Legislature(2025 - 2026)ADAMS 519
02/12/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB53 || HB55 | |
| HB65 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 53 | TELECONFERENCED | |
| += | HB 55 | TELECONFERENCED | |
| *+ | HB 65 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | HB 69 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
February 12, 2025
1:37 p.m.
1:37:53 PM
CALL TO ORDER
Co-Chair Josephson called the House Finance Committee
meeting to order at 1:37 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative DeLena Johnson
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
Representative Calvin Schrage, Co-Chair
ALSO PRESENT
Alexander Schroeder, Staff, Representative Andy Josephson;
Representative Louise Stutes, Sponsor; Jane Pierson, Staff,
Representative Louise Stutes; Bill O'Leary, President and
CEO, Alaska Railroad Corporation; Meghan Clemens, External
Affairs Director, Alaska Railroad Corporation; Preston
Carnahan, Regional VP Destinations, Royal Caribbean Group.
PRESENT VIA TELECONFERENCE
Kat Sorensen, City Manager, City of Seward, Seward; Tom
Tougas, Self, Seward; Jillian Simpson, President and CEO,
Alaska Travel Industry Association, Anchorage; Jason Davis,
President, Turnagain Marine, Anchorage.
SUMMARY
HB 53 APPROP: OPERATING BUDGET; CAP; SUPP
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 APPROP: MENTAL HEALTH BUDGET
HB 55 was HEARD and HELD in committee for further
consideration.
HB 65 RAILROAD CORP. FINANCING
HB 65 was REPORTED out of committee with nine "do
pass" recommendations and with one new zero
fiscal note from the Department of Commerce,
Community and Economic Development.
Co-Chair Josephson reviewed the meeting agenda.
HOUSE BILL NO. 53
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
making reappropriations; making appropriations under
art. IX, sec. 17(c), Constitution of the State of
Alaska, from the constitutional budget reserve fund;
and providing for an effective date."
HOUSE BILL NO. 55
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
1:39:41 PM
Co-Chair Foster MOVED to ADOPT the proposed committee
substitute (CS) for HB 53, Work Draft 34-GH1462\N (Marx,
1/28/25).
Co-Chair Josephson OBJECTED for discussion. He asked his
staff to explain the CS.
1:40:19 PM
ALEXANDER SCHROEDER, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
explained the changes in the CS. The bill had no changes
from the governor's proposed operating budget, and merely
conformed to the drafting style for the Legislative Legal
Services. He continued that the Office of Management and
Budget (OMB) confirmed with Co-Chair Josephson's office
that it had no concerns with the differences between
Version A and Version N of the bill.
Co-Chair Josephson recognized Representative Louise Stutes
in the audience.
Co-Chair Josephson WITHDREW the OBJECTION.
Representative Stapp OBJECTED. He asked for a minute to
look at the CS.
1:41:46 PM
AT EASE
1:42:10 PM
RECONVENED
Representative Stapp WITHDREW his OBJECTION.
There being NO further OBJECTION, Work Draft 34-GH1462\N
was ADOPTED.
Co-Chair Foster MOVED to ADOPT the proposed committee
substitute for HB 55, Work Draft 34-GH1459\N (Marx,
1/28/25)).
Representative Stapp OBJECTED. He asked for the working
document number.
Co-Chair Foster provided the number.
Representative Stapp WITHDREW his OBJECTION.
There being NO further OBJECTION, Work Draft 34-GH1459\N
was ADOPTED.
Representative Hannan asked if the new version of the
budget included both rounds of supplemental items. She
noted that the initial governor's proposal did not include
the supplementals.
Co-Chair Josephson replied in the negative.
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 was HEARD and HELD in committee for further
consideration.
Co-Chair Josephson handed the gavel to Co-Chair Foster.
Co-Chair Foster reviewed the remainder of the agenda.
HOUSE BILL NO. 65
"An Act authorizing the Alaska Railroad Corporation to
issue revenue bonds to finance the replacement of the
Alaska Railroad Corporation's passenger dock and
related terminal facility in Seward, Alaska; and
providing for an effective date."
