STAND. COM. REP. NO. 442________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1077
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 1077 entitled: 

     "A BILL FOR AN ACT RELATING TO LIMITED LIABILITY COMPANIES,"

begs leave to report as follows:

     The purpose of this bill is to amend the Hawaii Limited
Liability Company Act of Chapter 428, Hawaii Revised Statutes, to
conform with amendments made to the Uniform Limited Liability
Company Act that was drafted and adopted by the National
Conference of Commissioners on Uniform State Laws (NCCUSL)
several years ago.  In addition to the conforming amendments, the
measure includes amendments that among other things, are intended
to:

     (1)  Repeal prohibitions against limited liability companies
          (LLCs) engaging in insurance company and financial
          institution activities, as well as those of other
          professions and vocations, without affecting other
          statutory requirements regarding those activities;

     (2)  Extend the time within which an administratively
          terminated LLC may apply to the Director of Commerce
          and Consumer Affairs for reinstatement;

     (3)  Allow the one-step amendment and restatement of an
          LLC's articles of organization; and


 
 
 
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                                 Page 2

 
     (4)  Repeal provisions requiring case law be applied when a
          party seeks to hold members of a limited liability
          company personally liable, a housekeeping measure that
          is not intended to affect underlying individual rights
          to "pierce the corporate veil."

     The Department of Commerce and Consumer Affairs (DCCA), and
a Hawaii member of the NCCUSL testified in support of this bill.
DCCA stated that the amendments to Hawaii's LLC Act were intended
to make Hawaii business law transparent to persons in states with
the same, uniform laws, thus making it easier to form limited
liability companies in, and encouraging the free flow of trade
and commerce through the State of Hawaii.

     Your Committee has made technical, nonsubstantive amendments
to this measure for purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 1077, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1077, H.D. 1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair