time                                                               
assisting those groups  because they are novices  requiring a lot                                                               
of attention.                                                                                                                   
                                                                                                                                
8:23:40 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PATKOTAK  commented that  his district,  the North                                                               
Slope  Borough, has  a population  under 15,000,  and he  filed a                                                               
POFD when  he ran  for assembly and  had no issue  doing so.   He                                                               
said  the borough  does not  experience turnover  of clerks.   He                                                               
asked where  the language was in  HB 309 which allows  the option                                                               
of continuing  to file  POFDs.   He then  pointed to  the sponsor                                                               
statement and noted  that there is already  "a minimum population                                                               
exemption  for   campaign  disclosures."    He   asked,  "Are  we                                                               
mirroring  that  number  with  that  15,000 mark  or  is  that  a                                                               
different number?"                                                                                                              
                                                                                                                                
MS. GROSS deferred to Ms. Hebdon.                                                                                               
                                                                                                                                
8:25:15 AM                                                                                                                    
                                                                                                                                
MS.  HEBDON asked  Representative Patkotak  to confirm  his first                                                               
question  as being  whether municipalities  exempted out  of POFD                                                               
under APOC  could elect  to "manage  it themselves"  and "require                                                               
that their officials file POFDs or something similar."                                                                          
                                                                                                                                
REPRESENTATIVE PATKOTAK responded yes.                                                                                          
                                                                                                                                
MS. HEBDON  confirmed that is correct.   She said she  knew a few                                                               
municipalities  already  doing   so.    Regarding  Representative                                                               
Patkotak's  second question,  she  said  the campaign  disclosure                                                               
threshold is a population of less than 1,000.                                                                                   
                                                                                                                                
REPRESENTATIVE PATKOTAK,  regarding the idea of  municipal office                                                               
holders following POFD  filing, asked whether, under  HB 309, and                                                               
considering  the responsibility  of  APOC, that  would "still  be                                                               
able to  be something that  could be  accomplished on line."   He                                                               
added  that he  wanted to  know whether  that is  something "that                                                               
still can  be accomplished with the  way the bill is  written, as                                                               
far as online  filing, if we do self-elect, and  we do fall under                                                               
that population threshold."                                                                                                     
                                                                                                                                
MS. HEBDON  said she does not  know the answer and  would have to                                                               
think about the question further.                                                                                               
                                                                                                                                
REPRESENTATIVE  PATKOTAK  emphasized  the  importance  of  proper                                                               
disclosure.                                                                                                                     
                                                                                                                                
8:29:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN announced that HB 309 was held over.                                                                            
                                                                                                                                
8:29:16 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 8:29 a.m. to 8:32 a.m.                                                                       
                                                                                                                                
        HB 227-MUNI ENERGY IMPROVEMNT ASSESSMENT PROGRAM                                                                    
                                                                                                                                
8:32:03 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN announced  that the next order  of business would                                                               
be HOUSE BILL  NO. 227, "An Act relating to  municipal energy and                                                               
resilience improvement assessment programs;  and providing for an                                                               
effective date.                                                                                                                 
                                                                                                                                
8:32:31 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SCHRAGE, as prime sponsor  of HB 227, reminded committee                                                               
members  that [the  resilience  improvement assessment  programs]                                                               
are  a new  financing mechanism  that has  spread throughout  the                                                               
U.S.   He noted that  HB 227  would expand the  property assessed                                                               
financing  mechanism set  in place  under House  Bill 80  [passed                                                               
during the  Thirtieth Alaska State  Legislature] and  loosen some                                                               
of   the  restrictions,   which  should   benefit  quite   a  few                                                               
communities with taxing authority.                                                                                              
                                                                                                                                
CO-CHAIR HANNAN noted that six  amendments had been submitted for                                                               
consideration.                                                                                                                  
                                                                                                                                
8:33:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCARTY moved  to adopt  Amendment 1  to HB  227,                                                               
labeled 32-LS1028\I.3, Dunmire, 3/2/22, which read as follows:                                                                  
                                                                                                                                
     Page 1, line 1, following "programs":                                                                                    
     Insert "for commercial buildings"                                                                                        
                                                                                                                                
8:33:48 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN objected for the purpose of discussion.                                                                         
                                                                                                                                
8:34:20 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 8:34 a.m. to 8:36 a.m.                                                                       
                                                                                                                                
8:36:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCARTY  spoke to Amendment 1,  explaining that it                                                               
would limit the provisions under HB 227 to commercial buildings.                                                                
                                                                                                                                
