House Standing Committee on Consumer Protection & Commerce

Good afternoon, everyone. We're convening the Committee on Consumer Protection and Commerce. It is Tuesday, February 4th, 2025, at 2:00 PM in Conference Room 329. We have a number of bills on the agenda, but first, I'm going to read this handy dandy script.

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And if we are—accidentally move on before allowing you to testify, just raise your hand and we'll try to stop and let you testify in the right measure. All right, my Vice Chair will be running the testimony portion of the hearing. So, please, Vice Chair.

Thank you, Chair. So, we're going to start on our agenda with House Bill 565. First up, we have DCCA RICO.

Good afternoon, Vice Chair, Chair, Members of the Committee. I'm Esther Brown and I'm with RICO and I'm going to stand on my testimony offering comments. Thank you.

Thank you. Next, we have DCCA again, except, OCP, with comments.

Good afternoon, Chair, Vice Chair. My name is Emma Olson with Office of Consumer Protection. We're going to stand on our written testimony with comments. Thank you.

Thank you. Next, we have DCCA, Professional Vocational Licensing, with comments.

Good afternoon, Chair, Vice Chair, Members of the Committee. Chelsea Fukunaga, on behalf of the Cemetery and Funeral Trust Program. The Program will stand on its written testimony providing comments. Thank you.

Thank you. Next, we have Cullen Hayashida, in support on Zoom/ Not present. That's all I have registered to testify, either in person or in Zoom. Is there anybody else who wishes to testify on this measure? Seeing none. Members, any questions? Tam?

Yeah. Can I have a—I have a question for DCCA.

Oh, which one?

Well, I'll just ask the question. Whichever one. Like, so, you know, as the Bill that's current—as the Bill is currently written—let's say someone, one of the crematory does try to make communication to the family member and they don't receive any communication back. Do they have to hold on to this indefinitely or—I don't know who's the right Department to answer that question, cus, oh.

I'm not a member of the DCCA, but I did notice that, as well. And I think I'm going to fix that—we've got language to fix that.

Okay.

Okay. No further question.

Any other questions, Members? Seeing none. Let's move on. So next up, we have House Bill 208. And we're going to call up Robbie Baldwin from Scarlet Honolulu on Zoom in support.

Hi, Robbie Baldwin, Scarlet Honolulu, support Bill 208. This bill and the amendments that we uploaded in the written testimony begin to update the liquor laws of the state to current, common sense, national norms, which is desperately needed. The other written testimony submitted on this bill further underscores this need.

Most of the written testimony is a little misguided, suggesting this bill gives the Liquor Commissions more power, when in fact it does the opposite and puts some guardrails on their current power. But the fear expressed by the other licensees is real and further underscores the need for the Legislature to act.

I've spoken to some of the testifiers to explain this bill further to them. If the amendments we put forward in our written testimony were adopted, we would finally be moving towards fair and equal treatment of the licensee population and common sense reforms to our liquor laws. Thank you for your time and your hearing of this bill.

Great. Thank you. Next, we have Lanikai Brewing Company in opposition on Zoom. We have Maui Brewing Company in opposition on Zoom.

Aloha, Chair, Vice Chair, Members of the Committee. Thanks for hearing us. With respect to the prior gentleman, having not seen the amendments, I can't comment on that. It was a grossly broad description of a bill, so I would like to investigate that further. But we stand in any opposition to bills that, you know, give essentially unchecked authority to liquor. Happy to work with anybody on the facts behind how liquor works.

But I think we have all heard stories around the entire state of how small businesses are quite literally persecuted by liquor control. You know, and I can give you instances personally as well as Steve and others, you know, so we, we have no issues of course with the cabaret language. I wanted to clarify that. There's nothing there for us that is of concern or anything we see a need to keep. However, the quote clarification of powers, the way that's taken when it turns into local rule becomes unchecked authority.

The system already exists for inspection, and it happens at any time they so please with an immediacy, and typically they choose the busiest time of the day to come in and shut you down while they investigate the question. So I would actually go the other way that we have to reel in some of their power and act that ask that they act with aloha and some decorum. So again, just clarifying, we stand in opposition to the bill and any expansion of LC powers.

Okay, thank you. That's all I have registered either in person or on Zoom. Is there anybody else wishing to testify on this measure? Seeing none. Members, any questions? Representative Iwamoto.

Thank you, Chair. But there are... So there are no offices present or on... Do we, does it, is there time to subpoena this office to come and answer questions? Sorry.

Why don't we talk in a little bit about it.

Any other questions, Members?

