House Standing Committee on Housing

Good morning, Comittee. This morning's joint hearing on the Committee of Tourism, Committee on Housing and Committee of Economic Development and Tourism and Technology. Today is January 30th, 2025. Time is 9:00 am. We are here in conference room 423. First up on the agenda is our joint with the Committee on Housing.

Joining me is Chair Luke Evsiln, Vice Chair Tyson Miyake and their respective Committee Members. First up, we have House Bill 604 relating to tax revenue.

Beginning on January 1st, 2026, it increases the transient accommodation tax rates by 1 percentage point, deposits the increased revenue into the Hawaiian Home General Loan Fund established under the Hawaiian Homes Commission Act of 1920, as amended. First up to testify, we have Department of Hawaiian Homelands.

Aloha chairs, Tam, Evslin, Vice Chairs, and Members of the Committee. Katie Lambert, on behalf of Kelly Watson and the Department, on House Bill 604.

And we are strongly in support of this measure, and we appreciate the introducers of this Bill and what the intent is to try to find a source of consistent revenue that would help us fund the programs that we do. Mahalo.

Thank you. Next up we have Department of Taxation.

Aloha Chairs, Vice Chairs. Eliza from the Department of Taxation. We stand on our written comments.

Thank you. Next up we have Grassroots Institute of Hawaii.

Aloha chairs, Vice Chairs, Members of the Committee, Ted Kefalas of the Grassroots Institute. We are in opposition to HB604. And while we're in favor of more housing, I think, you know, we need to pause before we move forward with yet another tax increase on tourists.

I understand the impulse to keep raising taxes on visitors, but the reality is we're already the highest tax tourist destination in the world. So according to money, a UK-based financial comparison website, Honolulu tops the global list for highest tourism taxes with a 10.25 tax rate.

That means we're already charging tourists more than any other destination on the planet just to stay here. We seriously risk pricing ourselves out of the market. Visitors have choices and if they start choosing elsewhere, it's going to be people, regular folks, local families that are hurt, people that run restaurants, people that are tour operators, workers at hotels.

All of these people are going to face the pinch when it comes to raising the tax. So I urge you to consider the long term effects and reject HB604 today.

Thank you. Next time we're going to move on to Zoom. We have Tax foundation of Hawaii.

Good morning, Chair, Members of the Committee. This is Jade McMillen on behalf of Tom Yamachika for the Tax Foundation of Hawaii.

We submitted some comments on the measure, strengthening concerns with Grassroots Institute as Hawaii does already have the highest accommodations taxes in the country and further increases in the taxes will most definitely impact economic performance and then effect on tax revenues. So comments on the measure, but we're not necessarily in support either. Thank you.

Thank you. Chair wants to note that, this is all that we have signed up to testify. Is there anyone else in the audience wishing to testify in the measure for us, which is House Bill 604? Seeing none, Chair wants to note that there we have received in total one, testimony in support, two in opposition, and four with comments.

We'll start with the House Committee and Tourism. Members, do you have any questions? Okay. Chair has no questions, so we'll move on to the Committee of Housing.

Housing Committee members, any questions? Seeing none.

All right, we're going to do a short recess before we decision make on the first measure. Thank you. Recess.

Thank you. We're gonna reconvene this morning's agenda for the purpose of decision making on the first item on the agenda, and then we're going to go straight into the rest of the agenda so that we can have our Housing Committee get on their way for their next hearing.

So first up, we have House Bill 604 relating to tax revenues beginning on January 1st, 2026, increases tax accommodation, transient accommodations tax rates by one percentage point, deposit the increased revenues into Hawaiian Homes General Loan Fund established under the Hawaiian Homes Commission Act of 1920 as amended.

So Chair's recommendation is to pass this out as an HD1, and we're going to defect the date on the Bill. We're going to start with the Tourism Committee members. Any comments, questions, or concerns? Seeing none. We'll take our vote right now. Vice Chair for the vote.

[ROLL CALL]

Noting the reservations from Representative Matsumoto, Chair your recommendation is adopted.

