SENATE STATE AFFAIRS COMMITTEE January 27, 1998 3:30 p.m. MEMBERS PRESENT Senator Lyda Green, Chairman Senator Jerry Ward, Vice-Chairman Senator Jerry Mackie MEMBERS ABSENT Senator Mike Miller Senator Jim Duncan COMMITTEE CALENDAR SENATE BILL NO. 223 "An Act lowering the age requirement from 60 years to 55 years for purposes of senior housing programs; and repealing a provision relating to the interest rate on senior housing loans made by the Alaska Housing Finance Corporation." - MOVED SB 223 OUT OF COMMITTEE PREVIOUS SENATE COMMITTEE ACTION SB 223 - No previous action to record. WITNESS REGISTER Benjamin Brown Staff to Senator Kelly State Capitol Juneau, AK 99801-1182 John Bittney Alaska Housing Finance Corporation PO Box 101020 Anchorage, AK 99510 ACTION NARRATIVE TAPE 98-3, SIDE A Number 001 SB 223 - SENIOR HOUSING CHAIRMAN GREEN called the Senate State Affairs Committee to order at 3:43 p.m., and brought SB 223 before the committee as the only order of business. MR. BEN BROWN, staff to Senator Kelly, the prime sponsor of the bill said the bill has two basic provisions. The first thing the bill would do is lower the definition of senior in the statute that governs a program known as the senior housing revolving fund. The term would then apply to a person 55 years of age, previously it was 60. The second provision of the bill would eliminate an unnecessary interest rate surcharge for this same program according to Mr. Brown. He says the Alaska Housing Finance Corporation (AHFC) no longer wants to impose this surcharge. He clarified he had been referring to two programs: both the senior housing revolving fund and special needs multi-family housing program. He noted the presence of John Bittney and Kay Murphy from AHFC who would be available for further questions. CHAIRMAN GREEN asked if the second part of the bill was the section for the repeal and Mr. Brown affirmed it was the repealer, mandating the repeal of the surcharge. He said the repeal of the surcharge was allowable with the overhead of AHFC and the manner in which they calculate their bonds. CHAIRMAN GREEN asked if there might be any negative aspect to lowering the age to 55. Mr. Brown was not aware of any and AHFC has some discretion if it created too much demand for certain programs. Number 090 SENATOR MACKIE asked if it is possible that if there were competition for units that a younger person might be awarded the unit rather than an older Alaskan. Mr. Brown supposed it might be possible but currently demand was low and units were unoccupied. SENATOR WARD said that it was his understanding once a project filled up, financing would be made available for another one. MR. JOHN BITTNEY, representing AHFC, said AHFC has been involved in senior housing since 1992 and they have provided better rates and financing terms than previously available. They considered reducing the age through regulation but were concerned it may be too far reaching so they were hoping to be given discretion. He does not foresee the majority of 55 year old people gravitating immediately toward these projects. He said overall AHFC supports the bill. SENATOR MACKIE made a motion to move SB 223 out of committee with individual recommendations and zero fiscal notes. Without objection, it was so ordered and CHAIRMAN GREEN adjourned the meeting at 3:53 p.m.