Is there anyone here from the Liquor Commission? I assume not. Questions were for them, but I do have a question for Robbie Baldwin regarding his testimony on one of the amendments. So in one of the things that you recommended is that we added a non-anonymous complaint description onto it.

Is there a fear that this could possibly lead to any unintended consequences? That an individual that does have a complaint, a legitimate one, can face retaliation from the establishment that they're filing the complaint against if they were to do it non-anonymously.

I don't believe so. I mean I think that, you know, you should know who your accuser is and be able to work with that person. Unfortunately, the Liquor Commission has been accused of writing their own complaints to target certain licensees, and it seems like what we would have to do to make sure that that doesn't happen.

Okay, no further questions.

Okay.

Any other questions, Members? Seeing none. Let's move on. So, next on the agenda we have House Bill 939. First up, we have Department of Taxation, with comments.

Good afternoon, Chair, Vice Chair, Members of the Committee. Clinton Piper, Department of Taxation Rules Office. We'll stand on our written comments available for questions.

Thank you. Next, I have Tax Foundation of Hawaii, on Zoom, with comments.

Good afternoon, Chair, Vice Chair, Members of the Committee. Tom Yamachika from Tax Foundation of Hawaii. We will stand our written comments and be available for questions.

Okay, thank you. Next, we have Maui Brewing Company, on Zoom, in support.

Yes. Aloha, again. Thank you for the opportunity to testify. I'll stand on my written testimony in strong support of this Bill, with an amendment. 244-D currently has a category called Cooler Beverages, which is very similar to what these low-alcohol, low-ABV spirits, spirits-based beverages would be.

So, we ask that that be lined up with current law. Again, HRS 244 states that it's a 7% ABV or less. That would just create less chaos and confusion in the industry, so we aren't trying to manage multiple ABVs based on, also, multiple taxation levels. So, standing on the written testimony, available for questions. Thank you.

Okay. Thank you very much.

Thank you.

Next, we have Johnson Brothers of Hawaii, in support.

Hello Chair, Vice Chair, Members of the Commission—I'm sorry, Members of the Committee. Emmanuel Ziwakalam, here on behalf of Johnson Brothers. We sent out written testimony in support of this measure and can answer any questions you may have.

Thank you. Next, we have the Wine Institute, in opposition, on Zoom—in person.

Good afternoon, Chair, Vice Chair, Members of the Committee. Mihoko Ito, here on behalf of the Wine Institute. We respectfully oppose this measure. What this measure is, is a tax break, on the fastest growing segment of spirits products.

There's already an established gallonage tax system for all alcoholic beverages and it's based on two things—the license of the producer and its raw material, and second, the alcohol by volume. So, that is how the tax classes are currently determined.

This measure tries to take one of those products, out of context of that system, and lowers it just based on its alcohol by volume. There have been studies that show that, in two states that did pass this, that the benefits to consumers was minimal.

In fact, prices went up in those two states, over the period of time that was studied, and there was a real tax revenue loss to the state.

We believe that if the Legislature wishes to consider reducing taxes on alcoholic beverages, it should evaluate the rates across all categories, rather than solely providing a special tax break to one segment of the industry. Thanks for the opportunity to testify.

Thank you. Next, we have Anheuser Busch, in person, in opposition.

Thank you, Chair, Vice Chair, Members of the Committee. Just like to echo the comments of the Wine Institute. There really doesn't need to be a tax break for one specific category of alcohol. If we do, we should have a more comprehensive look at it. But these things are really selling well.

It doesn't merit a tax break, at this point. But I would also call out that the fact that most beer, for instance, is less than 5% alcohol by volume, so it'd actually be establishing a category of ABV that would contradict what the beer is being taxed at too. Happy to answer any other questions. Thanks.

Thank you.

Thank you. That's all I have who registered either online or in person to testify. Is there anybody else who wishes to testify on this measure? Seeing none. Members, any questions? Seeing none. Let's move on. Next, we have House Bill 979. First up, we have Department of Taxation with comments.

Good afternoon again, Chair, Vice Chair, Members of the Committee. Clinton Piper, Department of Taxation, Rules Division. We'll stand on our written comments. Available for questions.

Thank you. Next, Tax Foundation of Hawaii on Zoom with comments.

Thank you, Chair, Vice Chair, Members of the Committee, Tom Yamachika from Tax Foundation of Hawaii. We will stand on our written comments.

Hey, Tom, you're coming in real soft.

Thank you. We'll stand on our written comments and be available for questions.

Okay, thank you.

