Legislature(2009 - 2010)CAPITOL 17
03/11/2010 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB354 | |
| HB366 | |
| HB267 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 354 | TELECONFERENCED | |
| *+ | HB 366 | TELECONFERENCED | |
| *+ | HB 267 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 354-AK CAPSTONE AVIONICS REVOLVING LOAN FUND
CHAIR P. WILSON 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."
1:33:57 PM
MATTHEW JOHNSON, Staff, Representative Wes Keller, Alaska State
Legislature, paraphrased from the sponsor statement, which read
as follows [original punctuation provided]:
In 2008 the Alaska Legislature commissioned the
Capstone Avionics Loan Program. It was designed to
provide access to a new generation of avionics for
Alaskan aircraft owners and operators. The impetus for
the program was an FAA pilot program that confirmed
the substantial value and effectiveness of the
technology. The results of the pilot program revealed
a 47 percent decrease in accident rates in the trial
area, and the FAA estimates that full implementation
will result in 33 percent fewer fatalities statewide.
HB 354 is being proffered to amend existing statute in
order to carry out the mission and original intent of
the Capstone Avionics Program more effectively.
As initially conceived, the program was intended to
provide loans that would allow in-state operators and
carriers to upgrade their avionics. However, there is
an unforeseen gap in eligibility standards precluding
significant portions of the target market from
participation. Because the threshold for eligibility
is predicated upon ownership of aircraft, an owner or
carrier that chooses to lease its aircraft or fleet is
deemed ineligible to access the program. This bill
seeks to redress this deficiency by allowing for
maximal participation.
HB 354 is being offered only as an improvement to the
Capstone Avionics Program because we believe it is in
the interest of public safety, especially as it
pertains to flights in and out of rural
Alaska.
MR. JOHNSON commented on the zero fiscal note attached to
the bill.
1:37:17 PM
CHAIR P. WILSON recalled that Capstone Avionics assist
pilots by providing the next generation of technology to
improve flight safety.
MR. JOHNSON offered that the "Automatic Dependent
Surveillance - Broadcast (ADS-B)" allows aircraft equipped
with the avionics to interact with ground infrastructure
and satellite stations to provide pilots their exact
location, airspeed, rate of ascent and descent, surrounding
terrain, other aircraft and real time weather, which is
essential data needed for a safe flight.
1:38:53 PM
GREG WINEGAR, Director, Division of Investments, Department
of Commerce, Community, & Economic Development (DCCED),
introduced himself.
CATHY JEANS, System Branch Manager, Division of Investments,
Department of Commerce, Community, & Economic Development
(DCCED), introduced herself.
1:39:29 PM
REPRESENTATIVE GRUENBERG referred to the sponsor statement
and related his understanding that owners who lease their
planes are excluded from participating in the Capstone
Avionics Program.
MR. WINEGAR explained that the lessee cannot obtain a state
loan for the Capstone Avionics equipment. In further
response to Representative Gruenberg, he clarified that the
state can only make loans to owners from the Alaska
Capstone Avionics Revolving Loan Fund.
CHAIR P. WILSON explained that some companies buy aircraft
for the purpose of leasing. The owners are not willing to
purchase the Capstone Avionics equipment, but the lessees
want the safety equipment installed in the planes. Thus,
the lessees desire to participate in the Capstone Avionics
Loan Program.
1:40:50 PM
REPRESENTATIVE GRUENBERG asked whether any law currently
would prevent an owner who leases a plane from qualifying
for the loan.
MR. WINEGAR clarified that the Division of Investments can
make a loan to an owner, but HB 354 would allow lessees to
also qualify for the Capstone Avionics loans. In further
response to Representative Gruenberg, he agreed that owners
are not willing to take out loans for the Capstone Avionics
equipment for planes the owners lease out.
1:41:55 PM
REPRESENTATIVE GRUENBERG asked whether the loans are
collateralized by the planes.
MR. WINEGAR agreed that the Capstone Avionics loans would
require collateral, but the division might also need other
collateral.
REPRESENTATIVE GRUENBERG expressed his concern that if an
owner refused to take out a loan he/she may also not allow
the plane to be used as collateral.
MR. WINEGAR agreed. He explained that unless the lessee
has some way to collateralize the Capstone Avionics loan
the division would not make the loan. This bill would
provide the legal authority to make loans to
lessee/operators. He provided a scenario in which a
commercial carrier owned a hangar free and clear, but
leased a plane from a company in Sweden. The company would
offer the deed of trust on the hangar to secure the loan.
In further response to Representative Gruenberg, he
answered that he doubted that a long-term lease would be
allowed.
1:43:15 PM
REPRESENTATIVE GRUENBERG asked whether the lessee/operator
would have the ability to collateralize.
MR. WINEGAR stated he was unsure. He explained that some
people expressed interest to do so and in those instances,
the potential lessees/operators have the ability to
collateralize. He was unsure whether all operators who may
be interested in the Capstone Avionics loans have
sufficient collateral to qualify for the loans.
1:43:57 PM
REPRESENTATIVE GRUENBERG asked for the typical amount
needed for Capstone Avionics loans.
