ALASKA STATE LEGISLATURE  HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE  April 29, 2025 8:06 a.m. MEMBERS PRESENT Representative Rebecca Himschoot, Co-Chair Representative Donna Mears, Co-Chair Representative Carolyn Hall Representative Ky Holland Representative Mike Prax Representative Justin Ruffridge MEMBERS ABSENT  All members present COMMITTEE CALENDAR  HOUSE BILL NO. 133 "An Act establishing a 30-day deadline for the payment of contracts under the State Procurement Code; establishing deadlines for the payment of grants, contracts, and reimbursement agreements to nonprofit organizations, municipalities, and Alaska Native organizations; relating to payment of grants to named recipients that are not municipalities; and providing for an effective date." - MOVED CSHB 133(CRA) OUT OF COMMITTEE HOUSE BILL NO. 47 "An Act relating to crime and criminal procedure; relating to generated obscene child sexual abuse material; relating to the powers of district judges and magistrates; relating to teaching certificates; and relating to licensing of school bus drivers." - MOVED CSHB 47(CRA) OUT OF COMMITTEE HOUSE BILL NO. 184 "An Act relating to the Alaska Industrial Development and Export Authority; and relating to workforce housing development projects." - HEARD & HELD PREVIOUS COMMITTEE ACTION  BILL: HB 133 SHORT TITLE: PAYMENT OF CONTRACTS SPONSOR(s): REPRESENTATIVE(s) HIMSCHOOT 03/12/25 (H) READ THE FIRST TIME - REFERRALS 03/12/25 (H) CRA, STA 03/25/25 (H) CRA AT 8:00 AM BARNES 124 03/25/25 (H) Heard & Held 03/25/25 (H) MINUTE(CRA) 03/27/25 (H) CRA AT 8:00 AM BARNES 124 03/27/25 (H) Heard & Held 03/27/25 (H) MINUTE(CRA) 04/03/25 (H) CRA AT 8:00 AM BARNES 124 04/03/25 (H) Heard & Held 04/03/25 (H) MINUTE(CRA) 04/08/25 (H) CRA AT 8:00 AM BARNES 124 04/08/25 (H) Heard & Held 04/08/25 (H) MINUTE(CRA) 04/10/25 (H) CRA AT 8:00 AM BARNES 124 04/10/25 (H) Heard & Held 04/10/25 (H) MINUTE(CRA) 04/29/25 (H) CRA AT 8:00 AM BARNES 124 BILL: HB 47 SHORT TITLE: GENERATED OBSCENE CHLD SEX ABUSE MATERIAL SPONSOR(s): REPRESENTATIVE(s) VANCE 01/22/25 (H) PREFILE RELEASED 1/17/25 01/22/25 (H) READ THE FIRST TIME - REFERRALS 01/22/25 (H) CRA, JUD 03/11/25 (H) CRA AT 8:00 AM BARNES 124 03/11/25 (H) Heard & Held 03/11/25 (H) MINUTE(CRA) 03/13/25 (H) CRA AT 8:00 AM BARNES 124 03/13/25 (H) Heard & Held 03/13/25 (H) MINUTE(CRA) 03/18/25 (H) CRA AT 8:00 AM BARNES 124 03/18/25 (H) 04/24/25 (H) CRA AT 8:00 AM BARNES 124 04/24/25 (H) Heard & Held 04/24/25 (H) MINUTE(CRA) 04/29/25 (H) CRA AT 8:00 AM BARNES 124 BILL: HB 184 SHORT TITLE: AIDEA FINANCE WORKFORCE HOUSING DEVELOP. SPONSOR(s): REPRESENTATIVE(s) STORY 04/11/25 (H) READ THE FIRST TIME - REFERRALS 04/11/25 (H) CRA, L&C 04/24/25 (H) CRA AT 8:00 AM BARNES 124 04/24/25 (H) Heard & Held 04/24/25 (H) MINUTE(CRA) 04/29/25 (H) CRA AT 8:00 AM BARNES 124 WITNESS REGISTER ELLA LUBIN, Staff Representative Rebecca Himschoot Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Answered questions during the hearing on CS HB 133, Version H, on behalf of Representative Himschoot, prime sponsor. BOB BALLINGER, Staff Representative Sarah Vance Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Gave a recap of CSHB 47, Version N, on behalf of Representative Vance, prime sponsor. REPRESENTATIVE ANDI STORY Alaska State Legislature Juneau, Alaska POSITION STATEMENT: As prime sponsor, gave a recap of HB 184. JAMES HOLST, Executive Director Juneau Economic Development Council Juneau, Alaska POSITION STATEMENT: Gave invited testimony during the hearing on HB 184. MICHELE BROWN, Program Director Housing Alaskans Anchorage, Alaska POSITION STATEMENT: Gave invited testimony during the hearing on HB 184. BRANDON BREFCZYNSKI, Deputy Director Alaska Industrial Development & Export Authority Anchorage, Alaska POSITION STATEMENT: Answered questions during the hearing on HB 184. STACY BARNES, Director Governmental Relations, Alaska Housing Finance Corporation Anchorage, Alaska POSITION STATEMENT: Answered questions during the hearing on HB 184. ACTION NARRATIVE 8:06:08 AM CHAIR DONNA MEARS called the House Community and Regional Affairs Standing Committee meeting to order at 8:06 a.m. Representatives Ruffridge, Hall, Holland, Himschoot, and Mears were present at the call to order. Representative Prax arrived as the meeting was in progress. HB 133-PAYMENT OF CONTRACTS  8:07:28 AM CO-CHAIR MEARS announced that the first order of business would be HOUSE BILL NO. 133, "An Act establishing a 30-day deadline for the payment of contracts under the State Procurement Code; establishing deadlines for the payment of grants, contracts, and reimbursement agreements to nonprofit organizations, municipalities, and Alaska Native organizations; relating to payment of grants to named recipients that are not municipalities; and providing for an effective date." [Before the committee, adopted as the working document on 4/10/25, was the proposed committee substitute (CS) for HB 133, Version 34- LS0114\H, Dunmire, 4/7/25 "Version H".] 