8:36:59 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SCHRAGE said  while he  appreciated  the intent  behind                                                               
Amendment 1, there are provisions of  HB 227 that "apply to other                                                               
projects than just  commercial buildings."  He  said changing the                                                               
title of the bill would make  it inconsistent with the content of                                                               
the  bill  and, thus,  constitutionally  invalid.   He  said  the                                                               
proper  way  to  address  the   issue  would  be  to  "amend  the                                                               
corresponding  sections  of  the   bill  that  would  need  those                                                               
changes."                                                                                                                       
                                                                                                                                
8:38:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE  agreed with  the  bill  sponsor that  the                                                               
corresponding  language   would  need  to  be   changed,  and  he                                                               
concurred  with  Representative  McCarty regarding  the  need  to                                                               
limit the bill  to commercial buildings.  He  questioned how wide                                                               
open the bill would be.                                                                                                         
                                                                                                                                
CO-CHAIR SCHRAGE deferred to his staff.                                                                                         
                                                                                                                                
8:39:14 AM                                                                                                                    
                                                                                                                                
RYAN  JOHNSTON,  Staff,  Representative  Calvin  Schrage,  Alaska                                                               
State  Legislature, on  behalf of  Representative Schrage,  prime                                                               
sponsor of HB 227, pointed out  where in statute the provision is                                                               
limited  to  industrial  and  commercial  properties  only:    AS                                                               
29.55.100(a)(1), which read as follows:                                                                                         
                                                                                                                                
           (a) A municipality may establish an energy                                                                           
      improvement assessment program under AS 29.55.100 -                                                                       
     29.55.165 to  finance the installation  or modification                                                                    
     of permanent improvements that are                                                                                         
          (1) fixed  to existing privately  owned commercial                                                                    
     or industrial property; and                                                                                                
                                                                                                                                
REPRESENTATIVE  MCCABE concluded  that  Amendment  1 would  "more                                                               
conform" the proposed legislation to statute.                                                                                   
                                                                                                                                
CHAIR  SCHRAGE responded  no.   He offered  his understanding  as                                                               
follows:                                                                                                                        
                                                                                                                                
     The  issue is  that  the  amendment specifically  deals                                                                    
     with sections  that also apply  to other  statutes; ...                                                                    
     however, this  C-PACE program is  limited --  there's a                                                                    
     reason  it's  called   C-PACE:    "Commercial  Property                                                                    
     Assessed Clean  Energy" is what  it was called.   We're                                                                    
     talking  more  of the  first  three  letters here,  but                                                                    
     again,  it's restricted  just to  those commercial  and                                                                    
     industrial properties.                                                                                                     
                                                                                                                                
8:40:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND remarked  on  the  restrictions in  what                                                               
could  be  commercial,  such as  between  an  apartment  building                                                               
versus a condominium.                                                                                                           
                                                                                                                                
CO-CHAIR  SCHRAGE  said  he thinks  Representative  Drummond  was                                                               
correct that it would be "restricted in that way."                                                                              
                                                                                                                                
REPRESENTATIVE  DRUMMOND asked  whether there  is a  program that                                                               
would  apply  to  a  condominium   project  that  is  similar  in                                                               
structure to  a mixed-use development but  wherein the apartments                                                               
are separately owned.                                                                                                           
                                                                                                                                
CO-CHAIR  SCHRAGE offered  his understanding  that  there is  not                                                               
such  a  program currently.    He  said  there has  been  initial                                                               
restriction  to   those  structures   "that  we  have   the  most                                                               
confidence in," but  other states have expanded  beyond that, and                                                               
that is something that Alaska could consider in the future.                                                                     
                                                                                                                                
8:42:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PATKOTAK  directed attention  to language  on page                                                               
3, in  Section 5, subsection  (a), [paragraphs] (1) and  (2), and                                                               
said he thinks  "that's where you start to see  the scope broaden                                                               
beyond  commercial  and industrial  property."    He offered  his                                                               
understanding  that  by  removing [paragraph]  (2)  and  allowing                                                               
Legislative Legal  Services to  make conforming  changes, "that's                                                               
how the title would change."                                                                                                    
                                                                                                                                
8:43:36 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SCHRAGE pointed  to language  on page  3, beginning  on                                                               
line [13],  which read: "new  construction or  existing privately                                                           
owned commercial  or industrial  property [;]  and that",  and he                                                           
explained  that [paragraphs]  (1) and  (2) ensue.   He  clarified                                                               
that [paragraph]  (2) expands  the types  of projects  that would                                                               
qualify for  this financing mechanism,  but the projects  have to                                                               
be for a commercial or industrial property.                                                                                     
                                                                                                                                
REPRESENTATIVE  PATKOTAK  noted  that  the  last  sentence  of  a                                                               
memorandum  from  Legislative  Legal Services  [included  in  the                                                               
committee  packet] read,  "The scope  of [AS]29.55.100(a)  is not                                                               
clearly limited to commercial buildings."                                                                                       
                                                                                                                                