All right, thank you. That's all I have who registered to testify either online or in person. Is there anyone else who wishes to testify on this measure? Seeing none. Members, any questions? Seeing none. Moving on. Next up, we have House Bill 808. First up, we have Department of Accounting and General Services with comments.

Good afternoon. Eric Nishimoto on behalf of Comptroller Keith Regan. We stand on our written testimony with comments.

Thank you. Next, we have the State Procurement Office with comments.

Good afternoon, Chair, Vice Chair, Members of the Committee. Bonnie Kahakui, Administrator, State Procurement Office. We stand on our written testimony providing comments of some of the consequences if this bill should pass. Thank you.

And next up, we have the Subcontractors Association of Hawaii in opposition.

Thank you, Mr. Chairman, Vice Chairman, Members of the Committee. I'm Tim Lyons with the Subcontractors Association, and we are opposed to this bill. We think it would be a real impediment to the continuing procurement of construction services for the state. A 50% insurance policy.

There are many, many contractors that would not have the financial wherewithal in order to do this. In most cases, the bond company is not going to sit there for 10 years and hope that they can send a bill every year and get it paid. Instead, what they will do is ask for a 50% cash bond, which makes no financial sense whatsoever. We also note that their... Contractors, of course, aren't always innocent. There can be problems on the job, but that is what the job site inspection is for. That's what the specs are for.

And if there is an issue in that area, we think that that's where it should be attacked. We hear almost on a weekly basis from contractors saying why is it so difficult to do business with the state for construction? That's why I don't bid state jobs. I hear that constantly. So your contractor base, I think, would shrink measurably under this bill. Thank you.

Thank you. That's all I have who signed up either in person or on Zoom. So is there anybody else who wishes to testify on this measure? Seeing none. Members, any questions? Chair.

Yeah, this question is for the Comptroller's Office, although it, I'm also going to ask this of SPO in a little bit. The reason I introduced this bill is because the state seems to be getting stuck with the repair bill all the time. You know, a building will be constructed or something will be constructed, there'll be construction defects. But the state hired a special purpose entity or single purpose entity to do it, and the single purpose entity is gone at that point, and the state has no recourse.

This bill originally was a bond bill, went to Insurance. I understand that there's nothing on the market right now for this, but what is the state's avenue of relief if Maui College, for example, is kind of falling apart because of construction defects, what's our recourse if not through some other third party?

I guess within the warranty period of the, of the contract. As far as latent defects, you know, we call on the contractor to resolve the problem. Beyond that, I think it's a little more difficult. I think we need to consult the AG's Office. However, like our comments say, we, I guess you kind of did some research.

The market doesn't provide that type of insurance. And then even if, say, we do find a defect eight years later, within that 10 year period, I'm not sure that it will be that easy to make a claim. We'd have to prove it and probably need to hire people, which costs money. I think it needs to be researched more. We're not totally opposing the idea because we do have defects, like you say. I think it just needs a little more research to see how doable it is.

No, certainly. And I don't expect contractors who to pay for wear and tear or anything like that. But if it was a true construction defect, I just feel like the state is being left holding the bag here. And by state, I mean all of us, the taxpayers. So I don't. I mean if you. I'm looking for ideas here. I mean if this bill is going to go down, that's fine. But I'd like your office and SPO to come up with some kind of solution or at least proposed solution to this problem or more than one. You know, don't limit yourself.

I think we're willing to look at what the options are, especially when defects occur after warranty.

Well, what is, what's the status quo? Like what, what happens? What does the state do? Do we just eat it? I mean, do we try to go after the contractor?

With our limited staff, we do look into the problem. Sometimes it's, it could be a material defect and warranties on that are usually longer than the contractor's defect within the contract. So we could make a claim against the manufacturer. Say maybe a roofing material has a 10 year or 20 year warranty. If the defect is because of the material, then the state could pull on the manufacturer's warranty.

Okay. Manufacturer's warranty I can see.

One instance. Not always the case, but...

But practically, does that happen? Do we do that?

We try to with our limited resources, when it does happen, if it does. And you know, again, proving that it was, that's the problem, especially if there's wear and tear or was it a defect from the start.

And it should be our burden of proof. Don't get me wrong here. But I mean, how often does the state actually go after a contractor for a construction defect?

I'm not in that section. But we do go after. I do know that. And we are. I know for one project especially.

Okay. SPO. Not quite in your wheelhouse, but if you don't mind commenting. Construction defects. And you guys aren't, I'm sure you guys aren't the ones going after them after the construction defect happens, but I'd like to know your thoughts.

