NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Heaton

 

DATE TYPED:

 2/3/03

 

HB

27/aHBIC

 

SHORT TITLE:

 Amend Limited Partnership Act

 

SB

 

 

 

ANALYST:

Maloy

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

NFI

 

 

 

 

 

SOURCES OF INFORMATION

 

Responses Received From

Secretary of State’s Office   

 

SUMMARY

 

     Synopsis of HBIC Amendment

 

The House Business and Industry Committee amendment removes Section 2, lines 18 and 19 on page 2, which states:  “REPEAL. Section 54-1-47, NMSA 1978 (being Laws 1995, Chapter 185, Section 12, as amended) is repealed.”

 

Removal of this section reinstates the requirement that limited liability partnerships carry liability insurance.

 

     Synopsis of Original Bill

 

House Bill 27 creates a new type of partnership entity for registration in New Mexico.  Currently, the Secretary of State’s Office registers general partnerships, limited partnerships and limited liability partnerships.  HB27 adds limited liability limited partnerships.

 

HB27 also deletes the requirement that limited liability partnership’s carry liability insurance.

 

     Significant Issues

 

Limited liability limited partnerships must comply with the same registration and name requirements that currently apply with limited liability partnerships.

 

ADMINISTRATIVE IMPLICATIONS

 

The Secretary of State’s office will need to make minor alternations to the data processing systems it currently uses to register partnerships.

 

POSSIBLE QUESTIONS

 

What are the distinctions between the liability exposure of a limited partnership (vs.) a limited liability partnership (vs.) a limited liability limited partnership ?

 

What is the affect of eliminating the requirement that limited liability partnerships carry liability insurance?  Which party(ies) will be placed in the position of absorbing losses should there be a failure of the partnership ---- the partners personally, debtors of the partnership, consumers of the product or service ?

 

SJM/yr:njw