1:44:30 PM
Co-Chair Foster invited the bill sponsor to the table.
REPRESENTATIVE LOUISE STUTES, SPONSOR, introduced the bill
with prepared remarks.
It is a pleasure to be in front of the House Finance
Committee today to present HB 65 - "An Act authorizing
the Alaska Railroad Corporation to issue revenue bonds
to finance the replacement of the Alaska Railroad
Corporation's passenger dock and related terminal
facility in Seward, Alaska; and providing for an
effective date."
Many of you may be familiar with HB 65. This bill, in
its current form, passed through both bodies last year
as HB 122, sponsored by Rep. Tomaszewski. The bill was
then vetoed by the Governor for passing after
midnight. For this reason, it is imperative that HB 65
gets passed into law prior to the end of March, so
that the new Seward passenger dock and related
terminal facilities are ready to greet passengers in
the 2026 cruising season.
The current Seward passenger dock is nearing the end
of its useful life. The replacement and expansion of
the passenger dock and terminal ensures continued
service, expanded capabilities, employment
opportunities, as well as economic growth for the City
of Seward.
Also important to note, the improved Port of Seward
could function as an alternative to the Port of
Anchorage, if it became unavailable due to a disaster.
Allowing for the transport of goods and supplies into
Southcentral to remain viable. In the event of an
emergency, the Port of Seward would allow commerce to
continue as well as providing food security to the
region.
The passenger dock and related terminal expansion is
important to the City of Seward, the tourist industry,
the Alaska Marine Highway, and the State of Alaska.
This project serves as a key point of entry from
cross-gulf itineraries, creating a vital multimodal
transportation hub that connects rail, marine and the
road system to moving passengers throughout the State.
The dock and terminal improvements will also serve as
the first step to bringing the Alaska Marine Highway
back to Seward.
This project is an expression of the Alaska Railroad
Corporation and Royal Caribbean Group's strong
commitment to Seward. The new infrastructure will
support the cruise industry in Seward for the next 50
years. This project is a boon for the City of Seward
and its economic future by providing infrastructure to
accommodate tourists and Alaskans alike.
Representative Stutes asked her staff to provide details on
the bill.
1:48:44 PM
JANE PIERSON, STAFF, REPRESENTATIVE LOUISE STUTES,
introduced herself and provided prepared remarks:
As required under AS 42.40.285, House Bill 65 grants
legislative authority to the Alaska Railroad
Corporation, to issue bonds, of no more than $75
million, to fund the construction of a new passenger
dock and terminal facility in Seward, Alaska. The
requested $75 million in bond authority is in addition
to the $60 million authorized in 2022, for a total of
$135 million in bonding for the project.
Furthermore, it is important to understand that under
AS 42.40.690 the State of Alaska is not liable for the
debts of the Alaska Railroad Corporation. These bonds
will be secured by a 30-year pier usage agreement with
anchor tenant the Royal Caribbean Group, with annual
revenue to cover the debit.
This is a necessary project. The existing passenger
dock was constructed in 1966. However, in over 50
years of use, the dock's pile foundation has
experienced significant corrosion that limits the
dock's remaining useful life and has resulted in
weight restrictions being implemented. While safe to
use, the dock is clearly nearing the end of its useful
life.
The new passenger dock is designed to the
specifications of the Alaska Railroad's anchor tenant
the Royal Caribbean Group. The new dock design will be
able to accommodate Quantum Class ships and will
support industry growth and demand for the next 50
years.
During the off-season, the terminal facility provides
support and moorage for freight, the U.S. Coast Guard,
and non-cruise passenger vessels, as well as a venue
for community events.
The successful passage of HB 65 by March in the 2025
legislative session is imperative to meet the timeline
of completing the new dock and terminal for the 2026
cruise season.
Ms. Pierson listed others available to provide further
details on the project, including the Alaska Railroad
Corporation (ARC), the Royal Caribbean Group (RCG), the
City of Seward, and Turnagain Marine Construction.
