02/12/2008 01:00 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB164 | |
| SB249 | |
| SB164 | |
| SB249 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| * | SB 164 | ||
| * | SB 249 | ||
ALASKA STATE LEGISLATURE
SENATE TRANSPORTATION STANDING COMMITTEE
February 12, 2008
1:07 p.m.
MEMBERS PRESENT
Senator Albert Kookesh, Chair
Senator John Cowdery, Vice Chair (via teleconference)
Senator Donald Olson
Senator Bill Wielechowski
Senator Gary Wilken
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 164
"An Act relating to disclosures required for the sale of a used
motor vehicle, including a trailer, by a motor vehicle dealer."
MOVED SB 164 OUT OF COMMITTEE
SENATE BILL NO. 249
"An Act establishing the Alaska capstone avionics revolving loan
fund and relating to the fund; and providing for an effective
date."
MOVED SB 249 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 164
SHORT TITLE: USED MOTOR VEHICLE SALES
SPONSOR(s): SENATOR(s) MCGUIRE
04/27/07 (S) READ THE FIRST TIME - REFERRALS
04/27/07 (S) TRA, JUD
02/12/08 (H) TRA AT 1:00 PM CAPITOL 17
BILL: SB 249
SHORT TITLE: CAPSTONE AVIONICS FUND/LOANS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/25/08 (S) READ THE FIRST TIME - REFERRALS
01/25/08 (S) TRA, FIN
02/12/08 (H) TRA AT 1:00 PM CAPITOL 17
WITNESS REGISTER
TREVOR FULTON, staff
to Senator McGuire
Alaska State Legislature
POSITION STATEMENT: Presented an overview of SB 164.
ED SNIFFEN, Assistant Attorney General
Department of Law
Anchorage, AK
POSITION STATEMENT: Answered questions on SB 164.
JON COOK, Legislative Director
Alaska Auto Dealers Association (AADA)
Anchorage, AK
POSITION STATEMENT: Supported SB 164.
HEIDI ANDERSON, Owner
Quality Auto Sales
Anchorage, AK
POSITION STATEMENT: Supported SB 164.
FRANK RICHARDS, Deputy Commissioner
Department of Transportation and Public Facilities
Juneau, AK
POSITION STATEMENT: Presented overview of SB 249.
GREG WINAGER, Director
Division of Investments
Department of Commerce and Community Economic Development
Juneau, AK
POSITION STATEMENT: Presented overview of SB 249.
MIKE STEDMAN, Director of Operations
Wings of Alaska
Juneau, AK
POSITION STATEMENT: Supported SB 249.
WILFRED RYAN, President
Alaska Air Carriers Association
Anchorage, AK
POSITION STATEMENT: Supported SB 249.
LEONARD KIRK
University of Alaska Anchorage (UAA)
Aviation Technology
Anchorage, AK
POSITION STATEMENT: Answered questions on SB 249.
ACTION NARRATIVE
CHAIR ALBERT KOOKESH called the Senate Transportation Standing
Committee meeting to order at 1:07:51 PM. Present at the call to
order were Senators Olson, Kookesh and Cowdery (via
teleconference).
SB 164-USED MOTOR VEHICLE SALES
CHAIR KOOKESH announced consideration of SB 164.
1:08:29M
TREVOR FULTON, staff to Senator McGuire, sponsor of SB 164, said
SB 164 rights a wrong in Alaska statutes removing language in
subsection (c) that governs used motor vehicle sales. He said
the language was obsolete and no longer of any benefit to
dealers, consumers or the state, because it required a notice on
all used vehicles for sale that it is not subject to Alaska's
lemon laws, is not covered under a manufacturer's warranty, and
is not manufactured for sale in Canada or another foreign
country.
All three of these conditions are unnecessary or redundant
because Alaska's lemon laws apply only to new vehicles, the
Federal Trade Commission already requires dealers to disclose
that the vehicle is not covered under a manufacturer's warranty
and AS 45.25.470 already mandates that dealers disclose in
writing whether a motor vehicle was originally manufactured for
sale in Canada or another country.
1:11:58 PM
SENATOR COWDERY asked if the warranty follows the vehicle or the
owner.