8:44:45 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN asked  for confirmation  that  [Amendment 1]  is                                                               
specifying the  actual physical building,  not the  property that                                                               
surrounds it.                                                                                                                   
                                                                                                                                
REPRESENTATIVE MCCARTY answered that's correct.                                                                                 
                                                                                                                                
8:45:29 AM                                                                                                                    
                                                                                                                                
MR. JOHNSTON  noted that changing  the bill title as  proposed in                                                               
Amendment  1 would  "nullify the  industrial side  of the  bill."                                                               
Regarding the intent  to address structures only,  he pointed out                                                               
that  commercial   construction  would  be  on   land  zoned  for                                                               
commercial  or industrial  use.   He said,  "So, that  would also                                                               
conflict with  the intent of  the bill to allow  new construction                                                               
to be utilizing C-PACE programs."                                                                                               
                                                                                                                                
[AN UNIDENTIFIED SPEAKER] said, "Correct."                                                                                      
                                                                                                                                
8:46:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE said he still "sees  this as an issue."  He                                                               
opined that  "it still  needs to  be focused  on buildings."   He                                                               
said, "If  you're going to  construct a new building,  this would                                                               
apply,  because  it's  in  here;  it  says  construction  of  new                                                               
buildings."   He expressed concern regarding  "the green agenda,"                                                               
and continued as follows:                                                                                                       
                                                                                                                                
     I  could have  a[n]  industrial  or commercially  zoned                                                                    
     property  on the  corner  of 20th  and  Muldoon, and  I                                                                    
     could put in a charging  farm with nothing but charging                                                                    
     stations  under this  bill, get  a  huge tax  financing                                                                    
     break, and make  a pile of money on  the commuters that                                                                    
     are leaving Anchorage that forgot  to charge their cars                                                                    
     on the way out.                                                                                                            
                                                                                                                                
REPRESENTATIVE MCCABE said  he does not think that  is the intent                                                               
of  HB  227;  the  intent  is  to  provide  resilience  following                                                               
earthquakes,  floods,   and  high   winds,  so   that  commercial                                                               
buildings  can  continue  to  operate  quickly.    Resiliency  is                                                               
tightly defined  and is not  needed for  a piece of  property, he                                                               
posited.                                                                                                                        
                                                                                                                                
8:48:02 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SCHRAGE  said  Representative  McCabe  brought  forward                                                               
valid concerns.   He then clarified how the  bill "might actually                                                               
work in application."   He talked about a co-housing  unit in his                                                               
district.  He mentioned solar panels  that could be put up in the                                                               
parking area,  not on  the building  itself.   Then he  said [the                                                               
proposed  legislation]  is not  offering  a  financial break  but                                                               
rather a  financial mechanism  that allows  the obligation  to be                                                               
placed on  the property  instead of  the individual  owner, which                                                               
allows for  a more secure  line of  credit with longer  terms and                                                               
lower interest rates.  He specified  there is no subsidy from the                                                               
government.  Finally, he said  whether or not [committee members]                                                               
think  [the  bill] should  be  limited  to commercial  buildings,                                                               
Amendment 1 does not limit the  bill "in any way whatsoever."  He                                                               
reiterated  that there  is  a way  to make  changes  to the  bill                                                               
itself, but "this amendment is not that."                                                                                       
                                                                                                                                
8:50:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND said  she  could see  many places  where                                                               
"storm water  management, for example,  would be smart  to manage                                                               
for the  building that you  own on that  property."  She  gave an                                                               
example.  She  concluded that she does not see  "why it should be                                                               
limited only to the building."                                                                                                  
                                                                                                                                
8:51:11 AM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.  Representatives  McCarty and McCabe                                                               
voted  in  favor of  Amendment  1  to  HB 227.    Representatives                                                               
Drummond, Patkotak,  Prax, Schrage, and Hannan  voted against it.                                                               
Therefore, Amendment failed by a vote of 2-5.                                                                                   
                                                                                                                                
8:52:10 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCARTY moved  to adopt  Amendment 2  to HB  227,                                                               
labeled 32-LS1028\I.4, Dunmire, 3/2/22, which read as follows:                                                                  
                                                                                                                                
     Page 6, lines 22 - 25:                                                                                                     
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
8:52:12 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN and REPRESENTATIVE DRUMMOND objected.                                                                           
                                                                                                                                
8:53:26 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SCHRAGE compared  this  to refinancing,  as this  would                                                               
provide  a  financing  mechanism  that  is  a  great  benefit  to                                                               
commercial and industrial property owners.   He said, "Instead of                                                               
exchanging a mortgage for a  mortgage, they would be exchanging a                                                               
mortgage for a  property."  He said this could  "free up capital"                                                               
that then could be invested in the community.                                                                                   
                                                                                                                                
