Legislature(2023 - 2024)BARNES 124
03/14/2024 01:00 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Collaboration Between Fairbanks Area Surface Transportation (fast) Planning and Alaska Dept. of Transportation & Public Facilities | |
| HB122 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 386 | TELECONFERENCED | |
| += | HB 122 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 122-RAILROAD CORP. FINANCING
2:21:46 PM
CHAIR MCCABE announced that the final order of business would be
HOUSE BILL NO. 122, "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."
2:22:31 PM
REPRESENTATIVE FRANK TOMASZEWSKI, Alaska State Legislature, as
prime sponsor, introduced HB 122. He noted that this is a re-
introduction of the bill and would answer any questions and take
amendments at the will of the committee.
2:22:57 PM
ZACH YOUNG, Staff, Representative Frank Tomaszewski, Alaska
State Legislature, on behalf Representative Tomaszewski, prime
sponsor of HB 122, paraphrased the sponsor statement [included
in the committee packet], which read as follows [original
punctuation provided]:
The purpose of HB 122 is to enable the Alaska Railroad
Corporation to secure financing for the critical
replacement of its passenger dock and associated
terminal facility in Seward, Alaska. By issuing
revenue bonds, the Alaska Railroad Corporation can
address infrastructure needs, enhance transportation
services, and contribute to the economic vitality of
the region.
The existing passenger dock and terminal facility play
a crucial role in supporting tourism, commerce, and
transportation along the scenic Alaska Railroad route.
However, due to wear and aging, these facilities
require immediate attention. The proposed financing
through revenue bonds will allow for timely upgrades,
ensuring safe and efficient operations for passengers,
freight, and tourism-related activities.
The replacement project aims to enhance the overall
experience for travelers, promote economic growth, and
maintain the Alaska Railroad's status as a vital
transportation link within the state. By investing in
modern infrastructure, we can continue to connect
communities, foster tourism, and support local
businesses.
HB 122 represents a collaborative effort to address
critical infrastructure needs while maintaining fiscal
responsibility. We appreciate your support for this
legislation, which will benefit Alaskans and visitors
alike.
2:24:20 PM
CHAIR MCCABE announced that the committee would take up
amendments.
REPRESENTATIVE MCKAY moved to adopt Amendment 1 to HB 122,
labeled 33-LS0623\A.1, Klein, 2/8/24, which read as follows:
Page 1, line 13:
Delete "$150,000,000"
Insert "$135,000,000"
CHAIR MCCABE objected for the purpose of discussion.
REPRESENTATIVE MCKAY explained that the change would reduce the
maximum principal amount of revenue bonds the ARCC can issue for
the replacement of their passenger dock and terminal facility in
Seward, Alaska.
CHAIR MCCABE removed his objection to the motion to adopt
Amendment 1. There being no further objection, Amendment 1 was
adopted.
2:26:07 PM
The committee took a brief at-ease at 2:26 p.m.
2:26:29 PM
CHAIR MCCABE moved to adopt Amendment 2 to HB 122, labeled 33-
LS0623\A.2, Klein, 2/21/24, which read as follows:
Page 1, line 3, following "Alaska;":
Insert "authorizing the Alaska Railroad
Corporation to issue revenue bonds to finance the
completion of the Port MacKenzie Rail Extension in
Point MacKenzie, Alaska;"
Page 2, following line 6:
Insert a new bill section to read:
"* Sec. 2. The uncodified law of the State of
Alaska is amended by adding a new section to read:
LEGISLATIVE AUTHORIZATION AND APPROVAL. (a) The
Alaska Railroad Corporation is authorized to issue
revenue bonds under AS 42.40.250 to finance the
completion of the Port MacKenzie Rail Extension in
Point MacKenzie, Alaska, and associated costs,
including, without limitation, reserves for debt
service and capitalized interest, if necessary or
appropriate, and costs of issuance. The maximum
principal amount of bonds that the Alaska Railroad
Corporation may issue under this section is
$58,000,000. The Alaska Railroad Corporation may issue
the bonds in a single issuance or in several
issuances, without limitation as to number of
issuances or timing, and as the Alaska Railroad
Corporation determines best furthers the purpose of
financing the extension of the Alaska Railroad
Corporation's rail from Point MacKenzie, Alaska, to
Houston, Alaska, and associated costs. The bonds shall
be repaid from revenue or other funds available to the
Alaska Railroad Corporation. The general credit of the
Alaska Railroad Corporation and the state may not be
pledged for the repayment of the bonds.
(b) The authorization under (a) of this section
extends to bonds issued to refund the bonds authorized
in this Act. The principal amount of the bonds
authorized in this Act may be increased in an issue of
refunding bonds in an amount equal to the costs of
refunding.
(c) This section constitutes the approval
required by AS 42.40.285 for the issuance of the bonds
described in this section.