1:51:19 PM
Representative Bynum asked to hear how important it was to
get moving on the issue. He wondered if there was an impact
from the delay of the bill passing late in the previous
session.
Ms. Pierson emphasized that it was imperative that the bill
passed. If the bill did not pass the dock would not be
available for the 2026 cruise season. She thought the
committee would hear from RCG and the railroad that they
had already started selling bookings on the ships. The veto
of the bill the prior year had hindered the project, as the
railroad needed the legislative authority to issue the
bonds.
Representative Bynum appreciated hearing about the value to
Alaska.
1:52:34 PM
Co-Chair Foster asked to hear from the Alaska Railroad.
BILL O'LEARY, PRESIDENT AND CEO, ALASKA RAILROAD
CORPORATION, introduced himself and other available
speakers. He provided a PowerPoint presentation entitled
"Seward Passenger Dock and Terminal Replacement Project"
(copy on file). He noted the presentation would be brief
and acknowledged that legislators were familiar with the
project. He began on slide 2 and addressed the railroad's
mission statement that emphasized safety, service,
profitability, and economic development. He considered that
the project fit into each category. He thought the project
was critical for ARC and for the entire visitor industry in
the state. He thought it also had presented significant
impact on the Southeast market.
1:54:49 PM
MEGHAN CLEMENS, EXTERNAL AFFAIRS DIRECTOR, ALASKA RAILROAD
CORPORATION, reviewed the project on slide 3. She explained
that the current dock in Seward was approaching the end of
its useful life. She considered the dock to be critical
infrastructure for Seward and the tourism industry. She
relayed that the dock replacement had been an item of
interest for ARC for a number of years, and also been a
priority for its cruise partners.
Ms. Clemens described that RCG had worked with a local
developer to identify a dock design and had brought the
project to the railroad. The railroad determined the
project design would meet its needs. There were plans to
use bonds to finance the purchase, with legislative
approval. The bond on the purchase would be serviced by a
30-year commitment by RCG at no recourse or obligation to
the state.
1:56:41 PM
Ms. Clemens advanced to slide 4 and provided a review of
the planned investments in Seward marine infrastructure.
She mentioned a planned $25 million expansion for the
adjacent freight dock for fall 2026, completed in 2027.
1:57:25 PM
Ms. Clemens moved to slide 5 and discussed the details of
the new dock. The new passenger dock would be larger than
the current structure, which would support the growth and
trends in the cruise industry. There would be a double-
berth pier with a floating barge dock, which would be a
more stable design than many floating docks. The new dock
would be able to accommodate both Quantum-class RCG ships
as well as side-loading Alaska Marine Highway vessels and
freight barge vessels. She noted that outside of the scope
of the $137 million project, the railroad was also
investing an additional $1.8 million to upgrade the
transfer span associated with the dock, in support of off-
season freight activity.
1:59:01 PM
Ms. Clemens turned to slide 6 and discussed the new
terminal building, which would be much larger and more
updated than the existing facility. She noted that the
building was meaningful to the community and hosted many
events and would include over 40,000 feet of enclosed space
and 20,000 feet of outdoor space.
1:59:22 PM
Representative Hannan asked if the current terminal would
be torn down or if the new building would be on a different
footprint.
Ms. Clemens affirmed that the new building would be on a
different footprint. She pointed to slide 7 showing an
image of the dock and surrounding facilities. She noted
that the new terminal building will be on the uplands
rather than the dock itself and would be more easily
accessible.
Representative Hannan stated that many people became aware
of the Seward area when watching the Olympics. She asked if
the current building would be repurposed or torn down.
Ms. Clemens answered that the building would be removed
from the existing dock and would be given to the City of
Seward to repurpose.
2:00:52 PM
Ms. Clemens addressed the funding and timeline on slide 8.
She mentioned securing the bond authorization for the
critical date of spring 2026 and noted that RCG was making
plans to bring ships into Seward in 2026 and needed the
confidence of having the facility ready and waiting.
Mr. O'Leary addressed the key points on slide 9. He
reiterated that timing was critical for the project. He
emphasized that there were no state funds that would be
used for the project. He asked for comments from RCG.
