Behind the Budget — Important Business Law Updates

As of this writing, it looks like Massachusetts will finally have a budget just in time for Fiscal Year 2012.  The budget conference committee needs to file the final budget bill by 8 p.m. tonight in order to bring the budget to the House and Senate floor for final approval Friday.  With a big focus on the state budget, progress on other important bills could be stalled. As you know, an essential component of the BBA’s work is improving the quality of Massachusetts’ laws. Take, for example, a piece of legislation providing technical corrections to the Business Corporations Act of 2004.

A little background. . . In 2004, the Legislature completely rewrote the corporate business laws, which had not been updated for more than 30 years.  Simply put, chapter 156B was replaced by chapter 156D.  But chapter 156B was not repealed, nor did the legislature update all of the cross-references in the Massachusetts banking statute.  The unfortunate upshot is that today, a lawyer planning a corporate transaction for a Massachusetts bank must now refer to at least three chapters of the General Laws to decipher the cross-references in the banking law.

The proposed technical corrections bill, originally drafted and filed in 2008 by lawyers at Pierce Atwood as a pro bono project, was referred to the Joint Committee on Financial Services and placed into a study order last session.  In April 2010, the proposed technical corrections legislation was endorsed by the BBA Council.  We’re now working together on this with Pierce Atwood and our partners at the Mass Bankers Association.

And there’s even more work to do on chapter 156D.  Stan Keller, an original drafter of chapter 156D and a partner at Edwards Angel Palmer & Dodge, has asked the BBA to assist in his efforts to make other corrections to chapter 156D that will clarify various sections, reconcile inconsistencies, and fix omissions found in the current statute.  These technical corrections are contained in H 2774.

The difficulty here isn’t convincing the legislature that the two housekeeping proposals are beneficial to the Massachusetts business climate. The real challenge is drawing the legislature’s attention to these common sense and important updates.

- Kathleen Joyce
Government Relations Director
Boston Bar Association
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