STAND. COM. REP. NO. 91

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1139
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 1139 entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to conform the State's
Uniform Limited Liability Company Act to amendments made to the
Uniform Limited Liability Company Act (ULLCA).

     The Department of Commerce and Consumer Affairs and a Hawaii
commissioner to the National Conference on Uniform State Laws
presented testimony in support of the measure.  The Business Law
Section of the Hawaii State Bar Association and two individuals,
though not present at the hearing, submitted written supportive
testimony.

     Since Hawaii became the first state to adopt the ULLCA, the
National Conference of Commissioners on Uniform State Laws has
adopted several amendments to the Act.  This measure incorporates
those amendments and updates Hawaii's ULLCA.  Additionally, this
measure:

     (1)  Repeals the prohibition against a limited liability
          company (LLC) engaging in the activities of financial
          institutions, insurance companies, and other
          professions;


 
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     (2)  Extends the period for reinstatement of a terminated
          LLC from ninety days to two years; 

     (3)  Allows an LLC to amend and restate its articles of
          organization in one procedure; and

     (4)  Repeals the requirement that a court adjudicating the
          personal liability of LLC members apply case law
          relative to "piercing the corporate veil".   

     Your Committee has conformed the measure to preferred
drafting style and made technical, nonsubstantive amendments to
the measure.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 1139, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 1139, S.D. 1, and be placed on the calendar for Third
Reading.

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



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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