SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE April 22, 1996 2:32 p.m. MEMBERS PRESENT Senator John Torgerson, Chairman Senator Randy Phillips, Vice Chairman Senator Tim Kelly MEMBERS ABSENT Senator Fred Zharoff Senator Lyman Hoffman COMMITTEE CALENDAR CS FOR HOUSE BILL NO. 322(FIN) "An Act authorizing grants for temporary housing assistance during emergencies and disasters." CS FOR HOUSE BILL NO. 192(FIN) am "An Act relating to housing assistance provided by the Alaska Housing Finance Corporation and to its rural housing programs, to the corporation's supplemental housing development grants to regional housing authorities, and to housing programs of regional housing authorities; permitting regional housing authorities to make, originate, and service loans for the purchase and development of residential housing; and amending the definitions of `rural' and `small community' as applied in various housing programs." SENATE BILL NO. 322 "An Act relating to distribution of national forest income to boroughs; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION HB 322 - See Community & Regional Affairs minutes dated 4/3/96, 4/10/96. HB 192 - See State Affairs minutes dated 4/11/96. SB 322 - No previous action to record. WITNESS REGISTER Carol Carroll, Director Administrative & Support Services Division Department of Military & Veterans Affairs P.O. Box 110900 Juneau, AK 99811-0900 POSITION STATEMENT: Offered information on HB 322 Bryce Edgmon, Staff to Representative Richard Foster State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on HB 192 Kay Murphy, Mortgage Operations Director Alaska Housing Finance Corporation P.O. Box 101020 Anchorage, AK 99510-1020 POSITION STATEMENT: Responded to questions on HB 192 Bruce Kovarik, Executive Director Bering Straits Regional Housing Authority P.O. Box 995 Nome, AK 99762 POSITION STATEMENT: Testified in support of HB 192 John Bitney Alaska Housing Finance Corporation P.O. Box 101020 Anchorage, AK 99510-1020 POSITION STATEMENT: Testified in support of HB 192 Senator Robin Taylor State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of SB 322 Julie Penn Alaska Environmenal Lobby P.O. Box 22474 Juneau, AK 99802 POSITION STATEMENT: Opposes SB 322 ACTION NARRATIVE TAPE 96-22, SIDE A Number 001 CSHB 322(FIN) GRANTS FOR HOUSING FOR DISASTER VICTIMS  CHAIRMAN TORGERSON called the Senate Community & Regional Affairs Committee meeting to order at 2:32 p.m., and brought CSHB 322(FIN) before the committee as the first order of business. He noted that at the previous hearing on the legislation, concern was expressed by the committee about this possibly being a new program and that it would set an unlimited amount of money that could go forward for disaster relief funds. CAROL CARROLL, Director, Administrative & Support Services Division, Department of Military & Veterans Affairs, explained the state already has programs that provide temporary housing, and the only difference that the bill would make is that instead of the department signing the leases and providing for rent for disaster victims, they would give the victims the money and they would then go and find their own rental units. The department would stop being a landlord or rental agent. SENATOR TORGERSON asked how the department proposed handling some of the concerns that the committee had about the possibility of potential fraud if the grants were to be made directly to the individuals. MS. CARROLL said the department would do an assessment of what the rental rates are in a community at the pre- disaster rate and then come up with an amount they will provide toward their monthly lodging. If individuals choose to stay in a higher rental unit, they would have to provide the difference over the average rental rate, which is the way the program is run at the present time. SENATOR KELLY asked if disaster victims have to contact the department in advance and the department then tells them the game rules before they can go out and commit the department to paying for their temporary housing. MS. CARROLL replied the individuals have to come in and do an interview and establish their eligibility before any assistance is provided. She also acknowledged it is exactly the way the federal government runs their program, and when there is a federal declaration, then the federal government runs the temporary housing program. Number 100 There being no further questions from the committee, SENATOR TORGERSON asked for the will of the committee. SENATOR RANDY PHILLIPS moved CSHB 322(FIN) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered.  CSHB 192(FIN) am AHFC HOUSING LOANS  SENATOR TORGERSON brought CSHB 192(FIN) am before the committee as the next order of business. BRYCE EDGMON, staff to Representative Richard Foster who is prime sponsor of HB 192, said the legislation essentially brings statutes for rural areas into compliance with urban areas. He noted the bill is supported by the regional housing authorities, as well as the Alaska Housing Finance Corporation. The primary change made by the legislation will enable regional housing authorities to process loans and refinance applications within their jurisdictions instead of having to go through a loan examiner in Anchorage. The legislation also reduces the age of qualification for senior citizens from 60 to 55 for senior housing programs. Language was also added to ensure that regional housing authorities are restricted to making loans only in their areas of jurisdictions and that any AHFC loan programs must adhere to non- discrimination statutes. Mr. Edgmon also presented a section-by-section analysis of the bill and responded to committee members' questions. Number 270 SENATOR TORGERSON asked if a provision in the legislation puts the AHFC in the water and sewer business. KAY MURPHY, Mortgage Operations Director, Alaska Housing Finance Corporation, testifying via teleconference from Anchorage, answered that it does not. She explained the funds that Alaska Housing would be using to supplement Federal HUD funds would be used to pay for off-site water and sewer improvements, but AHFC would not take ownership of those utilities. Number 285 SENATOR KELLY commented that if a regional housing is doing one of these water and sewer projects, they can hook up to these individuals' homes and