STAND. COM. REP. NO.2074

Honolulu, Hawaii

, 2002

RE: S.B. No. 2732

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 2732 entitled:

"A BILL FOR AN ACT RELATING TO BUSINESS REGISTRATION,"

begs leave to report as follows:

The purpose of this measure is to update and clarify Hawaii's business registration laws to reflect modern business practices and Department of Commerce and Consumer Affairs (DCCA) filing procedures, and to make it more desirable for existing Hawaii business entities to remain in the State and for new businesses to form in the State.

Your Committee received testimony in support of this measure from DCCA, from the President, Executive Director, Registered Lobbyist and three members of Unity House, Inc., and from a member of the Business Law Section of the Hawaii State Bar Association.

Your Committee finds that several gaps exist in Hawaii's business registration laws, both in the Hawaii Nonprofit Corporation Act, which was enacted in 2001, and in other business registration laws that have been on the books for years.

Your Committee further finds that this voluminous measure contains three broad groups of amendments. The first group involves dissolved corporations and how to dispose of the property of the dissolved corporation.

The second group of amendments addresses the issue of electronic means of communication, which is not specifically contemplated by Hawaii's existing business registration laws.

The third major group of amendments clarifies that the board of directors of a Hawaii corporation may utilize its power to issue rights and options to adopt a plan to thwart a hostile corporate takeover by shareholders who have amassed a large block of stock for that sole purpose.

This measure also contains numerous amendments to chapter 414D, the Hawaii Nonprofit Corporations Act, primarily to correct technical errors.

Your Committee supports this measure and applauds the efforts of the Business Registration Division of DCCA, along with the Business Law and Real Estate sections of the Hawaii State Bar Association, who drafted this administration measure through a collaborative effort.

Your Committee amended this measure to incorporate amendments proposed by Unity House, Inc. Unity House recommended four amendments to chapter 414D to avoid conflict with federal law, ease the process of voting by proxy, and ensure the privacy of a member's information. Specifically, sections 414D-109(b), 414D-113(b), 414D-302(b)(3), and 414D-305, Hawaii Revised Statutes, have been amended to accomplish this purpose.

Your Committee finds that the amendments proposed by Unity House, along with the amendments contained in the measure as introduced, strike an appropriate balance by easing some of the unnecessary burdens on business entities in Hawaii, while at the same time ensuring that shareholders and members are protected.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2732, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2732, S.D. 1, and be referred to the Committee on Judiciary.

 

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

____________________________

RON MENOR, Chair