MINUTES SENATE FINANCE COMMITTEE April 22, 1999 9:07 AM TAPES SFC-99 # 104, Side A and Side B CALL TO ORDER Co-Chair John Torgerson convened the meeting at approximately 9:07 AM. PRESENT Senator John Torgerson, Senator Sean Parnell, Senator Randy Phillips, Senator Dave Donley, Senator Loren Leman, Senator Gary Wilken and Senator Al Adams. Also Attending: SENATOR MIKE MILLER; SENATOR JERRY MACKIE; ALISON ALGEE, Deputy Commissioner, Department of Administration; GINNY FAY, Legislative Liaison, Office of the Commissioner, Department of Commerce and Economic Development; CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Commerce and Economic Development; ELMER LINDSTROM, Special Assistant, Office of the Commissioner, Department of Health and Social Services; DAN FAUSKY, CEO/Executive Director, Alaska Housing Finance Corporation, Department of Revenue; JOHN BITTNEY, Legislative Liaison, Alaska Housing Finance Corporation, Department of Revenue; NANCY SLAGLE; Director, Division of Administrative Services, Department of Transportation and Public Utilities; TOM BRIGHAM, Director, Division of Statewide Planning, Department of Transportation and Public Facilities; DAVE MILLER, Federal Highway Administration. Attending via Teleconference: From Anchorage: DWIGHT BECKER, Program Coordinator, Adult Protective Services, Division of Senior Services, Department of Administration; BRUCE KOVARIK, Executive Director, Association of Alaska Housing Authorities; SUE BENEDETTE, Vice President, First National Bank of Anchorage and Co-Chair, Alaska Mortgage Bankers Association; ROBIN WARD; From Dillingham: DAVE MCCLURE, Executive Director, Bristol Bay Housing Authority, and Board Member, AHFC; From Homer: ANNE WHITNEY, President-elect, Katchemak Board of Realtors; ANGIE NEWBY, President, Katchemak Board of Realtors; From Kodiak: BOB BRODIE; BONNIE AULABAUGH, Broker, Chelsea Realty; ED MAHONEY, President, Kodiak Building Industry Association From Valdez: NANCY LETHCOE. SUMMARY INFORMATION SB 107-ABOLISH TOURISM MARKETING COUNCIL A committee substitute and a fiscal note were adopted. The committee heard from the sponsor, the House Finance Committee, Department of Commerce and Economic Development plus additional public testimony. The bill was reported from committee. SB 73-ASSISTED LIVING FACILITIES The sponsor and the Department of Administration addressed the committee. The bill was held in committee. SB 149-TRANSPORT.PLAN/ROAD MONEY The committee heard from the sponsor, the Department of Transportation and Public Utilities and the Federal Highway Administration. The bill was held in committee. SB 150-SMALL COMMUNITY HOUSING LOANS The committee heard from the Alaska Housing Finance Corporation. Public testimony was taken and the bill was held in committee. CS FOR SENATE BILL NO. 107(L&C) "An Act relating to tourism and tourism marketing; eliminating the Alaska Tourism Marketing Council; and providing for an effective date." DARWIN PETERSON, aide to Senator John Torgerson explained the changes made in the proposed CS before committee members. Many of the items conformed to changes made by the House Finance Committee to the companion bill. Some of the changes were as follows: Language was deleted that stated, "The tourism related contract awarded under AS 44.33.125(b) to a qualified trade association with the right of first refusal or subcontract by a qualified trade association." This was conforming changes to those made in the House version. Language was inserted to clarify the location of a visitor center in Tok, Alaska. Co-Chair John Torgerson said the intent was to ensure the location of the only state- operated visitor center. Direction was given as to what kind of research could be conducted in relation to tourism. This provision was not included in the House bill. Section 15 was amended to provide for marketing operations. Instead of stating that the procedures were to be directed by the department, the language gave the direction. This also conformed to the House changes. Language was inserted to read "or fails to accept the offer within a reasonable time" and related to the contracting of services. This was not contained in the House bill but was inserted here to show the Legislature's intent to the trade association. Co-Chair John Torgerson clarified this was to avoid contract delay. Clarification was given to allow the use of the state seal and other logos. The use of mailing lists and other data received as part of the contractual services was also stipulated. Conforming technical changes were made to apply to the substantive amendments. Senator Sean Parnell offered a motion to adopt the CS Version "I" as a Workdraft. Senator Al Adams objected. He wanted the sponsor to testify as to whether or not he agreed with the changes. SENATOR JERRY MACKIE, sponsor of the bill, stated he supported the changes. Many of the changes were technical and cleaned up the language. Senator Al Adams removed his objection and Version "I" was adopted. GINNY FAY, Legislative Liaison, Department of Commerce and Economic Development testified. Although she had not had an opportunity to review the CS, she felt the changes were fine. Senator Al Adams asked if new fiscal notes would be prepared. Co-Chair John Torgerson said the committee would draft fiscal notes to reflect the changes. Senator Jerry Mackie stated the changes wouldn't change the fiscal notes. Co-Chair