Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 2640 entitled:

begs leave to report as follows:

The purpose of this measure is to clarify that a voluntary employees' beneficiary association trust may be established by an employee organization for all state and county employees represented by that employee organization.

Testimony in support of this measure was submitted by the Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO; the Hawaii State Teachers Association; and the United Public Workers, AFSCME Local 646, AFL-CIO. Comments on the measure were also submitted by the Department of the Attorney General.

Your Committee finds that Act 245, Session Laws of Hawaii 2005, authorized the establishment of voluntary employees' beneficiary association (VEBA) trusts by an employee organization for state and county employees of a particular bargaining unit. Your Committee further finds that clarification in the law is necessary to ensure that the intent of the law that one or more bargaining units may benefit from the establishment of VEBA trusts is patent. It was not the Legislature's intent that the authorization to establish VEBA trusts only be provided to a single employee organization or a single bargaining unit, regardless of the establishment of VEBA trusts as only a three-year pilot program. Your Committee believes that this measure will further clarify that VEBA trusts may be established by any employee organization for multiple bargaining units that may also benefit from their combined numbers.

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. 2640 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.