STAND. COM. REP. NO. 519-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2480
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 2480 entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to increase the uniformity of
state laws relating to limited liability partnerships (LLPs) with
those of other states, modernize the law, and make the formation
of LLPs in this state more attractive, by:

     (1)  Repealing the Limited Liability Partnership Act, Part V
          of Chapter 425, Hawaii Revised Statutes;

     (2)  Adopting the Uniform Partnership Act (UPA) as amended
          in 1997;

     (2)  Reflecting current business and administrative
          practices in the law adopted;

     (3)  Deleting the prohibition against the formation of LLPs
          by attorneys; and

     (4)  Deleting insurance and financial responsibility
          requirements that are not a part of the UPA.

     Your Committee received testimony in support of this measure
from the Department of Commerce and Consumer Affairs (DCCA) and
four attorneys.

 
                                 STAND. COM. REP. NO. 519-00
                                 Page 2

 

     Your Committee heard testimony that this bill is the product
of a working group formed by DCCA in which the Business Law
Section of the Hawaii State Bar Association participated.  The
measure repeals the current LLP law and provides for uniformity
with the LLP laws of other states by adopting the 1997 UPA.

     There was testimony that in modernizing the LLP law, this
bill would also cure existing problems with the law.  Existing
law contains contradictions and anomalies that make it difficult
to interpret and apply.  As a result, it cannot be relied on by
businesses to provide limited liability protection.  Your
Committee finds that this measure would benefit businesses and
improve the business climate of the State.

     Your Committee has made numerous technical, nonsubstantive
amendments to this bill 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. 2480, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
2480, H.D. 1, and be placed on the calendar for Third Reading.

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



                                   ______________________________
                                   RON MENOR, Chair