Legislature(2023 - 2024)BARNES 124
02/27/2024 01:30 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| HJR19 | |
| HB122 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 122 | TELECONFERENCED | |
| *+ | HJR 19 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
February 27, 2024
1:35 p.m.
DRAFT
MEMBERS PRESENT
Representative Kevin McCabe, Chair
Representative Sarah Vance, Vice Chair
Representative Tom McKay
Representative Craig Johnson
Representative Jesse Sumner
Representative Louise Stutes
Representative Genevieve Mina
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 19
Supporting the completion of the Port MacKenzie Rail Extension
and the Northern Rail Extension; supporting the increase in
defensive capabilities at Fort Greely, Alaska; encouraging a
renewed commitment by the Alaska Railroad to a community-minded
approach to future rail expansion; and encouraging the
development of critical Arctic infrastructure.
- MOVED HJR 19 OUT OF COMMITTEE
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."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HJR 19
SHORT TITLE: NORTHERN RAIL EXTENSION
SPONSOR(s): TRANSPORTATION
02/14/24 (H) READ THE FIRST TIME - REFERRALS
02/14/24 (H) TRA, MLV
02/22/24 (H) TRA AT 1:30 PM BARNES 124
02/22/24 (H) -- MEETING CANCELED --
02/27/24 (H) TRA AT 1:30 PM BARNES 124
BILL: HB 122
SHORT TITLE: RAILROAD CORP. FINANCING
SPONSOR(s): TOMASZEWSKI
03/17/23 (H) READ THE FIRST TIME - REFERRALS
03/17/23 (H) TRA, FIN
02/20/24 (H) TRA AT 1:30 PM BARNES 124
02/20/24 (H) -- MEETING CANCELED --
02/27/24 (H) TRA AT 1:30 PM BARNES 124
WITNESS REGISTER
JULIE MORRIS, Staff
Representative Kevin McCabe
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HJR 19 on behalf of
Representative Kevin McCabe, prime sponsor.
LIEUTENANT GENERAL DAVID KRUMM, Retired
Big Lake, Alaska
POSITION STATEMENT: Gave invited testimony in support of HJR
19.
BILL O'LEARY, President & CEO
The Alaska Railroad Corporation
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony in support of HJR
19; gave a PowerPoint titled "Seward Passenger Dock & Terminal
Replacement Project" during the hearing on HB 122.
MEGHAN CLEMENS, Director of External Affairs
Alaska Railroad Corporation
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony in support of HJR
19.
REPRESENTATIVE FRANK TOMASZEWSKI
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, introduced HB 122.
ZACK YOUNG, Staff
Representative Frank Tomaszewski
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave the sectional analysis for HB 122, on
behalf of Representative Frank Tomaszewski, prime sponsor.
PRESTON CARNAHAN, Regional Vice President of Destinations
Royal Caribbean Group
Seattle, Washington
POSITION STATEMENT: Gave invited testimony in support of HB
122.
KATHLEEN SORENSEN, City Manager
City of Seward
Seward, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
122.
BRIAN LINDAMOOD, Vice President Engineering
Alaska Railroad Corporation
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
122.
ACTION NARRATIVE
1:35:58 PM
CHAIR KEVIN MCCABE called the House Transportation Standing
Committee meeting to order at 1:35 p.m. Representatives C.
Johnson, McKay, Vance, Stutes, Mina, and McCabe were present at
the call to order. Representative Sumner arrived as the meeting
was in progress.
HJR 19-NORTHERN RAIL EXTENSION
1:37:49 PM
CHAIR MCCABE announced that the first order of business would be
HOUSE JOINT RESOLUTION NO. 19, Supporting the completion of the
Port MacKenzie Rail Extension and the Northern Rail Extension;
supporting the increase in defensive capabilities at Fort
Greely, Alaska; encouraging a renewed commitment by the Alaska
Railroad to a community-minded approach to future rail
expansion; and encouraging the development of critical Arctic
infrastructure.
1:38:12 PM
JULIE MORRIS, Staff, Representative Kevin McCabe, introduced HJR
19 on behalf of Representative McCabe, prime sponsor, and
paraphrased the sponsor statement [included in the committee
packet], which read as follows [original punctuation provided]:
This resolution advocates for completing two pivotal
rail extensions, the Port MacKenzie Rail Extension and
the Northern Rail Extension, alongside critical
initiatives to fortify our state's infrastructure and
defense capabilities. Alaska's strategic position as
the sole state bordering the Arctic Ocean highlights
the significance of these endeavors, especially given
recent expansions in defense infrastructure at Fort
Greely.