John Torgerson concurred but noted he wanted to address the personnel services component of the note. Ginny Fay noted there should be an updated fiscal note. The department had found a mistake and submitted a revised fiscal note. NANCY LETHCOE testified via teleconference from Valdez in support of the bill. The committee began addressing the fiscal notes. Co-Chair John Torgerson noted he had requested that the department provide a breakdown. A House Finance Committee fiscal note would also be considered for this bill. Senator Jerry Mackie spoke to the fiscal notes. He supported the fiscal notes submitted to the committee with the Senate Resources committee substitute. He spoke to the location of staff positions, which were agreed upon with the department. These actually showed a reduction. Co-Chair John Torgerson said the biggest concern was with the personnel services line. Ginny Fay pointed out a misunderstanding in one of the fiscal notes. The House Finance Committee fiscal note was based on the millenium plan and was in error. She shared the same confusion that the reductions weren't happening more rapidly. She detailed the situation and showed how the latest fiscal note corrected the error. JOE BALASH, Staff to Representative Gene Therriault came to the table at the request of the co-chair. He was asked if the budget would be increased with the HFC fiscal note. He clarified that numbers the previous witness referred to were general funds only and the long-range discussion would address that. He detailed the fiscal information. There was discussion between Ginny Fay and Joe Balash on the matter. Co-Chair John Torgerson understood that the project development and the project assistance portions would not be funded through the department. There would be fewer positions funded. Senator Jerry Mackie affirmed. There was discussion as the differences of the number of positions requested in the various fiscal notes. Senator Jerry Mackie supported the existence of the Division of Tourism. It provided important functions. However, he noted that if many of the functions were removed, the same number of positions could not be justified. He spoke to the general budget situation. He was trying to be realistic. Co-Chair John Torgerson asked if the personnel services line totaled $890,400. Ginny Fay stated there would be a reduction from 16 staff to nine. Joe Balash countered that was not correct. There was a $100,000 difference in the personnel services line and $20,000 in the contract line for FY00. Co-Chair John Torgerson was inclined to recommend the committee adopts the HFC fiscal note. Senator Jerry Mackie asked the department to defend their argument that they needed to maintain the same level of staffing in light of the intent to scale down the division. Ginny Fay responded that the fundamental difference was that currently there was no staff in either the ATMC or the Division of Tourism to directly do marketing functions. It was contracted out and overseen by staff. If the bill passed, there would not actually be a privatization of marketing but rather a consolidation of marketing. Staff would be reduced in both agencies and the Division of Tourism would be required to oversee a contracting level that was four times greater that the present. Co-Chair John Torgerson was not convinced. Senator Loren Leman agreed with Co-Chair John Torgerson's assumptions on the first year, but looked at the second year and suggested merging the numbers of the two fiscal notes as the amount was higher in the house fiscal note than the division requested. Joe Balash commented on the contractual line item saying that the funding would be to fund initial contract services. After the initial contracts were made, fewer funds would be needed to oversee the contractors. Senator Jerry Mackie said the $200,000 was for tourism related research and had been provided for in the committee substitute. Senator Randy Phillips made a motion to direct the co-chair to write a new fiscal note similar to the house version and work out the details later. Senator Al Adams objected and spoke to his objection. By having the co-chair draft the new fiscal note, the remainder of the committee would not know the amount and allocation of funds between the personnel services and contractual services components. Co- Chair John Torgerson said he would write the fiscal note using the direction of the discussion held in this hearing. Senator Loren Leman did not have a problem granting the co- chair authority to write the fiscal note. He had concerns with the additional spending allowed in the second year. He didn't believe sufficient savings were presented. The motion to create a new fiscal note adopted by a vote of 6-2-2. Senator Loren Leman and Senator Al Adams voted against the motion. Senator Dave Donley and Senator Sean Parnell were absent. Senator Randy Phillips offered a motion to report CS SB 107 (FIN) out of committee with the new fiscal note. There was no objection and it was so ordered. [Pause] CS FOR SENATE BILL NO. 73(HES) "An Act relating to assisted living homes; and providing for an effective date." This was the second hearing for this bill. Co-Chair John Torgerson explained proposed committee substitute, Version "G". He commented that he supported the bill but had concerns about the fiscal note. The CS addressed those concerns. Under the proposed CS, the bill would provide