five per cent or more of the proprietary interest of any unincorporated en-
terprise. (Reference: Chapter 110)

The group life and group accident and health laws as set forth in Chapter
175, Sections 110 and 133 were amended to authorize employee contributions
in multiple -employer trustee groups. (Reference: Chapter 229)

Chapter 32, "Laws Relating to Retirennent Systems and Pensions" was
amended by insertion of Section 19A which authorized the assignment and
withholding from pensions of State employees of amounts for payment of
hospital, medical or surgical insurance premiums due insurance companies
and others. (Reference: Chapter 509)

Section 128 of Chapter 175 was amended to authorize each minor resident
who has attained the age of 15 to contract for life or endowment insurance
upon his life and to exercise rights on policies on his life. ( Reference:
Chapter 97)

A bill was passed permitting corporations in the Commonwealth to author-
ize directors, or officers having powers of directors, to make contributions
for charitable, scientific or educational purposes, provided that those con-
tributions, in excess of 1/2 of 1% of capital and surplus of a stock corpora-
tion, or 1/2 of 1% of surplus of a non-stock corporation, shall be authorized
by shareholders or nnembers at a regular or special meeting. (Reference:
Chapter 415)

Important changes were made in Sections 79 and 90C of Chapter 175 with
respect to the guaranty capital of mutual companies. (Reference: Chapter
220)



P.D. 9



The General Laws were amended by inserting after Chapter 90 a new
chapter designated "Chapter 90A, The Highway Safety Act". This act set
up an unpaid committee comprised of the registrar of motor ve.hicles, the
attorney-general, the commissioner of insurance, the commissioner of
public works, the commissioner of public safety, the commissioner of edu-
cation, the chairman of the youth service board, the chairman of the metro-
politan district commission, the commissioner of mental health, and three
members to be appointed by the Governor and set forth the mechanics and
procedures to be followed to establish effective programs of safety on high-
ways. Provisions therein were made to fix and establish a point system for
the evaluation of the operating record of owners of registered motor vehi-
cles and other person to whom a license to operate motor vehicles has been
granted under Section eight of Chapter ninety and for the determination of
the continuing qualification of such persons for the rights and privileges
granted by such registration or license, and for penalties to be imposed for
violations under the point system. Thereunder, the commissioner of in-
surance shall fix and establish a schedule of premium surcharges to be ap-
plied to premium charges as penalties, graduated according to the point
accumulation records of the owners of the motor vehicle covered by the
policy. Changes were made in Sections 26, 27 and 29 of Chapter 90, and
Section 113H was added to Chapter 175 to cover certain aspects of Chap-
ter 90A as relates to the insurance business. (Reference: Chapter 570)

The General Court resolved, - that an unpaid special commission be es-
tablished for the purpose of making an investigation and study relative to in-
surance laws of the Commonwealth with a view to revising the motor vehicle
liability insurance law and laws as relate to certain disability benefits, the
extension of group life insurance to dependents, and provisions of fire,
health, accident and life policies, and to consider the subject matter of cer-
tain insurance bills introduced in the last session. Report date of said
commission shall be not later than the last Wednesday of December 1953.
(Reference: Resolves, 1953 - Chapter 77)

The text of the foregoing summary of Acts and Resolves in 19 53, following
the sequence as heretofore reported, is as follows:

CHAPTER 671 - AN ACT TO INCCKPCRATE THE MASSACHUSETTS BUSINESS DEVELOPMENT
CORPORATION

Whereas, The aeferred operation of this act would tend to defeat its pur-
pose, which is to create immediately a corporation as provided for therein,
especially empowered to promote, develop and advance the prosperity and
economic welfare of the commonwealth, and exercise as soon as practical
the other pov/ers and privileges hereinafter provided for, therefore it is
hereby declared to be an emergency law, necessary for the immediate pres-
ervation of the public convenience.

Be it enacted, etc., as follows:

SECTION 1. In this act, unless the context otherwise requires, the follow-
ing words shall have the following meanings:

"Corporation", The Massachusetts Business Development Corporation
created by this act.

"Financial Institution", any banking corporation or institution, trust com-
pany, savings bank, co-operative bank, savings and loan association, insur-



Part I



ance company, or related corporation, partnership, foundation, or other in-
stitution engaged primarily in lending or investing funds.

