STAND. COM. REP. NO. 1374

Honolulu, Hawaii

RE:    S.C.R. No. 178

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred S.C.R. No. 178 entitled:

"SENATE CONCURRENT RESOLUTION REQUESTING THE AUDITOR TO CONDUCT A STUDY ON THE IMPACT OF VOLUNTARY EMPLOYEES' BENEFICIARY ASSOCIATION TRUSTS ON PUBLIC EMPLOYEES AND EMPLOYERS AND TO PROVIDE A BASIS FOR THE LEGISLATURE TO DECIDE WHETHER TO EXTEND ACT 245, SESSION LAWS OF HAWAII 2005,"

begs leave to report as follows:

The purpose of this measure is to request the Legislative Auditor to conduct a study on the impact of Voluntary Employees' Beneficiary Association Trusts on public employees and employers and to provide a basis for the Legislature to decide whether to extend Act 245, Session Laws of Hawaii 2005.

     The measure requests the Auditor to conduct a comprehensive study on the impact of Act 245, Session Laws of Hawaii 2005 on:

     (1)  Hawaii State Teachers Association members and retirees;

     (2)  Members and retirees of other bargaining units who have remained with the Hawaii Employer-Union Health Benefits Trust Fund;

     (3)  Public employers;

     (4)  The operations and finances of the Hawaii Employer-Union Health Benefits Trust Fund;

     (5)  Public employees who would be ineligible to join a Voluntary Employees' Beneficiary Association Trust due to their lack of membership in a public sector uion; and

     (6) Any other persons or areas that may be identified by the Auditor.

     The Auditor is requested to conduct the study on both a historical and prospective basis, including what would be the future financial viability of the Hawaii Employer-Union Health Benefits Trust Fund if Act 245, Session Laws of Hawaii, were to become permanent and more unions were to establish Voluntary Employees' Beneficiary Association Trusts.

     Finally, the Auditor is requested to study the impact of Voluntary Employees' Beneficiary Association Trusts on compliance with Governmental Accounting Standards Board Statement Numbers 43 and 45 and the possibility of employers pre-funding retiree health benefit costs.

     Testimony in support of this measure was received from the Director of Budget and Finance, the Administrator of the Hawaii Employer-Union Health Benefits Trust Fund (EUTF) and the Director of Budget and Fiscal Services of the City and County of Honolulu (County).  The Board of the EUTF voted unanimously to seek passage of this resolution. 

     The County requested that the measure be expanded to include the impact on GASB 45 financial reporting requirements on Other Post-Employment Benefits (OPEB) for the State and the counties as such impact is unknown. This concern is addressed in this measure.

     Your Committee recognizes that House Bill 1746, SD1 extends the repeal date of Act 245, SLH 2005 and has been referred to your Committee on Ways and Means.  However, the information that is requested in this measure will be helpful for the Legislature in future deliberations on requests that impact the EUTF.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report,

your Committee concurs with the intent and purpose of S.C.R. No. 178 and recommends that it be referred to the Committee on Ways and Means.

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

____________________________

CLAYTON HEE, Chair