STAND

STAND. COM. REP. NO. 597

Honolulu, Hawaii

, 2005

RE: S.B. No. 702

S.D. 1

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 702 entitled:

"A BILL FOR AN ACT RELATING TO ANTITRUST,"

begs leave to report as follows:

The purpose of this measure is to update the antitrust laws governing mergers and acquisitions.

The Attorney General and ML Macadamia Nut Orchards, L.P. testified in support of this measure.

Current law prohibits certain acquisitions by and among corporations, but does not prohibit these transactions when one of the entities involved is not a corporation, but some other form of business entity. This limitation makes the legal process to challenge mergers and acquisitions more difficult and cumbersome.

This measure broadens the scope of the law to include its application to other business entities by expanding the definition of "person" to include various business entities, and amending the mergers and acquisitions law to apply to a person, rather than a corporation.

Additionally, this measure authorizes a court to award attorney's fees and costs to a prevailing party in actions brought to challenge a merger or acquisition, and repeals an obsolete provision. Your Committee finds that these amendments to the law will facilitate enforcement of the antitrust laws to the benefit of businesses and consumers.

Your Committee has amended this measure:

(1) To authorize a court, in an action challenging a merger or acquisition, to order the divestiture or other disposition of a party's assets to eliminate the substantial lessening of competition or the tendency to create a monopoly;

(2) To retain statutory language in the mergers and acquisition law relating to the "holding" of assets in order to continue to effect the legislature's intent in its establishment of the law; and

(3) By making technical changes to reflect preferred drafting style and to correctly reflect the language of the Hawaii Revised Statutes.

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. 702, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 702, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.

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

		____________________________ RON MENOR, Chair