"Member", any financial institution authorized to do business within this
commonwealth which shall undertake to lend money to the corporation upon
its call and in accordance with the provisions of section seven.

"Board of directors", the board of directors of the corporation consti-
tuted under section eleven in office from time to time.

"Lefan limit", for any member, the maximum amount permitted to be out-
standing at any one time on loans made by such member to the corporation,
as determined under paragraph (3) (b) of section seven, assuming that such
member holds no capital stock of the corporation at the time of such deter-
mination.

SECTION 2. G. Harry Adalian, C. F. Adams, Jr. , Harrison Amber,
O. Kelley Anderson, Raymond Andrews, Helen D. Audella, Jacob Bailen,
Robert E. Barrett, Thomas P. Beal, J. William Belanger, Vincent Berna-
gozzi, Edward Bigelow, William Bird, S. Bruce Black, Harry J. Blake,
Richard A. Booth, Walter E. Borden, Mark Bortman, Richard L. Bowditch,
Donald C. Bowersock, Lloyd C. Brace, Bartholomew A. Brickley, Henry J.
Brides, Walter A. Brown, Leeds Burchard, Marjorie Mills Burnes, Howard
J. Cadwell, Floyd D. Campbell, Leonard Campbell, Elmer O. Cappers,
Anthony L. Cassese, Ephron Catlin, Jr. , Walter Cenerazzo, Thomas D.
Chatfield, Paul F. Clark, Roe S. Clark, Edward L. Clifford, Charles E.
Cotting, Alvah Crocker, Russell Davenport, John M. Deeley, Thomas G.
Dignam, Margaret Divver, Frederick C. Dumaine, Jr., Robert R. Duncan,
William Dwight, Samuel Epstein, Roland A. Erickson, Herbert N. Faulkner,
Louis S, Finger, Louis Fiorani, John G. Flint, Marron Fort, Lee Friedman,
Richard Furbush, Foster Furcolo, Everett W. Gammons, G. Peabody Gard-
ner, Charles Gibbons, Carl G. Gilbert, Charles Gilbert, Mary H. Gillespie,
Louis Gordon, C. Lane Goss, Abraham Green, Richard N. Greenwood,
Merrill Griswold, John S. Gwinn, Kurtz M. Hanson, Edward Heaphy, Chris-
tian A. Herter, Donald P. Hess, Douglas Hewat, Charles E. Hodges,
Harold D. Hodgkinson, Richard S. Holden, Richard A. Hunter, Donald J.
Hurley, Maynard Hutchinson, John B. Hynes, James Jackson, Jr. , S.
Harley Jones, Jacob J. Kaplan, Michael T. Kelleher, John F. Kennedy,
P. J. Kennedy, Jr., Julia B. Kirlinj A. Lionel Lawrence, Halfdan Lee,
Jacob Lewiton, Leon Lomax, Cora MacKenzie, Clarence G. McDavitt, Jr. ,
Kenneth McDougall, John C. Makepeace, Clifford F. Martin, James J.
Minot, Irwin L. Moore, Gardner Morse, Richard Morse, J. Reed Morss,
George P. Nason, Daniel O'Connell, P. A. O'Connell, Adrian P. O'Keeffe,
Thomas Pappas, Magnus Peterson, Henry H. Pierce, Samuel Pinanski,
H. Ladd Plumley, William H. Potter, Jr., George Rabb, Sidney R. Rabb,
John J. Regan, Richard S. Robie, Paul T. Roihwell, Leverett Saltonstall,
Harlan A. Sears, Ruth Simonatis, Gifford Simonds, Sumner H. Slichter,
William B. Snow, Robert C. Sprague, Seabury Stanton, Roy Stevens, Craw-
ford H. Stocker, Jr., Harry Stoddard, Charles Stoddard, Robert W. Stod-
dard, Allan H. Sturgis, T. G. Sughrue, Rockwell C. Tenney, Edward R.
Tufts, Frank Vorenberg, James T. Wall, George Wallace, Louis Van N.
Washburn, W. Bradford West, Robert Wheeler, Donald White, Sumner G.
Whittier, Harriet Wilinsky, Orrin G. Wood, their associates, successors,
and assigns, are hereby constituted a body corporate under the name of
Massachusetts Business Development Corporation. The corporation shall
be subject to, and have the powers and privileges conferred by, the pro-
visions of chapter one hundred and fifty-five and sections eighteen, twenty-
six, twenty-seven, thirty-one, thirty -three, and thirty-four of chapter one
hundred and fifty-six of the General Laws as presently enacted or hereafter



P.D, 9



amended, except so far as said provisions are inconsistent with or other-
wise restricted or limited by the provisions of this act.