MR. FULTON replied that this bill doesn't specifically address
that but someone from the Alaska Automobile Owner's Association
could probably address that.
SENATOR COWDERY asked why it is necessary to have the bill
retroactive.
MR. FULTON replied that class-action lawsuits are being brought
against car dealerships in the State of Alaska for unfair trade
practices because for a couple of years they weren't stickering
their used vehicles; making it retroactive would address those
lawsuits.
CHAIR KOOKESH asked Mr. Sniffen to address the retroactivity
clause and how it relates to the present lawsuits.
ED SNIFFEN, Assistant Attorney General, Department of Law, said
the retroactivity provision was requested by the auto dealers.
He said there is some question whether the bill could be
retroactively applied to halt pending litigation. He didn't know
what the result of that will be, but this bill would not
interfere with those lawsuits if it was determined that the
retroactive provision couldn't stop the litigation.
Fundamentally, the reason the dealers are asking for
retroactivity is because when this law was passed in 2004, it
tried to address a problem with "current model used vehicles."
This is a used vehicle, but one that is still was within the
current model year of vehicles being produced and offered for
sale by a manufacturer. He offered an example where a Fort
Richardson soldier buys a new Chevy 1500 pickup truck and gets
deployed to Iraq three months later and tries to bring the
vehicle back to the dealer for sale or trade. That vehicle would
be considered a current model vehicle because it is still within
the current model year even though it already had one owner. Not
only were some dealers selling them with very low mileage,
others were buying them in Canada to take advantage of the
exchange rate and selling them in Alaska with sometimes less
than 20 miles. So they had the appearance of a new vehicle.
To address that, additional disclosure were required so
consumers would understand clearly these very low mileage
vehicles were not new and they wouldn't have some of the
protections they would have if they were. When the law passed,
for some reason, the disclosure requirement was extended to all
used vehicles not just the current model low-mileage ones. That
wasn't the intent and dealers did not sticker all used vehicles.
The retroactivity language was requested to make it clear it was
never the intent that these disclosures be posted on all used
cars, but rather just on current model used vehicles.
1:17:02 PM
CHAIR KOOKESH said he wanted to make sure that was on the record
because the committee does not want to interfere with current
lawsuits.
SENATOR OLSON questioned what will happen to the plaintiffs with
class action lawsuits.
MR. SNIFFEN replied it's hard to say. He said some dealers might
see what kind of mileage they can get out of the retroactive
provision. The law is very gray in this area regarding whether
the lawsuits will be dropped or limited to current model
vehicles. This will need to be an argument between plaintiffs'
lawyers and the defendant dealers.
SENATOR OLSON asked if something could be added to this bill to
avoid more litigation.
MR. SNIFFEN replied that current language will discourage
lawsuits and he didn't know what else could be done. It is clear
that legislators intend the law to apply retroactively to the
extent that it can be, to protect dealers who in good faith were
trying to comply with the law at the time.
1:18:58 PM
SENATOR OLSON asked what kind of consumer protection buyers will
have under this bill, since grievous action by used car dealers
is commonly known.
MR. SNIFFEN answered that currently a host of consumer
protections under the Automobile Dealers Act in AS.45.25
includes disclosures to consumers regarding vehicles
manufactured in another country so they can decide if the
warranty will follow the vehicle. Alaska also requires used car
dealers to obtain information about a vehicle's prior accident
or repair history for prospective purchasers.
In 2002 he along with legislators and industry came up with some
good consumer protection legislation against offensive used car
practices. The Federal Trade Commission (FTC) also requires
disclosures already on used vehicles concerning warranty
limitations and other rights a consumer may have. He said he
thinks sufficient protections are in place that don't overburden
dealers, but still provide good protection for Alaskan
consumers.
1:20:59 PM
MR. FULTON said the bill packet includes an "as is sticker" that
explicitly states what is or is not covered under warranty.
Alaska Statute 45.25.470 on sales of vehicles manufactured in a
foreign country says that before a sale, a motor vehicle dealer
shall disclose in writing whether a motor vehicle was originally
manufactured for sale in Canada or another foreign country.
SENATOR COWDERY asked how the dealer can comply with the
retroactive provision if he has already sold the vehicle.