REPRESENTATIVE MCCABE asked whether those  people who have had to                                                               
remodel  their  businesses  but   did  not  do  any  "resiliency"                                                               
projects would get nothing from this.                                                                                           
                                                                                                                                
CO-CHAIR SCHRAGE  gave the  example of a  property owner  who has                                                               
made improvements  for a drainage  issue and, under  the proposed                                                               
legislation, rather  than take on  the debt alone,  could "attach                                                               
that lien  to the property."   That  could increase the  value of                                                               
the property.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  MCCABE asked  about the  limit of  two years  for                                                               
retroactivity.                                                                                                                  
                                                                                                                                
CO-CHAIR  SCHRAGE responded  that he  would support  an amendment                                                               
extending that period.                                                                                                          
                                                                                                                                
8:57:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCARTY spoke  about  someone getting  a loan  to                                                               
purchase property  and then flipping  the debt on the  new owner.                                                               
He   said  beyond   helping  with   energy   and  resiliency   in                                                               
construction, there would  also be the ability for  owners to use                                                               
the funding for other purposes, which he said raises a red flag.                                                                
                                                                                                                                
CO-CHAIR SCHRAGE  described a hypothetical situation  in which he                                                               
bought property  for $50,000 and then  sold it for $100,000.   If                                                               
he  used the  property lien  assessment,  then when  he sold  the                                                               
property, he would  sell it for $50,000, because  the buyer would                                                               
recognize   that  the   property  was   encumbered  by   $50,000;                                                               
therefore, it  would not be  worth $100,000.  He  clarified, "All                                                               
of  this is  going  to  be disclosed  in  the purchase  process."                                                               
Addressing  Representative McCarty's  red flag  concern, he  said                                                               
that if he were to get a  conventional loan for $100,000 and an 8                                                               
percent interest  rate, the  value of  that loan  is going  to be                                                               
higher than  if he  were to get  that same $100,000  loan at  a 6                                                               
percent interest  rate.  He  described the banks having  a higher                                                               
level of  faith that  the loan  will get  repaid on  the assessed                                                               
property;  therefore, they  can  offer the  lower interest  rate,                                                               
which  frees up  capital on  the  project that  could be  further                                                               
invested in the property or  community or other developments.  He                                                               
said  these   proposed  transactions  would  be   vetted  by  the                                                               
financial institutions.                                                                                                         
                                                                                                                                
REPRESENTATIVE  MCCARTY stated  concern about  a loan  being used                                                               
for other  purposes than originally  intended.  He  mentioned the                                                               
risk of  being a lender.   He acknowledged that with  the program                                                               
proposed  under  HB  227,  the  risk to  the  lender  is  reduced                                                               
"because property is  seized."  With the  retroactive proposal of                                                               
Amendment 2,  there could  be properties  that have  already gone                                                               
through the  loan process, "and  now we're  going to come  in and                                                               
allow them  to ... seize money,"  and he said he  is concerned if                                                               
that "goes back to 1964."                                                                                                       
                                                                                                                                
9:02:19 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SCHRAGE  explained that  if  he  took  out a  loan  for                                                               
improvement  of property,  only those  improvements that  fit the                                                               
definition   of  HB   227  could   be   refinanced  through   the                                                               
commercially  assessed   property  mechanism.     He   said  with                                                               
refinancing, it is likely the  money has already been invested in                                                               
the  projects,  and when  refinancing  as  a property  lien,  the                                                               
lender  and  municipality  would  make sure  that  the  money  is                                                               
associated with clean energy projects.   He pointed out that both                                                               
commercial  property  owners and  lenders  have  sent letters  of                                                               
support for  HB 227.   He concluded, "It's a  good way for  us to                                                               
... make  more secure  loans, ...  on a longer  term, at  a lower                                                               
cost  of capital  for  the  property owner,  and  allows them  to                                                               
further invest in their community."                                                                                             
                                                                                                                                
9:03:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PATKOTAK  asked about  taxing and  the possibility                                                               
of there being a higher rate on the assessed value.                                                                             
                                                                                                                                
CO-CHAIR SCHRAGE  responded that someone who  made the investment                                                               
to his/her  property would  likely have  a higher  assessed value                                                               
and  thus  be paying  higher  property  taxes.   He  offered  his                                                               
understanding that  anyone who made  an investment would  be made                                                               
aware of the tax implications.                                                                                                  
                                                                                                                                
9:05:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  maintained her  objection to  the motion                                                               
to adopt Amendment 2.                                                                                                           
                                                                                                                                
