Bill Text: HI HB594 | 2014 | Regular Session | Introduced
Bill Title: Hawaii Employer-Union Health Benefits Trust Fund Board of Trustees ($)
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2013-12-18 - Carried over to 2014 Regular Session. [HB594 Detail]
Download: Hawaii-2014-HB594-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
594 |
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TWENTY-SEVENTH LEGISLATURE, 2013 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The purpose of this Act is to make the composition and certain powers and duties of the board of trustees of the Hawaii employer-union health benefits trust fund similar to those of the employees' retirement system board of trustees. The legislature finds that, in the past, the latter board has operated with more effectiveness, efficiency, and foresight than the former board.
This Act also clarifies the fiduciary duties of the trust fund board of trustees.
SECTION 2. Chapter 87A, Hawaii Revised Statutes, is amended by adding four new sections to part II to be appropriately designated and to read as follows:
"§87A-A Composition of board. (a) The board shall consist of eight members as follows:
(1) The director of finance, ex officio;
(2) Four employees who are enrolled in health benefits plans of the fund. Two of the four shall be general employees, meaning employees in active service with the State or counties, including police officers and firefighters, but not public school teachers. One of the four shall be a public school teacher, and one shall be a retired employee. The four employees shall be elected by employees under rules adopted by the board to terms of six years commencing on the January 1 immediately following the expiration of their predecessors' terms; provided that, if after the close of filing of petitions for candidacy, an employee is unopposed for election to a trustee position, the employee shall be declared to be duly and legally elected to the office of trustee without an election. If a trustee who is an employee ceases to be enrolled in a health benefits plan of the fund, the trustee shall be disqualified from continuing in office, and the vacancy shall be filled in accordance with section 87A-B; and
(3) Three residents of the State who are not employees. One of the three shall be an officer of a financial institution, public accounting firm, or insurance company authorized to do business in the State or a resident of similar experience. The three residents shall be appointed by the governor, with the advice and consent of the senate, to serve for a term of six years commencing on the January 1 immediately following the expiration of their predecessors' terms.
(b) Each trustee shall serve until the trustee's successor is elected or appointed, as the case may be, and qualified.
§87A-B Vacancy. If a vacancy occurs in the office of a trustee, the vacancy shall be filled for the unexpired term in the same manner as the office was previously filled, except that in the case of a trustee elected by the employees, the vacancy shall be filled for the unexpired term by the appointment of an employee by the remaining trustees.
§87A-C Voting. Each trustee shall be entitled to one vote on the board. Five concurring votes shall be necessary for a decision by the trustees at any meeting of the board, except that a higher number of votes shall be necessary when required by other law.
§87A-D Prohibited interest of trustees and staff members. Except as provided in this section, no trustee or staff member of the fund shall have any direct interest in the gains or profits of any investment made by the board. No trustee or staff member shall use, directly or indirectly, for oneself or as an agent in any manner, the moneys of the fund, except to make current and necessary payments authorized by the board. No trustee or staff member shall be an endorser or surety or be in any manner an obligor for moneys loaned by the board."
SECTION 3. Section 87A-1, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "board" to read:
""Board" means the board of
trustees of the Hawaii employer-union health benefits trust fund described in
section [87A-5.] 87A-A."
2. By amending the definition of "trustee" to read:
""Trustee" means a trustee of
the board of trustees of the Hawaii employer-union health benefits trust fund[,
as described in section 87A-5]."
SECTION 4. Section 87A-15, Hawaii Revised Statutes, is amended to read as follows:
"[[]§87A-15[] Administration]
Duties of the board; administration of the fund. (a) The
board shall have the fiduciary duty to administer and carry out the
purpose of the fund. [Health and other benefit plans shall be provided at a
cost]
(b) The board shall provide health benefits plans to employee-beneficiaries and dependent-beneficiaries that are affordable to both the public employers and the public employees.
(c) The board shall implement and recommend policies, in accordance with law, to amortize the unfunded actuarial accrued liability within thirty years from January 1, 2014.
(d) The board shall expend the employers' and employees' contributions received for the costs of the health benefits plans in compliance with appropriations acts and other applicable law."
SECTION 5. Section 87A-24, Hawaii Revised Statutes, is amended to read as follows:
"§87A-24 Other powers. In addition to the power to administer the fund, the board may:
(1) Collect, receive, deposit, and withdraw money on behalf of the fund;
(2) Invest moneys and other assets of the fund
in the same manner specified in section 88-119(1)(A), (1)(B), (1)(C), (1)(F),
(2), (3), (4), (5), (6), [and] (7)[;], (8), (9), (10), and
(11), and engage in related activities under sections 88-120, 88-121, and 88‑121.5.