1:22:37 PM
MR. SNIFFEN responded that if the vehicle has been sold without
the disclosure, the violation has already occurred or hasn't
occurred if this bill includes the retroactive provision, and
there's nothing the dealer can do. Potentially some of the
vehicle sales could be identified if the purchasers could be
located.
SENATOR COWDERY asked if owners can't be located means no other
options are available.
MR. SNIFFEN replied that is correct. He said that is a problem
with the large transient population in Alaska especially with
military bases.
1:24:02 PM
JON COOK, Legislative Director, Alaska Auto Dealers Association
(AADA), Anchorage, AK, said he supported SB 164. He said his
association has been working with Mr. Sniffen trying to deal
with the unintended consequences of the earlier legislation and
the only party to benefit from this provision is class-action
attorneys. Most dealerships in Alaska are small family-owned
operations and litigation could put them out of business. The
lemon law, the manufacturer's warranty, and where a vehicle was
manufactured are already covered under existing statute or don't
apply. He said the two sides, industry and the department, have
come together in agreement to create balanced legislation.
1:27:15 PM
HEIDI ANDERSON, owner of Quality Auto Sales, supported SB 164.
She confirmed that the sticker is redundant and was originally
designed for Canadian cars brought into the market. The language
of AS 45.25.465, subsection (c) repeats what is addressed
elsewhere or does not even deal with the used car market. She
said the deleted language doesn't benefit anyone and is only
being used to generate lawsuits against dealers.
1:29:19 PM
SENATOR OLSON asked if anyone opposes this bill.
MR. FULTON replied there has been no opposition.
CHAIR KOOKESH set SB 164 aside until Senator Wielechowski and
Senator Wilken could join the committee.
SB 249-CAPSTONE AVIONICS FUND/LOANS
CHAIR KOOKESH announced consideration of SB 249.
1:29:59 PM
FRANK RICHARDS, Deputy Commissioner, Department of
Transportation and Public Facilities, Juneau, AK, said SB 249,
creates a loan fund within the Department Of Commerce and
Community Economic Development (DCCED) called the Alaska
Capstone Avionics Revolving Loan Fund. The purpose is to
increase the safety of aviation transportation within Alaska by
providing low interest loans for purchase and installation of
Capstone avionics equipment.
He explained that Capstone is the next generation of technology
to improve flight safety and community access in Alaska. The
technology is called "Automatic Dependent Surveillance -
Broadcast" (ADS-B). It allows aircraft equipped with the
avionics to interact with ground infrastructure and satellite
stations to provide pilots their exact location, airspeed, rate
of accent and descent, surrounding terrain, other aircraft and
real time weather - essentially, the whole package of data you
need for safe flight.
The Federal Aviation Administration (FAA) sponsored this
technology in rural Alaska as a test, predominantly in Southwest
around the lower Yukon Delta and Southeast Alaska. The result
for those aircraft equipped with the new avionics was a 47
percent reduction in accidents and 33 percent reduction in
fatalities. The FAA would now like to expand this technology
statewide and has funding to build the necessary infrastructure.
They have determined the need for about 4,000 aircraft to be
equipped.
This bill creates a low interest loan program within DCCED to
provide aircraft owners who are unable to shoulder the initial
purchase cost with a reasonable loan. The Department of
Transportation and Public Facilities supports passage of this
bill.
1:32:38 PM
GREG WINAGER, Director, Division of Investments, Department of
Commerce and Community Economic Development (DCCED), said the
Capstone Project has shown great potential to reduce accidents
and save lives. His agency is pleased to play a role in this
effort and has been doing loan programs, since the early 1970's,
and has the expertise and a loan infrastructure in place.
MR. WINAGER explained the purpose of the loan program is for
aircraft owners who log substantial hours in Alaska and enables
them to get a loan for purchasing on-board avionics. The program
would be set up as a revolving fund; as repayments come in, they
can be turned around to create new loans to new borrowers. This
means all the operating expenses would be paid out of the fund.
The bill would allow loans of up to 80 percent of the cost of
the avionics including installation. The interest rate would be
4percent with a maximum term of 10 years. An average size
project could have a $15,000 installation cost and receive a
$12,000 loan.