8:07:46 AM CO-CHAIR HIMSCHOOT, as prime sponsor, gave a recap of HB 133. She said the bill would create a 30-day deadline for payments from the state to nonprofits, Tribes, and municipalities. 8:08:41 AM REPRESENTATIVE HALL moved to adopt Amendment 1 to Version H, labeled 34-LS0114\H.1, Dunmire, 4/15/25, which read: Page 1, line 2: Delete "the deadline for payments and" Page 2, line 23, through page 3, line 5: Delete all material. Renumber the following bill sections accordingly. CO-CHAIR MEARS objected. 8:08:48 AM REPRESENTATIVE HALL explained that Amendment 1 would remove redundant language on page 2, line 23, through page 3, line 5. 8:10:08 AM The committee took an at-ease at 8:10 p.m. 8:11:40 AM CO-CHAIR MEARS asked Representative Hall to re-explain Amendment 1. 8:11:58 AM REPRESENTATIVE HALL restated that the Amendment would remove Section two entirely because the language is redundant to the overall intent of the bill. REPRESENTATIVE HOLLAND asked if section two is redundant, where is it covered elsewhere in the bill. 8:13:50 AM ELLA LUBIN, Staff, Representative Rebecca Himschoot, Alaska State Legislature, on behalf of Representative Himschoot, prime sponsor, said AS 36.90.200 already establishes prompt payment deadlines for private contractors of public works and public construction projects. Section 2 touches on subsection (a) of that current statute, which provides for those deadlines. CO-CHAIR MEARS removed her objection. There being no further objection, Amendment 1 was adopted. 8:15:54 AM CO-CHAIR HALL moved to report CSHB 133, Version 34-LS0114\H, Dunmire, 4/7/25, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 133(CRA) was reported out of the House Community and Regional Affairs Standing Committee. 8:16:24 AM The committee took a brief at-ease at 8:16 p.m. HB 47-GENERATED OBSCENE CHLD SEX ABUSE MATERIAL  8:16:27 AM CO-CHAIR MEARS announced that the next order of business would be HOUSE BILL NO. 47, "An Act relating to crime and criminal procedure; relating to generated obscene child sexual abuse material; relating to the powers of district judges and magistrates; relating to teaching certificates; and relating to licensing of school bus drivers." [Before the committee, adopted as the working document on 4/24/25, was the proposed committee substitute (CS) for HB 47, Version 34-LS0334\N, C. Radford, 4/18/25 "Version N".] 8:18:51 AM BOB BALLINGER, Staff, Representative Sarah Vance, Alaska State Legislature, on behalf of Representative Vance, prime sponsor, said the bill does three things: expands current sexual abuse material (CSAM) statutes to include the likeness of an identifiable, real child. Further, the bill creates a new crime of generated CSAM for material that is considered obscene even if the child is not identifiable. Thirdly, the Version N brings the new statute into conformity with child sexual abuse material in other places in [statute]. Everything else is conforming language. 8:20:21 AM REPRESENTATIVE PRAX moved to adopt Amendment 1 to Version N, labeled 34-LS0334\N.1, C. Radford, 4/25/25, which read: Page 1, line 2: Delete "relating to the powers of district judges  and magistrates;" CO-CHAIR MEARS objected for purposes of discussion. 8:20:33 AM The committee took a brief at-ease at 8:20 a.m. 8:20:38 AM REPRESENTATIVE PRAX explained that Amendment 1 proposes a title change, as the bill does not address the powers of district judges and magistrates. 8:21:44 AM MR. BALLINGER agreed with Representative Prax. CO-CHAIR MEARS presumed that it's supported by the bill sponsor. MR. BALLINGER answered yes. CO-CHAIR MEARS removed her objection. There being no further objection, Amendment 1 was adopted. 