Housing Committee Members, same recommendation, any discussion? Sorry. Same recommendation, any discussion, Housing Committee Members? Vice Chair for the vote.

[ROLL CALL]

The recommendation is adopted.

Thank you Members. We're going to do a short recess to allow them any Committee on Housing to leave the room. Recess.

Reconvening this morning's here in the Committee on Tourism Committee on Housing and Committee on Economic Development Technology. We're going to move on to the rest of our agenda.

First—next up, we have House Bill 973, relating to transient accommodations.

Require transient accommodations brokers and any other persons or entities to offer, list, advertise, or display a transient accommodations rate until rate. That includes all resort fees required for the furnishing of the transient accommodation, requires transit accommodations brokers and any other persons or entity to include all the applicable taxes and fees imposed by the gov—by government—on the state of the total price to be paid before the consumer services furnishes—furnishing of transient accommodation. Established penalties effective January 1st, 2026. First up, we have DCCA.

Happy New Year of the Snake. Honorable Chair and Committee Members. Mana Moriarty for State Office of Consumer Protection. Acknowledging that every single person, I dare say, on this Committee and in this room, has encountered junk fees. Maybe it was buying a car, maybe it was in a concert setting.

It's a serious issue that consumer protection has concerns about.

Otherwise, we do have opposition to this Bill, because of the—on May 10th, there is a Federal Uniform Standard, that is set to take effect, that would affect the short-term lodging industry and that is a nationwide standard that applies to short-term lodging, through a rule adopted by the Federal Trade Commission.

Acknowledging, I think, that that is a—the goal—that is sought to achieve in this measure, we feel that that Measure needs to get some real due consideration. Another concern that we have—any state consumer protection law is, if you look on the books in our statutes, they do not require the enforcer to prove intent.

And so, that intent bar, which is incorporated in this Bill, requiring proof of intent by the defendant and let's say a court action, is a higher bar than virtually every consumer protection law that's on the books in the State of Hawaii.

We encourage you, if you're inclined to move this Bill forward, that you remove that intent requirement, because it does set a higher bar and an incredibly, from our perspective, possibly a poor precedent for state consumer protection laws which, again, do not require people to prove intent. They focus on the expectations of the reasonable consumer. That's it.

Happy to answer questions.

That is all that we have signed up to testify. Is there anyone else wishing to testify? Yes. Please state your name, who you're representing, or—and—your position.

Hello, Mai Kakou. My name is Ajen Louis Kwan. The—I represent the Hawaii Hotel Alliance and EHLA, and we submitted testimony late yesterday, and we are in strong support of this measure. What it does—it really provides transparency for consumers.

And we think it also provides some uniformity among all of the lodging units that provide lodging to our visitors. With respect to the concerns expressed by Office of Consumer Protection, we very much align—we're very much willing to work with the Department of the Division to see what we can do to effect enforcement, that that's realistic.

We know that there is an FTC, Federal Trade Commission, ruling, but the is, with the new Federal, National Administration, is whether that ruling will survive. And, and so, what 973 does, it harmonizes with the FTC rule. It also harmonizes with the California model. And so, we would urge that this body move this matter forward.

Thank you.

Is there anyone else wishing to testify on the measure for us? Go ahead. Please go on to state your name and your stance on the Bill.

Thank you. Angela Melody Young, testifying on behalf of ROAR Cares, neutral and commenting. So, the goal—so, I agree with the goal, the common goal of the Legislature and the business marketplace and consumer protection rights, that consumers should have access to price transparency, and this law would enact a measure for transparent display fees.

And yet, it could be considered a burden because it's a $10,000 fine. That's a heavy fine. And so, this is just, you know, one opinion. I'm a member of the public, an American citizen, so I'm just commenting. Should the Legislature consider the burden upon the legislative process and businesses, to elevate advertisement standards?

Because at the same time, in American law, you already can't do false advertisement, and this is managed by the FTC, Federal Trade Commission, when consumers see or hear an advertisement, whether it's on the Internet, or played on the radio or television, the Federal law says that the ad must be truthful and not misleading when appropriate.