SECTION 3. The principal office of the corporation shall be located in the
city of Boston. The corporation may have offices in such other places with-
in the commonwealth as may be fixed by the board of directors.

SECTION 4-. The purposes of the corporation shall be to promote, stimulate,
develop and advance the business prosperity and economic welfare of the
commonwealth of Massachusetts and its citizens; to encourage and assist
through loans, investments or other business transactions, in the location
of new business and industry in this commonwealth and to rehabilitate and
assist existing business and industry; and so to stimulate and assist in the
expansion of all kinds of business activity which will tend to promote the
business development and maintain the economic stability of this common-
wealth, provide maximum opportunities for employment, encourage thrift,
and improve the standard of living of the citizens of this commonwealth;
similarly, to cooperate and act in conjunction with other organizations, pub-
lic or private, in the promotion and advancement of industrial, commercial,
agricultural, and recreational developments in this commonwealth; and to
provide financing for the promotion, development, and conduct of all kinds
of business activity in this commonwealth.

In furtherance of such purposes and in addition to the powers conferred
on business corporations by the provisions of the General Laws specified in
section two, the corporation shall, subject to the restrictions and limitations
herein contained, have the following powers:

(a) To elect, appoint and employ officers, agents and employees; to make
contracts and incur liabilities for any of the purposes of the corporation;
provided, that the corporation shall not incur any secondary liability by way
of guaranty or endorsement of the obligations of any person, firm, corpor-
ation, joint stock company, association or trust, or in any other manner.

(b) To borrow money from the members only, for any of the purposes of
the corporation; to icssue therefor its bonds, debentures, notes or other ev-
idences of indebtedness, whether secured or unsecured, and to secure the
same by mortgage, pledge, deed of trust or other lien on its property, fran-
chises, rights and privileges of every kind and nature or any part thereof
or interest therein, without securing stockholder or member approval;
provided, that no loan to the corporation shall be secured in any manner
unless all outstanding loans to the corporation shall be secured equally and
ratably in proportion to the unpaid balance of such loans and in the same
manner .

(c) To make loans to any person, firm, corporation, joint stock company,
association or trust, and to establish and regulate the terms and conditions
with respect to any such loans and the charges for interest and service con-
nected therewith.

(d) To purchase, receive, hold, lease, or otherwise acquire, and to sell
convey, transfer, lease or otherwise dispose of real and personal property,
together with such rights and privileges as may be incidental and appurtenant
thereto and the use thereof, including, but not restricted to, any real or per-
sonal property acquired by the corporation from time to time in the satisfac-
tion of debts or enforcement of obligations.



Part I



(e) To acquire the good will, business, rights, real and personal proper-
ty, and other assets, or any part thereof, or interest therein, of any per-
sons, firms, corporations, joint stock companies, associations or trusts,
and to assume, undertake, or pay the obligations, debts and liabilities of
any such person, firm, corporation, joint stock company, association or
trust; to acquire improved or unimproved real estate for the purpose of
constructing industrial plants or other business establishments thereon or
for the purpose of disposing of such real estate to others for the construc-
tion of industrial plants or other business establishments; and to acquire,
construct or reconstruct, alter, repair, maintain, operate, sell, convey,
transfer, lease, or otherwise dispose of industrial plants or business es-
tablishments.

(f) To acquire, subscribe for, own, hold, sell, assign, transfer, mort-
gage, pledge or otherwise dispose of the stock, shares, bonds, debentures,
notes or other securities and evidences of interest in, or indebtedness of,
any person, firm, corporation, joint stock company, association or trust,
and while the owner or holder thereof to exercise all the rights, powers and
privileges of ownership, including the right to vote thereon.

(g) To mortgage, pledge, or otherwise encumber any property, right or
thing of value, acquired pursuant to the powers contained in paragraphs (d),
(e) or (f), as security for the payment of any part of the purchase price
thereof.