9:05:49 AM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.   Representatives Patkotak, McCarty,                                                               
and  McCabe  voted in  favor  of  Amendment 2.    Representatives                                                               
Drummond,  Schrage,  and Hannan  voted  against  it.   Therefore,                                                               
Amendment 2 failed by a vote of 3-3.                                                                                            
                                                                                                                                
9:07:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCARTY moved  to adopt  Amendment 3  to HB  227,                                                               
labeled 32-LS1028\I.5, Dunmire, 3/2/22, which read as follows:                                                                  
                                                                                                                                
     Page 7, line 8, following "of":                                                                                            
     Insert "commercial building"                                                                                           
                                                                                                                                
9:07:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN objected  and noted there was  a legal memorandum                                                               
("memo")  to  distribute  [from Andrew  Dunmire,  Legal  Counsel,                                                               
Legislative Legal  Services, dated 3/2/22,  subsequently included                                                               
in the committee packet].                                                                                                       
                                                                                                                                
9:07:15 AM                                                                                                                    
                                                                                                                                
The committee  took a  brief at-ease at  9:07 a.m.  to distribute                                                               
the memo.                                                                                                                       
                                                                                                                                
9:07:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCARTY spoke to Amendment  3, which he said would                                                               
specify  the type  of construction  being done  as pertaining  to                                                               
commercial buildings.                                                                                                           
                                                                                                                                
9:08:29 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SCHRAGE again  noted that  the  underlying statute,  as                                                               
well  as  HB  227,  are  already  restricted  to  commercial  and                                                               
industrial  properties.   He referred  to the  legal memo,  which                                                               
notes that  [Amendment 3] would  be inconsistent in that  it does                                                               
not reference industrial  properties.  He said  the limitation to                                                               
only  buildings  could be  problematic.    He said  this  section                                                               
addresses  reports  required,  not   types  of  investments  that                                                               
qualify; therefore, it seems inconsistent  to allow a wider scope                                                               
for  the  types  of  investments allowed  while  restricting  the                                                               
reporting  to just  investments on  commercial buildings  and not                                                               
commercial or industrial properties.                                                                                            
                                                                                                                                
9:09:59 AM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.  Representatives  McCarty and McCabe                                                               
voted  in  favor  of  Amendment  3.    Representatives  Drummond,                                                               
Patkotak,  Schrage,  and Hannan  voted  against  it.   Therefore,                                                               
Amendment 3 failed by a vote of 2-3.                                                                                            
                                                                                                                                
9:10:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCARTY moved  to adopt  Amendment 4  to HB  227,                                                               
labeled 32-LS1028\I.6, Dunmire, 3/2/22, which read as follows:                                                                  
                                                                                                                                
     Page 9, lines 2 - 3:                                                                                                       
          Delete   "[FROM    AN   INDEPENDENT,   THIRD-PARTY                                                                    
     QUALIFIED ENERGY AUDITOR THE FOLLOWING:]"                                                                                  
       Insert "from an independent, third-party qualified                                                                       
     energy auditor the following:"                                                                                             
                                                                                                                                
9:10:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND objected.                                                                                               
                                                                                                                                
9:11:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCARTY spoke to Amendment 4.   He said he did not                                                               
know  why   the  third-party  auditor  was   being  removed,  and                                                               
Amendment 4 would reinstate that language in HB 227.                                                                            
                                                                                                                                
9:12:05 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SCHRAGE  responded  that  the  reason  the  third-party                                                               
auditor is being  removed is because there has  been the addition                                                               
of projects to  the scope of the financing mechanism  that do not                                                               
have anything  to do with  energy, for example, seismic  or storm                                                               
water improvements.   Further,  he said he  does not  know anyone                                                               
that would loan money without vetting the proposed project.                                                                     
                                                                                                                                
9:13:31 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN stated  her understanding  that  HB 227  expands                                                               
existing [statute],  thus an auditor can  direct for construction                                                               
of "XYZ,"  and improvements  on which financing  is based  can be                                                               
met.    However,  with  new  construction,  "you  couldn't  audit                                                               
something that  does not  exist, but  you could  design it  to be                                                               
more energy  efficient."  She  added, "So, requiring audit  of it                                                               
sort of is contrary to allowing new construction."                                                                              
                                                                                                                                
CO-CHAIR  SCHRAGE  confirmed Co-Chair  Hannan  is  correct.   The                                                               
property assessed  financing mechanisms were introduced  only for                                                               
projects that  would result  in a positive  cash flow  via energy                                                               
savings.   However, some  projects may not  result in  savings of                                                               
money but may increase the value of the property, he said.                                                                      
                                                                                                                                
