Legislature(2003 - 2004)
04/30/2004 08:43 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 274 An Act relating to the housing assistance loan fund in the Alaska Housing Finance Corporation; creating the housing assistance loan program; repealing loans for teacher housing and providing for loans for multi- family housing; making conforming amendments; and providing for an effective date. BRIAN BUTCHER, LEGISLATIVE LIAISON, ALASKA HOUSING FINANCE CORPORATION (AHFC), DEPARTMENT OF REVENUE, explained that the bill would make two changes to the rural loan program. The first of these would change it from a housing assistance revolving fund to a program in order to address the liquidity concerns of the AHFC. The current revolving nature of the fund limits it to purchases of new loans under this program. For FY 03, over one third of the AHFC's net income was in this fund. The Corporation pays a dividend of $103 million to the State, with the funds continuing to come entirely from the working capital because of the restrictions of the rural loan fund. Mr. Butcher said that this has resulted in the liquid assets of the Corporation declining at an accelerated rate. In addition, the revolving fund hasn't really revolved for several years. The new loans made in the program have exceeded the cash available in the fund, causing the AHFC is use its working capital to purchase and hold loans for reimbursement from the fund. Mr. Butcher explained that this bill would allow the program to operate in the same way the Corporation's other programs operate. Other than this change, he said that the program would continue to operate in the same way. Mr. Butcher explained that the second modification in the bill would change the rural teacher multi-family loan program to the rural multi-family loan program. In 2002, SB 181 passed and changed the rural multi-family loan program to the rural teacher loan program. This change required anyone using the program to fill their multi-family building with at least one teacher in every unit. In the nearly two years since the change, there have been no loans made because it's been too restrictive. People aren't willing to take out long-term financing on a multi-family building requiring a teacher in every unit for the period of time of the loan. This bill would change the program back to a rural multi-family program available to anyone, including teachers. It would also allow an owner to occupy one of the units. Representative Foster commented that in the villages, the Native corporation or the IRA owns land and sells lots to its members, but not on the open market. He asked how to open up new land for teacher housing. PAUL KAPANSKY, DIRECTOR OF MORTGAGE OPERATIONS, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, VIA TELECONFERENCE, replied that it is difficult if it isn't sold on the open market, because that indicates a deed restriction. A deed restriction affects the value and the financing of the land, making it basically not financeable. JOE DUBLER, CHIEF FINANCIAL OFFICER, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, argued that Native corporations would not be excluded from this program and could obtain financing to build a duplex or triplex on their land. The Native corporations could obtain financing for teachers. Representative Foster MOVED to report SB 274 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. SB 274 was REPORTED out of Committee with a "do pass" recommendation and one previously published zero fiscal impact note.