UCC Update Bill: Primed to Pass During Informal Session

This month the BBA Council voted to support House Bill 25 “An Act Making amendments to the Uniform Commercial Code Covering General Provisions, Documents of Title and Secured Transactions.”  This legislation was filed in January 2011 at the beginning of the 187th legislative session.  House Bill 25 will modernize provisions of Articles 1, 7 and 9 of the Uniform Commercial Code (UCC).  These updates will bring Massachusetts in line with the national model.  The revisions to the UCC include things like providing for electronic bills of lading and warehouse receipts and addressing technical corrections in personal property secured transactions.

House Bill 25 has broad support from groups representing creditors and debtors alike – including the Massachusetts Bankers Association and the Associated Industries of Massachusetts.  Last October, the Financial Services Committee held a public hearing on the bill, and it is now before the Economic Development and Emerging Technologies Committee.

The Legislature is in informal session through December. In order for bills to pass during informal session there cannot be any opposition – even a single member can derail a piece of legislation. This means that typically only non-controversial proposals would have a chance of advancing in the next two months.  Passage of a bill during an informal session is generally a win-win for everyone – because legislators get credit for passing sensible reforms and supporters are rewarded for their hard work.

Despite the fact that the Legislature only meets in informal sessions between now and the end of the year, House Bill 25 is still alive and there is a good chance that it will find its way to the Governor’s desk before January.  Here’s why….it’s a good bill, it’s non-controversial, and it has broad support and no known opposition.  Probably even more important than all of that is the fact that during informal sessions there is a much smaller queue of bills vying for placement on the legislative calendar.

A legislative victory by the end of December – and during an informal session – wouldn’t be the first time the BBA has seen a flurry of activity in the waning months of a legislative session.  In December 2010, when the last legislative session was coming to an end, the BBA was pleased to see homestead reform and an update to the bankruptcy exemptions statute in Massachusetts become law.  Similar to the updates of the UCC, these bills made sensible improvements to existing laws that were widely supported. Both bills progressed quickly in the final days of session but actually took years to gain traction to advance in the Legislature.  The BBA had been working on homestead reform for numerous legislative sessions and on various iterations of the bankruptcy exemptions statute for several years.

Controversial and contentious bills often grab headlines during formal session.  Informal sessions can present opportunities for the Legislature to turn attention to seemingly mundane but important issues like House Bill 25.  With more time to fully vet and promote passage, bills in this category often become law before the session ends.  The BBA will now focus on getting this bill on legislators’ radar screens in an effort to secure passage before the end of the year.

-Kathleen Joyce
Government Relations Director
Boston Bar Association
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