(h) To co-operate with and avail itself of the facilities of the department
of commerce and any similar governmental agencies; and to co-operate
with and assist, and otherwise encourage organizations in the various com-
munities of the commonwealth in the promotion, assistance, and develop-
ment of the business prosperity and economic welfare of such communities
or of this commonwealth or of any part thereof.

(i) To do all acts and things necessary or convenient to carry out the
powers expressly granted in this act.

SEC3TI0N 5. The authorized capital stock of the corporation shall consist
of four million shares of common stock with a par value of one dollar each,
which shares shall be issued only on receipt by the corporation of cash in
such amount not less than the par value thereof as may be determined by
the board of directors.

No stockholder shall be entitled as of right to purchase or subscribe for
any unissued or treasury stock of the corporation, whether now or here-
after authorized, or whether of a class now existing or of a class hereafter
created, and no stockholder shall be entitled as of right to purchase or sub-
scribe for any bonds, notes, certificates of indebtedness, debentures, or
other obligations convertible into stock of the corporation.

SECTION 6, Notwithstanding any rule at common law or any provision of
any general or special law or any provision in their respective charters,
agreements of association, articles of organization, or trust indentures:
(1) all domestic corporations organized for the purpose of carrying on busi-
ness within this commonwealth, including without implied limitation any
electric or gas company as defined in section one of chapter one hundred
and sixty-four of the General Laws, and any railroad corporation as de-
fined in section one of chapter one hundred and sixty of said General Laws,
and all trusts, are hereby authorized to acquire, purchase, hold, sell,



P.D. 9



assign, transfer, mortgage, pledge or otherwise dispose of any bonds, se-
curities or other evidences of indebtedness created by, or the shares of the
capital stock of the corporation, and while owners of said stock to exercise
all the rights, powers and privileges of ownership, including the right to vote
thereon, all without the approval of any regulatory authority of the common-
wealth; (2) all financial institutions are hereby authorized to become mem-
bers of the corporation and to make loans to the corporation as provided
herein; (3) a financial institution which does not become a member of the
corporation shall not be permitted to acquire any shares of the capital
stock of the corporation; and (4) each financial institution which becomes a
member of the corporation is hereby authorized to acquire, purchase, hold,
sell, assign, transfer, mortgage, pledge, or otherwise dispose of, any
bonds, securities or other evidences of indebtedness created by, or the
shares of the capital stock of the corporation, and while owners of said
stock to exercise all the rights, powers and privileges of ownership, in-
cluding the right to vote thereon, all without the approval of any regulatory
authority of the commonwealth; provided, that the amount of the capital
stock of the corporation which may be acquired by any member pursuant to
the authority granted herein shall not exceed ten per cent of the loan limit
of such member. The amount of capital stock of the corporation which any
member is authorized to acquire pursuant to the authority granted herein is
in addition to the amount of capital stock in corporations which such mem-
ber may otherwise be authorized to acquire.

SECTION 7. Any financial institution may request membership in the cor-
poration by making application to the board of directors on such form and
in such manner as said board of directors may require, and naembership
shall become effective upon acceptance of such application by said board.

Each mennber of the corporation shall make loans to the corporation as
and when called upon by it to do so on such terms and other conditions as
shall be approved from time to time by the board of directors, subject to
the following conditions:

(1) All loan limits shall be established at the thousand dollar amount
nearest to the amount computed in accordance with the provisions of this
section.

(2) No loan to the corporation shall be made if immediately thereafter
the total amount of the obligations of the corporation would exceed the less-
er of (a) eight times the amount then paid in on the outstanding capital stock
of the corporation, or (b) thirty-two million dollars.

(3) The total amount outstanding on loans to the corporation nnade by any
member at any one time, when added to the amount of the investment in the
capital stock of the corporation then held by such member, shall not exceed:

(a) Twenty per cent of the total amount then outstanding on loans to the
corporation by all nnembers, including in said total anaount outstanding,
amounts validly called for loan but not yet loaned.