Representative Bynum stated that the biggest change he had
seen was the port electrification portion of the project.
He mentioned a $45 million Environmental Protection Agency
(EPA) grant and matching funds from the industry. He asked
for comment on the additional benefits to the community and
local utilities.
Ms. Clemens agreed that the EPA grant was a new development
since the past spring and relayed that it was part of the
Clean Port Program. The railroad had worked with the City
of Seward and the developer to pursue the grant. The City
of Seward was awarded a $45 million grant that would
support the dock electrification as well as the necessary
city utility infrastructure upgrades. She continued that
the updates included a battery bank system and a training
program at the local Alaska Vocational Technical Center
(AVTEC) to train maintenance technicians. She reiterated
that the match for the grant was being supplied by the Port
of Tomorrow, the developer of the project. The component
would add an additional $50 million investment into the
project and community.
2:03:58 PM
Representative Bynum appreciated it. He was a big advocate
of shore electrification to benefit communities and provide
economic growth and opportunity.
Co-Chair Foster asked to hear from RCG.
PRESTON CARNAHAN, REGIONAL VP DESTINATIONS, ROYAL CARIBBEAN
GROUP, appreciated the legislature's time and work. He
relayed that the company was excited to bring a lot of
happy guests to the state. The company had 10 of its 65
ships in Alaska annually from Seattle and Vancouver. The
company had been calling into the Port of Seward for 20
years. The company looked forward to the opening in 2026.
2:05:30 PM
Co-Chair Foster asked to hear from the City of Seward.
KAT SORENSEN, CITY MANAGER, CITY OF SEWARD, SEWARD (via
teleconference), read from prepared remarks. She mentioned
testimony she had offered a year previously and reflected
that not much had changed. She commented that Seward was an
essential economic and transportation hub for the state.
The current dock was nearing the end of its useful life.
The proposed new terminal was designed for year-round
community use. The inclusion of shore power infrastructure
aligned with the city's plans and goals. The newly acquired
federal funding would enable shore power that would reduce
emissions and stabilize local power rates. The shore power
plan incorporated a battery that would ensure no
disruptions in power. She discussed the increased jobs and
positive impact on the community. She urged the committee's
passage of the bill.
Representative Bynum asked if the shore power component
would only be used for cruise ships or if it would be used
for other vessels.
Ms. Sorensen answered that over time it could be used for
other vessels depending on the vessel's infrastructure.
2:08:12 PM
Co-Chair Foster OPENED public testimony.
TOM TOUGAS, SELF, SEWARD (via teleconference), shared that
he operated major marine tours in Seward. He had lived in
Seward for over 30 years. He stated that the project was
very important to the community, especially in the off
season. He commented that many of the vessels on the
western rivers came back to Seward for marine repair and it
was very important for the winter economy to have the dock
available. He thanked the committee.
Co-Chair Foster noted that he inadvertently skipped an
invited testifier. He asked to hear from Ms. Jillian
Simpson.
2:10:23 PM
JILLIAN SIMPSON, PRESIDENT AND CEO, ALASKA TRAVEL INDUSTRY
ASSOCIATION, ANCHORAGE (via teleconference), spoke in
strong support of the bill. She thought the dock was a
critical piece of Alaska tourism. She read from prepared
remarks. She cited that the previous year there had been
over 1.7 million visitors to the state. She continued that
25 percent of cruise passengers crossed the Gulf of Alaska,
and many of the passengers continued to travel on land. An
Alaska Travel Industry Association (ATIA) economic study
had shown that in 2022, passengers had generated $500
million in spending. She mentioned the larger class of
ships that the new dock would accommodate. She emphasized
that ATIA strongly supported the dock and terminal that
would provide economic benefits to all regions of the
state.
2:12:20 PM
JASON DAVIS, PRESIDENT, TURNAGAIN MARINE, ANCHORAGE (via
teleconference), was available for questions. He supported
the bill. He mentioned progress on the project.
Co-Chair Foster CLOSED public testimony. He provided the
email address to submit written testimony.
