03/26/1998 01:35 PM Senate L&C

                                                                               
        HB 178 - UNIFORM COMMERCIAL CODE:LETTERS OF CREDIT                     
                                                                               
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee                  
meeting to order at 1:35 p.m. and announced a work session on HB
.                                                                           
                                                                               
MR. ART PETERSON, Uniform Law Commissioner, said HB 178 is mainly              
an update that tries to decrease the amount of litigation that is              
building in the field of letters of credit, a $200 billion industry            
in this country.  A lot of the activity is international and it's              
necessary for the law of the various states in this country to get             
in step with the international scene.  This is especially important            
in Alaska.  The bill recognizes the increasing population, the                 
increasing business, and the increase in international trade, and              
recognizes that we do business by computer.                                    
                                                                               
CHAIRMAN LEMAN said he has looked through his materials and                    
trusted that Mr. Peterson and his fellow commissioners had done                
good work.                                                                     
He said there is evidence of opposition to proposed amendments last            
year when this was being considered in the House and asked if those            
were adopted.                                                                  
                                                                               
MR. PETERSON answered that they were not adopted.  They were                   
proposed by a House member responding to a constituent.  At a                  
hearing held last October, Jerry Weaver, representing the bankers,             
testified strongly in favor of the bill.  He didn't know of any                
opposition to it.                                                              
                                                                               
Number 94                                                                      
                                                                               
MR. JERRY KURTZ said he is also a commissioner to the Uniform Law              
Conference and a mostly retired partner in an Anchorage law firm               
that deals primarily with banking, business, and commercial and                
real estate problems.  He said he participated in drafting this                
bill and feels strongly that it should be adopted.  Thirty-one                 
states have already adopted it as of September 1997 and it wasn't              
promulgated until 1995 which indicates an almost universal lack of             
any opposition.  He doesn't know of any court case of any                      
consequence that has arisen out of the existing act, originally                
promulgated about 40 years ago.  The new act is better and helps us            
deal with the electronic means of transferring documents and deals             
with the problem of letters of credit which would not be acted upon            
by banks and other institutions.  This bill contains time limits               
which force them to act or tell you why they aren't acting, so you             
can cure the problem.  This is a huge improvement from the                     
standpoint of the business person, particularly if he isn't                    
represented by counsel.                                                        
                                                                               
MS. SHIRLEY ARMSTRONG, Staff to House Labor and Commerce Committee,            
said that they introduced this bill at the request of the Uniform              
Law Commissioners. The amendments were proposed by a Representative            
who was subsequently convinced that the time limits took care of               
his concerns with banks not transmitting money to the end person.              
This is the only discussion they had that had the least bit of                 
negative overtones.  None of the amendments were adopted.  The bill            
is before them as it was presented to the House Labor and Commerce             
Committee where it was fully discussed.  The sectional analysis was            
done by the drafter who worked on it this session and last session.            
                                                                               
CHAIRMAN LEMAN said he intended to pass the bill when he had a                 
quorum and adjourned the meeting at 1:48 p.m.