I agree with Eric that maybe we can take a look. Instead of doing a wholesale insurance, maybe we can take a look at certain warranties. Should be, should we have extended warranties? Should... I think that we can tackle it maybe. I haven't really thought about too much, but I agree that we do hear about buildings falling apart.

It's just been built. So I'd like to work with Eric and also contact our sister states and find out what they're doing and how they're attacking these defects. So give us an opportunity to talk to them, and we can go back to the Legislature and perhaps provide some resolution.

Do you think it'd be practical for all state? I mean, and I, I'm appreciative of Tim's comments that it's already very difficult to do business with the state. I certainly don't want to overly complicate this, but would it be practical for builders to or contractors to put into some kind of shared relief fund kind of thing to help the state pay for the construction defects that show up? I mean, if it is our inspectors that are missing it, it might be partially on us. So I'm cognizant of that fact, too. Anyway, I don't want to put you on the spot. If you guys could try to put your heads together and think of a solution, I'd appreciate it. Okay. Thank you. Thank you, Vice Chair.

Thank you. Any other questions members, seeing none. Let's move on to the next Bill. So next up, we have House Bill 809. First up, we have state Procurement office in opposition.

Good afternoon, again. Chairs, Vice Chairs, Members of the Committee. Bonnie Kahakui, State Procurement office. We stand under written testimony in opposition of this Bill. Thank you.

Thank you. Next up, we have Department of Accounting and General Services in opposition.

Eric Nishimoto again, on behalf of Comptroller Keith Regan, we stand on our written testimony in opposition of this Bill.

Thank you. Next we have the General Contractors Association of Hawaii in support.

Next up, we have the Subcontractors Association of Hawaii, in opposition.

Thank you, Chair, Vice Chair. I'm Tim Lyons with the Subcontractors Association, and we can't recommend this Bill. It's not so much the subject matter, but it's the system. There was a great deal of discussion about this issue, as you well know, a few years ago. Nothing has materially changed.

We would also dispute the general-purpose findings of the Bill—that the disclosure requirement has caused the unintended consequence of increasing the number and complexity of construction protests, which, in fact, we don't think the facts will bear that out. In fact, the protests have declined significantly. Particularly, frivolous protests. That's not the requirement of the subcontractor listing.

We think that's their problem. That's the application of that. The subcontractor listing clause is not your target, we would submit. So, based on that, we're opposed. Thank you.

All right, thank you. That's all I have of persons who either registered to testify, either in person or on Zoom. Is there anybody else who wishes to testify on this measure? Seeing none. Members, any questions? Chair.

Bonnie, thank you. So, per your testimony, under HAR 3122 31-C procurement offices—I went and read the administrative rules that you referenced. It doesn't exactly say what your testimony says. It says that they may. It gives them discretion on whether or not to allow that to—them to correct certain arithmetic errors and other minor ones.

How often is this discretion withheld?

I don't know of any time that it was withheld. I mean, but I also don't get reports on that. But I've not heard from any vendors or any agencies that are trying to say that they have this issue. So, I would defer to Public Works, to see if they've had any issues, but I've not heard any personally.

Okay, so, but because it's already on the books, then you, you really don't have a problem with, with this Bill then, with, with that language?

Well, I, I do oppose that—giving them an additional 24 hours. We just don't see the need for this, since it's already in the, in the statutes. It just, to me, it just adds another complexity to the, the procurement. It opens the door for other protests.

For instance, if they open it and they find some discrepancy, then the contractor wants to make any changes or the offeror wants to make changes, then other protesters would come in and say, well, they shouldn't have been allowed. I just think it adds to that.

But they should have been allowed if this Bill passes, right? I mean, I don't see the bid protests increasing, based on this Bill. In fact, I see them decreasing. That's the whole point of this Bill—is to allow minor corrections to be made, without triggering that bid protest later on.

Well, it, but it allows for it now. So, it's just giving them extra time, if it already allows for it. Pardon me?

24 hours, though under your administrative rules, they've got much more than 24 hours. So, I don't know what the protest is. So, if you're giving them more than 24 hours anyway, I don't, I don't see the—I don't understand the argument.

So, I guess the question would then be, if it's 24 hours, if the Bill were to pass 24 hours, then that would be a hard and fast deadline, that you're telling the procurement officer, the program manager, whoever's evaluating it, that's it, that's all the time you had. So, if the vendors don't make corrections, they don't have any options after that.

They're, they're—they can both exist, right? 24 hours, they have—you don't have discretion to tell them no. Within 24 hours, they can, on their own volition, correct it. But you know, HAR—the HAR section that you cited could still exist after that 24-hour period.