Representative Hannan relayed that she had supported the
bill previously and intended to support it again. She noted
they had heard a lot of testimony in support of the dock
and terminal from other users. She asked about the
management and scheduling of the dock. She wondered if
other cruise lines would pay the railroad, and if such
payments would reduce the obligation of RCG.
Mr. O'Leary replied that the dock would be owned, managed,
and operated by ARC. It would be an open dock. Other cruise
lines would be welcome to use the dock. Royal Caribbean
would have preferential use for one side of the dock for a
certain period of time. He commented that it was for the
benefit of all concerned that there was more traffic at the
dock.
2:15:50 PM
Representative Hannan recalled that RCG's long-term
commitment would pay off the bond. She pondered that the
railroad's leasing of the dock to others for day use or
winter use would reduce RCG's obligation.
Mr. O'Leary agreed.
Representative Galvin was excited to support the project.
She referenced the Alaska Marine Highway System (AMHS) and
understood the project was a shared dock with one side
including a preference for RCG. She asked if there was also
preference for AMHS or if the state would have to pay.
Mr. O'Leary replied that currently AMHS did not serve
Seward. He noted that the project would need to make sure
the ferry fit into the plan should it have the opportunity
to be there.
Representative Galvin understood that the project was
designed so marine ferries would be able to use the dock.
Ms. Clemens replied affirmatively. When considering
construction of the new facility, the railroad had
considered something that could best serve Alaskans for
years to come. She was not aware of imminent plans to
resume ferry service to Seward. She noted that side-loading
vessels would be able to utilize the new facility, which
was reflected in the bill language. She noted that there
were multiple docks available in Seward, and that the
freight dock next door could potentially be an option for
AMHS vessels. She relayed that the group had wanted to
ensure that the project could serve multiple vessel types.
Representative Galvin thought it sounded like any fees
would be established later.
Ms. Clemens nodded affirmatively.
2:19:26 PM
Co-Chair Foster asked about the fiscal note from the
Department of Commerce, Community and Economic Development.
Ms. Clemens replied that it was a zero fiscal note. She
noted that while the railroad did require legislative
approval to issue revenue bonds, there was no recourse to
the state nor impact to the budget.
Co-Chair Foster queried any intent of members to submit
amendments and did not see any indication. He also wanted
to offer Representative Tomaszewski the option to make a
motion to move the bill out of committee.
Representative Tomaszewski thanked the testifiers and
Representative Stutes for the legislation. He relayed that
he was focused on economic development and things to move
the state forward.
Representative Tomaszewski MOVED to REPORT HB 65 out of
committee with individual recommendations and the
accompanying fiscal note.
Co-Chair Foster read the version number.
Representative Tomaszewski agreed.
HB 65 was REPORTED out of committee with nine "do pass"
recommendations and with one new zero fiscal note from the
Department of Commerce, Community and Economic Development.
Co-Chair Foster asked for any comments from the bill
sponsor.
Representative Stutes thanked the committee for the
expediency in which it handled the bill. She thanked
Representative Tomaszewski for his past work on the bill.
Representative Allard thanked Representative Stutes and
Representative Tomaszewski.
Co-Chair Foster reviewed the schedule for the following
day.
ADJOURNMENT
2:23:54 PM
The meeting was adjourned at 2:23 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 65 Resolution ATIA Supporting Seward Dock.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |
| HB 65 Presentation ARRC RCG 2025.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |
| HB 65 Resolution of Support City of Seward 2.27.23.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |
| HB 65 Sectional Analysis version A.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |
| HB 65 Sponsor Statement version A.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |
| HB 65 Support Letter - ARRC- 1.21.25.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |
| HB 65 Support letter - City of Seward.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |
| HB 65 Support Letter RCG- January 2025.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |
| HB 65 Research Applicable Statutes 021125.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |
| HB 55, CS WorkDraft v. N 021225.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 55 |
| HB 53 CS WorkDraft v. 021225.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 53 |
| HB 65 Public Testimony Rec'd by 021224.pdf |
HFIN 2/12/2025 1:30:00 PM |
HB 65 |