The State of Alaska and the Alaska Airmen's Association only gave one-day's notice to review the Capstone Revolving Loan Program!
Here is the loan regulation:
3 AAC 75 is amended by adding a new chapter to Part 10 to read:
Chapter 75. Alaska Capstone Avionics Revolving Loan Fund
Section
10. Application process
15. Examination
20. Loan committee
25. Eligibility of aircraft and equipment
30. Financial and credit record
35. Ability to repay
40. Collateral
45. Lending practices
50. Disbursement of loan money
55. Costs
60. Assumptions
65. Modifications
70. Reconsideration of loan request
75. Confidentiality of loan information
900. Definitions
3 AAC 75.010. Application process. (a) To apply for a loan the applicant shall file with the department
(1) a completed application for a Capstone avionics loan, on a form provided by the department;
(2) documentation to verify that the aircraft receiving the Capstone avionics improvements meets the eligibility requirements contained in AS 44.33.665(a) and 3 AAC 75.025;
(3) a letter of intent stating the amount requested and the intended use of the proposed loan money on a form provided by the department;
(4) a schedule of acceptable collateral, including a copy of the aircraft title and Capstone avionics equipment to be acquired with the loan proceeds, on a form provided by the department;
(5) an individual financial statement consisting of a current balance sheet and a profit and loss statement, on a form provided by the department;
(6) a signed credit authorization, on a form provided by the department;
(7) copies of the applicant's federal income tax return for the preceding year, and for additional years if requested by the department;
(8) consent to release information, on a form provided by the department;
(9) copies of the purchase agreement, cost estimates, invoice or other documentation to verify the cost of equipment being purchased and installed with loan proceeds;
(10) a $50 nonrefundable application fee; and
(11) any other information that might be helpful to the applicant in demonstrating eligibility for a loan, as requested by the department.
(b) An applicant who submits a false sworn or unsworn statement on or in support of a loan application is subject to AS 11.56.200 - 11.56.210 and will, in the department's discretion, be denied any future loans.
(c) The department will, in its discretion, process loan requests without the information described in (a) of this section in cases where it determines that the information is not necessary in order for the department to make the lending decision. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.015. Examination. (a) The materials described in 3 AAC 75.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's eligibility, financial and credit history, financial statement, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either
(1) inactivate the application
i) due to lack of information required under 3 AAC 75.010;
ii) ineligibility of the applicant; or
iii) failure by the aircraft to meet the eligibility requirements under 3 AAC 75.025; or
(2) recommend proposed action on the loan request to the appropriate loan committee. However, the recommendation of a loan officer is not binding on a loan committee. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.020. Loan committee. (a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify and approve a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) adding the department as loss payee on an existing aircraft insurance policy.
(d) A loan committee shall consider the applicant's eligibility for a loan, financial and credit record, ability to repay, operating plan, and the adequacy of collateral offered to secure the loan. A loan committee may also consider the recommendations of the loan officer assigned to process the application and any other relevant information.
(e) A loan committee may fix, within the limitations set by AS 44.33.670, the term of a loan and repayment schedule.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied upon.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665 AS 44.33.670
3 AAC 75.025. Eligibility of aircraft and equipment. (a) For an aircraft to be eligible for a loan under AS 44.33.650 – 44.33.690, the applicant must document that the aircraft has logged a substantial percentage of flight hours in the state. For purposes of this section, “substantial flight hours” means at least 90% of the aircraft’s flight hours were logged in Alaska over the preceding twelve months.
(b) Capstone avionic equipment eligible for a loan includes
(1) Automatic Dependent Surveillance – Broadcast (ADS-B) Data Link;
(2) GPS/WAAS navigation equipment;
(3) a moving map multifunction display (MFD); or
(4) other equipment as determined by the department in consultation with the Department of Transportation and Public Facilities. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.030. Financial and credit record. (a) The department will, in its discretion, consider the following factors in evaluating an applicant's financial and credit record
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) bankruptcies;
(6) existence of tax liens;
(7) judgments and foreclosures; and
(8) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred in recent years. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.035. Ability to repay. (a) The department will, in its discretion, consider the following factors in evaluating an applicant's ability to repay
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of projected profit and loss statement; and
(6) other relevant experience. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.040. Collateral. (a) A loan must be secured by collateral acceptable to the department, which may include a lien on the equipment being financed and the aircraft receiving the improvements.
(b) The aircraft being upgraded must have airworthiness certification. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.045. Lending practices. (a) A loan will not be approved for refinancing of debt of an existing loan, the proceeds of which were used to purchase or install avionic equipment similar to that described in 3 AAC 75.025.
(b) Loan proceeds may not be used to reimburse an applicant for Capstone avionics equipment similar to that described in 3 AAC 75.025 which was purchased more than six months before receipt of the application by the department.
(c) The interest rate for the loan program will be 4%.
