Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1060
                                     H.D. 2

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Labor and Public Employment, to which was
referred H.B. No. 1060, H.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to make changes to employer
contributions to the Hawaii Public Employees Health Fund by:

     (1)  Eliminating state and county employer contributions for
          health benefits of employees hired after June 30, 1999;

     (2)  Limiting employer contributions to a single plan at a
          percentage based on the employee's years of service.

     The Department of Budget and Finance testified in support of
the bill.  The Board of Trustees of the Hawaii Public Employees
Health Fund submitted comments on the measure.  United Public
Workers, the Hawaii State Teachers Association, the University of
Hawaii Professional Assembly, the Police Department of the City
and County of Honolulu, the State of Hawaii Organization of
Police Officers, and Hawaii Government Employees Association
opposed the bill.

     Your Committee notes that all public employee benefits are
in need of a comprehensive review.  Such a review should
encompass both the direct effects of broad changes to public

                                 STAND. COM. REP. NO. 631
                                 Page 2

employee benefits, as well as the indirect effects, such as the
effect on efforts to recruit new personnel.  In addition, your
Committee has passed this bill with the understanding that rights
under collective bargaining agreements will not be affected.

     Your Committee has amended the bill by:

     (1)  Delaying its effect until July 1, 2000 to provide more
          opportunity for discussion and review; and

     (2)  Making technical, nonsubstantive amendments for the
          purpose of style.

     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. 1060, H.D. 1, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1060, H.D. 2, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public

                                   TERRY NUI YOSHINAGA, Chair