Legislature(1997 - 1998)
03/26/1998 01:35 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE March 26, 1998 1:35 P.M. MEMBERS PRESENT Senator Loren Leman, Chairman Senator Lyman Hoffman MEMBERS ABSENT Senator Jerry Mackie, Vice Chairman Senator Tim Kelly Senator Mike Miller COMMITTEE CALENDAR HOUSE BILL NO. 178 "An Act relating to letters of credit under the Uniform Commercial Code; and providing for an effective date." - HEARD AND HELD PREVIOUS SENATE COMMITTEE ACTION HB 178 - No previous action to consider. WITNESS REGISTER Mr. Art Peterson Uniform Law Commissioner 350 N. Franklin Juneau, AK 99801 POSITION STATEMENT: Supported HB 178. Mr. Jerry Kurtz Uniform Law Commissioner 1050 Beech Lane Anchorage, AK 99501 POSITION STATEMENT: Supported HB 178. Ms. Shirley Armstrong, Aide House Labor and Commerce Committee State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Commented on HB 178. ACTION NARRATIVE TAPE 98-17, SIDE A Number 001 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 178. 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.