(d) A loan for the purchase of Capstone avionics equipment will be made only if the aircraft is in the name of the applicant and the equipment to be purchased is offered as security for the loan. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.050. Disbursement of loan money. (a) Loan funds will be disbursed when
(1) requirements of the loan committee have been met; and
(2) the borrower is in compliance with all other provisions of the loan documents and this chapter. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665 AS 44.33.670
3 AAC 75.055. Costs. (a) All expenses incurred by the department in processing an application must be paid by the applicant.
(b) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(c) An extension fee, not to exceed $50.00, will, in the department's discretion, be charged to a borrower to process a loan extension. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.060. Assumptions. (a) A request for permission to assume the obligations and benefits of a loan made under AS 44.33.650 – 44.33.690 and this chapter will be processed in the same manner as a loan request.
(b) A loan committee may permit an assumption if
(1) the applicant meets requirements as outlined in this chapter;
(2) is a good financial risk; and
(3) the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 44.33.650 – 44.33.690 and this chapter is prohibited and constitutes a default on the loan. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660
3 AAC 75.065. Modifications. (a) A request for a modification to a loan made under AS 44.33.650 – 44.33.690 and this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require the applicant to file one or more of the items specified in 3 AAC 75.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660
3 AAC 75.070. Reconsideration of loan request. (a) If a loan request is denied, inactivated or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the departments’ decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.075. Confidentiality of loan information. (a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including a financing statement, aircraft title, or aircraft documentation;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, profit and loss statements, credit information obtained from banks and other creditors, reports from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant; and
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made and will be determined in accordance with 2 AAC 96.100 – 2 AAC 96.900. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed. (Eff. _____/___/______, Register ______)
Authority: Art. I, sec. 22, Ak Const. AS 40.25.120 AS 44.33.660
AS 40.25.110
3 AAC 75.900. Definitions. (a) In this chapter, unless otherwise provided or the context otherwise requires,
(1) “commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(2) "default" includes a violation of any provision of this chapter, AS 44.33.650 – 44.33.690, the loan documents, or failure to make the necessary payment within 15 days after it is due;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "guarantor" means a person who legally assures that the loan requirements will be met if the borrower fails to pay or perform as contracted;
(5) "wraparound financing" means a contract that includes the balance due on an existing debt and any additional amount to cover the difference between the selling price and the existing debt;
(6) "director" means the director of the division of investments or its successor agency in the department. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.690
Is this good for all aircraft owners? Comment today! (May 2)
Here is the loan regulation:
3 AAC 75 is amended by adding a new chapter to Part 10 to read:
Chapter 75. Alaska Capstone Avionics Revolving Loan Fund
Section
10. Application process
15. Examination
20. Loan committee
25. Eligibility of aircraft and equipment
30. Financial and credit record
35. Ability to repay
40. Collateral
45. Lending practices
50. Disbursement of loan money
55. Costs
60. Assumptions
65. Modifications
70. Reconsideration of loan request
75. Confidentiality of loan information
900. Definitions
3 AAC 75.010. Application process. (a) To apply for a loan the applicant shall file with the department
(1) a completed application for a Capstone avionics loan, on a form provided by the department;
(2) documentation to verify that the aircraft receiving the Capstone avionics improvements meets the eligibility requirements contained in AS 44.33.665(a) and 3 AAC 75.025;
(3) a letter of intent stating the amount requested and the intended use of the proposed loan money on a form provided by the department;
(4) a schedule of acceptable collateral, including a copy of the aircraft title and Capstone avionics equipment to be acquired with the loan proceeds, on a form provided by the department;
(5) an individual financial statement consisting of a current balance sheet and a profit and loss statement, on a form provided by the department;
(6) a signed credit authorization, on a form provided by the department;
(7) copies of the applicant's federal income tax return for the preceding year, and for additional years if requested by the department;
(8) consent to release information, on a form provided by the department;
(9) copies of the purchase agreement, cost estimates, invoice or other documentation to verify the cost of equipment being purchased and installed with loan proceeds;
(10) a $50 nonrefundable application fee; and
(11) any other information that might be helpful to the applicant in demonstrating eligibility for a loan, as requested by the department.
(b) An applicant who submits a false sworn or unsworn statement on or in support of a loan application is subject to AS 11.56.200 - 11.56.210 and will, in the department's discretion, be denied any future loans.
(c) The department will, in its discretion, process loan requests without the information described in (a) of this section in cases where it determines that the information is not necessary in order for the department to make the lending decision. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.015. Examination. (a) The materials described in 3 AAC 75.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's eligibility, financial and credit history, financial statement, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either
(1) inactivate the application
i) due to lack of information required under 3 AAC 75.010;
ii) ineligibility of the applicant; or
iii) failure by the aircraft to meet the eligibility requirements under 3 AAC 75.025; or
(2) recommend proposed action on the loan request to the appropriate loan committee. However, the recommendation of a loan officer is not binding on a loan committee. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.020. Loan committee. (a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify and approve a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) adding the department as loss payee on an existing aircraft insurance policy.