for a reimbursement rate of $50 per day, up from the current $34. This rate would apply for two years. In FY02, the rate would increase to $75 per day, where it would remain. The current version allowed for an additional raise to $100 per day, which this would eliminate. He noted an agreement with the Alaska Mental Health Trust Authority that they would provide $600,000 per year toward this increase. Co-Chair John Torgerson asked Senator Mike Miller if he opposed the drafted CS. SENATOR MIKE MILLER qualified that he had tried to grant as much reimbursement to the caregivers as possible. In light of the current fiscal crisis, he believed this would be an improvement for the caregivers and would help many assisted living homes. He told the committee he was making other efforts to help the assisted living facilities in ways that would not cost the state any money. Senator Randy Phillips moved for adoption of the CS Version "G". There was no objection and it was so ordered. Senator Mike Miller further commented that he felt this legislation was a step in the right direction and that it should not be delayed. DWIGHT BECKER, Program Coordinator, Adult Protective Services, Division of Senior Services, Department of Administration, testified via teleconference from Anchorage. He asked for clarification of when the $75 reimbursement rate actually began. Tape: SFC - 99 #104, Side B 9:54 AM Co-Chair John Torgerson clarified that the program would begin in the calendar year 2001. However the fiscal year was 2002. ALISON ELGEE, Deputy Commissioner, Department of Administration and ELMER LINDSTROM, Special Assistant, Office of the Commissioner, Department of Health and Social Services came to the table to speak to the fiscal notes. Co-Chair John Torgerson asked why there were two fiscal notes rather than one. Alison Elgee answered that this program impacted the clients of the Division of Senior Services and the clients of the Division of Mental Health and Developmental Disabilities. The program operated under one set of statutes and regulations although it serviced two different client groups. Co-Chair John Torgerson wanted to know the total general fund expenditure. Elmer Lindstrom detailed the amounts of both fiscal notes adjusting for the receipts from the Alaska Mental Health Trust Authority. Senator Gary Wilken calculated the general fund component at $1.26 million. Co-Chair John Torgerson ordered the bill held in committee to work on the fiscal notes. SENATE BILL NO. 149 "An Act relating to awards of federal funds to municipalities for road projects and to the statewide transportation improvement program; and providing for an effective date." This was the first hearing for this bill. Co-Chair John Torgerson made general remarks to the bill. There had been discussion in committee regarding appropriation to specific transportation projects, which the department failed to do even after the projects passed the entire legislative process and was approved by the Governor. This legislation would address that. It would also place into statute, under the Community Road Program, how the funds would be broken down. MARY JACKSON, staff to Senator John Torgerson came to the table. The bill contained two things. It would put the Statewide Transportation Program (STIP) into statute and it would establish a new program for municipalities. She gave a sectional analysis of the bill. Section 1 set the STIP into statute and broke it down into three components: the National Highway System, the Community Transportation Program and Trails and Recreation Access for Alaska. It established a percentage value for all federal funds. It also set out a process for revising the STIP to give direction to the department. It made clear the legislative process was clear when the Legislature took action on a STIP during the budget process. Subsection (b) addressed the CTP and established the categories and percentages. The Anchorage Metropolitan Area Transportation Study (AMATS) was identified at 30 percent. Remote Areas was identified at ten-percent. State Highway Systems was identified at 15 percent. Gravel Improvement and Upgrades was identified at 15 percent as well. Reconstruction and Transfer was identified at ten-percent. Finally, Statewide Competitive was identified at 20 percent. Subsection (C) gave direction to the department on how to rank the projects with priority given to road that would be upgraded from gravel or asphalt treatment and turned over to a municipality for maintenance. They intent was to reduce the cost of maintenance to the department. Subsection (d) stipulated that if there were not sufficient projects within a component, a transfer to other categories was provided. Subsection (e) gave definitions. Section 2 provided the Gravel to Pavement was a separate program that would sunset after four years. The 15 percent allocation for that category would transfer to the Statewide Competitive category. It also stipulated that projects could not be included in this category if they qualified for either the NHS or TRAAK programs. Section 3 gave the definitions with reference to the Gravel and Pavement category and would sunset in four years. Section 4 was a new program for the award of federal funds to municipalities. This would allow the municipalities to come to the department with projects that qualified under federal program eligibility standards. The