9:15:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE  moved to  adopt Conceptual Amendment  1 to                                                               
Amendment 4,  to insert "appraiser, or  licensed home inspector,"                                                               
following "auditor".                                                                                                            
                                                                                                                                
9:16:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  objected to  question the use  of "home"                                                               
when  this is  commercial property.   She  then pointed  out that                                                               
there  are already  companies  dedicated  to doing  "construction                                                               
estimating."                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE  explained that  his intent was  "to expand                                                               
the   definition  from   energy  auditors,"   and  he   expressed                                                               
willingness   to   change   the  language   to   "architect"   or                                                               
"construction  estimator".     He  explained  his   concern  that                                                               
"there's too much opportunity for  nefarious activity ... between                                                               
banks and good  buddy commercial property owners,"  and he opined                                                               
there  needs to  be a  third party  to verify  the work  is being                                                               
done.                                                                                                                           
                                                                                                                                
9:18:41 AM                                                                                                                    
                                                                                                                                
CO-CHAIR   HANNAN   suggested  Representative   McCabe   withdraw                                                               
Conceptual Amendment 1 to Amendment 4.                                                                                          
                                                                                                                                
9:18:53 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SCHRAGE  suggested that if an  amendment were necessary,                                                               
it could  be to require an  independent third party, but  he said                                                               
he  is struggling  to  come up  with the  right  language and  is                                                               
concerned about legislating "on the fly."                                                                                       
                                                                                                                                
9:19:57 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN  noted those on line,  who could weigh in  on the                                                               
issue.                                                                                                                          
                                                                                                                                
9:20:54 AM                                                                                                                    
                                                                                                                                
SHAINA KILCOYNE,  Energy and Sustainability Manager,  Solid Waste                                                               
Services,  Municipality of  Anchorage,  said it  is difficult  to                                                               
pinpoint which  kind of auditor  to require, and  typically other                                                               
states' statutes  are "leaving that  up to the handbook  where we                                                               
have all of the details of the program within it."                                                                              
                                                                                                                                
9:22:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE withdrew  the motion  to adopt  Conceptual                                                               
Amendment 1 to Amendment 4.                                                                                                     
                                                                                                                                
9:22:36 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN noted  that the lenders could speak  to the issue                                                               
but were not currently available on line.                                                                                       
                                                                                                                                
9:22:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE said  he would  discuss the  issue with  a                                                               
former testifier for the purpose  of offering an amendment on the                                                               
House floor.                                                                                                                    
                                                                                                                                
9:23:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCARTY  concluded   that  more  information  was                                                               
needed to make  an informed decision; therefore,  he withdrew the                                                               
motion to adopt Amendment 4.                                                                                                    
                                                                                                                                
9:24:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE moved  to  adopt Amendment  5  to HB  227,                                                               
labeled 32-LS1028\I.2, Dunmire, 3/2/22, which read as follows:                                                                  
                                                                                                                                
     Page 6, line 16:                                                                                                           
          Delete "market"                                                                                                   
                                                                                                                                
     Page 6, lines 17 - 18:                                                                                                     
        Delete "or completion of the proposed energy or                                                                     
     resilience improvement project"                                                                                        
                                                                                                                                
9:24:49 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN objected for the purpose of discussion.                                                                         
                                                                                                                                
REPRESENTATIVE  MCCABE  spoke  to  Amendment  5.    He  expressed                                                               
concern  that without  Amendment 5,  the legislation  would allow                                                               
people "to overreach."                                                                                                          
                                                                                                                                
9:26:28 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SCHRAGE  said  he  understood  Representative  McCabe's                                                               
concern.  He  highlighted that the changes proposed  under HB 227                                                               
are  modeled after  programs  in other  states,  and lenders  are                                                               
supporting  these changes  because  they do  not  result in  high                                                               
risk.    He  talked  again about  opening  markets  and  infusing                                                               
communities with investments made.                                                                                              
                                                                                                                                
9:28:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND noted  that  the bill  would remove  the                                                               
word "assess", which she said makes  sense.  She pointed out that                                                               
it  is  more  difficult  to  assess  a  commercial  property,  as                                                               
compared  to a  home;  therefore,  she does  not  think the  word                                                               
"market" needs to  be deleted from the bill.   She added that she                                                               
does not agree with the second part of Amendment 5.                                                                             
                                                                                                                                
9:29:44 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PATKOTAK said he  is inclined to support Amendment                                                               
5 based on the intent of  the maker of the amendment; however, he                                                               
questioned what the  benchmark of value would be  if "market" was                                                               
removed.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  MCCABE explained  the intent  was to  "remove the                                                               
change  that  inserts  'market'   instead  of  'assessed',"  thus                                                               
leaving "assessed value" in the bill language.                                                                                  
                                                                                                                                