The Alaska Railroad Transfer Act (ARTA) of 1983
reaffirmed Congress's recognition of the railroad's
importance in providing freight and passenger rail
service to Alaska. Recognizing the necessity of
continued services and expansion to meet federal,
state, and private objectives, Congress deemed the
state's continued operation and expansion of the
railroad a fitting public use of the rail system.
The completion of Phase 1 of the Northern Rail
Extension project, including crossing the Tanana
River, represents a significant milestone, bringing
the rail line within 70 miles of Delta Junction and
Fort Greely. This progress demonstrates our commitment
to realizing the full potential of rail transportation
in Alaska and lays the foundation for further
expansion and connectivity.
With the United States Department of Defense expanding
the anti-ballistic missile facility and the United
States Army developing new training range areas to
support the Stryker Brigade, ensuring seamless rail
connectivity is crucial to sustaining military
operations effectively. Notably, the lack of rail
access at Fort Greely, the only military base in
Alaska without it, underscores the urgency of this
resolution.
Moreover, commendable progress by the Matanuska-
Susitna Borough and the Alaska Railroad in completing
nearly two-thirds of the Port MacKenzie Rail Extension
is essential. This extension will substantially reduce
energy and transportation costs, improve air quality,
and facilitate efficient movement of goods from
tidewater to and across Interior Alaska.
Furthermore, the extension of the Alaska Railroad from
Port MacKenzie to Houston, Delta Junction, and Fort
Greely aligns with long-term objectives, promoting
economic integration and enhancing transportation
networks. These extensions offer significant economic
and resource development benefits, particularly for
mining operations in Delta Junction and Tetlin, as
well as the agricultural industry in the Delta
Junction area.
In conclusion, this resolution underscores our
commitment to fostering economic development,
enhancing defense readiness, and promoting community
engagement in critical infrastructure projects
essential to Alaska's long-term prosperity and
security.
Your support for this resolution is greatly
appreciated.
1:40:10 PM
CHAIR MCCABE reminded the committee that this resolution was
just about the same as the resolution passed last year and the
year before, and resolutions are only good for a year. He said
there would be a dignitary coming for a tour of the Port of
MacKenzie and he hoped to bring the resolution then.
1:41:04 PM
REPRESENTATIVE STUTES asked for confirmation that it is strictly
for the rail extension, not the port.
CHAIR MCCABE confirmed that was correct.
1:41:34 PM
REPRESENTATIVE MINA asked what the projected cost was to
complete the remaining 70 miles of the Northern Rail Extension.
CHAIR MCCABE responded that last year's cost was north of $1.2
billion, and Port MacKenzie may be close to $250 million. He
stated that the tentative plan is to do it in three years.
1:42:23 PM
REPRESENTATIVE VANCE stated that she hoped for the resolution to
"stand firm on its own" and that the intent is much broader than
just defense.
CHAIR MCCABE replied that it could be discussed further and
there could be a possibility for amendments.
1:43:53 PM
REPRESENTATIVE C. JOHNSON asked Chair McCabe who the dignitary
was.
CHAIR MCCABE said he could not confirm a name yet, but the
person is part of an exercise along with approximately 28 others
that have been invited to give a presentation.
REPRESENTATIVE C. JOHNSON noted there could be an easy
conceptual amendment if needed.
1:45:17 PM
REPRESENTATIVE MINA asked whether there have been any follow up
conversations with the state's congressional delegation
regarding the resolution and federal funding opportunities.
CHAIR MCCABE confirmed there had been conversations and, in
addition, that he was looking for any way to find funding,
matching funding, and interested parties.
1:46:34 PM
CHAIR MCCABE provided a biography for Lieutenant General Krumm,
who would speak as an invited testifier.
1:48:10 PM
LIEUTENANT GENERAL DAVID KRUMM, Retired, gave invited testimony
in support of HJR 19. He thanked Chair McCabe for the
introduction and stated that he was honored to speak to the
resolution today. He said although the views he will express
are his own and not necessarily the U.S. Department of Defense
(DOD), they are informed by his time as a commander. He opined
that timing could not be better to discuss the extension because
the U.S. needs the infrastructure to expand its economy and
better our capabilities for crisis. Having extra rail options
would be a substantial improvement, he said, and heavier
transport lends itself to the use of railways rather than air or
road. He offered his belief that the Port MacKenzie Rail
Extension would be a welcome addition for many uses.