(d) The bonds authorized to be issued under this
section are issued by a public corporation and an
instrumentality of the state for an essential public
and governmental purpose.
(e) In this section, "bonds" means bonds, bond
anticipation notes, notes, refunding bonds, or other
obligations."
Renumber the following bill section accordingly.
REPRESENTATIVE STUTES objected for the purpose of discussion.
CHAIR MCCABE summarized that Amendment 2 would authorize ARRC to
complete the Port MacKenzie rail extension. He noted he had
done the amendment before on the floor two years in a row.
REPRESENTATIVE STUTES asked whether the completion of Port
MacKenzie had been anticipated by ARRC.
CHAIR MCCABE said there is no current plan, just "circling
around" the financing.
REPRESENTATIVE STUTES asked whether the bonding would require a
public vote.
CHAIR MCCABE replied no.
2:28:30 PM
REPRESENTATIVE MINA stated that she was curious about ARRC's
perspective on Amendment 2.
2:28:50 PM
MEGHAN CLEMENS, External Affairs Director, Alaska Railroad
Corporation, explained that ARRC is supportive of rail
infrastructure and actively pursuing opportunities to the build
the Port MacKenzie rail extension. Having the bond
authorization would expedite the process; therefore, ARRC had no
objection toward Amendment 2 to HB 122.
2:29:37 PM
REPRESENTATIVE VANCE questioned why bonding authority was not
included for the northern rail extension as well.
CHAIR MCCABE indicated that that was considered, but he
anticipated it may be easier to "take it in small chunks."
2:30:58 PM
REPRESENTATIVE VANCE asked Ms. Clemens if this were to pass what
the next step in the bonding authority would be.
MS. CLEMENS replied that the next step is to continue trying to
identify a commercial customer that would be able to secure the
bond debt.
2:32:48 PM
REPRESENTATIVE MINA asked whether ARRC would typically have
funding secured prior to asking for the bond authority.
MS. CLEMENS suggested Mr. O'Leary weigh in on the question.
2:33:30 PM
BILL O'LEARY, President & CEO, Alaska Railroad Corporation,
joined the discussion on HB 122 and, in response to
Representative Mina, stated it has gone both ways over the years
but the majority of the time there is a specific revenue source
identified prior to coming to the legislature.
2:34:33 PM
REPRESENTATIVE STUTES removed her objection.
2:34:36 PM
REPRESENTATIVE MINA objected.
2:34:42 PM
A roll call vote was taken. Representatives C. Johnson, McKay,
Vance, Stutes, and McCabe voted in favor of Amendment 2 to HB
122. Representative Mina voted against it. Therefore,
Amendment 2 to HB 122 was adopted by a vote of 5-1.
2:35:39 PM
REPRESENTATIVE STUTES moved to adopt Amendment 3 to HB 122,
labeled 33-LS0623\A.3, Walsh, 3/4/24, which read:
Page 1, line 11, following "issuance.":
Insert "The replacement dock and terminal facility
must accommodate Alaska marine highway system
vessels."
CHAIR MCCABE objected for the purpose of discussion.
2:35:47 PM
REPRESENTATIVE STUTES [moved to adopt] Conceptual Amendment 1 to
Amendment 3 to add "with side loading doors" following "highway
system vessels".
REPRESENTATIVE C. JOHNSON objected.
2:36:47 PM
REPRESENTATIVE STUTES explained Conceptual Amendment 3, as it
would be amended by Conceptual Amendment 1.
2:37:37 PM
REPRESENTATIVE C. JOHNSON asked, "Why would we limit our
options?"
2:38:18 PM
REPRESENTATIVE STUTES replied that was a consideration, but
there is not a timeline on when rebuilding the cargo dock will
begin. She said when the cargo dock is rebuilt, it will accept
the front, back, and side loading vessels. She pointed out that
allowing these vessels to be used at the same dock as the cruise
ships, there is accessibility.
2:38:55 PM
CHAIR MCCABE agreed with Representative Stutes and offered his
belief that the design change to the dock that would allow a
front-loading vessel would be fairly significant at this point.
2:40:19 PM
REPRESENTATIVE VANCE asked whether the bonding amount request
would change.
MS. CLEMENS replied it does not change the scope or "price tag"
of the proposed passenger dock. She added that the cargo dock
has a construction plan in place and the project is funded, but
the timeline has been pushed slightly since federal dollars are
involved, she said.
2:41:28 PM
REPRESENTATIVE C. JOHNSON removed his objection to Conceptual
Amendment 1 to Amendment 3. There being no further objection,
Conceptual Amendment 1 to Amendment 3 was adopted.
CHAIR MCCABE announced that Amendment 3, [as amended], was
adopted.