I guess our concern, too, is what kind of corrections they're going to make, and would that be open to further discussions or further protests? So, I have a problem.

I feel like I'm missing something here. I mean, we're not letting them change their entire thing. It's ministerial changes, right? And are you folks reviewing it like so quickly that 24 hours would slow you folks down?

No, we're not reviewing it.

So, in that case, it doesn't, it doesn't slow you down at all then. Is that correct?

Correct.

Okay.

Yep.

Okay. Thank you. GCA? I made him come. Thank you, Ryan.

So, practically, what are you folks seeing on the ground?

So, originally, this Bill was intended to address two issues. One was—this is a Bill that we had introduced several years back and abandoned it after we couldn't get the stakeholders to agree to it. But it was meant to address two issues. One was the specific bid protests coming in on the subcontractor list.

And the second one was procurement ethics, where we try to get rid of as much discretion involved in procurement, where someone cannot deny somebody, but then allow somebody else to have their bid altered, or their sub list altered. We just wanted to get rid of that.

We just felt that that was an ethical concern for some of our members. We—I don't know, off hand, of any of our members getting denied or I don't know how many of our members are actually getting approved.

We just didn't like the idea that there's somebody that has that ability to approve somebody else's corrections and not somebody—and deny somebody else. We just thought it should be black and white. If it's immaterial, you forgot one license number or you forgot something, you should just automatically be allowed to fix that.

It's not changing the price. You're not bid shopping. But then, because of the fact that we couldn't get everyone to agree—this is a very sensitive subject amongst the construction industry—we abandoned our pursuit of trying to get this thing through.

Okay. I mean if this is not a practical problem on the ground, if you don't have data for it—more inclined to kill it, either now or later. Do you think you're going to have, do you think you can get?

I think I can ask around. I can, I can pull my members. I, I don't know if anyone in the departments would have this. Bonnie doesn't seem to be aware of it either. So, it's not something we've actually looked into.

It just was a recommendation that California does this and it seemed to be reducing their bid protest amount, and so, we thought if it worked there, why couldn't we mirror it here? But seemed that we can't get consensus on it. I will look into it and give you guys some answers.

Okay, that's fair. Sorry, last question. For Tim. Tim, are you concerned about the subcontractor—the subcontractors themselves being changed in this 24-hour period?

Yes, that is part of it.

Okay.

As you know, the, the—when they list their subs, they list not only the name but the specialty work and the license number.

And where this issue has come up, in several cases, is because the general contractor is processing so many sub bids, even though it's a $15 million project, they don't check those numbers. And so now, the seven replaces the eight. So, technically he's not, he's not—that's not the same person. So, yes, we are in that.

Because this whole issue is all about bid shopping and there's a great deal of dissatisfaction with that, between the subcontractors, they have no negotiation power with general contractors. They are inferior in every way that it can be.

So, they're submitting those bids and then hoping that he lists them because he likes that particular guy, or he's got the low bid. So, yeah, we are worried about playing around with that system. I know we feel like it's bound to be subject to abuse, in some way.

And the way it is now seems to work a lot better.

What restrictions would you like in place to make sure that the subcontractors aren't changed themselves? Because that is not my intent in this Bill.

Well, I think, first of all, the 24 hours is a problem. I understand you kind of, excuse me, but you kind of scoffed at that 24 hours.

But you know, when it comes to changing a bid and million-dollar projects, 24 hours is plenty in order for a general to go in and try to change some things here and there. And we just don't think we want to open that door at all. Right now, it's a fairly legitimate system.

Here, I won't say that the subcontractor listing clause is perfect, but it does seem to work quite well in comparison, particularly by way of limiting some protests, that caused some protests, I admit, but it mostly tends to limit those, those protests.

I mean, I scoffed at the 24 hours because they're not even reviewing it within 24 hours. So, it didn't seem like the argument that would slow the process down, wouldn't do anything. But as far as the subcontractors, I mean, I know you're not selling yourself short here. It seems like there are bid protests.

I mean, you just mentioned it earlier in your testimony. There are bid protests based on a seven to an eight, or things like that. I'm assuming that you, as subcontractors, would want those changes fixed. So why not give the general contractor—I mean, I understand that you're afraid of abuse, but in a perfect world, I'm assuming that you would want those changes fixed, to reduce bid protests. Is that correct?

If it was just the fixes and an honest way that we're looking at it, yes.

So, it's just that you don't trust the generals?

