Honolulu, Hawaii



RE:    H.B. No. 1287

       H.D. 2

       S.D. 1




Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii




     Your Committees on Education and Housing and Labor, to which was referred H.B. No. 1287, H.D. 2, entitled:




beg leave to report as follows:


     The purpose of this measure is to extend the enabling law for voluntary employees' beneficiary association trusts from July 1, 2010, to December 31, 2010, to allow for a smoother transition to the Hawaii Employer-Union Health Benefits Trust Fund (EUTF) and to appropriate funds for EUTF staff to assist with the transition and other duties of the EUTF.


     Testimony in support of this measure was submitted by one state agency, one county agency, one private organization, and one individual.  Testimony in support of the intent of this measure was submitted by one state agency and two individuals.  Testimony in opposition to this measure was submitted by one individual.  Written testimony presented to the Committees may be reviewed on the Legislature's website.


     The EUTF has encountered difficulties in performing its duties due to staff shortages and, more recently, the retirement of its Administrator.  Your Committees find that allowing the beneficiaries of voluntary employees' beneficiary association (VEBA) trusts to transition back into the EUTF under these circumstances could precipitate further confusion, delays, errors, and other negative impacts.  It is also unclear at this point what the exact impact on the EUTF, the Hawaii State Teachers Association (the only employee organization that has established a VEBA trust since the enactment of Act 245, Session Laws of Hawaii 2005, which authorized the establishment of voluntary employees' beneficiary association trusts in the State), and their respective beneficiaries will be when the VEBA is transitioned back into EUTF.


     For the above reasons, your Committees have amended this measure as follows:


     (1)  By extending the sunset date for the VEBA trust from July 1, 2010, to July 1, 2012, to provide the EUTF with additional time to ensure a smooth transition of the VEBA trust beneficiaries to EUTF;


     (2)  By removing the language that establishes and appropriates funds for five temporary positions for the EUTF since the extension of the VEBA trust by two years should provide ample time for EUTF employees to perform the necessary tasks to ensure a smooth transition; and


     (3)  By making technical, nonsubstantive changes for the purposes of clarity and consistency.


     As affirmed by the records of votes of the members of your Committees on Education and Housing and Labor that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1287, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1287, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.


Respectfully submitted on behalf of the members of the Committees on Education and Housing and Labor,