8:22:37 AM CO-CHAIR MEARS said it would have been nice to see more movement on the proposed artificial intelligence (AI) task force, and expressed her hope that the legislature would not need to come back and address things as more is learned about regulating AI. 8:23:47 AM CO-CHAIR MEARS moved to report CSHB 47, Version 34-LS0334\N, C. Radford, 4/18/25, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 47(CRA) was reported out of the House Community and Regional Affairs Standing Committee. 8:24:15 AM The committee took an at-ease from 8:24 a.m. to 8:29 a.m. HB 184-AIDEA FINANCE WORKFORCE HOUSING DEVELOP.  8:29:21 AM CO-CHAIR MEARS announced that the final order of business would be HOUSE BILL NO. 184, "An Act relating to the Alaska Industrial Development and Export Authority; and relating to workforce housing development projects." 8:29:50 AM REPRESENTATIVE ANDI STORY, Alaska State Legislature, as prime sponsor, gave a recap of HB 184 from the following prepared remarks [original punctuation provided]: As we discussed in our first hearing of this bill on Thursday April 24th, Alaska is facing a housing crisis, and a shortage in building of certain kinds of multi-family housing construction of 5 dwellings or more. This is typically higher-density rental housing units or condominiums for many residents who make up a large part of our workforce. Businesses report having difficulty hiring personnel and residents report lack of housing as a stress and a factor in making a decision to leave or stay. This lack of housing is hindering the growth of our economy. It is a necessity that more housing is built in Alaska. This bill allows the Alaska Industrial Development and Export Authority (AIDEA) to provide loans for housing construction of 5 or more dwelling units that cost the occupant less than 30 percent of their income, of those making 120 percent of the area mean income as determined by United States Department of House and Urban Development (HUD). It was asked in the first hearing how the numbers in section 5 defining workforce housing was determined. The 30 percent is derived from HUD's understanding of what constitutes "affordable", in that rent should constitute no more than 30 percent of a household's income. The point that Rep. Ruffridge made about this not being affordable for the average person is mostly accurate. Stacy Barnes from Alaska Housing Finance Corporation, in response to committee questions, sent a chart with these corresponding rent caps to the Committee, which you should have before you. If the committee wants to amend those numbers to something more accessible to a wider income group, I am open, and the sponsor of the companion bill in the Senate is also agreeable. The focus of this bill is workforce housing for individuals and families of 5 or more dwelling units, which is typically rental units or condos. The housing problem in Alaska is primarily that new builds of multi-family housing are just not happening. I have a couple articles to hand out for the committee about this problem. Affordability is also a problem. AIDEA stated that they have already had discussions about the need for funding of multi-unit housing projects with some municipalities. The Authority is well-situated to provide these loans through their loan participation program. AIDEA says that they already have the ability to finance workforce housing but haven't done so in a long time. This bill specifies loans for workforce housing in statute and would contribute to AIDEA's goal of developing more industry in Alaska by meeting industry's housing needs for a healthy workforce. It would also incentivize the construction of these much-needed developments. I believe this is an investment of AIDEA state resources that most Alaskans would strongly agree with, and I urge your support of HB 184. I have two invited testifiers today: Brian Holst, Executive Director with n the Juneau Economic Development Council; and Michele Brown, Program Manager for Housing Alaskans. I also have Brandon Brefczynski, Deputy Director for Alaska Industrial Development and Export Authority, and Stacy Barnes, Director of Governmental Relations and Public Affairs for Alaska Housing Finance Corporation, available online for questions. I want to thank Co-chairs Himschoot and Mears for allowing me to bring this bill before the committee today and again ask committee members for your support of House Bill 184. 