STAND

STAND. COM. REP. NO. 394

Honolulu, Hawaii

, 2005

RE: S.B. No. 1783

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 Labor, to which was referred S.B. No. 1783 entitled:

"A BILL FOR AN ACT RELATING TO THE EMPLOYER-UNION HEALTH BENEFITS TRUST FUND,"

begs leave to report as follows:

The purpose of this measure is to change the composition of the Board of Trustees (Board) of the Employer-Union Health Benefits Trust Fund (EUTF) from ten to fourteen members.

This measure also:

(1) Amends the appointment procedures by requiring six trustees to be selected by each of the six exclusive representatives of the bargaining units in section 89-6(a), Hawaii Revised Statutes, with a seventh to represent retirees, selected by the aforementioned six exclusive representatives;

(2) Changes the term of a trustee from four years to a term that is determined at the pleasure of the appointing or selecting authority;

(3) Amends procedures for filling vacancies to be in the same manner in which the trustee who vacated the position was appointed or selected; and

(4) Amends the number of members necessary for quorum.

Testimony in support of this measure was submitted by the Hawaii Government Employees Association and the Hawaii State Teachers Association. Testimony in opposition to this measure was submitted by the Department of Budget and Finance. Comments on this measure were also submitted by the Department of Human Resources of the City and County of Honolulu.

Your Committee finds that better representation of the employee-beneficiaries of the EUTF is necessary to protect the interests of the employee-beneficiaries. The expansion of the Board will provide fairer representation by allowing a trustee to be selected by each of the six exclusive representatives of the bargaining units under section 89-6(a), Hawaii Revised Statutes. Your Committee further finds that the current four-year term limit does not allow for ample time to truly benefit from a trustee's knowledge and abilities obtained and developed regarding the complex subject matters involving in the health care industry and plan administration. Therefore, at will terms will better serve the EUTF and its members.

Your Committee has amended this measure by changing the number of trustee votes representing the employee-beneficiaries from five to four for the matter to be handled by dispute resolution.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1783, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1783, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Labor,

		____________________________ BRIAN KANNO, Chair