And the FTC enforces these truth-in-advertising laws and applies the standards, no matter where the advertisement appears—in newspaper, magazines, online, in mail, or anywhere else. So, yeah. Thank you.

Thank you. Is there anyone else wishing to testify on House Bill 973? Okay, moving on to questions. Members, any questions? Chair has a question for DCCA. So, my question is that, you know, I am aware of this FTC rule, but how easy is it for the Federal Government to rescind this rule? That's my question.

Thanks, Chair. Mana Moriarty for DCCA. That's an excellent question. I think we've probably all seen in the news that it's pretty easy for the new Administration to rescind an issue—a rule issued.

I, I don't—I'm not an expert on the Congressional Review Act, which, I think, comes into play and requires certain procedural votes, within the Senate and House, to rescind a previously adopted final rule. We could try and get back to you on, you know, the procedures that are necessary for the Administration to revoke the final rule.

Okay, so, as a hypothetical, if the Administration were to rescind this rule, even though it's through the FTC and we were to pass this Bill and this Bill basically goes into effect, if it were to, were to be rescinded and we accept your amendments, does the DCCA have the ability to enforce it?

That was one of the concerns that I didn't mention previously because this particular Bill, I gotta make sure I'm thinking of the right one, does not specifically, I think, expressly grant Office of Consumer Protection authority to enforce. So, that may have been an oversight with something we could write into the Bill.

There's some technicalities about where it's placed in Chapter 481-B. So, an easy amendment that would grant express authority to OCP to enforce, would be placing it in Part 1 of 481-B, and that would resolve the issue of DCCA's enforcement authority.

Okay. Thank you.

Thank you, Chair.

Members, any questions? Okay. Moving on to House Bill 594 relating to hotels. Requires hotel keepers to provide adequate notice of service disruption to guests and third party vendors under certain conditions. Allows for recovery of damages. First up, we have Attorney General. Well, let's go with, oh, you're in person, Attorney General.

Good morning. Deputy Attorney General Christopher Hahn with comments on the Bill. We're recommending a couple of housekeeping amendments to bolster the Bill against potential legal challenges.

Namely, in the beginning, there should be a purpose section identifying the government interest behind the Bill to address the First Amendment issue, and at the end, a savings clause to address potential contracts clause challenges. Thank you.

Thank you so much. Next, we have UNITE HERE Local 5.

Aloha, Chair, Members of the Committee. UNITE HERE Local 5 represents over 10,000 Hawaii workers in hotels, health care, airports and food service. And we are in strong support of HB594 with the amendments noted in our written testimony.

We feel that when consumers book hotel rooms, they have certain expectations based on what the hotel or third party vendor's website advertises. And visitors, of course, put a great deal of money into their vacations and they deserve to get what they paid for when their expectations are not met.

It's incumbent on us to mitigate this as much as possible. And we want people to have a good impression of Hawaii so that they'll want to return. We feel this is an extension of transparency in advertising and sales. Yet it does not always happen. You know, sometimes things come up.

Construction projects, closures, renovations, labor disputes and so on. We hope to avoid these things, but that's not always possible or practicable. And our union has found that guests are not always notified of service disruptions.

We've taken steps to notify them ourselves when possible, but for the most part, we don't have the same ability to reach guests, especially individual travelers, before they arrive. So this Bill seeks to remedy that. We note the concerns of the Attorney General's Office and we agree with the office's suggestions on further amendments.

We believe that there's some language in HB945, particularly the preamble, that can resolve some of the concerns if incorporated here, as well as some of the amendments that we had included within our written testimony. Thank you.

Thank you. That is all that we have signed up to testify. Is there anyone else wishing to testify on the measure before us, which is House Bill 9594? Go ahead. Please state your name and your position on the Bill.

Angela Melody Young in strong support of the appropriation of funds. So this is for technology enablement.

The President banned TikTok, but TikTok helps small businesses with social media, such as media companies, to have a free platform to do marketing with an advanced technology platform. To build an app for technology development innovation to help contemporary small businesses be equipped with marketplace strategies to have a flourishing operation is a good idea.

And I think these are things and initiatives that can be accomplished within this mandate.