8:35:21 AM JAMES HOLST, Executive Director, Juneau Economic Development Council (JEDC), said Alaska's persistent shortage of affordable workforce housing is a major barrier to economic growth and community stability. He spoke to why the bill is needed, explaining that Alaska's housing crisis is well documented with Juneau's rental vacancy rate at 4 percent, well below a healthy market rate of 5-8 percent indicating that demand far outweighs supply. Across the state, construction of new housing has not kept up with demand, especially for multi-family rental units that serve working families. High development costs often more than double those in the Lower 48 meaning that many workforce housing projects do not pencil out with additional financing tools. This shortage contributes to the ongoing outmigration and workforce challenges in Alaska. For 12 consecutive years, more people have left the state than have moved in. He shared statistics related to outmigration and nonresident workers, a population that is at an all-time high, specifically in construction and the oil and gas industries. He said the tools in HB 184 would enable Alaska Industrial Development and Export Authority (AIDEA) to bridge financing gaps, reduce project risks, and make workforce housing projects more likely to be built. 8:39:35 AM REPRESENTATIVE RUFFRIDGE asked what affordable housing looks like in terms of rental rates. MR. HOLST said the definition of workforce housing in HB 184 defines affordable housing as 120 percent of median household income, which is about $80,000-$90,000. 8:41:29 AM REPRESENTATIVE RUFFRIDGE said 30 percent of area median income (AMI) is a big number in many areas of Alaska. He asked Mr. Holst what "affordable" means to him in terms of rental prices, as well as the cost of homes. MR. HOLST pointed out that 30 percent would be the maximum and is only affordable if someone is earning 120 percent of median income. He acknowledged that $3,000 is not affordable to most working people in Juneau. He reiterated that there's not enough housing, so demand continues to push up the rent. By bringing on additional supply, the demand would increase, and rental prices would decrease. There's also a high cost of development because there's a large amount of risk, so enabling AIDEA would "de-risk" the process and lower cost resulting in more units that cost less and bring competition to the market. CO-CHAIR MEARS asked whether gaps in certain brackets had been identified in Juneau's market. MR. HOLST said there are needs for housing at all income levels in Juneau. He observed that there are more jobs in Juneau than there are workers, and the primary reason nonresident mine workers choose not to live in Alaska is the high cost of housing. He concluded that the current price level is too high, although its difficult to determine what price is needed. CO-CHAIR MEARS asked whether there would be more demand for rent at $2,000 rather than $3,000. MR. HOLST responded yes, but service workers need housing in the $1,200 to $1,500 range. 8:48:28 AM REPRESENTATIVE RUFFRIDGE questioned the cost per square foot to build in Juneau. MR. HOLST offered to follow up with the requested information. 8:48:50 AM REPRESENTATIVE HALL shared her understanding that affordable housing is considered low income, whereas attainable housing is the "missing middle." She asked whether there are different brackets below 120 percent AMI. MR. HOLST reiterated that there are needs across all income levels in Juneau. 8:53:26 AM REPRESENTATIVE HOLLAND asked whether offering another funding source would actually solve the issue. He opined that the funding source is not a current constraint. MR. HOLST said bringing AIDEA in would reduce risk and make it more affordable to build. He explained that part of the solution is providing additional capital from an organization that can share some of the risk. He shared an example of ways that de-risking the project would help. 8:56:34 AM REPRESENTATIVE HOLLAND observed that nonresident workers seem to be highly paid. He questioned whether affordable housing would align with the nonresident workers Alaska is trying to attract. MR. HOLST agreed that 30 percent of 120 percent of AMI or $3,000 in rent - is not "low cost" housing. He reiterated that the cost of housing is the number one reason that nonresident workers choose not to live in Alaska. 