REPRESENTATIVE PATKOTAK suggested  adding "assessed" back through                                                               
a conceptual amendment to Amendment 5.                                                                                          
                                                                                                                                
9:31:45 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 9:31 a.m. to 9:32 a.m.                                                                       
                                                                                                                                
9:32:51 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE  moved Conceptual Amendment 1  to Amendment                                                               
5 to insert "assessed" where "market" had been removed.                                                                         
                                                                                                                                
REPRESENTATIVE  DRUMMOND  objected,  and   she  referred  to  her                                                               
previous   comment  about   assessed  valuations   of  commercial                                                               
property.                                                                                                                       
                                                                                                                                
9:34:15 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SCHRAGE said either "assessed"  or "market" needed to be                                                               
left in  the bill.  He  said the Municipality of  Anchorage would                                                               
prefer  "market value"  as a  better metric  to use  in terms  of                                                               
"what the market is  going to pay for the property."   He said it                                                               
would be  "a tremendous  limitation" on  developers or  those who                                                               
want to  invest in communities  by "putting in a  development" if                                                               
they are  allowed to utilize  only existing assets for  the lien,                                                               
and  "the  value  that  would  be created  by  the  loan  has  no                                                               
consideration by  the lender."   He added,  "If we are  to remove                                                               
the ability to  take in that future value that  would be created,                                                               
'market' would be the preferable phrase."                                                                                       
                                                                                                                                
REPRESENTATIVE MCCABE  stated his problem with  "market value" is                                                               
that it  is a nebulous  term because  "it's not defined  who sets                                                               
the market  value."  He suggested  it could be set  by a licensed                                                               
commercial property appraiser.   He concluded, "And  with that, I                                                               
think I'll withdraw this and do it on the floor."                                                                               
                                                                                                                                
9:37:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PRAX  proffered  that  the  municipally  assessed                                                               
value  is supposed  to  be the  market value,  and  "that is  the                                                               
official  determination   on  other  property  tax   payments  or                                                               
assessments,  and this  is  kind of  attached to  the  tax."   He                                                               
added,  "So, it  would seem  like we  should stick  with what  is                                                               
legally in there."                                                                                                              
                                                                                                                                
9:38:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR   SCHRAGE  asked   for  clarification   as  to   whether                                                               
Representative McCabe  had withdrawn just Conceptual  Amendment 1                                                               
to Amendment 5 or the underlying Amendment [5].                                                                                 
                                                                                                                                
REPRESENTATIVE MCCABE responded, "I  withdraw both the conceptual                                                               
amendment and Amendment  5."  In response to  Co-Chair Hannan, he                                                               
noted that  he would not  be offering Amendment 6,  as previously                                                               
planned, at this time.                                                                                                          
                                                                                                                                
9:39:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND moved  to report HB 227,  as amended, out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying fiscal notes.                                                                                                      
                                                                                                                                
CO-CHAIR  HANNAN  noted there  had  been  no amendments  adopted;                                                               
therefore,  she  asked  Representative Drummond  to  restate  the                                                               
motion.                                                                                                                         
                                                                                                                                
9:39:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND moved  to report HB 227  out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.  There being no objection,  HB 227 was reported out of the                                                               
House Community and Regional Affairs Standing Committee.                                                                        
                                                                                                                                
9:40:04 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 9:40 a.m. to 9:45 a.m.                                                                       
                                                                                                                                
            SB 143-COMMON INTEREST COMMUNITIES; LIENS                                                                       
                                                                                                                                
9:45:00 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN announced that the  final order of business would                                                               
be SENATE BILL  NO. 143, "An Act relating  to horizontal property                                                               
regimes  and   common  interest  communities;  and   relating  to                                                               
mortgages, deeds of trust, and other property liens."                                                                           
                                                                                                                                
9:45:27 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN opened public testimony on SB 143.                                                                              
                                                                                                                                
9:45:48 AM                                                                                                                    
                                                                                                                                
ANNA BRAWLEY,  President, Edgewater Villa HOA  Board, referred to                                                               
a  letter  of  support  from the  Edgewater  Villa  Home  Owner's                                                               
Association Board,  "in a prior  committee."  She  emphasized the                                                               
financial impact  of one financial  delinquency from one  unit on                                                               
all the other units.  She said  SB 143 addresses this issue.  She                                                               
described a  situation in  which the  HOA, incorporated  prior to                                                               
1986, did  not have first  priority on a  lien and was  unable to                                                               
collect an unpaid  assessment, and this resulted  in costly legal                                                               
fees.   She said the  HOA has  considered changing its  bylaws to                                                               
address this  problem, but  there would be  cost to  mitigate the                                                               
risk.  She indicated that SB  143 also addresses this issue.  She                                                               
strongly urged  the committee  to pass  SB 143.   In  response to                                                               
Representative Drummond,  she confirmed she  is the chair  of the                                                               
Turnagain Community Council.                                                                                                    
                                                                                                                                