In performing these duties, the board shall have the same authority as the
board of trustees of the employees' retirement system;
[(3) Hold, purchase, sell, assign, transfer,
or dispose of any securities or other investments of the fund, as well as the
proceeds of those investments and any money belonging to the fund;
(4)] (3) Appoint, and at pleasure
dismiss, an administrator and other fund staff[.], including a chief
investment officer. The administrator and staff shall be exempt from
chapter 76 and shall serve under and at the pleasure of the board;
[(5)] (4) Make payments of periodic
charges and pay for reasonable expenses incurred in carrying out the purposes
of the fund;
[(6)] (5) Contract for the performance
of financial audits of the fund and claims audits of its insurance carriers;
[(7)] (6) Retain auditors, actuaries, [investment
firms and managers,] benefit plan consultants, or other professional
advisors to [carry out the purposes] assist in the administration
of this chapter;
(7) Retain investment firms and managers to provide advice and services on investment of the assets of the fund and pay for them out of the investment earnings;
(8) Establish health benefits plan and long-term care
benefits plan rates that include administrative [and other] expenses
necessary to effectuate the purposes of the fund; and
(9) Require any department, agency, or employee of the State or counties to furnish information to the board to carry out the purposes of this chapter."
SECTION 6. Section 87A-31.5, Hawaii Revised Statutes, is amended to read as follows:
"[[]§87A-31.5[]]
Employer contributions irrevocable. Notwithstanding any law to the
contrary, all of the monthly contributions that the State and counties make to
the fund under sections 87A-32, 87A-33, 87A-33.5, 87A-34, 87A-35,
87A-36, and 87A-37, and all other contributions that the State and counties may
make to the fund, shall be irrevocable; provided that this shall not preclude
the fund from returning contributions or payments made by the State or any
county under a mistake of fact within one year after the payment of the
contributions or payments."
SECTION 7. Section 87A-5, Hawaii Revised Statutes, is repealed.
["§87A-5 Composition of board.
The board of trustees of the employer-union health benefits trust fund shall
consist of ten trustees appointed by the governor in accordance with the
following procedure:
(1) Five trustees, one of whom shall
represent retirees, to represent employee-beneficiaries and to be selected as
follows:
(A) Three trustees shall be
appointed from a list of two nominees per trustee selected by each of the three
exclusive representative organizations that have the largest number of
employee-beneficiaries;
(B) One trustee shall be appointed
from a list of two nominees selected by mutual agreement of the remaining
exclusive employee representative organizations; and
(C) One trustee representing
retirees shall be appointed from a list of two nominees selected by mutual
agreement of all eligible exclusive representatives; and
(2) Five trustees to represent public
employers.
Section 26-34 shall not apply to board
member selection and terms. Notwithstanding any other provision of this
section, no exclusive representative of a bargaining unit that sponsors or participates
in a voluntary employee beneficiary association shall be eligible to select
nominees or to be represented by a trustee on the board.
As used in this section, the term
"exclusive representative" shall have the same meaning as in section
89-2."]
SECTION 8. Section 87A-6, Hawaii Revised Statutes, is repealed.
["§87A-6 Term of a trustee;
vacancy. The term of office of each trustee shall be four years;
provided that a trustee may be reappointed for one additional consecutive
four-year term.
A vacancy on the board shall be filled in
the same manner as the trustee who vacated that position was nominated or
appointed; provided that the criteria used for nominating or appointing the
successor shall be the same criteria used for nominating or appointing the
person's predecessor; provided further that vacancies on the board for each
trustee position representing retirees and employee-beneficiaries appointed
under section 87A-5(1)(A) and (B) shall be filled by appointment of the
governor as follows:
(1) If a vacancy occurs in one of the
trustee positions described in section 87A-5(1)(A), then the vacancy shall be
appointed from a list of two nominees submitted by the exclusive employee
representative from among the three largest exclusive employee representatives
that does not have a trustee among the three trustee positions;
(2) If a vacancy occurs in a trustee
position described in section 87A-5(1)(B), then the vacancy shall be appointed
from a list of two nominees submitted by mutual agreement of the exclusive
employee representatives described in section 87A-5(1)(B); and
(3) If a vacancy occurs in the retiree
position described in section 87A-5(1)(C), then the vacancy shall be appointed
from a list of two nominees submitted by mutual agreement of all eligible
exclusive employee representatives.
