Legislature(2007 - 2008)BUTROVICH 205
02/12/2008 01:00 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB164 | |
| SB249 | |
| SB164 | |
| SB249 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| * | SB 164 | ||
| * | SB 249 | ||
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 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.
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