1:52:27 PM
BILL O'LEARY, President & CEO, Alaska Railroad Corporation, gave
invited testimony in support of HJR 19. He stated that the
Alaska Railroad Corporation (ARRC) is in full support of the
rail extension, and he opined it would fit beautifully within
the railroad's economic development.
1:54:32 PM
MEGHAN CLEMENS, Director of External Affairs, Alaska Railroad
Corporation, gave invited testimony in support of HJR 19. She
mirrored comments made by Mr. O'Leary and added that ARRC
embraced this approach to economic development, and the
community involved approach is one that works well and is
necessary when looking at large projects, she said. In relation
to both Port MacKenzie and Northern Rail Extensions, she said
there had been significant outreach to different stakeholders to
put together a coalition to move these projects forward and
benefit the state. She further mentioned bonding opportunities
that could be useful, as projects may advance in that direction.
She said ARRC had a proven track record for managing large
projects successfully, which is an important role that can be
provided.
1:59:13 PM
CHAIR MCCABE invited questions from committee members.
1:59:29 PM
The committee took an at-ease from 1:59 p.m. to 2:00 p.m.
2:00:57 PM
REPRESENTATIVE VANCE moved to report HJR 19 out of committee
with individual recommendations and the accompanying fiscal
notes.
2:01:14 PM
CHAIR MCCABE objected for the purpose of discussion.
2:01:21 PM
REPRESENTATIVE SUMNER stated he supported the resolution.
2:01:27 PM
CHAIR MCCABE removed his objection. There being no further
objection, HJR 19 was reported out of the House Transportation
Standing Committee.
2:01:52 PM
The committee took an at-ease from 2:01 p.m. to 2:05 p.m.
HB 122-RAILROAD CORP. FINANCING
2:05:04 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."
2:05:20 PM
REPRESENTATIVE FRANK TOMASZEWSKI, Alaska State Legislature, as
prime sponsor, presented HB 122. He offered 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.
2:07:23 PM
ZACK YOUNG, Staff, Representative Frank Tomaszewski, Alaska
State Legislature, on behalf of Representative Tomaszewski,
prime sponsor, gave the sectional analysis for HB 122 [included
in the committee packet] which read as follows [original
punctuation provided]:
Section 1. Beginning Page 1, Line 5: Authorizes the
Alaska Railroad Corporation to issue an additional $90
million, for a total not to exceed $150 million, in
revenue bonds to finance the replacement of ARRC's
passenger dock and related terminal facility in
Seward, Alaska.
Section 2. Page 2, Line 7: Sets an immediate effective
date.
2:08:15 PM
REPRESENTATIVE STUTES related that when she first heard about HB
122, she presumed ARRC was in partnership with someone involved
in the repairs and rebuilding of the docks.
REPRESENTATIVE TOMASZEWSKI confirmed that ARRC is and added that
ARRC staff were available for questions.
2:09:15 PM
CHAIR MCCABE noted it was a good segway for ARRC staff to join
the discussion.
2:10:02 PM
MR. O'LEARY joined the discussion on HB 122 in support of the
proposed legislation and presented a short PowerPoint [hard copy
included in the committee packet], titled "Seward Passenger Dock
& Terminal Replacement Project." He stated that the reason ARRC
was present is due to railroad statutes requiring legislative
approval before issuing bonds. He noted the three docks in
Seward as he continued on slide 2, titled "Need for
Replacement," which read as follows [original punctuation
provided]:
• Current Seward dock facility is rapidly approaching
end of useful life
Seward cruise port is critical infrastructure for
Alaska's travel industry: 188,124 passengers cruised
to or from Seward in 2023, many adding on travels in
Southcentral and Interior
MR. O'LEARY further stated that ARRC is being forced to put
millions of dollars into the docks through 2025 just to keep
them safe and functional.
2:13:42 PM
MR. O'LEARY continued on slide 3, titled "Funding & Timeline,"
which read as follows [original punctuation provided]:
2022: $60 million in bond authorization approved
2024: Requesting additional $75 million bond
authorization
Fall 2025: Construction begins
Spring 2026: New dock and terminal complete
Bonds issued by ARRC are not a liability of the state,
and no state dollars will be used for repayment; ARRC
bonds will be secured by a long-term use agreement
with anchor tenant Royal Caribbean Group.