2:41:50 PM
REPRESENTATIVE MCKAY moved to adopt [Conceptual] Amendment 4 to
HB 122, labeled 33-LS0623\A.4, Walsh, 3/14/24, which read as
follows:
Page 1, line 3, following "Alaska;":
Insert "authorizing the Alaska Industrial
Development and Export Authority to issue bonds to
finance infrastructure that supports development of
critical mineral and rare earth element projects;"
Page 2, following line 6:
Insert a new bill section to read:
"* Sec. 2. The uncodified law of the State of
Alaska is amended by adding a new section to read:
LEGISLATIVE APPROVAL: STATEWIDE CRITICAL MINERAL
AND RARE EARTH ELEMENT INFRASTRUCTURE PROJECTS. (a)
The Alaska Industrial Development and Export Authority
may issue bonds to finance infrastructure and
construction costs of infrastructure that support the
development of critical mineral and rare earth element
projects located in the state. The critical mineral
and rare earth element project infrastructure shall be
owned and operated by the authority or financed under
AS 44.88.172, 44.88.650 - 44.88.690, or 44.88.800 -
44.88.840. The principal amount of the bonds provided
by the authority for critical mineral and rare earth
element projects may not exceed $300,000,000 and may
include the costs of issuing bonds considered
reasonable and appropriate by the authority. The bonds
shall be repaid from revenues of the authority.
(b) The Alaska Industrial Development and Export
Authority may issue the bonds under this section in a
single issuance or in several issuances, without
limitation as to the number of issuances or timing,
and as the authority determines best furthers the
purpose of financing infrastructure that supports the
development of critical mineral and rare earth element
projects in the state.
(c) The bonds authorized by this section may not
be considered in calculating the authority's bonding
limitation for a 12-month period under
AS 44.88.095(a).
(d) This section constitutes legislative
approval required by AS 44.88.095(g)."
Renumber the following bill section accordingly.
2:41:52 PM
REPRESENTATIVE STUTES objected.
REPRESENTATIVE MCKAY explained that [Conceptual] Amendment 4
would allow Alaska Industrial Development and Export Authority
(AIDEA) to issue bonds in the amount up to $300 million to
finance infrastructure and construction costs necessary to
develop critical mineral and rare earth projects located in
Alaska. The amendment grants the legislative approval necessary
for AIDEA to issue bonds and finance economically viable
projects. He further related example projects.
CHAIR MCCABE noted that the amendment was brought in late;
therefore, it is a conceptual amendment by Representative McKay.
2:43:56 PM
REPRESENTATIVE STUTES opined that Conceptual Amendment 4 "junks
up the bill" and makes the bill less likely to go anywhere. She
added her belief that it is not germane to the original bill and
maintained her objection.
2:44:27 PM
REPRESENTATIVE VANCE understood the bill would go to the House
Finance Committee next, and she requested that the amendment
sponsor give more details on, once bonded, what kind of process
there is with the legislature and public on each of the various
projects.
REPRESENTATIVE MCKAY referred the inquiry to a member of AIDEA.
2:46:30 PM
MARK DAVIS, Special Counsel, AIDEA, joined the discussion on HB
122 and directed his response to Representative Vance. He said
this is a preauthorization for bonds that would be issued under
AIDEA but not revenue bonds. He said AIDEA issues two types of
bonds and has products all over the state that deal with
critical minerals. If a project were being developed and needed
to go back to the legislature for bonding approval, then it
would take time, and sometimes that means the deal does not go
forward, he said. He summarized that AIDEA is asking for
preauthorization for rare earth metals, but that they are not
the debt of the state.
2:47:51 PM
REPRESENTATIVE STUTES inquired whether, if the bond
authorization is issued, there would be a requirement to come
back to the legislature in order to get authorization for that
particular project using the funds.
MR. DAVIS replied not if it was for the rare earth metals. He
added if it were any other kind of bond for a different purpose,
then it would not be an authorization. Any bond issuance has to
go through all governance, he said, to make sure they track and
make sense.
2:49:00 PM
CHAIR MCCABE, considering time, announced that HB 386, which had
a public testimony component, would be held until the next
hearing. He apologized to those listening specifically for HB
386.
2:49:45 PM
REPRESENTATIVE STUTES offered her understanding that if AIDEA
has a project and needs bonding, it must explain the reason
behind it to the legislature.
MR. DAVIS confirmed that is correct and added that if the
general obligation (GO) bonds are less than $25 million, then
AIDEA can issue them by themselves and issue revenue bonds as
well.
2:50:51 PM
REPRESENTATIVE MINA asked Mr. Davis whether AIDEA has pursued
this language in a separate bill or a committee bill throughout
this legislature.
MR. DAVIS stated he did not think the matter had been presented
until very recently.
REPRESENTATIVE MINA asked whether there was a timeline or
urgency for the passage of HB 122 and what would happen if the
bill did not pass.
