SB1586

THE SENATE	S.B. NO.	1586
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND BOARD OF TRUSTEES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 87A-5, Hawaii Revised Statutes, is amended to read as follows:

"§87A-5 Composition of board. The board of trustees of the employer-union health benefits trust fund shall consist of [~~ten~~] nine trustees as follows:

(1) The director of finance or designee of the State, who shall be an ex officio trustee; and

(2) The following eight trustees to be appointed by the governor in accordance with the following procedure:

[~~(1)~~ ~~Five trustees,~~] (A) Three trustees to represent employee-beneficiaries, 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~~] per trustee vacancy that are nominated and mutually agreed to by all 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~~] (B) Two trustees to represent public employers[.]; and

(C) Three trustees who are residents of the State, one of whom shall have at least two years of experience providing financial services, including investments, to public, corporate, or private institutional clients, and another who shall have at least two years of experience in the health industry.

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 2. Section 87A-6, Hawaii Revised Statutes, is amended to read as follows:

"§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.], or as provided under this chapter, as applicable.

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[.] or one hundred twenty calendar days after the trustee's term ends, whichever is earlier."

SECTION 3. Section 87A-11, Hawaii Revised Statutes, is amended to read as follows:

"[[]§87A-11[]] Quorum; board actions; voting. (a) [~~Six~~] Five trustees, [~~three~~] two 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.] Each trustee shall be entitled to one vote.

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~~] five trustees, the board shall participate in dispute resolution.

(d) Subject to the limitations of this part, the board, from time to time, shall establish rules for the administration of the funds of the system and for the transaction of its business."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

Report Title:

EUTF; Board of Trustees; Composition; Quorum; Voting

Description:

Amends the composition of the Hawaii employer-union health benefits trust fund board of trustees. Clarifies vacancy procedures. Amends quorum requirements and voting powers.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

SB 1586: RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND BOARD OF TRUSTEES.

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