The new dock and terminal facility will support the
next 50 years of industry growth and visitor demand.
MR. O'LEARY stressed that it is a debt of ARRC only and no state
monies can be used to pay the debt; they are revenue bonds. He
quickly moved through slides 4 and 5 which showed a rendering of
the new dock and terminal facilities.
2:17:06 PM
PRESTON CARNAHAN, Regional Vice President of Destinations, Royal
Caribbean Group, gave invited testimony in support of HB 122 and
added that he represented a number of developments throughout
the Western U.S. Region, and that the dock in Seward clearly
needed to be replaced. He offered his belief the right solution
had been found, which is why he said Royal Caribbean Group would
offer a three-decade commitment to back the project up with
revenue.
2:18:32 PM
CHAIR MCCABE invited questions from committee members.
2:18:43 PM
REPRESENTATIVE STUTES inquired about the utilization of the dock
and whether any other cruise companies had been consulted.
MR. O'LEARY responded that the proposal is to build a floating
dock, and ARRC had discussions with those individuals who work
on the docks about their concerns and how the dock could be used
other than for cruise lines. He pointed out the project to
widen the freight dock as well, and that the longshoremen's
union has been in the loop. He further discussed the projected
versatility of the docks.
2:22:12 PM
REPRESENTATIVE STUTES clarified that she wished to know whether
other cruise lines or longshoremen were consulted before the
plans were drawn up.
MR. O'LEARY responded that the structure of the deal included a
developer, an anchor tenant, and the owner being ARRC. He
clarified it is being looked at like a real estate type
transaction.
REPRESENTATIVE STUTES asked whether the City of Seward was
involved.
MR. O'LEARY said he could not respond to the level of detail,
but Ms. Sorensen was online to answer questions.
2:25:20 PM
KATHLEEN SORENSEN, City Manager, City of Seward, addressed
Representative Stutes and stated that the City of Seward had
been in discussions with ARRC for years and was excited about
the project. She added that there was a presentation recently
to the City Council regarding the design, and other
administrations have been involved.
REPRESENTATIVE STUTES referred to the cargo dock being rebuilt
and asked what the timeframe was. She expressed her concern
that if there were a disaster, Seward would be the next place as
an ice-free port where anyone could go and must be available for
cargo ships.
MR. O'LEARY explained that the cargo dock has been somewhat
delayed while grants and environmental permitting are being put
in place. It would be challenging to manage two dock projects
at the same time and would take significant coordination, he
said. He requested that Mr. Lindamood join the conversation.
2:28:17 PM
BRIAN LINDAMOOD, Vice President Engineering, Alaska Railroad
Corporation, added that one of the complications was scheduling.
He clarified that at any given time there must be a place for at
least one ship to berth, and he confirmed there have been
discussions with the development team to make sure that happens.
Traffic must be maintained during construction, he said, and to
make sure coordination is happening.
REPRESENTATIVE STUTES stated it alarmed her that there may not
be the ability to accommodate a large cargo ship, but the
priority is a cruise ship. She expressed her opinion that the
dock may not be large enough to accommodate a large ship
offloading goods somewhat easily.
2:30:13 PM
MR. O'LEARY affirmed that the freight dock could be used in a
pinch, and there have been discussions about contingency plans
in Seward should there be an issue at the Port of Alaska, but it
may not be the most efficient.
REPRESENTATIVE STUTES reiterated that she hoped there would be
something in place before "you start tearing everything apart."
2:31:07 PM
CHAIR MCCABE wondered about the dock itself and whether the ramp
could be wider to accommodate bigger loads.
MR. O'LEARY noted that Turnagain Marine is the constructor, and
the focus is not for it to only be a freight dock, but to have
greater utility in the off season.
CHAIR MCCABE expressed interest in obtaining a timeline and
mirrored Representative Stutes' concerns.
2:33:32 PM
MR. LINDAMOOD added that the passenger dock schedule is more
filled right now, and the intent is to continue through the
winter and open back up again in time for the 2026 cruise
passenger season. He confirmed that the existing berth at the
freight dock is not going away, but is being expanded long term,
and that the project is being held up slightly.
2:35:26 PM
CHAIR MCCABE asked whether the docks were being built somewhere
else.
MR. CARNAHAN stated that the dock would be built in two sections
in Washington state, which he described as the closest center of
excellence for that type of work. The construction is more
robust than any other floating dock, he said.
