Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Labor and Judiciary and Hawaiian Affairs, to which was referred S.B. No. 761 entitled:

beg leave to report as follows:

The purpose of this measure is to allow the Board of Trustees for the Employer-Union Health Benefits Trust Fund to hire independent legal counsel.

Testimony in support of this measure was submitted by the Hawaii Government Employees Association.

Testimony in opposition to this measure was submitted by the Department of the Attorney General.

Your Committees find that the Employer-Union Health Benefits Trust Fund (EUTF) is an independent agency established by law to provide health benefits to approximately 90,000 active and retired public employees. The Board of Trustees (Board) is composed of five employers and five employees, appointed by the Governor. Your Committees further find that the Board is authorized to hire its own administrator and consultants; however, the law requires the Department of the Attorney General to act as legal counsel for the Board.

Accordingly, your Committees determine that in order to maintain independence and ensure action that it is in the best interest of the EUTF, the Board should be authorized to select independent legal counsel with significant experience in the issues relating to the trust fund, including insurance law, contract law, and investments.

As affirmed by the records of votes of the members of your Committees on Labor and Judiciary and Hawaiian Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 761 and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.