municipalities would undertake construction of the projects and provide the matching grant requirement. Sections 5 and 6 were the effective dates for the components. Mary Jackson noted that representatives were present from the department and the National Highway System. Co-Chair John Torgerson wanted to hear from the representatives but did not intend to take up amendments at this meeting. Senator Al Adams commented that some of the projects would be passed along to municipalities. He wanted to know if the bill contained language that shifted liability from the state to the municipality, once the funds were transferred. He also commented that the percentages should not be dictated. While he felt the remote category should be at least 15 percent, he didn't believe the limitations should be placed on the department. Co-Chair John Torgerson felt those were good questions for the department. He commented that the matter had been discussed and the proposed percentage amounts closely mirrored history. Senator Al Adams noted the available funding amounts fluctuated. TOM BRIGHAM, Director, Division of Statewide Planning, Department of Transportation and Public Facilities was called to the table to respond to Senator Al Adams's concerns about local liability. The department believed it was never completely off the hook, according to Tom Brigham. Language in the bill would help however. In addressing Senator Al Adams's concerns about the ten- percent allocated to rural projects, Tom Brigham said it would depend on the future of sanitation roads in rural communities. If you look at the out-years currently projected for the program, ten-percent was not unreasonable. However, Public Health Service and Village Safe Water staff saw additional projects on the horizon and felt a higher percentage would be needed. Senator Al Adams wanted to know if language could be added to limit the state's liability. Tom Brigham responded that the Attorney General would be better suited to address the matter. Senator Gary Wilken wondered why a particular area of the state was singled out (Anchorage) and wanted to know if other areas such as Fairbanks should be considered for inclusion. Senator Gary Wilken had a question on what would happen when the gravel to pavement provision sunset. Mary Jackson responded that the intent was the percent allocated to that program would be added to the statewide competitive category. Senator Gary Wilken wanted to know the percentage allocation for the six categories in the past for comparison. Co-Chair John Torgerson said there wasn't officially an FMATS established for Fairbanks even though there was some money appropriated to it. However, the question was well taken. Tom Brigham confirmed. Senator Gary Wilken then asked what was the FMATS if it was not an official organization. Tom Brigham said it was an operating agreement between the Department of Transportation and Public Utilities, the borough, the City of Fairbanks and the City of North Pole. Once the urban area of Fairbanks reached 50,000 people, it would then qualify. At that point, the department would treat it in the same manner AMATS was treated. Senator Gary Wilken wanted to make sure the matter was clear before the bill was moved from committee. Senator Lyda Green asked how the Gravel to Pavement Upgrade timeframe was established. Was the intent that all projects would be completed in four years, or if projects after that date would not be listed in the separate allotment? Co- Chair John Torgerson said the target was set by the TEA21. Mary Jackson confirmed and detailed. DAVE MILLER, Assistant Division Administrator, Federal Highway Administration, came before the committee to address the municipal road project portion of the bill. Title 23 in itself specifically allowed for states to contract with municipalities or other governmental agencies to conduct projects. He read the specific language into the record. The same provision stipulated that the state agency was not relieved under federal law or regulation in the event it utilized the services of another organization. In his interpretation, that held the state responsible for assuring compliance with federal regulation. Senator Al Adams asked if federal law allowed an appropriation to rural Alaska or if the funds were granted in a lump sum to the state for disbursement. Dave Miller answered that TEA21 provided funds to the state in a number of general categories. Considerable flexibility was granted to the State Of Alaska that was not normally considered for other states. The subcategories proposed in this bill was a practice done throughout the US and was acceptable but not necessarily encouraged. Dan Miller noted that his office did not have an opportunity to assess the proposed percentages. Co-Chair John Torgerson ordered the bill held in committee. He told members that amendments would be distributed by the time of the next hearing on the bill. SENATE BILL NO. 150 "An Act relating to interest rates for small community housing mortgage loans under the housing assistance program of the Alaska Housing Finance Corporation." This was the first hearing for this bill. DAN FAUSKY, CEO/Executive Director, Alaska Housing Finance Corporation, Department of Revenue, came to the table at the request of Senator Al Adams. Senator Al Adams wanted to know how much money would be made in rural Alaska using the one-percent