It's going to get monkeyed around with and that's what we see happening every day, when it's not state and county jobs.

Okay. I'd like you to try to think of what kind of language you'd like to see in here, if to circumvent that, or to prevent that from happening.

Sure.

And let's circle around. If you could email my office either later today or tomorrow morning.

Yep. I'll be happy to.

Thank you. Thank you, Vice Chair.

Thank you. Any other questions, Members? Question? Representative Iwamoto.

To the gentleman who earlier answered, who knows the history of this Bill. Thank you. Oh, sorry. Okay, well, both of you. Sorry. Okay.

Are you talking about GCA for Ryan?

Yeah. I think it was you who mentioned.

The one with the glasses.

Yeah, well, they both have glasses. Sorry about that. Okay, so this has to do with the bidding process. Is this a hard copy? Is it a digital copy? What gets submitted, and what doesn't get looked at?

Because what stuck out to me in this Bill is this idea that there's this 24-hour period that the Department, who's reviewing the bids, doesn't look at it. So, I don't—but then somebody, if the person, if the contractor comes in and does some tweaking, how would you know what they tweaked, if you never saw the original?

The Department would have the copy of the original that's turned in.

Certain agencies do, I guess, digital type of submittals. For DAGs, we do paper, we do receive the original signed copy of the bid offer. I guess with this proposal, with this Bill, you know, they could introduce complications like Tim mentioned, the bid shopping. Sorry. Yeah.

Within that 24 hours it's, I would say it's very easy to bid shop. The contractor receives the bids, puts his price offer to us, total price.

And then, I don't know if you guys are aware, but when we do, when we do check for subcontractors, if they're appropriately licensed for the work that they describe, a lot of times there's companies with similar names and they fill up the list with not the complete name, but it could be either one of those companies.

So, and then, I think there was a mention of whether we do allow for corrections. Yes, we do. When it's—when they can prove that it was arithmetic, just simply adding up the wrong number.

And also with the sub listing, if it is clear there is only one company with that name, even though they didn't list the full correct name, you know, we would accept the bid. But there are many times that companies have similar names, and you can't tell which subcontractor it is. So, there's a potential they could bid shop.

Just—we're concerned about the unintended consequences. And then, of course, the administrative burden on our staff, to basically now receive two documents and who knows what's going to happen after that. It's less transparent, in that now you have two opportunities versus one.

We're encouraging the GCN—we meet with them quarterly to try get their subs to provide the correct name, and I know they receive it last minute. Their letterhead is wrong. Their license number is wrong, because they changed their license number or their name. But they don't tell the General.

So, that's something to us, within their own industry that they—both subcontractors and general contractors. We feel it's not the state's burden to correct that. Why should it be the state's burden? It should be on the industry to follow the law. And I know it's difficult for them because I hear them complain every quarter with their—our—Committee.

But that's our position. We feel it's the burden, on the industry, to make the correct adjustments on their end and not rely on the state to take on that additional burden.

Thank you.

Any further questions? Seeing none. We're moving on. Next up we have House Bill 1277. We have CoinFlip in opposition on Zoom.

Chair, vice vhair and honorable members of the House Consumer Protection and Commerce Committee, thank you for the opportunity to provide testimony today regarding HB 1277. My name is Kevin Lawley and I'm the Assistant General Counsel and Consumer Protection Officer for CoinFlip. CoinFlip opposes certain language in HB 1277 relating to proposed regulation of virtual currency kiosks.

However, CoinFlip does support regulatory measures that would further consumer protection. CoinFlip is a money service business registered with the Financial Crimes Enforcement Network. And as an MSB, CoinFlip is subject to the Bank Secrecy Act, the United States Patriot Act, and they're implementing rules and regulations.

CoinFlip embraces licensing regimes as an effective means to create baseline requirements for operations as well as effective oversight. The proposed transaction limit in the spill to does not adequately adequately consider federal reporting requirements, including suspicious activity reports, travel rule requirements, and currency transaction reports that create a repository for law enforcement to quickly and accurately conduct investigations.

Hawaii's proposed $2,000 transaction limit encourages stacking transactions across multiple kiosk operators and limits companies anti money laundering efforts.

We know that new users are the most vulnerable to fraud and while those who have used our machines for years know what to watch out for, should there be any transaction limits, we would suggest that they apply to new users within the first 72 hours of becoming a customer.

CoinFlip believes smart regulation is good for business, including the following, require licensure with the state, require robust compliance programs, require clear, highly visible warnings and fee disclosures, require the use of blockchain analytics and requiring live customer service. Thank you for your time and consideration and I'm happy to answer any questions.