call that part of the project, but in developed areas, generally most homes have to assume that cost themselves. He observed AHFC is doing something for free that in most urban developments the homeowner pays for. Number 315 BRUCE KOVARIK, Executive Director, Bering Straits Regional Housing Authority and also representing the Association of Alaska Housing Authorities, testifying via teleconference from Nome, voiced their support for HB 192. The legislation will allow regional housing authorities to originate and service AHFC loans in rural areas; it adds the outside water and sewer capability; it will allow more activity for the supplemental housing grants; and it will provide clarification and improvement of AHFC loan programs which affect rural communities. Addressing Senator Kelly's concern with water and sewer projects, Mr. Kovarik said more and more regional housing authorities find themselves acting as private developers and being treated exactly as private developers by both the Public Health Service and the state of Alaska. The bill doesn't add any more money to the program, but it gives them the flexibility for making those connections and making those off-site ties that are not currently available with supplemental housing grants. Additionally, the authorities are limited by HUD with a total development cost for their projects. Number 342 SENATOR KELLY asked what AHFC's delinquency rate has been in the rural unincorporated areas. KAY MURPHY responded their regular rural loan program has averaged under 4 percent. The rural program has had delinquencies in the past, but the portfolio looks good now as do the urban loans. She said AHFC doesn't see them being any higher risk than they do with the urban loans if they are properly underwritten. SENATOR KELLY said he just wanted to get that point on the record because we continue to hear how the unorganized areas of the state can't afford to pay property taxes, to fund education, etc., and yet AHFC says they are having no problem paying their mortgages. Number 377 SENATOR TORGERSON noted Section 17 changes the age of seniors from 60 years of age to 55 years of age to qualify for these programs, and he asked why the age limit was being lowered. KAY MURPHY clarified that AHFC was not the party to institute that change, but they do not anticipate that the decrease in the age limit will add a lot of activity to their loan program or for the requests for grant funds. She also clarified to Senator Torgerson that the declaration of age applies to AHFC's senior housing loan program and its grant programs and doesn't distinguish between urban or rural. Number 418 JOHN BITNEY, representing Alaska Housing Finance Corporation, stated their support for HB 192. Number 422 SENATOR TORGERSON stated it was his intent to hold HB 192 in committee until its next meeting so that the committee could take a closer look at sections of the bill. SB 322 DISTRIBUTION OF NATIONAL FOREST INCOME  SENATOR TORGERSON introduced SB 322 as the next order of business, and invited Senator Taylor to present an overview on the legislation. SENATOR ROBIN TAYLOR, prime sponsor of SB 322, said timber receipts have vacillated significantly over the last several years, but they do provide a significant portion of the funding base for many of the school districts within his district. However, when the law was amended approximately three years ago, it was amended in such a way that it provides a distribution of forest receipts based on a formula of average daily membership within the schools, the population factor and the number of acres within a borough. The largest number of acres and highest population is Juneau, Alaska, where there has not been a timber harvest for a lengthy period of time. He said it seems that funds are being distributed based on a formula that drives the majority of those into an area that has no harvesting of timber and has no roads to maintain because there are not roads being built as the result of havesting of timber. Senator Taylor said SB 322 will revise the formula so as to find a triggering mechanism which indicates that if a community is being impacted by timber harvesting, that community should receive those impact funds. He acknowledged that the bill as it is currently structured is a bit cumbersome and doesn't work as well as he would have hoped. He advised that he would look to the committee for its advice and assistance in redrafting the bill so as to accomplish its overall purpose. Senator Taylor believes it is an issue that needs to be revisited because he doesn't think the funds are currently being equitably distributed. Number 492 SENATOR TORGERSON said he agrees with what Senator Taylor is trying to do with the legislation, but he wasn't sure if it would be legal according to the federal regulations on how those forest receipts are divided up. He wondered if there was a way to tie the allowable cut acreage into where the funds are distributed. SENATOR TAYLOR said he has thought about that too, but he hasn't come up with a good alternative. He said it may be that we will have to look at some radius from where the timber is harvested that would then impact and allow all of the communities within that radius to share within that fund. Number 532 JULIE PENN, representing the Alaska Environmental Lobby, said the Federal Code, 16 U.S.C. 500, designating U.S. Forest Service 25 percent receipts, clearly prohibits Alaska from allocating those receipts based on logging activity or any other criteria except for the proportional share of national forest land in each borough. She pointed out Juneau would lose money on this while other boroughs in Southeast would gain, and she said it sounds divisive to her as a person who lives in Southeast. She also the noted the bill's sponsor statement singles out the boroughs that oppose logging, and because of that she thinks that the bill is punitive in its intent. As a member of the Alaska Environmental lobby, she respectfully suggested that the committee pursue the legislation no further. Number 550 There being no further testimony on SB 322, SENATOR TORGERSON asked for the pleasure of the committee. SENATOR KELLY moved SB 322 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business to come before the committee, the meeting was adjourned at 3:15 p.m.