STAND. COM. REP. NO. 628

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 359
                                     H.D. 1




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

Sir:

     Your Committee on Labor and Public Employment, to which was
referred H.B. No. 359 entitled: 

     "A BILL FOR AN ACT RELATING TO THE HAWAII PUBLIC EMPLOYEES
     HEALTH FUND,"

begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Provide that total employer contribution shall not
          exceed the actual cost of a health benefits plan,
          including any overpayment refunds;

     (2)  Ensure that a public employer pays the same percentage
          of the health benefits plan of an employee, regardless
          of whether the employee participates in a Health Fund
          or union-sponsored plan; and

     (3)  Clarify that the Board of Trustees of the Health Fund
          owe a fiduciary duty to the State to ensure employer
          contributors to the Health Fund are receiving a fair
          return for their contribution.

     The Hawaii Government Employees Association opposed the
intent and purpose of this measure stating that contributions for
health benefit plans are negotiable under the collective
bargaining statute and should be determined by negotiations
between employer and the union.


 
 
                                 STAND. COM. REP. NO. 628
                                 Page 2

 
     The Hawaii State Teachers Association opposed this measure
stating that the union-sponsored plans already in place have a
better experience rating than the state health fund and any
savings from union-sponsored plans are used to expand benefits
for members,

     The University of Hawaii Professional Assembly opposed this
measure stating that the measure destroys any incentive for the
union to become involved in attempting to purchase better
benefits for members.

     Your Committee has amended this measure by making technical,
nonsubstantive amendments for purposes of style and clarity.

     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. 359, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 359, H.D.
1, and be referred to the Committee on Finance.

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



                                   ______________________________
                                   TERRY NUI YOSHINAGA, Chair