9:01:00 AM REPRESENTATIVE PRAX asked whether AIDEA is the right agency as opposed to Alaska Housing Finance Corporation (AHFC). He opined that AIDEA is being spread thin. MR. HOLST said AIDEA's strength is the tremendous amount of flexibility the agency has to make project work. He expected that AIDEA would help projects by co-investing and bringing an array of tools to meet the need in the community. 9:04:01 AM MICHELE BROWN, Program Director, Housing Alaskans, gave invited testimony during the hearing on HB 184. She said the bill would make clear that AIDEA has the authority to invest in workforce housing development projects and open the door to exploring an array of innovative financing tools that other states have deployed. She further noted that this is consistent with AIDEA's mission to finance for profit, nonprofit, and community projects for meaningful economic development, and necessary to support the workforce needed to breathe life into the other major projects that AIDEA invests in. She spoke to the lack of housing and the high cost of construction and acquiring capital. She said other states have demonstrated that state level financial tools stimulate the development of affordable housing. She said the bill could allow AIDEA to evaluate and influence finance tools like government backed loans with lower interest rates, longer term loans, financing that allows developers to fund projects in stages. AS these tools are developed, AIDEA could engage in partnerships to further reduce risk and share resources and enable the development of more affordable options. 9:07:52 AM MS. BROWN, in response to previous questions, she defined "affordable housing" as rent up to $1,600 for low-income households that are below 60 percent AMI, and up to $2,400 for middle income households that are between 80 and 120 percent AMI. She pointed out that federal subsidies are offered to lower income households and higher income households can generally take care of themselves; however, middle-income folks have no real tools to help drive down the cost of market and nonsubsidized housing. She said a new funding source is not enough, but empowering AIDEA would help leverage and coordinate funding. CO-CHAIR MEARS asked how utilities play into the cost of rent. MS. BROWN clarified that in Housing Alaskans' studies, utilities are in addition to the rental figures. 9:11:40 AM CO-CHAIR HIMSCHOOT said there's been an ongoing conversation about the aging population. She asked Ms. Brown to comment on that part of the housing market and whether the bill supports that gap between the empty nest and assisted living. MS. BROWN said currently, there is a housing gridlock. In a normal, healthy economy people start out in rentals or low-cost ownership and move up as their income grows, which frees up lower cost housing - eventually downsizing as they age. However now, people cannot afford to give up their low interest rate by selling because rates are so high. She said the bill would help with movement along the entire housing continuum. 9:15:07 AM REPRESENTATIVE PRAX asked what AIDEA could do that AHFC could not. MS. BROWN said AIDEA has resources that could be deployed. She acknowledged that AHFC has the housing expertise and AIDEA has the funding. She suggested that AIDEA could choose to join forces with AHFC or a for-profit or nonprofit entity. REPRESENTATIVE HOLLAND asked whether there is any data on the need for rentals as opposed to condominiums or homes. In addition, he asked how much of the AIDEA financing would be for rentals versus ownership options. MS. BROWN said there is a high rental population at over 40 percent. She said HB 184 targets rentals but there could be a healthy appetite for ownership. REPRESENTATIVE HOLLAND sought to clarify that the bill is directed at rentals. 9:19:38 AM REPRESENTATIVE STORY deferred to AIDEA. 9:20:42 AM BRANDON BREFCZYNSKI, Deputy Director, Alaska Industrial Development & Export Authority (AIDEA), said AIDEA would finance rental developments because they can be modeled out based on cash flow and occupancy, which ensures repayment on the investment. CO-CHAIR MEARS concluded that although the bill is not specific to rentals, the economic model leads more to rentals versus ownership. MR. BREFCZYNSKI answered yes. CO-CHAIR MEARS asked whether Ms. Barnes could address the robustness of programs at AHFC for home loans. 