MR. WINEGAR answered that the average Capstone Avionics
loan would be $87 thousand for commercial aircraft. He
stated that general aviation loans are less expensive,
typically ranging from $12,000-$18,000.
1:44:34 PM
REPRESENTATIVE PETERSEN asked whether the loans ranging
from $12,000 to $100,000 are to retrofit existing aircraft.
MR. WINEGAR agreed that the typical loan would be to add
Capstone Avionics to existing aircraft.
REPRESENTATIVE PETERSEN asked whether new aircraft already
are equipped with Capstone Avionics technology.
MR. WINEGAR answered probably not. He said that the
Capstone Avionics technology is relatively new technology
currently being tested in Alaska. The technology will
subsequently be used in the Lower 48 since the Federal
Aviation Administration (FAA) is currently implementing
Capstone Avionics infrastructure at airports.
Additionally, the FAA is currently working on regulations
that will likely allow for additional manufacturers. The
proposed regulations are anticipated to be finalized in
April 2010. Thus, as new manufacturers enter the market,
the price of the Capstone Avionics technology should also
go down.
1:46:10 PM
REPRESENTATIVE PETERSEN inquired as to whether Alaska is
testing this equipment since it is a rugged environment and
if it works well in Alaska the prediction is that Capstone
Avionics will work anywhere.
MR. WINEGAR agreed. He related that testing Capstone
Avionics technology was initiated about six years ago and
was found to be "the way to go." Thus, the Capstone
Avionics technology will be implemented throughout the
country, he stated.
1:46:46 PM
CHAIR P. WILSON asked whether the FAA will provide any
funding.
MR. WINEGAR answered yes. He stated that the FAA is
providing a "huge amount of money" for the ground
infrastructure. He characterized the FAA's involvement as
a very large capital investment. The FAA has been working
on portions of the state. He said the federal government
has signaled that it would like Alaska to also invest. He
related that it does not make a lot of sense to equip
airports if the aircraft cannot take advantage of the
Capstone Avionics technology. He offered that Southeast
Alaska and the Anchorage-Fairbanks corridor are now
completed and the FAA has a plan in place for the remainder
of the state.
1:48:23 PM
MR. WINEGAR, in response to Representative Munoz, reported
that the Alaska Capstone Avionics Revolving Loan Fund
started out at $4.8 million and current fund balance is
$4.3 million. In further response to Representative Munoz,
he related that the $4.3 million balance represents the
state funds in the Alaska Capstone Avionics Revolving Loan
Fund. The funding for airport infrastructure will be all
FAA funds. He recalled that the federal contribution would
be in the $50 to $100 million range to cover Alaska.
1:49:26 PM
REPRESENTATIVE JOHNSON asked whether the Capstone Avionics
loan would cover the installation of the Capstone Avionics
technology in aircraft.
MR. WINEGAR answered yes. He noted that certified
installers must install the Capstone Avionics, but the
costs of installation can be part of the loan.
REPRESENTATIVE JOHNSON related his understanding that the
installation could not be collateralized so the
lessee/operator must provide additional collateral.
MR. WINEGAR agreed.
1:50:07 PM
REPRESENTATIVE GRUENBERG referred to page 1, lines 8-10, of
HB 354. He opined the definition for applicant is vastly
superior to the general definition contained in Title 1.
He offered, for the benefit of members serving on other
committees, that he thought this definition should be used
as the model for other statutory definitions for a person.
1:51:23 PM
CHAIR P. WILSON reported that no public member wishes to
testify during public testimony.
REPRESENTATIVE JOHNSON remarked he has been familiar with
the Capstone Avionics program since its inception. He
offered his belief that Alaska is in the forefront on this
issue. He professed that he is proud the state is
encouraging Capstone Avionics installations in aircraft.
He predicted that the sooner airplanes are equipped with
Capstone Avionics, the sooner lives will be saved. He
said, "I wholeheartedly encourage the passage of this
legislation."
REPRESENTATIVE JOHNSON 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 Transportation Standing
Committee.
1:52:46 PM
The committee took an at-ease from 1:52 p.m. to 1:53 p.m.
1:53:28 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB267 sponsor stmt TRA.pdf |
HTRA 3/11/2010 1:00:00 PM HTRA 3/16/2010 1:00:00 PM |
HB 267 |
| hb 267 backup TRA.pdf |
HTRA 3/11/2010 1:00:00 PM HTRA 3/16/2010 1:00:00 PM |
HB 267 |
| HB366 Backup TRA.pdf |
HTRA 3/11/2010 1:00:00 PM |
HB 366 |
| HB366 Sectional TRA.pdf |
HTRA 3/11/2010 1:00:00 PM |
HB 366 |
| HB366 Sponsor strmt TRA.pdf |
HTRA 3/11/2010 1:00:00 PM |
HB 366 |
| HB354 Sponsor Statement.pdf |
HTRA 3/11/2010 1:00:00 PM |
HB 354 |
| HB354 Sponsor Statement TRA.pdf |
HTRA 3/11/2010 1:00:00 PM |
HB 354 |
| HB354 Sponsor Statement TRA.pdf |
HTRA 3/11/2010 1:00:00 PM |
HB 354 |