9:50:01 AM                                                                                                                    
                                                                                                                                
DEBORAH BOROLLINI, representing self,  testified in opposition to                                                               
SB 143.  She said the  committee should have heard testimony from                                                               
the Alaska Housing Finance Corporation  (AHFC), which she said is                                                               
the property owner  of several pre-1986 condominiums.   She spoke                                                               
about  law suits  and the  effects of  them on  homeowners.   She                                                               
mentioned the  notice requirement and  pointed out the  length of                                                               
time it  takes for  mail to be  delivered, including  when mailed                                                               
from out  of state.   She said  she is a  former paralegal.   She                                                               
warned  that condominium  association boards  can "go  rouge" and                                                               
"have  taken unlawful  actions against  homeowners in  the past."                                                               
She talked about the trauma faced  by homeowners, and she said it                                                               
is  not  uncommon  for  HOA   board  members  to  not  understand                                                               
financial records and  federal and state laws.   She related that                                                               
the majority of those who have  reached out to her for assistance                                                               
have  been Alaska  Native minorities  and first-time  home buyers                                                               
who  do not  have the  money to  hire lawyers.   Sharing  her own                                                               
story, Ms.  Borollini expressed that  if she had not  reached out                                                               
to  AHFC  directly, she  would  have  lost  her  own home.    She                                                               
indicated  a   desire  to  see  legislation   that  will  protect                                                               
homeowners,   most   especially   those   who   own   condominium                                                               
properties.                                                                                                                     
                                                                                                                                
9:55:06 AM                                                                                                                    
                                                                                                                                
JASON  HENNINGS, representing  self,  stated that  he has  worked                                                               
with HOAs on and off for ten years  and supports SB 143.  He said                                                               
of two condominiums  he has managed, the one built  in 1986 had a                                                               
delinquency rate of 5 percent, while  the one built in 1985 had a                                                               
delinquency rate of  24 percent.  He talked  about going directly                                                               
to the  bank when there is  a delinquency and working  out a plan                                                               
to avoid foreclosures.  He  emphasized getting everything "on the                                                               
same playing  field" by  giving those HOAs  formed prior  to 1986                                                               
the same rights  as those formed in  1986 and later.   He said he                                                               
thinks  "this  process"  will  help  HOAs  in  Alaska  and  "make                                                               
everything fair."                                                                                                               
                                                                                                                                
9:56:43 AM                                                                                                                    
                                                                                                                                
CINDY  LENTINE,  President,  Commodore  Park  HOA,  testified  in                                                               
support  of SB  143.    She described  the  condominiums and  the                                                               
variety of residents, indicating some  are on fixed incomes.  She                                                               
said  there have  been multiple  occasions in  which some  owners                                                               
have not  paid, and  the other  owners "must  meet the  cost when                                                               
this happens."   Meanwhile, the bank gets the benefit  of the HOA                                                               
interest without contributing to the cost.   She said SB 143 will                                                               
solve this  problem by treating  pre-1986 properties the  same as                                                               
post-1986 properties in regard to  the liens.  She said Commodore                                                               
Park has one or two amended  governing documents but has not been                                                               
able to get response from the  bank to get lienholder approval in                                                               
writing    a requirement.   The proposed legislation  solves this                                                               
problem.                                                                                                                        
                                                                                                                                
9:58:38 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN asked  Emma Torgerson  whether the  bill sponsor                                                               
had heard from AHFC.                                                                                                            
                                                                                                                                
9:59:06 AM                                                                                                                    
                                                                                                                                
EMMA  TORGERSON,   Staff,  Senator   Josh  Revak,   Alaska  State                                                               
Legislature,  on behalf  of Senator  Revak, prime  sponsor of  SB                                                               
143, stated  that the  sponsor's office had  not heard  from AHFC                                                               
regarding the proposed legislation.                                                                                             
                                                                                                                                
9:59:29 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN,  after ascertaining  there was  no one  else who                                                               
wished to testify, closed public testimony on SB 143.                                                                           
                                                                                                                                
CO-CHAIR HANNAN stated  her intention to have  the committee send                                                               
a formal request to AHFC "to weigh in on the bill."                                                                             
                                                                                                                                
[SB 143 was held over.]                                                                                                         
                                                                                                                                
10:00:33 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Community and Regional Affairs Standing Committee meeting was                                                                   
adjourned at 10:00 a.m.