Legislature(2009 - 2010)BARNES 124
03/08/2010 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB354 | |
| HJR51 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 354 | TELECONFERENCED | |
| *+ | HJR 51 | TELECONFERENCED | |
HB 354-AK CAPSTONE AVIONICS REVOLVING LOAN FUND
3:21:16 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 354, "An Act relating to eligibility for loans
from the Alaska capstone avionics revolving loan fund."
3:21:42 PM
MATTHEW JOHNSON, Staff, Representative Wes Keller, Alaska State
Legislature, presented an overview of HB 354. In 2008, the
Capstone Avionics Loan Program was established in Alaska. The
impetus for the program was a Federal Aviation Administration
(FAA) pilot program that confirmed the substantial value and
effectiveness of the new avionics technology. The results of
the pilot program revealed that it reduced accident rates in the
trial area by 47 percent. The FAA estimates that full
implementation of the program will result in 33 percent fewer
fatalities statewide. The program was intended to provide loans
for in state operators and carriers to upgrade their avionics.
However, an unforeseen gap exists and those carriers who lease
their aircraft are not eligible for the program. This bill, HB
354, would correct that problem. It would amend the Alaska
Capstone Avionics Revolving Loan Fund program to allow a lessee
of an aircraft that logs a substantial percentage of flight
hours in the state to qualify to apply for loans to purchase
Capstone Avionics equipment. The effect of the change will be
to open up the program funds to lessees of aircraft.
3:23:46 PM
CATHY JEANS, Systems Branch Manager, Division of Investments,
Department of Commerce, Community, & Economic Development
(DCCED), stated that the division manages the Alaska Capstone
Avionics Revolving Loan Fund program. As Mr. Johnson mentioned,
the change would allow individuals that have leased an aircraft
to qualify for loans to purchase and install Capstone Avionics
equipment in aircraft operated in Alaska. The current law only
allows aircraft owners to qualify. Lessees of aircraft would
still need to meet all of the program requirements, including
collateral, credit, and capacity for repayment. The Division of
Investments (DOI) anticipates a small number of additional loan
requests with passage of HB 354. The Alaska Capstone Avionics
Revolving Loan Fund program has adequate resources to handle the
requests and will not need additional operating funds to
administer the change. The DOI supports the bill as it should
increase safety for the Alaskan flying public.
3:25:25 PM
REPRESENTATIVE BUCH recalled that this proposed bill would have
a small impact in Alaska. He related his understanding that
enhancing the program would allow more people to qualify for the
program loans.
MS. JEANS agreed. This bill would allow lessees of aircraft to
apply for loans to install Capstone Avionics in leased aircraft.
Currently, this program is limited to owners of aircraft.
3:26:12 PM
REPRESENTATIVE CHENAULT asked whether any liability issues will
result with passage of HB 354.
MS. JEANS stated that she is unaware of any liability issues
created by installing Capstone Avionics equipment in aircraft.
She offered to check with the FAA and report back.
CHAIR OLSON remarked that one result would be to reduce
liability insurance premiums and hull coverage, as well.
3:27:06 PM
MONTE GATES, Peninsula Airways, stated that a large portion or 7
of 10 SAAB 340 aircraft Peninsula Airways are leased. Peninsula
Airways would like to install new equipment, but must install
the equipment in the whole fleet, which would mean they must
rewrite all the lease agreements for seven aircraft. The
alternate method of amending the statute would allow a more
direct approach for eligibility for the Capstone Avionics
Revolving Loan Program.
3:28:27 PM
CONSTANCE JOY JOURNEAY, Executive Director, stated that the
Alaska Air Carriers support this change. More than half of the
carriers lease portions of their fleet and this bill would allow
their aircraft to be eligible for the program.
3:29:24 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 354.
REPRESENTATIVE NEUMAN moved to report HB 354 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 354 was reported from the
House Labor and Commerce Standing Committee.
The committee took an at-ease from 3:29 p.m. to 3:31 p.m.
3:31:29 PM