So as technology advances, it synchronizes and streamlines and creates efficiency in our business procedures so middle class families can have a balanced lifestyle of work and play. And so middle class families can actually have an easier time making money and contributing to the economy.

I think it'd be better within this act to provide a framework for Hawaii Technology Development Corporation with the standard structure ABC. A: primary agency is invited to sit at the table, B: others invited to the Commission. C: responsibilities and common goals of industry stakeholders for a more effective process to get to common goals in a more efficient manner.

Because a lot of times an act is followed up by legislation next year to clarify responsibilities. So I'm in strong support of this enactment of this mandate because it will help our generation advance business goals. Thank you.

Thank you. Is there anyone else wishing to testify on the measure before us? Seeing none. Members, any questions? Okay. We're going to move on to our next Bill, which has happened to be with the Committee on Economic Development and Technology. So first up, we have House Bill 448 relating to technology enablement.

It appropriates funds Hawaii Technology Development Corporation to assist small businesses, including those related to the tourism sector, with technology enablement. First up to testify, we have HTDC in support.

Hi, good morning, Chair, Vice Chair, Members of the Committee, Wayne Inouye, HTDC. We're in strong support of the Bill. As you know, technology is in our name. Hawaii Technology Development Corporation. And we understand that technology plays a big role in our everyday lives. But I think for supporting tourism, we really need to understand what problem we're solving.

So it's really about working with our sister agency, HTA, to understand some of the challenges that our small businesses are using to support our tourism industry and figure out what technology works best to solve what problem. I think it's really important that we just don't go out and just throughout technology.

We really need to understand what problem we're solving and select the appropriate technology, whether it's e-commerce, whether it's, you know, back end type of administrative type support for technology. So again, we're in strong support. It's just that we need to make sure that we're doing the right thing and we're not just gunshotting technology out.

And we just need to do our due diligence to make sure that we're promoting the right type of technology implementation for these small businesses. So thank you very much.

Thank you. Next up, we have Hawaii Food Industry Association on zoom.

Good morning, chairs, vice chairs and Committee Members. I'm Alexis Chapman for HFIA. We stand on our testimony in support of this measure. We think HTDC, as we mentioned, they have technology in the name. They're ideally positioned to enable these small businesses to get the technology assimilation that they need. And I'm happy to answer any questions.

Thank you. That is all that we have signed up to testify. Chair wants to know that we have only supportive testimony. Is there anyone else in the audience wishing to testify on the measure for us?

Apologies, submitted late testimony, but we stand on our written testimony.

Thank you. And that was the Chamber of Commerce of Hawaii. Anyone else wishing to testify on the measure before us? Seeing none. Members, any questions?

Chair, feel free to call on the ECD Members for questions throughout the two bills. Thank you.

Yes, of course. Members of ECD, any Questions? Okay, thank you. We will move on to our next Bill. House Bill 449 relating to economic development, establishes a program that provides technology enablement for small businesses relating to tourism in the state. Appropriates funds for assistance in the development and promotion of Hawaii manufactured products through the Innovate Hawaii program.

First up, we have HTDC.

Good morning, Chair. Vice Chairman of the Committee, Wayne Inouye, HTDC. So again, we're super excited about this Bill. You know, our Innovate Hawaii program is a program of the Department of Commerce specifically to help our local manufacturers. HCDC has been the administrators of this program for almost 20 years now.

And we have a very unique process to really work with our local manufacturers here to really support the infrastructure for manufacturing here in Hawaii. We understand manufacturing in Hawaii is very challenging because of our geographic location, our cost for energy, our transportation costs.

But we have programs and we are trying to address these issues and try to grow our manufacturing industry here in Hawaii.

We do use a system called Voice of the Customer, which really gets the feedback of our constituents here, our local manufacturers, to really, again, going back to understanding the problem, what problem are we trying to solve and trying to find solutions to really solve these problems and not just again go out on a shotgun type approach to get problems solved.

So it's really understanding our challenges and doing the adjustment that way. Thank you.

Thank you. Next up, we have Hawaii Food Industry Association.