Thank you. That's all I have listed who are registered to testify in this measure. Are there any others who wish to testify on this bill? Seeing none, members, any questions? Representative Marten.

I have a question for the CoinFlip representative. What benefit does that business bring to our state? Do we tax you? Is there anything of value to our state for having that business here?

Yeah, great question. So we are, we do pay certain taxes as well as monthly. We pay local businesses a monthly rent to host our machines. I believe it is, we've paid some around a quarter of $1 million to local stores, convenience stores, etc in order to host the machine.

As well, we paid armored car services in the area and third party technicians to provide maintenance to the machines. So there's a number of things that we do that bring value to the State of Hawaii.

What taxes do you pay?

I apologize, I don't know right off the top of my head. But I could provide that information and submit it to the committee as soon as possible, if that's all right with you.

Any other questions? Representative Tam.

I have a question for CoinFlip. How easy is it for an individual to want their transactions reversed under your company and other companies like this, your kiosk?

Yeah. So due the nature of blockchain, and this isn't just a kiosk company, this would be for online exchanges, et cetera, that once the transaction is completed on the network, we no longer have control to reverse that transaction.

However, if that is something that we're worried about with fraud, one of the things that we've discussed or we can look into and I would maybe suggest to the committee is especially for those new customers that I was talking about that were the most concerned about, or we know that we've identified, are the most susceptible, holding those transactions for, you know, a 72 hour period to make sure that they are protected in a way that we can actually reverse the transaction and give those funds back.

Follow up question. Do you think that 72 hours is enough? I can see myself being a new customer and all of a sudden I don't even know who to call. If I click the button multiple times and multiple transactions were made and suddenly I don't even notice.

And do you not see how this can affect senior citizens or other people that you know, might not be familiar with this and that a $2,000 limit, daily limit would actually protect them as a consumer from basically draining their entire bank account and not being able to recuperate those funds that they inadvertently gave away?

Yeah, that's a great question. So from our internal data and some of the data that I think that we've seen from a national level.

When there is scam activity at the kiosk, what we see is that they're more likely than not, they are going to be what I'd call like one time scams where an individual maybe is being threatened with, they have a warrant out for their arrest. An impersonation scam.

And so we find that users usually report that fairly quickly around 24 hours. We have live customer service 24/7. I suggest that other individuals do. They are trained at least twice a year in BSA standards and spotting fraud. It is plastered both on the physical machine as well as all the kiosk screens.

And if an individual makes a transaction, they can't just keep making more transactions. We have a know your customer anti money laundering procedure. And once they hit those limits they have to, they have to stop, they have an account that they, they sign up for and we will stop any more transactions happening when they hit that limit.

And so that's why I would say that that, that time period would provide that adequate protection that we're talking about.

So what's the limit?

So in this situation, what I would say if we had that 72 hour limit for the $2,000 that would make, that would make sense to us. We have our own internal transaction limits as well that you have to provide more and more information that as the transaction increases. But that first level is $960 for CoinFlip.

Okay, thank you. No further questions.

Any other questions, seeing none. Thank you very much. We're going to be moving on. Next up we have House Bill 1047. First up we have DCCA in support.

Good afternoon Chair, Vice Chair, Members of the Committee. Winnie Groves here for Commissioner Dwight Young. We'll stand on our testimony and be here for questions.

Thank you. Next we have Hawaii Bankers Association with comments.

Good afternoon Chair, Vice Chair, Members of the Committee. Tiffany Yajima, on behalf of the Hawaii Bankers Association. We submitted comments on this measure, we're just unclear what national rate would be.

We want to note for the Committee that local financial institutions already place insurance proceeds in interest bearing accounts based on each bank's offerings and at the request of the consumer, most of which accrue interest at money market rate accounts or otherwise based on the type of deposit accounts that customer would choose.

Secondly, we would like to be able to see the ability, would like to be able to have the ability to offset administrative costs. We're happy and willing to work with DFI and the Committee on amendments as this moves forward. Thank you.

Thank you. Next we have late testimony from Hawaii Credit Union League with comments.

Good afternoon. Stefanie Sakamoto, on behalf of the Hawaii Credit Union League. We'll stand on our written comments. Thank you.

Thank you. That's all I have registered to testify on Zoom and in person. Is there anyone wishing to testify on this measure, Seeing none. Members, any questions?

Chair Matayoshi. Tiffany for the Hawaii Bankers Association. In your testimony, you suggested that certain fees should be able to or this interest should be at least be able to use. Be used for certain fees, but it was a little broad. You gave examples of fees associated with the property itself.

