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. [RECORDING EQUIPMENT FAILURE MUCH OF RECORDING IS INAUDIBLE] FRANK RICHARDS, DEPUTY COMMISSIONER OF HIGHWAYS & PUBLIC FACILITIES, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, discussed SB 249, the revolving loan fund. The bill creates a loan fund within the Department of Commerce, Community and Economic Development. Mr. Richards commented that the purpose of the bill is to increase safety of aviation transportation within the State of Alaska by providing low interest loans for purchase and installation of the Capstone Avionic equipment. 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)", which 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. An entire package of data for a safe flight. Mr. Richards continued, the Federal Aviation Administration (FAA) sponsored the technology and used rural Alaska as a test bed. The results for those aircraft equipped with the new avionics had 47% reduction in accidents and a 33% reduction in fatalities. The FAA would like to expand the technology statewide and has funding to build out the infrastructure. The concern is that they have determined the need for 4,000+ aircraft to be equipped. SB 249 creates a low interest loan program within Department of Commerce, Community and Economic Development to provide aircraft owners unable to shoulder the initial purchase cost out of pocket with a reasonable loan to use. Mr. Richards concluded the Department of Transportation and Public Facilities support passage of the bill. 3:49:54 PM GREG WINEGAR, DIRECTOR, DIVISION OF INVESTMENTS, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, described the loan program. The purpose of the bill is to make loans to aircraft owners that have a substantial number of flight hours in Alaska. The program would be established as a revolving loan fund. Additionally, all of the operating budget costs for the program would be paid for out of the fund itself. Mr. Winegar noted that the bill stipulates that the Department can loan up to 80% of the cost of purchasing and installing the avionics. The anticipated interest rate is 4% for a maximum of ten years. The goal is to provide loan terms and payment plan that is manageable while providing sufficient cash flow for the expenses and then returns the money back to the General Fund. Mr. Winegar pointed out that Department's fiscal note, which proposes to capitalize the fund with $4.8 million dollars, allowing for about 400 loans during the first year and about 60 per year after that. At the end of the estimated date, all funds both principle and earnings, would return to the General Fund. The note requests two positions to handle the increased work load. 3:52:26 PM Representative Joule referred to Global Positioning System (GPS) problems in cars and wondered if similar glitches could occur in the aircraft Capstone. Mr. Richards understood that the associated ground based computers provide for a better triangulation. He directed testimony to someone from the FAA. 3:54:09 PM WILFRED RYAN, FEDERAL AVIATION ADMINISTRATION (FAA) (Testified via teleconference), replied that the GPS systems installed in cars do not have the same standards as proposed in the aircraft and that the tolerances for that aviation equipment is much tighter and more efficient. Co-Chair Chenault asked if there would be a remaining balanced when the program ends in 2020. He questioned how long the Capstone technology could last. [Inaudible] Mr. Richards replied that the Capstone satellite based technology coupled with ground-based FAA monitoring for the aircraft will likely last many years. Today, the radar technology used was designed in the 1940's. The goal is to install the technology into commercial aircraft. Alaska has been used as the test bed for the technology. 3:58:31 PM Co-Chair Chenault assumed that the program would be open to commercial as well as private air carriers. He asked if there would be a difference in how it would be administered. Mr. Winegar answered there would be no difference. Mr. Richards added that the loan would be on a first come, first serve bases. The technology is currently used in the Southwest and Southeast Alaska for commercial carriers. Co-Chair Chenault inquired if the State Troopers and the Department of Fish and Game qualify. Mr. Richards understood that the Department of Fish and Game had put forth a budget amendment seeking the funding for their aircraft. Representative Kelly commented on the strengths associated with the Capstone avionics. The technology has taken dramatic steps forward and that the safety improvements are significant. He said it is critical that the State support the legislation and those recommendations put forward by the FAA. WILFRED RYAN, FEDERAL AVIATION ADMINISTRATION (FAA) (Testified via teleconference), spoke in support of the legislation. [Inaudible] KAREN CASANOVAS, DIRECTOR, ALASKA AIR CARRIERS ASSOCIATION (Testified via teleconference), spoke in support of the bill, which will move the State forward in improving aviation concerns. JOE PEARSON, ALASKA AIRMEN'S ASSOCIATION (Testified via teleconference), reiterated previous comments in support of the legislation. He added that most of Alaska is under- serviced & unsupported in their coverage. He urged that the State participate in the proposal. The current cost of the equipment is very high, so a loan program would encourage utilization of greater safety devices in air travel. He hoped to work with the manufacturers to bring the cost of the equipment down. He urged support of the bill. 4:05:19 PM JERE HAYSLETT, FEDERAL AVIATION ADMINISTRATION (Testified via teleconference), spoke in support of the bill. PUBLIC TESTIMONY CLOSED. SB 249 was HELD in Committee for further consideration.