House Finance advances HB 65 to authorize Alaska Railroad bonds for Seward passenger dock and terminal

The Alaska House Finance Committee on Feb. 12 moved House Bill 65 out of committee with individual recommendations and an attached fiscal note, granting the Alaska Railroad authority to issue revenue bonds to finance replacement and expansion of the Seward passenger dock and related terminal facilities.

Sponsor Representative Louise Stutes (District 5) told the committee HB 65 would authorize the Alaska Railroad Corporation to issue no more than $75,000,000 in revenue bonds under state law to fund construction of a new passenger dock and terminal in Seward. Staff to the sponsor, Jane Pearson, said that the $75 million request is additional to $60 million authorized in 2022, for a combined $130 million in bonding authority for the project.

Pearson cited the dock’s age and structural limits: the existing passenger dock was built in 1966, its pile foundation has corroded, and the facility faces weight restrictions as its useful life nears an end. The proposed new design is sized to meet Alaska Railroad and anchor tenant Royal Caribbean Group specifications, including accommodating Quantum‑class vessels and supporting the industry for decades. Pearson said the bonds would be secured by a 30‑year usage agreement with Royal Caribbean and that “the state of Alaska is not, and I repeat, not liable for the debts of the Alaska Railroad Corporation.”

Bill O’Leary, president and CEO of the Alaska Railroad, and Megan Clemens, the railroad’s director of external affairs, gave a project overview. Clemens described the new passenger dock as a double‑berth pier with a floating barge dock to provide a more stable structure for a range of vessels, and she said the terminal building would be substantially larger than the current facility—more than 40,000 square feet of enclosed space and about 20,000 square feet of outdoor covered space.

Clemens also said the railroad plans a separate $25,000,000 expansion of a directly adjacent freight dock (planned for fall 2026–2027) and that the railroad will invest $1,800,000 to upgrade the dock’s transfer span outside the bond request. She emphasized the statutory limit on state liability: the bonds are revenue bonds of the Alaska Railroad and have no state recourse.

Royal Caribbean’s Preston Carnahan, vice president of destinations, said the company has called on Seward for about 20 years and is an anchor tenant for the new facility; the project’s timeline is aimed at availability for the 2026 cruise season. City Manager Kat Sorensen of Seward testified in support, calling the terminal “designed for year‑round community use” and highlighting local economic benefits and off‑season uses. Sorensen and Clemens described a recent federal Clean Ports grant for shore power: the City of Seward was awarded $45,000,000 under the EPA clean port program; the grant covers dock electrification, utility upgrades, a battery‑energy‑storage system and workforce training at the local AVTEC campus. Clemens said the Port of Tomorrow developer will provide a matching investment of about $50,000,000 to support electrification and related infrastructure.

Public testimony included local tour operators and business owners who described the dock’s role in Seward’s winter marine‑repair economy and its importance to seasonal employment. Jillian Simpson, president and CEO of the Alaska Travel Industry Association, said cruise passengers who cross the Gulf provide critical statewide tourism spending and that larger ships calling on Seward would increase economic impact.

Committee members asked operational and fiscal questions. Representative Hannon asked whether the Alaska Railroad manages scheduling and whether other vessels could use the dock; O’Leary and Clemens said the railroad will own, operate and manage the dock as an open facility and that other cruise lines and qualifying marine vessels could use berths; they acknowledged Royal Caribbean would have a preferential side under commercial terms. Representative Hannon also asked whether revenues from other users reduce Royal Caribbean’s debt obligation; the railroad confirmed those revenues would offset debt service obligations.

The committee noted the bill carries an OMB fiscal note of zero impact to the state budget because the bonds are revenue bonds with no state liability. Representative Tomaszewski moved HB 65 (work draft 34‑LS‑0448/A) out of committee with individual recommendations and the attached fiscal note; there were no recorded roll‑call tallies in the transcript and the motion was approved without recorded objection.

The committee record and testimony stressed timing: sponsors and industry partners said legislative authority before March is necessary to meet the construction timeline for a 2026 cruise‑season opening.