CHAIR MCCABE brought up a news release about Haines and the
Federal Government not paying for a $10 million hit, and he
sought to know if construction is robust enough to "take a hit
and be ok with it."
MR. CARNAHAN said he could not speak on behalf of Turnagain
[Marine], but in the past five years the construction company
has successfully completed all the new floating cruise ship
docks, and based on its portfolio, is a very robust company.
2:39:05 PM
REPRESENTATIVE STUTES asked whether the dock could accommodate
the Alaska Marine Highway System (AMHS).
MR. O'LEARY replied that should AMHS plan to return to Seward,
it would be at the freight docks as opposed to the cruise ship
dock.
REPRESENTATIVE STUTES asked whether ARRC would work with the
Department of Transportation & Public Facilities (DOT&PF) to
make sure the freight dock improvements would be facilitated.
MR. O'LEARY said they had not contacted DOT&PF yet but would.
2:39:54 PM
REPRESENTATIVE VANCE commented that the project looked a little
too efficient and inquired about Royal Caribbean Group's
objective in giving passengers time in communities on the
Central peninsula, as well as investing dollars into the
economy.
2:41:48 PM
MR. CARNAHAN first referred to the dock construction and said
that it was a very capable solution to handle the ship itself.
He said as a company, Royal Caribbean Group is locally focused
with strategic entrepreneurial partners and relies on Alaska
businesses to create these partnerships. He said he believed
many issues would be worked through by the time of the
completion of the dock in 2026.
2:44:53 PM
CHAIR MCCABE commented about the scheduling of passengers and
how the added population all at once may affect Seward.
2:45:40 PM
REPRESENTATIVE STUTES observed that the dock looked narrow and
inquired whether two ships could be in at once.
MR. CARNAHAN said it is a double-sided berth and could
accommodate two large passenger ships.
2:47:09 PM
REPRESENTATIVE VANCE spoke to the impacts of solid waste from
larger ships and asked if he had conversations with communities
in dealing with the waste.
MR. CARNAHAN said industry members have signed on to a
memorandum of understanding (MOU) where they discharge no waste
into the communities.
2:48:12 PM
CHAIR MCCABE announced that HB 122 was held over.
2:48:55 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:49
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR 19 Fiscal Note 2.26.24.pdf |
HTRA 2/27/2024 1:30:00 PM STRA 4/4/2024 1:30:00 PM |
HJR 19 |
| HJR019.VerB.SupportLetter.NovaMinerals.2.22.24.pdf |
HTRA 2/27/2024 1:30:00 PM STRA 4/4/2024 1:30:00 PM |
HJR 19 |
| HJR019.VerB.SupportLetter.Senator Murkowski.2.22.24.pdf |
HTRA 2/27/2024 1:30:00 PM STRA 4/4/2024 1:30:00 PM |
HJR 19 |
| HB0122.VerA.2.15.24.pdf |
HTRA 2/27/2024 1:30:00 PM |
HB 122 |
| HB 122 Sponsor Statement.2.15.24.pdf |
HTRA 2/27/2024 1:30:00 PM |
HB 122 |
| HB 122 Supporting Document Royal Caribbean Design Flip Book 2.15.24.pdf |
HTRA 2/27/2024 1:30:00 PM |
HB 122 |
| HB122 - Seward Dock Presentation - 2.27.24.pdf |
HTRA 2/27/2024 1:30:00 PM |
HB 122 |
| HJR019A.pdf |
HTRA 2/27/2024 1:30:00 PM |
HJR 19 |
| HJR019.VerB.SupportLetter.AKRR.2.22.24.pdf |
HTRA 2/27/2024 1:30:00 PM STRA 4/4/2024 1:30:00 PM |
HJR 19 |
| HJR19 Version B Support Letter MSB Mayor Manager 2.20.24.pdf |
HTRA 2/27/2024 1:30:00 PM STRA 4/4/2024 1:30:00 PM |
HJR 19 |
| HB122.Ver A.DCCED Fiscal Note.2 16 14.pdf |
HTRA 2/27/2024 1:30:00 PM |
HB 122 |
| HB122. VerA.Sectional Analysis.2.26.24.pdf |
HTRA 2/27/2024 1:30:00 PM |
HB 122 |
| HJR19 Sponsor Statement 2.28.24.pdf |
HTRA 2/27/2024 1:30:00 PM STRA 4/4/2024 1:30:00 PM |
HJR 19 |