MS. CLEMENS confirmed that there is an urgency to pass HB 122
and how it relates to the construction timeline of the Seward
passenger dock.
REPRESENTATIVE MINA asked Mr. Davis whether there was an urgency
for the proposed amendment and what the result may be if the
amendment does not go through.
MR. DAVIS offered his belief there was not urgency in the sense
of ARRC.
2:53:07 PM
REPRESENTATIVE VANCE asked Mr. Davis whether there is a revenue
that would be gained by the state through the projects once they
start to get implemented.
MR. DAVIS answered yes.
2:53:43 PM
REPRESENTATIVE STUTES, adding to Representative Vance's
question, inquired how there could be revenue for the state when
there are no projects lined up.
MR. DAVIS clarified that bonds are one of the last things done
on a project that is financed.
REPRESENTATIVE STUTES stated her belief that currently there are
no projects lined up that would be utilizing the bonding
dollars.
MR. DAVIS replied they are in discussions with companies that
would like to have the bonding authority, and he said he
believed they would come to fruition. He added they are not the
same as ARRC type projects with already laid out, detailed
plans.
REPRESENTATIVE STUTES reiterated that currently no projects are
lined up that would utilize these dollars.
MR. DAVIS confirmed there are currently discussions with
companies with the goal being to start projects within a
reasonable period of time.
2:55:29 PM
REPRESENTATIVE C. JOHNSON pointed out that recently, AIDEA was
designated as a state energy finance institution through the
U.S. Department of Energy and asked whether that made funds
available through the department to help with the projects and,
if so, how the bond would play into that interaction.
MR. DAVIS confirmed the designation was correct and mentioned
Title 17 [Clean Energy Funding], further explaining there are
guarantees of loans and credit to projects that would be used
with the bonding authorized by the amendment.
REPRESENTATIVE C. JOHNSON asked whether the dollars are
substantial or a match.
MR. DAVIS stated the dollars could be substantial depending on
the projects.
2:57:23 PM
JEFF SAN JUAN, Program Manager, AIDEA, added to Mr. Davis'
comments that AIDEA had the ability to draw investment from
other parts of private entities, and he referenced understanding
the mineral potential in Alaska and how the state could
capitalize on outside investment.
2:58:54 PM
REPRESENTATIVE MINA commented that she did not disagree with the
amendment but needed time to think about what it does. She
restated her opposition.
2:59:49 PM
CHAIR MCCABE welcomed any further discussion.
3:00:20 PM
REPRESENTATIVE STUTES maintained her objection.
3:00:20 PM
A roll call vote was taken. Representatives Sumner, C. Johnson,
McKay, Vance, and McCabe voted in favor of Conceptual Amendment
4 to HB 122. Representatives Mina and Stutes voted against it.
Therefore, Conceptual Amendment 4 was adopted by a vote of 5-2.
3:00:59 PM
The committee took an at-ease from 3:00 p.m. to 3:03 p.m.
3:03:04 PM
CHAIR MCCABE announced the committee would dispense with
Amendment 5 and asked for the will of the committee in moving
the underlying bill.
3:03:32 PM
REPRESENTATIVE MINA indicated that she would object to a motion
to move the bill out of committee.
3:04:01 PM
CHAIR MCCABE opened public testimony on HB 122, as amended.
After ascertaining no one wished to testify, he closed public
testimony.
3:04:33 PM
REPRESENTATIVE VANCE moved to report HB 122, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes.
3:04:50 PM
REPRESENTATIVE MINA objected.
3:04:58 PM
A roll call vote was taken. Representatives C. Johnson, McKay,
Vance, Stutes, and McCabe voted in favor of the motion to report
HB 122, as amended, out of committee with individual
recommendations and the accompanying fiscal notes.
Representative Mina voted against it. Therefore, CSHB 122(TRA)
was reported out of the House Transportation Standing Committee
by a vote of 5-1.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB0122.VerA.2.15.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 122 |
| HB 122 Sponsor Statement.2.15.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 122 |
| HB122 Sectional Analysis.2.12.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 122 |
| HB122.Ver A.DCCED Fiscal Note.2 16 14.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 122 |
| HB 386 Version A.3.8.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 386 |
| HB 386 Transmittal Letter version A.3.8.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 386 |
| HB 386 Highlights version A.3.8.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 386 |
| HB 386 Sectional Analysis version A 3.8.24..pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 386 |
| HB 122 Amendment A.1 3.8.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 122 |
| HB122 Amendment A.3 3.8.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 122 |
| HB122 Amendment A.2 3.8.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 122 |
| FAST Planning Introduction Presentation.pdf |
HTRA 3/14/2024 1:00:00 PM |
Fairbanks MPO |
| HB 122 Amendment A.4 3.14.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 122 |
| HB 122 Amendment A.5 3.14.24.pdf |
HTRA 3/14/2024 1:00:00 PM |
HB 122 |