Legislature(2009 - 2010)

04/13/2010 09:46 AM House FIN

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 217                                                                                                             
     "An  Act relating  to the  issuance of  state-guaranteed                                                                   
     revenue   bonds   by   the    Alaska   Housing   Finance                                                                   
     Corporation   to   finance  mortgages   for   qualifying                                                                   
     veterans; and providing for an effective date."                                                                            
10:14:08 AM                                                                                                                   
BRYAN  BUTCHER,  DIRECTOR,  GOVERNMENT   AFFAIRS  AND  PUBLIC                                                                   
RELATIONS,  ALASKA  HOUSING FINANCE  CORPORATION,  DEPARTMENT                                                                   
OF REVENUE,  stated that  the house version  of the  bill (HB
291) was  heard before  the committee  earlier this  session.                                                                   
He explained  that SB  217 would  request the voters  approve                                                                   
$600,000,000 in  state guaranteed  bonds in the  2010 general                                                                   
election,  to  be  issued  by   the  Alaska  Housing  Finance                                                                   
Corporation  for  the  purchase  of mortgage  loans  made  to                                                                   
qualifying  veterans.  He  added that  federal  law  requires                                                                   
that general  obligation bonds  must be  issued by  the state                                                                   
for  this loan  program. The  veteran's loan  program is  the                                                                   
highest performing  loan program in the state.  Alaska is one                                                                   
of five states that qualify for the program.                                                                                    
Mr. Butcher  furthered that the  Senate added  two provisions                                                                   
to  SB 217  that were  not  included in  HB  291. The  Senate                                                                   
authorized  the  purchase  of  the  building  that  the  AHFC                                                                   
currently  inhabits at  4300 Boniface  parkway in  Anchorage.                                                                   
The corporation  would realize long-term savings  to purchase                                                                   
instead  of leasing  the building.  In  addition, the  Senate                                                                   
authorized  the  corporation   to  purchase  or  construct  a                                                                   
Public Housing Intake  Center. The current center  located on                                                                   
International  Boulevard  in  Anchorage  is  an  aging,  ill-                                                                   
equipped  building with  insufficient  parking. The  building                                                                   
is not  located on  a bus  route which  makes it a  difficult                                                                   
location for  public housing clients.  The cost to  bring the                                                                   
building up to code far exceeds the value of the building.                                                                      
Mr. Butcher  reported that  AHFC currently  has $3.5  million                                                                   
in federal  and corporate funds  to pay for the  building; no                                                                   
additional   funding  is   required  from   the  state.   The                                                                   
corporation  would  relocate  the  center  to  the  centrally                                                                   
located neighborhood of Mountain View.                                                                                          
DAN FAUSKE,  CEO/EXECUTIVE DIRECTOR,  ALASKA HOUSING  FINANCE                                                                   
CORPORATION,  DEPARTMENT OF REVENUE),  interjected  that AHFC                                                                   
had been  fully authorized to  proceed with the  $3.5 million                                                                   
funding for the  project for several years.  He believed that                                                                   
it was the right project to expend the funds.                                                                                   
Co-Chair Hawker  reported that the same project  was proposed                                                                   
last  year.  He  asked  for  assurance   that  there  was  no                                                                   
increase  in costs  that  occurred over  a  year. Mr.  Fauske                                                                   
replied  that no  increase has  occurred. He  added that  the                                                                   
project represents an economic gain for the corporation.                                                                        
10:17:16 AM                                                                                                                   
Representative  Doogan inquired about  the fiscal note,  FN 3                                                                   
(REV),  analysis that  estimates  the 4300  Boniface  Parkway                                                                   
purchase  in  the   amount  of  $14.5  million.   Mr.  Fauske                                                                   
elaborated  that AHFC presently  owns land  at 34th  Ave. and                                                                   
Denali  St.; the  previous  home to  the  AHFC. The  Tatitlek                                                                   
Corporation owns  the building  at 4300 Boniface  Parkway and                                                                   
wants  to  acquire the  land  at  34th  Ave. and  Denali  St.                                                                   
Therefore,  $5 million  will represent  a land exchange  with                                                                   
the  Tatitlek  Corporation  and the  remaining  $9.5  million                                                                   
will be from the  sale of AHFC 25 year bonds  to complete the                                                                   
purchase and rehabilitate the building.                                                                                         
10:18:45 AM                                                                                                                   
Representative  Joule  referred   to  the  sponsor  statement                                                                   
(copy on file)  that explained that a veteran  must apply for                                                                   
the loan  within 25  years of discharge  from active  duty to                                                                   
qualify for  the program.  He wondered  what impact  that had                                                                   
on the  exclusion of veterans  from the program.  Mr. Butcher                                                                   
explained  that  the program  was  established  in the  early                                                                   
1980's  by  congress.  The  initial  requirements  were  that                                                                   
veterans  had to  have served  prior to  1977 and  discharged                                                                   
from  service for  no  longer  than 30  years.  As the  years                                                                   
passed  the  requirements  reduced  the  number  of  veterans                                                                   
eligible  for  the  program  and did  not  include  Gulf  War                                                                   
veterans. AHFC lobbied  to change the requirements  over a 15                                                                   
year  period.  The   effort  met  with  some   resistance  in                                                                   
Congress but  resulted in  the removal  of the service  prior                                                                   
to  1977 requirement  and  replaced  that  with the  25  year                                                                   
provision.  Congress also  limited the  corporation or  state                                                                   
to issue  only $10  million in  bonds which was  subsequently                                                                   
increased  to $100  million.  He noted  that  AHFC was  still                                                                   
working to get the 25 year qualification removed.                                                                               
Co-Chair Stoltze closed public testimony.                                                                                       
10:23:14 AM                                                                                                                   
Representative  Foster cited  the definition  of active  duty                                                                   
from  the  sponsor  statement,  that service  in  a  military                                                                   
academy  may meet the  qualifications to  participate  in the                                                                   
program.  He asked  what  the military  academy  requirements                                                                   
LAURIE HOLTE,  OFFICE OF RESIDENTIAL LENDING,  ALASKA HOUSING                                                                   
FINANCE    CORPORATION,     DEPARTMENT    OF     REVENUE,(via                                                                   
teleconference), explained  that AHFC requests a  copy of the                                                                   
veterans   DD214    release   document   as    evidence   for                                                                   
qualification   for  the  veterans   mortgage  program.   The                                                                   
document  indicates whether  the veteran  has been  honorably                                                                   
discharged.  She did  not  know  if a  cadet  that leaves  an                                                                   
academy before they graduate receives a DD214.                                                                                  
10:25:50 AM                                                                                                                   
Vice-Chair  Thomas MOVED  to  report CS  SB  217(FIN) out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal note.                                                                                                       
CS  SB 217(FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation and  with  previously published  fiscal                                                                   
note: FN3 (REV)                                                                                                                 
10:26:41 AM    RECESSED                                                                                                       
10:29:57 AM    RECONVENED                                                                                                     

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