House Commerce committee to concur with Senate changes to H243, standardize certificates of good standing

The House Commerce and Economic Development Committee reviewed Senate amendments to H.243 on April 22 and signaled informal support to concur, committee members said.

The amendments, seven in all, rename a section that addresses service of process, add a new common provision governing certificates of good standing to cover additional entity types, and add the Senate Committee on Finance as a required recipient of a report from the Secretary of State's office.

Legislative counsel Rick Sagle, Office of Legislative Council, opened the committee discussion by explaining the amendments sent back by the Senate and noting the package includes technical and substantive clarifications to the House-passed bill. "One of the sections ... was just titled Secretary of State as Agent. And when I read the section, the 1656, it actually includes quite a bit more than just when the agent is the Secretary of State," Sagle said. He said the first amendment changes the section title to "Service of Process; Secretary of State as Agent" to better reflect its content.

David Ault, director of the Business Services Division at the Office of the Secretary of State, described the principal policy change in the Senate package: creating a single, cross-referenced provision for certificates of good standing. Ault said the change fixes a statutory gap that currently prevents the office from issuing a certificate of good standing for some entity types. "It turns out our law technically doesn't authorize us to issue a certificate of good standing for an LLP," Ault said. He added cooperative associations and assumed-name registrants also lacked explicit authorization under current language.

Ault said existing statutes already authorize certificates for limited liability companies, corporations, nonprofits and mutual benefit enterprises but use differing names and provisions. The new provision, he said, creates a uniform administrative framework in 11 V.S.A. chapter 15 and replaces multiple, tweaked sections with a single cross-reference so users know where to look for the governing rule.

Sen. Chris Maddox, who represents Chittenden North and sat in for the Senate presentation, told the committee the Senate had voice-voted the package and offered no substantive objections. "Like David was saying and what Rick was saying, just trying to harmonize the law even more with the certificate of good standing," Maddox said.

Committee members asked clarifying questions about the new statutory references. Sagle and Ault identified the affected provisions in the bill text as changes to the section currently numbered 1656 (title change) and the addition of a new section 1657 to house the common certificate-of-good-standing provision; other existing statute references would cross-reference the new section.

The committee conducted an informal straw poll on concurring with the Senate proposal of amendment; the chair indicated a majority favored concurring and said the formal report would be made to the House tomorrow so the bill could proceed to the governor if concurrence is formally recorded. No formal roll-call vote was recorded in the transcript.

Votes at a glance: the committee indicated it would concur with the Senate amendments to H.243 in a straw poll; a formal concurrence will be reported to the House on the following day.

The committee set no further conditions in the recorded discussion and indicated the matter was scheduled for action the next day.