If by the end of a trustee's term the
trustee is not reappointed or the trustee's successor is not appointed, the
trustee shall serve until the trustee's successor is appointed."]
SECTION 9. Section 87A-11, Hawaii Revised Statutes, is repealed.
["[§87A-11] Quorum; board actions;
voting. (a) Six trustees, three of whom represent the public
employer and three of whom represent employee-beneficiaries, shall constitute a
quorum for the transaction of business.
(b) Trustees representing the public
employers shall collectively have one vote. Trustees representing the
employee-beneficiaries shall collectively have one vote.
For any vote of the trustees representing
the public employers to be valid, three of these trustees must concur to cast
such a vote. In the absence of such concurrence, the trustees representing the
public employers shall be deemed to have abstained from voting.
For any vote of the trustees representing
the employee-beneficiaries to be valid, three of these trustees must concur to
cast such a vote. In the absence of such concurrence, the trustees
representing the employee-beneficiaries shall be deemed to have abstained from
voting.
An abstention shall not be counted as either
a vote in favor or against a matter before the board.
(c) Any action taken by the board shall be
by the concurrence of at least two votes. In the event of a tie vote on any
motion, the motion shall fail. Upon the concurrence of six trustees, the board
shall participate in dispute resolution."]
SECTION 10. (a) For the purpose of this section, the terms "board", "employee", and "trustee" shall have the same meanings as defined in section 87A-1, Hawaii Revised Statutes.
(b) Notwithstanding any law to the contrary, the term of office of trustees serving on the board on December 31, 2013, shall terminate at the end of that day.
(c) No later than September 1, 2013, the director of finance shall conduct an election among employees to elect four employees to the board in accordance with section 87A-A, Hawaii Revised Statutes. The director of finance shall conduct the election in approximately the same manner as the election of trustees of the employees' retirement system; provided that the director shall have exclusive discretion in establishing the procedures for the election and shall not be required to adopt rules to establish the procedures. The director of finance shall conclude the voting and counting of ballots in sufficient time to certify the results of the election by November 1, 2013.
Notwithstanding section 87A-A, Hawaii Revised Statutes, the employees initially elected as trustees shall serve for terms commencing on January 1, 2014, but the expiration of their terms shall be as follows:
(1) The general employee with the second-highest number of votes among general employee-candidates shall serve for a term expiring on December 31, 2014;
(2) The retired employee shall serve for a term expiring on December 31, 2016;
(3) The public school teacher shall serve for a term expiring on December 31, 2018; and
(4) The general employee with the highest number of votes among general employee-candidates shall serve for a term expiring on December 31, 2020.
(d) The governor shall appoint three residents to serve as initial trustees of the board as provided under section 87A-A, Hawaii Revised Statutes.
Notwithstanding section 87A-A, Hawaii Revised Statutes, the residents initially appointed as trustees by the governor shall serve for terms commencing January 1, 2014, without having first been confirmed by the senate. The governor shall designate one of the three to serve for a term expiring on December 31, 2015, another to serve for a term expiring on December 31, 2017, and the last to serve for a term expiring on December 31, 2019.
If a resident initially appointed by the governor as a trustee is not confirmed by the senate during the regular session of 2014, that trustee shall be deemed to have vacated the office on the date of the senate's failure to advise and consent to the trustee's nomination or, if no senate vote to advise and consent to the nomination is taken, on the adjournment sine die of the regular session of 2014. A successor shall be appointed by the governor to fill the unexpired term in accordance with section 26-34, Hawaii Revised Statutes.
(e) The successors of the initial trustees shall be elected or appointed in accordance with section 87A-A or 87A-B, Hawaii Revised Statutes, as appropriate.
SECTION 11. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2013-2014 for the election of employees to the Hawaii employer-union health trust fund in accordance with section 10.
The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.
SECTION 12. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 14. This Act shall take effect on January 1, 2014; except that sections 10 and 11 shall take effect on July 1, 2013.
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INTRODUCED BY: |
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Report Title:
Hawaii Employer-Union Health Benefits Trust Fund Board of Trustees
Description:
Amends composition and certain powers and duties of the Hawaii employer-union health benefits trust fund board of trustees. Makes appropriation.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
