California Law Hurts CFIs, Flight Schools

CFIs and flight schools in California are wondering how they will be able to comply with an onerous new law that requires all businesses that offer flight training to operate like colleges and trade schools.

Assembly Bill 48, penned by Sacramento Assemblyman Roger Niello and signed into law by Gov. Arnold Schwarzenegger last fall, eliminates a long-standing exemption for flight schools from authorizing legislation for the Bureau for Private Postsecondary and Vocational Education. The law mandates that anyone providing flight instruction, be it a Part 61 part-time flight instructor, a small FBO or a Part 141 operation, pay an initial $5,000 fee, followed by a $1,000 annual fee, and 0.75% of yearly revenue to the state. Minimum operational standards, including that all instructors have at least three years of education or experience, must be adhered to. The law also gives the bureau the right to audit a flight training facility.

Additionally, approximately $2.50 of every $1,000 collected from students will go into a tuition recovery fund, which will reimburse students if the school goes out of business.

The law was inspired by the sudden closure of Silver State Helicopters in February 2008. Silver State, which had locations all over the United States, including Sacramento, held flashy seminars where students were told that they could go from zero time to a commercial pilot certificate in approximately 18 months. Students were encouraged to sign up on the spot, including getting a loan for $60,000 to $80,000 from Key Bank to pay for training.

However, because of a lack of aircraft and instructors, most students found that it took significantly longer than 18 months — and a lot more money — to earn their tickets. Those who tried to drop out of the program were surprised to learn that their entire loan amount had been sent to Silver State, although training was not completed. Requests for refunds were often ignored, with Silver State drawing the last of the loan money out of students’ accounts just days before it went out of business.

No one wants to see people lose their money, said Ed Rosiak, president of the California Pilots Association, but he fears AB-48 is too Draconian, and “will be the death of flight training in California” because many independent CFIs and smaller flight schools cannot afford to comply with the measure.

“This is a state bureaucracy and they are now tasked with figuring out what to do with flight schools, with which they have no experience,” he said. “This is a typical ‘ready-aim-fire’ by politicians trying to look good and not fully understanding the situation.”

In a letter sent to Niello, Schwarzenegger, the Caltrans Division of Aeronautics, and various aviation alphabet groups, Rosiak noted: “We are disappointed with the stealth technique used in the elimination of the flight school training exemption, secretly adding flight schools to this bill. Further, we are shocked at the proposed fees associated with this bill, and the complete disregard for the welfare of the fragile general aviation industry in the state. Frankly, the fees are unreasonable, unnecessary and unfair to general aviation and the state’s associated businesses.”

Fees include a $5,000 application fee, a $1,000 fee per location and a five year renewal fee of $3,500. “We believe that the inclusion of aviation flight training in AB-48 will become a financial and bureaucratic disaster for the state’s flight schools, flight instructors, and general aviation,” he continued. “It is common sense not to pay 100% in advance for services not yet rendered. While Silver State Helicopters was a terrible fraud, they cannot punish the entire industry because of it.”

The Society of Aviation and Flight Educators also oppose the law. SAFE President Doug Stewart noted that the bill will hurt students in the long run because it could put flight instructors out of business.

“Lumping freelance instructors in with those who teach at large schools is as ridiculous as referring to a freelance Spanish tutor as a school,” he said.

FAA regulations establish comprehensive requirements and standards for aviation safety, according to FAA spokesman Ian Gregor, who notes that states cannot regulate areas over which FAA has authority. “We have not reviewed the California regulations in question, but likely would do so if asked by a person affected by the regulations,” he said.

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