Good morning. Alexis Chapman for HFIA. Again, we have proudly produced. HFIA has produced the Made in Hawaii Festival for 30 years. There are quite a few Made in Hawaii festival vendors, HFIA Members and other businesses that we know of that have successfully taken advantage of the Innovate programs through HTDC.

These programs work and they help businesses thrive in Hawaii and they help grow our manufacturing sector, which diversifies our economy and uplifts everyone. So we're in strong support of this measure and I'd be happy to answer any questions.

Thank you. Next up, we have Chamber of Commerce. It says the zoom, but I see you in person. So if you'd like to testify, we'll.

Stand on written testimony.

Thank you. That is all that we have signed up to testify. Chair wants to note that we've received six in support, zero in opposition, and the Hawaii Tourism Authority submitted comments. Is there anyone else wishing to testify on the measure before us? Okay. Seeing none. Members of Tourism Committee, any questions? Seeing none.

Members of the Economic Development and Technology Committee, any questions? Seeing none. We're going to take a short recess for decision making.

All right, Reconvening our Joint Committee hearing on Tourism, Housing and Economic Development and Technology. We've already voted on House Bill 604. Now we're going to start voting on House Bill 973 relating to transient accommodations.

Chair's recommendation is that we pass this out as an HD1. Knowing that the stakeholders are going to work together. We're going to insert technical amendments needed for clarity, consistency in style. We're going to defect the date and we're going to accept the ECCA's amendment to remove the intent request requirement. And that's the amendments that we have.

Members, any questions, comments or concerns? See none. Vice Chair for the vote.

Voting on House Bill 973. Chair's recommendation is to pass with amendments.

[ROLL CALL]

Chair noting that everyone is in favor. The recommendation is adopted.

Thank you. Next up we have House Bill 5.

Hold on, one more vote. Members, same recommendation.

Oh, we're not on that.

We're not on there. Sorry. Okay, go ahead.

Almost. Next up, we have House Bill 594 relating to hotels. Chair's recommendation is that we pass this out as in HD1. We're going to accept Local 5's amendments. We're going to insert a preamble and we're going to also set AG's amendments and we're going to defect the date. Members, any comments, questions or concerns. Seeing none. Vice Chair for the vote.

Voting on House Bill 594. Chair's recommendation is to pass with amendments. Chair and Vice Chair vote aye, noting that all Members are present. Are there any no's? any reservations? Chair, your recommendation is adopted.

Thank you. Moving on to House Bill 448 relating to technology enablement. Chair's recommendation is that we pass this out as an HD1. We're going to defect the date and blank out the appropriation amount in the Bill and move the appropriation amount of $250,000 into the Committee report.

Members, any questions or comments or concerns for the Committee of Tourism? Vice Chair for the vote.

Voting on House Bill 448. Chair's recommendation is to pass with amendments. Chair and Vice Chair vote aye, noting that all Members are present. Any no's? Any reservations? Chair, your recommendation is adopted.

Same recommendations with no test, with no questions and comments. Vice Chair, please take the vote.

Okay. For ECD. Anyone voting no. Any votes with reservations? Okay. Recommendation passes, is adopted.

Thank you. Next up, we have House Bill 449 relating to economic development. Chair's recommendation is that we pass this also as an HD1 with amendments. So we're going to delete line three to five on page three and section two of page three because that's duplicative of House Bill 448.

We're going to further amend it by blanking out the appropriation amount and moving the $500,000 as written in the Bill to the Committee report. And we will defect the date. Members, any questions, comments or concerns? Seeing none for Committee on Tourism. Vice Chair for the vote.

Voting on House Bill 449. Chair's recommendation is to vote with amendments. Chair and Vice Chair vote aye, noting that all Members are present. Members, any no's? Any reservations? Chair, your recommendation is adopted.

Same recommendation on HB449 with no comments or questions. Vice Chair, please take the vote.

Chair and Vice Chair vote aye. All Members are present. Any no's? Any with reservation? Chair, your recommendation is adopted.

Thank you. Members of the House Committee on Tourism and the House Committee on Economic Development and Technology. This hearing is adjourned.