1993-03-26                     House Journal                      Page 0794
HB 257                                                                       
HOUSE BILL NO. 257 by the House Rules Committee by request of                  
the Governor; entitled:                                                        
                                                                               
"An Act relating to the Uniform Commercial Code; amending                     
Alaska Rules of Civil Procedure 8 and 82, and Alaska Rule of                   
Evidence 402; and providing for an effective date."                            
                                                                               
was read the first time and referred to the Labor & Commerce, State            
Affairs, Judiciary and Finance Committees.                                     
                                                                               
The following fiscal notes apply to HB 257:                                    
                                                                               
Zero fiscal note, Dept. of Commerce & Economic Development,                    
3/26/93                                                                        
Zero fiscal note, Dept. of Administration, 3/26/93                             
                                                                               
The Governor's transmittal letter, dated March 26, 1993, appears               
below:                                                                         
                                                                               
"Dear Speaker Barnes:                                                          
                                                                               
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am     

1993-03-26                     House Journal                      Page 0795
HB 257                                                                       
transmitting a bill relating to amendments and additions to the Uniform        
Commercial Code (UCC).                                                         
                                                                               
The bill contains three basic parts recommended by the National                
Conference of Commissioners on Uniform State Laws (NCCUSL): 1)                 
a new article 2A on personal property leasing; 2) amendments to the            
UCC's articles 3 and 4 regarding negotiable instruments and bank               
deposits and collections; and 3) repeal of UCC article 6 on bulk sales.        
                                                                               
Nothing in the present UCC deals with leasing of personal property,            
which ranges from cars to heavy equipment and oil rigs.  The new               
article would provide statutory answers to a broad range of legal              
issues, covering such matters as offer and acceptance, warranties,             
mistake, failure to perform, risk of loss, and remedies.  The current          
lack of these rules promotes litigation.                                       
                                                                               
In the UCC, articles 3 and 4 are companion articles.  Article 3                
provides for all negotiable instruments including checks and certificates      
of deposits, while article 4 deals with bank deposits and collections.         
Amendments in this bill pertaining to these two articles are made              
primarily to recognize modern electronic technology and banking prac-          
tices.  The revisions provide numerous benefits to the public interest,        
including certainty of the law, speed and reliability by addressing new        
technologies, and clarification and modernization of these areas of the        
UCC.                                                                           
                                                                               
A "bulk sale" is usually one in which a business sells all or a large          
part of its inventory to a single buyer outside the ordinary course of         
business.  Since its original enactment, new laws have partially               
overlapped article 6, and more sophisticated and wide-spread inventory         
financing under article 9 of the UCC has provided even  more                   
significant protection for creditors.  The NCCUSL recommended repeal           
of article 6, although also offered a thorough revision for states where       
this would be appropriate.  As of 1991, 14 states had addressed the            
issue with 10 opting for repeal.                                               
                                                                               
The UCC is a comprehensive codification of commercial law.                     
However, to retain its vitality it must be updated on a continuing basis.      
This bill provides for significant improvements in Alaska law.  The            
changes it contains  are essential to business and consumers involved          
                                                                               

1993-03-26                     House Journal                      Page 0796
HB 257                                                                       
in commercial transactions.  It will help keep Alaska's Uniform                
Commercial Code up to date, thus encouraging a predictable and                 
favorable commercial climate, in line with the rest of the country.            
                                                                               
									Sincerely,                                                            
									/s/                                                                   
									Walter J. Hickel                                                      
									Governor"