The UCC isn’t going to grab headlines and it doesn’t even sound very exciting, but it is important to Massachusetts. There are just two months to go until July 1, 2013, the effective date for several provisions of the Uniform Commercial Code (UCC) contained in House Bill 28. If enacted, the changes contained in House Bill 28 will be good for our state and its economy. Without going into too much detail, this bill would reduce needless obstacles to the availability of credit for small businesses and reduce the cost of credit.
The bill had a public hearing before the Committee on Economic Development and Emerging Technologies on April 11 and was recently reported favorably from that Committee. As of this post’s publication, it is before the House Ways & Means Committee.
House Bill 28 contains two major sections — one providing technical and the other providing substantive changes. The first section revises various provisions of the UCC as they appear in Chapter 106 of the General Laws in the following three ways:
- First, there are updates to Article 1, which contains general definitions and provisions of the UCC.
- Second, there are revisions to Article 7 of the UCC, which deals with documents of title, including bills of lading and warehouse receipts. A very significant change contained in Article 7 would allow documents of title to be in electronic form.
- Third, there are certain technical amendments to Article 9 of the UCC.
The second section of House Bill 28 contains substantive changes providing rules for security interests in electronic documents of title. These provisions are necessary to coordinate Article 9 with the Article 7 amendments in the bill.
House Bill 28 is long overdue and revenue neutral. There is no opposition, it raises no consumer issues and requires no state appropriations, filing fees, or other charges. Among the bill’s supporters are the American Bar Association, Associated Industries of Massachusetts, International Warehouse Logistics Association, Massachusetts Bankers Association, Massachusetts Bar Association, Massachusetts Secretary of State’s Office and the Massachusetts Uniform Law Commission.
There were signs during the Legislature’s informal session in December that this legislation had a chance of becoming law before the end of 2012. Because that did not happen, we’re still talking about it. With two months to go before the uniform effective date of July 1, now is the time to get this done once and for all. If we fail to do this, Massachusetts will be at a competitive disadvantage relative to its neighbors: Connecticut, New Hampshire and Rhode Island.
– Kathleen Joyce
Director of Government Relations
Boston Bar Association