House Finance adopts temporary capitalization amendment, moves HB 388 out of committee

House Bill 388 would double the maximum loan available under Alaska's bulk fuel revolving loan program from $750,000 to $1,500,000. Paul LeBull, committee staff, explained the bill's intent is to increase available loans for communities facing high fuel costs.

Legislative Finance (Alexi Painter) described revolving‑loan mechanics: appropriations capitalize the fund; repaid loans remain in the fund and are available for new loans; the legislature may later transfer excess or replenish the fund as needed. Members expressed concern about the source of temporary capitalization and whether appropriations would reduce other priorities.

Representative Bynum offered Amendment 2 to allow temporary appropriations into the fund for fiscal years ending June 30, 2026 and June 30, 2027 and to require that funds be repaid to their original source. The committee debated the amendment's language and legal/finance staff recommended wording changes (using "and" to allow both years and adjusting references to "an eligible borrower"). Members adopted Amendment 2 as amended.

Representative Schiragi moved HB 388 (work order 34‑LS‑1670‑A) out of committee "as amended with individual recommendations and attached fiscal notes," and, with no objection, the motion carried. The committee authorized Legislative Legal to make technical and conforming changes.

Committee members asked follow‑up questions about interest rates (1%–4% typical; some loans start at 0% then rise to a maximum and repayment incentives can reduce rates), historical loan recovery (staff reported approximately 99% recovery historically), and nonperformance/default rates. Members requested updated fiscal notes reflecting the amendment's effects for FY '27.