Mass. House OKs Commercial Code Update
The state's uniform commercial code, a set of acts governing commercial transactions in Massachusetts, would be updated under legislation unanimously approved by the House Wednesday.
Adopted by most states, the code promotes economic development by enabling firms that do business in multiple states to conform their practices to one set of laws. Periodically, a commission with members appointed from each state recommends revisions to keep the code consistent with evolving business practices.
The commission recommended several revisions since Massachusetts last updated the code in 2001. Rep. Joseph Wagner, D-Chicopee, co-chair of the Joint Committee on Economic Development and Emerging Technologies, said that if the Legislature did not pass the changes, the state would be put at a competitive disadvantage and run the risk of losing commercial transactions across state lines.
Changes to the federal Uniform Commercial Code (UCC) are due to take effect at the federal level July 1, and the bill is an attempt to bring state law into compliance before then. Rep. Eugene O'Flaherty, D-Chelsea, said the goal is to try to establish as "much uniformity as possible" when it comes to the UCC so there is an understanding among states about how transactions will be conducted.
The bill had the support of various business organizations, including Associated Industries of Massachusetts and the Massachusetts Bankers Association, O'Flaherty said. Some of the changes in the state's UCC include bringing one section in line with modern business practices by providing a framework for the use of electronic documents of title, which current law does not address.
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