18 AAC 75.265 - Letters of credit
(a) An applicant may demonstrate financial
responsibility with a letter of credit, in favor of the State of Alaska, for
the applicable amount required under
18 AAC 75.235(a),
in full or in part. The letter of credit
(1)
must be irrevocable for a period of not less than one year on the part of the
issuer; in addition, the letter must provide that it will be automatically
extended for one year unless the department and the applicant are notified in
writing at least 90 days before expiration of its stated term that the letter
will not be renewed; however, if a vessel is to be used in state waters for
less than one year, the letter of credit must cover the period that the vessel
is to be used in state waters plus 30 days;
(2) must be irrevocable until satisfaction of
a judgment or of a claim against the applicant under
AS
46.04.040(i) or the
provisions cited in it which results from a discharge occurring during its
term, subject to the limit of credit;
(3) must be a standby letter of credit to
respond specifically to a claim under
AS
46.04.040(i) or the
provisions cited in it, subject to the limit of credit;
(4) may not be used as collateral and may not
be drawn upon by the applicant except to respond to a claim under
AS
46.04.040(i) or the
provisions cited in that subsection for as long as the letter of credit is used
by the applicant as proof of financial responsibility under
AS
46.04.040 or
46.04.055;
(5) must be issued by a financial institution
that has authority to issue letters of credit, and that is regulated and
examined by state and federal banking agencies; and
(6) must state an effective date and an
expiration date, and must be effective on or before the approval date of proof
of financial responsibility.
(b) The issuing bank shall pay upon
presentation by the State of Alaska of a draft or other document as specified
in the letter of credit and may not make determinations of fact or law that
might be at issue between the responsible party and the department.
Notes
Authority:AS 46.03.020
AS 46.04.040
AS 46.04.045
AS 46.04.055
AS 46.04.070
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