9:25:55 AM STACY BARNES, Director, Governmental Relations, Alaska Housing Finance Corporation (AHFC), said AHFC's mission is to provide Alaskans with access to quality and affordable housing. Through that mission AHFC provides housing through the public housing programs utilizing federal HUD funds and as the state's housing finance agency, can provide home loans for Alaskans with 1-4 units based on credit worthiness and the ability to go to market in partnership with banks and credit unions. In addition, AHFC provides multi family financing for rental properties. 9:32:47 AM REPRESENTATIVE HALL asked how many units are accounted for in the 15 multi-family loans offered by AHFC in FY 24, and the 12 multi-family loans in FY 25. MS. BARNES offered to follow up with the requested information. 9:33:36 AM REPRESENTATIVE RUFFRIDGE asked for the average cost per square foot of the 120 new housing units built by Housing Alaskans. MS. BROWN explained that Housing Alaskan decided to invest its personal dollars into stalled projects, some of which were at risk of losing public dollars because they had not built fast enough. This resulted in the acceleration of 122 units over two grant cycles. REPRESENTATIVE RUFFRIDGE restated the question and asked for the average cost to rent and/or purchase one of the housing units. MS. BROWN reported that in Anchorage it was $250 per square foot, Bethel was $350 per square foot, compared to the Lower 48 at $130 per square foot. REPRESENTATIVE RUFFRIDGE commented in agreement with Representative Holland that more money would not necessarily fix the problem. He concluded that at the end of the day, its expensive to build, and asked what the vision is for AIDEA and what kind of program it could offer to make housing affordable. He reiterated his belief that the bill may not solve the underlying problem, and urged the committee to consider contributing factors like "What goes in to $250 per square foot?" CO-CHAIR MEARS agreed that there are some deeper questions that need to be answered. 9:44:08 AM REPRESENTATIVE STORY reiterated that this is a key issue for Alaskans and acknowledged that a variety of factors need to be tackled. She said the bill is not a "silver bullet," but it would be another tool that allows AIDEA to get creative. She said [the legislature] needs to consider how to incentivize developers, and AIDEA is an organization that could show leadership in this area. REPRESENTATIVE PRAX asked whether both AIDEA and AHFC agree that AIDEA is the correct entity to take this on. MR. BREFCZYNSKI reiterated that AIDEA already has the ability to finance multi-unit housing projects. He shared that currently, AIDEA has no pending applications from developers. He added that AIDEA is in discussion with several municipalities about financing for multi-unit housing. REPRESENTATIVE PRAX directed the question to AHFC and expressed concern that AIDEA is being spread too thin. 9:49:25 AM MS. BARNES said AHFC is happy to answer questions and provide technical information on the bill and has worked with AIDEA on projects in the past with AIDEA acting as the developer and AHFC providing the long-term financing. REPRESENTATIVE PRAX referenced several multi-family units in the Fairbanks/North Pole area one financed by AHFC and the other by AIDEA. He questioned the specifics of each project and whether AIDEA's focus on developers is what distinguishes them from AHFC. MR. BREFCZYNSKI offered to follow up with specifics on the military housing development and why it stalled. REPRESENTATIVE STORY reiterated that AIDEA has not done housing development since the 1980s. She surmised that a lack of awareness about AIDEA's involvement in these programs may contribute to the lack of applications. She observed that both AIDEA and AHFC are supportive of each other's efforts. REPRESENTATIVE HOLLAND suggested that it would be helpful to hear from developers on this issue, as well as businesses that offer housing solutions. 9:57:39 AM CO-CHAIR MEARS opened public testimony on HB `184. After ascertaining that no one wished to testify, she closed public testimony and announced that the bill would be held over. 9:59:03 AM ADJOURNMENT  There being no further business before the committee, the House Community and Regional Affairs Standing Committee meeting was adjourned at 9:59 a.m.