He explained the goal in setting up the terms was to create a
manageable repayment plan and at the same time, provide enough
cash flow that could provide loans to future participants. The
program would pay its own way, and also returns its funds to the
general fund at the time the program sunsets in. The division is
requesting two positions, one loan officer and one loan closer.
These positions would only be filled if loan demand dictates it
is necessary. A fiscal note of $4.8 million would capitalize the
fund and allow about 400 loans in the first year and 60 loans
each year thereafter. Accounting expenses would be absorbed and
the division has new software to streamline loan programs.
1:35:06 PM
SENATOR OLSON asked if the interest rate is variable or fixed.
MR. WINAGER replied it is a fixed 4 percent rate.
SENATOR OLSON asked what would happen to the equipment if the
loan recipient defaulted.
MR. WINAGER replied that the loans would be secured with the
equipment. A last resort would be foreclosure returning the
equipment to the fund.
1:36:05 PM
SENATOR OLSON asked how the revolving loan program will deal
with the loss if an accident happens and the equipment is
destroyed without having been paid for.
MR. WINAGER replied that the fund would be added as a loss payee
on any insurance policies. If no insurance is involved other
means would be used to pursue the funds. However, a small amount
of risk is involved with potential losses.
SENATOR OLSON said he realized that much of this equipment is
integrated with the whole electrical system and asked if there
would be any efforts on the part of the state to encumber the
aircraft.
MR. WINAGER replied the fund would rely primarily on the
equipment to secure the loan, although a lean probably would be
recorded against the aircraft. The typical title insurance
usually applied when making a large loan against an aircraft
would not be required, so the equipment would be considered
secondary collateral.
1:37:42 PM
MIKE STEDMAN, Director of Operations, Wings of Alaska, Juneau,
AK, said he supports SB 249. He said he was representing all
Alaskans who travel by small airplanes whether for business or
pleasure, and this includes the children and grandchildren of
every member of the legislature. The safety benefits of having
an aircraft equipped with Capstone equipment are invaluable. A
price cannot be put on a person's life. The safety benefits have
been proven in Phase 1 in the Yukon Delta with an overall
reduction in the accident rate of 48 percent.
He explained that Controlled Flight into Terrain (CFIT) occurs
when an airworthy aircraft under the control of the flight crew
is flown unintentionally into terrain, obstacles or water,
usually with no prior awareness by the crew and it is the number
one cause of accidents in Alaska. Capstone provides Terrain
Awareness enabling the pilot to see the terrain on the screen in
the cockpit and know if that terrain is above him, at the same
elevation or below him. Real time weather and other airplane
traffic can also be seen in the cockpit. This provides for an
incredible amount of situational awareness. His company was one
of the first in Phase 2 Southeast to use the equipment. Wings
has 12 aircraft equipped with Capstone and the company fully
embraces it. He has been flying in Southeast for almost 30 years
and can attest to the safety benefits of having Capstone versus
the old days when the only thing pilots could rely on was their
experience.
SENATOR OLSON asked how often the equipment had failed.
MR. STEDMAN replied the failure rate has been minimal. He said
the few failures have been addressed by the manufacturer. The
process has involved a steep learning curve.
SENATOR OLSON asked if misinformation ever comes up on the
panel.
MR. STEDMAN replied there has been some, but very minimal.
1:40:30 PM
SENATOR OLSON asked who will pay for upgrade improvements in the
future.
MR. STEDMAN replied that the program is now in Phase 2. There
have been some Global Positioning System (GPS) upgrades as well
as some air data computer and software upgrades, all of which
the FAA Capstone Project has covered.
SENATOR OLSON asked who pays for training, especially for those
for whom training is not a high priority.
1:41:44 PM
MR. STEDMAN answered the pilots have been trained by the
University of Alaska Anchorage. He said he doesn't know who will
be paying for it.
CHAIR KOOKESH asked if Mr. Stedman had noticed an increase in
his landing and take-off capabilities and if he was flying more
often than normal with this new equipment.
MR.STEDMAN replied he has seen an increase in his capabilities
and his flying time.