proposal. In looking at the rural versus urban situation, he wondered how much money had been spent on this program in Anchorage. Senator Al Adams knew it was required that a portion of the earnings of this program be spent on certain housing programs. He asked where the proceeds of the one-percent interest rate went. Did they really go to rural Alaska or were they spread among communities across the state? Dan Fauske responded that the majority of the subsidized loans or enhancement programs went to Anchorage. That was a condition of the population base. He listed figures showing that. Regarding the consideration of removing the one-percent interest rate provision for rural Alaska, he noted the corporation could make more money if the percentage was increased. He anticipated however, that if it were eliminated there would be about a 16 percent drop in loan portfolio activity. Therefore, the program would break even and there would be no gain. He pointed out that in rural areas, and even less rural areas by Alaska standards, mortgage insurance could not be obtained. Therefore, if there were not a subsidy of some sort more down payment money would have to be required from residents. He explained that the rate established in statutes was one- percent of the taxable rate would have been had bonds been issued. This was a revolving fund and bonds were not sold to fund it. Generally, once the one-percent was removed, compared to a tax of the program, the rate was the same on a thirty-year mortgage. The rural program would exceed the tax-exempt program by an eight of a point for a fifteen- year mortgage. Senator Al Adams asked if the rural communities along the road system would be affected by this legislation. Dan Fauske answered that the current program required the population of communities along the road system had to be 1600 residents or less to qualify. Off the road system, the population requirement was 6500. The corporation had discussions with some realtors who would like to see those limits raised. He noted the program had tripled over the last three years. He listed the number of loans done in various rural communities during that period. Another concern raised was with communities that were annexed into a borough. Those residents would no longer qualify for the program. This had happened for areas in the Kodiak Island Borough and the Haines Borough. Dan Fauske believed it was a program that was necessary. Whether it stood up to strict economic standards was another issue. Charging a higher interest rate could always make more money. His concern was with the mortgage insurance. Senator Randy Phillips asked if the criteria for the program were the same for every person in Alaska regardless of where they lived. He noted the different number of loans given in various communities Dan Fauske said it was the same. Senator Randy Phillips asked if this applied to all of the programs the corporation offered. If the criteria were different, he felt it should be examined. Dan Fauske agreed. The only differences were found in the urban areas because of access to amenities such as ease of access or the quality of the property. Senator Randy Phillips asked about the mortgage insurance. Dan Fauske said that under the program, the borrower would still have to pay a ten-percent down payment. AHFC then assumed a part of the risk that would normally be covered under mortgage insurance. Under most programs, more than ten-percent would be required to obtain mortgage insurance. That was just the way the industry operated, he stressed. Senator Dave Donley was entertained by the witness testimony that if the subsidy was removed, fewer people would borrow money and the corporation would make the same amount of money. That seemed to argue for extension of the one-percent program to all Alaskans. Dan Fauske did not disagree. He was only trying to make an analogy and he didn't know how much business would be lost with the elimination of the one-percent provision. Senator Dave Donley referred to the comments that the rural loans were more difficult to make, which was the reason the AHFC was involved. For that reason, he doubted the private sector would choose to pick up the estimated sixteen- percent drop. Senator Dave Donley then noted the Boundary Commission's latest report that specifically identified this program as one of the most problematic and biggest inhibitors of the formation of local governments. This was because communities would not qualify for the program if they joined or formed boroughs. In his opinion, the lack of formation of local governments was one of the biggest problems facing the state today. He asked if the witness could propose a solution. Dan Fauske responded that the corporation was not trying to advocate a program that was based on these problems. He hoped to alleviate the problems associated with the qualifications of some properties based on which side of the road they were located. He had heard this concern from realtors. Senator Dave Donley made further comments on the formation of local boroughs. Senator Dave Donley then pointed out that other programs operated by AHFC applied to all Alaska's regardless of where they lived. He used veteran, disabled and first time homebuyer programs. This program was only available to those people who met a particular discriminatory category, in his opinion. Senator Randy Phillips