(b) The following limit, to be determined as of the time such member be-
comes a member on the basis of the audited balance sheet of such member

at the close of its fiscal year immediately preceding its application for mem-
bership, or, in the case of an insurance company, its last annual statement
to the commissioner of insurance: two per cent of the capital and surplus of
connmercial banks and trust companieis; one per cent of the guaranty fund



Part I



and profit and loss of savings banks; one per cent of the guaranty fund and
surplus of savings and loan associations and co-operative banks; one per
cent of the capital and unassigned surplus of stock insurance connpanies,
except fire insurance companies; one per cent of the unassigned surplus of
mutual insurance companies, except fire insurance companies; one tenth
of one per cent of the assets of fire insurance companies; and such limits
as may be approved by the board of directors of the corporation for other
financial institutions.

(4) Subject to paragraph three (a) of this section, each call nnade by the
corporation shall be prorated among the members of the corporation in sub-
stantially the same proportion that the adjusted loan limit of each member
bears to the aggregate of the adjusted loan limits of all members. The ad-
justed loan limit of a mennber shall be the amount of such member's loan
limit, reduced by the balance of outstanding loans made by such naember to
the corporation and the investment in capital stock of the corporation held
by such member at the time of such call.

(5) All loans to the corporation by members shall be evidenced by bonds,
debentures, notes or other evidences of indebtedness of the corporation,
which shall be freely transferable at all times, and which shall bear interest
at a rate of not less than one quarter of one per cent in excess of the rate of
interest determined by the board of directors to be the prime rate prevail-
ing at the date of issuance thereof in the city of Boston on unsecured com-
mercial loans.

SECTIOKT 8. Membership in the corporation shall be for the duration of the
corporation; provided that

(a) Upon written notice given to the corporation five years in advance, a
member may withdraw from membership in the corporation at the expira-
tion date of such notice; or

(b) If there shall be a legislative amendment of this charter which shall
not have been approved by the members and stockholders as provided for in
section ten within sixty days after the effective date of such amendment any
member voting against the approval of such amendment may withdraw from
membership forthwith upon giving written notice to the corporation not later
than ninety days from the effective date of such amendment.

A member shall not be obligated to amke any loans to the corporation pur-
suant to calls made subsequent to the withdrawal of said member.

SECTION 9. The stockholders and the nnembers of the corporation shall
have the following powers of the corporation: (a) to determine the number
of and elect directors as provided in section eleven hereof; (b) to make,
amend and repeal by-laws; (c) to amend this charter as provided in sec-
tion ten; (d) to dissolve the corporation as provided in section nineteen;
(e) to exercise such other of the powers of the corporation as may be con-
ferred on the stockholders and the members by the by-laws.

As to all matters requiring action by the stockholders and the nnembers
of the corporation, said stockholders and said members shall vote separate-
ly thereon by classes, and, except as otherwise herein provided, such mat-
ters shall require the affirmative vote of a majority of the votes to which
the stockholders present or represented at the meeting shall be entitled and
the affirmative vote of a majority of the votes to which the members present



P.D. 9



or represented at the meeting shall be entitled.

Each stockholder shall have one vote, in person or by proxy, for each
share of capital stock held by him, and each mennber shall have one vote, in
person or by proxy, except that any member having a loan limit of more than
one thousand dollars shall have one additional vote, in person or by proxy,
for each additional one thousand dollars which such member is authorized to
have outstanding on loans to the corporation at any one time as determined
under paragraph three (b) of section seven.

SECTION 10. This charter may be amended by the votes of the stockholders
and the members of the corporation, voting separately by classes, and such
amendments shall require approval by the affirmative vote of two thixds of
the votes to which the stockholders shall be entitled and two thirds of the
votes to which the members shall be entitled; provided, that no amendment
of this charter which is inconsistent with the general purposes expressed
herein or which authorizes any additional class of capital stock to be issued,
or which eliminates or curtails the right of the commissioner of commerce
to examine the corporation or the obligation of the corporation to make re-
ports as provided in section fourteen, shall be made without amendment of
this act; and provided, further, that no amendment of this charter which
increases the obligation of a nnember to make loans to the corporation, or
makes any change in the principal amount, interest rate, maturity date, or
in the security or credit position, of any outstanding loan of a member to
the corporation, or affects a member's right to withdraw from membership
as provided in section eight, or affects a member's voting rights as pro-
vided in section nine, shall be made without the consent of each member
affected by such amendment.

Within thirty days after any meeting at which amendment of this charter
has been adopted, articles of amendment signed and sworn to by the presi-
dent, treasurer and a majority of the directors, setting forth such amend-
ment and the due adoption thereof, shall be submitted to the commissioner