1:42:48 PM
WILFRED RYAN, President, Alaska Air Carriers Association (AACA),
Anchorage, AK, said he was also representing the Alaska Airman's
Association (AAA) and the Alaska Aviation Safety Foundation
(AASF). He said in response to Mr. Stedman that he hopes his
landings and take-offs are equal. The companies he is
representing include all commercial and general aviation
constituents in Alaska. All support SB 249. The original
Capstone program was a research and development program
established for Southeast Alaska and the Yukon/Kuskokwim Delta.
Now Alaska is able to compete with the rest of the country for
the deployment of the next generation of Capstone equipment.
He explained that the FAA and the Alaskan aviation industry
collaborated in developing the Capstone surveillance broadcast
services statewide plan by 2009. This included a commitment from
the FAA to deploy about $493 million in ground base
infrastructure, maintenance and operations over the next 27
years. This plan documents the activities for implementing
proven Capstone technologies throughout Alaska to increase
aviation safety and rural community access in concert with
ground base transceivers statewide.
MR. RYAN said coordinating deployment of the FAA ground
infrastructure and avionics equipment is key to the accelerated
implementation strategy and success of the program. To fully
gain the FAA's commitment to deploy $493 million in Alaska
through the next 27 years, the aviation industry is required to
equip about 4,000 Alaska-based aircraft with safety avionics.
While this is a challenge, it's attainable but only through a
commitment from the aviation industry in the state. Because more
than 90 percent of Alaska is only accessible by air, Alaska has
the highest aviation accident rate in the nation. The
implementation of Capstone technology is essential for safe
flying in the future. The Alaska Air Carriers Association (AACA)
represents more than 150 air carriers and associated suppliers.
The Alaska Airman's Association (AAA) represents more than 2200
private pilots and mechanics. The Alaska Aviation Safety
Foundation (AASF) is dedicated to improving aviation safety in
Alaska. They all support SB 249.
1:47:10 PM
LEONARD KIRK, Aviation Technology, University of Alaska
Anchorage (UAA), said UAA has been involved in the safety study
to assess the value of Capstone and it has resulted in a 48
percent reduction in accidents. Prior to Capstone a lot of fatal
accidents took place in the Yukon (YK) Delta with an accident
rate four times the rest of the state. Following Capstone
implementation, the YK Delta now has the safest record in Alaska
aviation. From fatal accidents every 29 days, there was a 26
month period when there were no fatal accidents. UAA, with
campuses throughout the state, has been involved in developing
the training for the new technology
1:48:43 PM
SENATOR OLSON asked how people in remote villages will get
trained.
MR. KIRK replied the avionic training devices are portable and
allow him to conduct trainings in Southeast Alaska, in the Yukon
Delta and elsewhere.
SENATOR OLSON asked if someone in an outlying village can get a
discount if he's not getting training.
MR. KIRK answered the aircraft would have to have the equipment
installed by an approved facility and before the airplane is
flown home, the pilot could be trained. He said they would do
everything they can to assist the process.
SENATOR OLSON asked if operators of larger aircraft are going to
be subscribing to this program as well.
MR. KIRK answered he would hope that all would subscribe to ADS-
B - (Automatic Dependent Surveillance - Broadcast). Northern Air
Cargo operates 121 planes and was part of Phase 1 of Capstone.
1:51:10 PM
CHAIR KOOKESH called a short recess to wait for Senators
Wielechowski and Wilken to join the committee.
SB 164-USED MOTOR VEHICLE SALES
1:54:33 PM
CHAIR KOOKESH reconvened the meeting and announced the committee
would again take up SB 164. Public testimony had been taken and
there was no opposition. He thanked Senator Wielechowski and
Senator Wilken for leaving another meeting to join the
committee.
1:55:35 PM
SENATOR OLSON moved to report SB 164 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, the motion carried.
SB 249-CAPSTONE AVIONICS FUND/LOANS
1:55:54 PM
CHAIR KOOKESH announced renewed consideration of SB 249. He
briefly restated the intent of the bill and said the next
committee of referral would be the Finance Committee.
SENATOR OLSON moved to report SB 249 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, the motion carried.
There being no further business to come before the committee
Chair Kookesh adjourned the meeting at 1:56:49 PM.
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