Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred H.B. No. 1057 entitled:

begs leave to report as follows:

The purpose of this bill is to assist the Public Employees Health Fund Board of Trustees to effectively carry out its fiduciary duty to the Health Fund.

Specifically, this bill empowers the Public Employees Health Fund Board of Trustees to annually audit each health benefits plan offered by an employee organization, with the costs of the audits to be borne by the Health Fund.

Your Committee received testimony supporting the intent of the bill from the Department of Budget and Finance. Testimony in opposition was received from the United Public Workers. The Public Employees Health Fund testified taking no position on the bill and the Hawaii Government Employees Association offered comments.

Your Committee believes that the Board of Trustees of the Public Employees Health Fund has a fiduciary duty to ensure that the moneys deposited into the Health Fund by both public employers and public employees for the payment of health benefit plans for public employees are properly and effectively expended. Your Committee finds that the Board of Trustees cannot effectively fulfill this fiduciary duty without clear authority to conduct financial audits of the health benefits plans offered by employee organizations.

As affirmed by the record of votes of the members of your Committee on Labor and Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1057 and recommends that it pass Second Reading and be referred to the Committee on Finance.