noted he had potential conflict of interest because he works for a mortgage company. He offered a motion to be allowed to abstain from voting on the bill. Senator Dave Donley objected and the motion was denied. Senator Loren Leman asked if the intent was to increase the rate in the rural area market using the one-percent provision. He wanted to know why the corporation didn't reduce the rate charged in the rest of the state instead. Dan Fauske responded that the other programs were bonded programs that were driven by the rate the bonds could be sold. This program was established as a revolving fund so the rates were calculated. The corporation was exploring other options with regard to universal statewide programs. He noted that there were limitations under the tax-exempt programs for income limits that were established by the federal government. Co-Chair John Torgerson introduced Alex Grundmann, age 13, who was visiting the committee as a participant of Take Your Child to Work Day. He was serving in the capacity of co-chair. Senator Al Adams asked if of the money earned from by the corporation how much was spent on this program. He also wanted to know if this money could be used to match the supplemental housing project in the capital budget. Dan Fauske answered that in terms what was spent on the total program, he only knew of only $200,000 that was spent on this subprogram. He would find out the actual figures and supply them to the committee. To answer the question on whether the arbitrage could be used for the CIP, he told Senator Al Adams that the arbitrage could only be used for a loan that met the same perimeters of what the bond was issued for. It had to be used for a loan with a reasonable expectation of repayment. Co-Chair John Torgerson noted the bill would not be reported out of committee this meeting. Tape: SFC - 99 #105, Side A BRUCE KOVARIK, Executive Director, Association of Alaska Housing Authorities, testified via teleconference from Anchorage. He had submitted written testimony. The association opposed the bill. It was clear to them that it would focus significant and adverse impact on the availability of affordable mortgage loans in rural Alaska. The bill would not save money and would further discourage private lending activities in rural Alaska. It would increase the cost of housing and lessen the economic development in areas of the state that needed it the most. He disagreed with Senator Dave Donley's assumption that this program was a special discriminatory subsidy. SUE BENEDETTE, Vice President, First National Bank of Anchorage and Co-Chair, Alaska Mortgage Bankers Association, testified via teleconference from Anchorage. FNBA lends on a statewide basis and found this program to be very successful in allowing it to lend to rural Alaska. It helped offset the higher cost of housing in rural areas. ROBIN WARD testified via teleconference from Anchorage. She stated that the bankers associations, the homebuilders and affiliated businesses viewed the AHFC as their own permanent fund. She would submit further testimony in writing. DAVE MCCLURE, Executive Director, Bristol Bay Housing Authority, and Board Member, AHFC, testified via teleconference from Dillingham. He had submitted a policy brief from HUD to the committee. It stated that home equity was the largest single source of household wealth for most Americans. A decrease in the interest rate exemption would have a negative affect on the number of loans made. He urged the committee to maintain the current program as a method of maintaining economic stability in rural areas. ANNE WHITNEY, President-elect, Katchemak Board of Realtors, testified via teleconference from Homer. The cost of living and the cost of construction was much higher in rural areas and that was one reason the one-percent provision was put into place. It did not cost AHFC any money. First-time homebuyers in urban areas were able to take advantage of other interest rate reduction programs. Therefore, this was not a fairness issue. ANGIE NEWBY, President, Katchemak Board of Realtors, testified via teleconference from Homer. This program had made home ownership possible for many people on the Kenai Peninsula. She listed the figures. BOB BRODIE, Assoc. Realty, testified via teleconference from Kodiak. He felt the committee missed the point. The object of AHFC was to make housing affordable for all Alaskans. When the interest rate was raised only one point many people were eliminated from qualification for home ownership. Instead of taking the program from rural Alaska, he supported Senator Dave Donley's suggestion to make all the AHFC loans one-percent lower than the market rate. That would pick up the revenue from those loans that typically went to FHA and Fanny Mae programs. BONNIE AULABAUGH, Broker, Chelsea Realty, testified via teleconference from Kodiak in opposition to the bill. She believed the program was set up to allow for loan programs in rural areas. She attested to the higher cost of home ownership in rural Alaska. ED MAHONEY, President, Kodiak Building Industry Association, testified via teleconference from Kodiak. The association opposed the legislation. The impact to the community would be substantial. Co-Chair John Torgerson ordered the bill held in committee. ADJOURNED Senator Torgerson with the assistance of Alex Grundmann recessed the meeting at 10:52 AM. SFC-99 (18) 4/22/99