(d) A loan committee shall consider the applicant's eligibility for a loan, financial and credit record, ability to repay, operating plan, and the adequacy of collateral offered to secure the loan. A loan committee may also consider the recommendations of the loan officer assigned to process the application and any other relevant information.
(e) A loan committee may fix, within the limitations set by AS 44.33.670, the term of a loan and repayment schedule.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied upon.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665 AS 44.33.670
3 AAC 75.025. Eligibility of aircraft and equipment. (a) For an aircraft to be eligible for a loan under AS 44.33.650 – 44.33.690, the applicant must document that the aircraft has logged a substantial percentage of flight hours in the state. For purposes of this section, “substantial flight hours” means at least 90% of the aircraft’s flight hours were logged in Alaska over the preceding twelve months.
(b) Capstone avionic equipment eligible for a loan includes
(1) Automatic Dependent Surveillance – Broadcast (ADS-B) Data Link;
(2) GPS/WAAS navigation equipment;
(3) a moving map multifunction display (MFD); or
(4) other equipment as determined by the department in consultation with the Department of Transportation and Public Facilities. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.030. Financial and credit record. (a) The department will, in its discretion, consider the following factors in evaluating an applicant's financial and credit record
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) bankruptcies;
(6) existence of tax liens;
(7) judgments and foreclosures; and
(8) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred in recent years. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.035. Ability to repay. (a) The department will, in its discretion, consider the following factors in evaluating an applicant's ability to repay
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of projected profit and loss statement; and
(6) other relevant experience. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.040. Collateral. (a) A loan must be secured by collateral acceptable to the department, which may include a lien on the equipment being financed and the aircraft receiving the improvements.
(b) The aircraft being upgraded must have airworthiness certification. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.045. Lending practices. (a) A loan will not be approved for refinancing of debt of an existing loan, the proceeds of which were used to purchase or install avionic equipment similar to that described in 3 AAC 75.025.
(b) Loan proceeds may not be used to reimburse an applicant for Capstone avionics equipment similar to that described in 3 AAC 75.025 which was purchased more than six months before receipt of the application by the department.
(c) The interest rate for the loan program will be 4%.
(d) A loan for the purchase of Capstone avionics equipment will be made only if the aircraft is in the name of the applicant and the equipment to be purchased is offered as security for the loan. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.050. Disbursement of loan money. (a) Loan funds will be disbursed when
(1) requirements of the loan committee have been met; and
(2) the borrower is in compliance with all other provisions of the loan documents and this chapter. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665 AS 44.33.670
3 AAC 75.055. Costs. (a) All expenses incurred by the department in processing an application must be paid by the applicant.
(b) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(c) An extension fee, not to exceed $50.00, will, in the department's discretion, be charged to a borrower to process a loan extension. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.060. Assumptions. (a) A request for permission to assume the obligations and benefits of a loan made under AS 44.33.650 – 44.33.690 and this chapter will be processed in the same manner as a loan request.
(b) A loan committee may permit an assumption if
(1) the applicant meets requirements as outlined in this chapter;
(2) is a good financial risk; and
(3) the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 44.33.650 – 44.33.690 and this chapter is prohibited and constitutes a default on the loan. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660
3 AAC 75.065. Modifications. (a) A request for a modification to a loan made under AS 44.33.650 – 44.33.690 and this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require the applicant to file one or more of the items specified in 3 AAC 75.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660
3 AAC 75.070. Reconsideration of loan request. (a) If a loan request is denied, inactivated or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the departments’ decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.665
3 AAC 75.075. Confidentiality of loan information. (a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including a financing statement, aircraft title, or aircraft documentation;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, profit and loss statements, credit information obtained from banks and other creditors, reports from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant; and
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made and will be determined in accordance with 2 AAC 96.100 – 2 AAC 96.900. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed. (Eff. _____/___/______, Register ______)
Authority: Art. I, sec. 22, Ak Const. AS 40.25.120 AS 44.33.660
AS 40.25.110
3 AAC 75.900. Definitions. (a) In this chapter, unless otherwise provided or the context otherwise requires,
(1) “commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(2) "default" includes a violation of any provision of this chapter, AS 44.33.650 – 44.33.690, the loan documents, or failure to make the necessary payment within 15 days after it is due;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "guarantor" means a person who legally assures that the loan requirements will be met if the borrower fails to pay or perform as contracted;
(5) "wraparound financing" means a contract that includes the balance due on an existing debt and any additional amount to cover the difference between the selling price and the existing debt;
(6) "director" means the director of the division of investments or its successor agency in the department. (Eff. _____/___/______, Register ______)
Authority: AS 44.33.660 AS 44.33.690