But is there anything more exact you can propose?

Yeah, I think we would be willing to look at the language. I don't have anything on me right now, but there is language in here that would prohibit that. And you know, we'd like to talk with DCCA, DFI and Chair if. If we'd be willing to take a look at that language together.

Okay. Thank you. Thank you. Start looking at it, please, and then try to get us something. Yeah. Thank you. Thank you.

Any other questions, Members? Seeing none. Let's move on. Next, we have House Bill 1048. First up, we have DCCA in support.

Hello. Winnie Groves, here again for Commissioner Dwight Young. We'll stand on our written testimony and be here for any questions.

Thank you. Next, we have late testimony by the American Fintech Council on Zoom in opposition.

Aloha. Good afternoon. We stand by our submitted testimony in opposition to the bill and are open to any questions.

Thank you. That's all the testifiers I have registered. Is there anyone else who wishes to testify in this measure? Seeing none, members, any questions? Seeing none. We're going to move on. Next up, we have House Bill 1053. First up, we have the Hawaii Real Estate Commission in support.

Good afternoon, chair, cice chair, members, Kedin Kleinhans, condominium specialist with the Real Estate Commission on behalf of Derrick Yamane. Just provide a brief background. In the commission's meeting with the governor's Joint Insurance Task Force, it was brought up that the commission does have admin rules that allow condo associations to borrow against reserves to pay for operating expenses.

However, also brought up were that there were concerns that the admin rules, and I believe the section is HAR 16107-66 is a rule that statutory authority is under HRS 514A, which was repealed back in 2017.

So given that the statutory authority of the rules was repealed, it's unclear whether the rule provision can stand as an option or only function just as guidance.

So in the rare event that it can only function as guidance, there's no comparable provision in HRS 514B, the current statute, that explicitly allows nor prohibits the borrowing of reserves to pay for insurance costs.

So this bill was drafted to clarify and preemptively ensure that the associations continue to have this flexibility to borrow from their reserves to pay for operating expenses. Available for any questions. Thank you.

Thank you. Next we have CAI, Richard Emery in opposition.

Good afternoon, chair, vice chair and fellow committee members. My name is Richard Emery, I represent Community Associations Institute who is opposed to this bill. If you read my extensive testimony, you would also note that I'm one of the nationally recognized reserve study experts in the country. The problem with this bill is several fold.

Most people don't understand there's two methodologies for preparing reserve studies. One uses as a funding method a percentage. The other uses what we call cash flow, a 30 year projection of the cash. More than 95% of the condominiums in Hawaii use the cash flow method of which there are no percentages anywhere in it.

So this analysis of you have to achieve or meet these percentages or do this or that is totally irrelevant to the methodology commonly used by condominiums in Hawaii. Number two, it's our position that the state law as well as the administrative rules allow borrowing to fund the reserves.

Understand this, if you're borrowing on insurance, you know insurance policies are 12 months. You certainly would not want a loan with a term longer than 12 months because you it would be self defeating. Today in the marketplace, associations because the rules provide, you don't need owner approval, can get insurance contracts financed with the simple approval of the board.

So there's a methodology to provide additional financing through insurance premium installment contracts without all the other hoopla that was proposed in this law. Third, I would just submit to you that this was a one time thing. The associations, we all got hit with these major increases, but all the associations have addressed that.

Now they've either assessed the owners, borrowed from reserves under the existing law, or they've used an insurance premium finance contract. We certainly don't want them doing this year after year after year because it's going to be detrimental to the reserve fund.

So all in all, we think that this bill is misplaced because it ignores the common cash flow funding method which is used by everybody in Hawaii. I would tell you I've been doing this about 30 years.

I cannot think of one example where an association used percent funding analysis under the law as our methodology because it's erratic in its nature and it's just not commonly accepted. So thank you for the opportunity to testify.

Thank you. That's all I have who registered to testify in person or on Zoom. Is there anyone else who wishes to testify on this measure? Seeing none. Members, questions? Chair Matayoshi.

The last testifier, please. Could you give us an example of cash flow? I think I don't fully understand it.

Explain the difference?

No, just explain. Could you give me just kind of an example of how cash flow would work for a reserve study or for reserves?

I'm sorry, it's going to take two minutes to explain it. But at the end, you will become experts, and there are very few people who are experts in this in the State of Hawaii, I promise you.

If it's really going to take two minutes, we can't do it, But.

I'll do my best I can.

Give it a try.

I'm sure I can explain it to you.

Okay.

Cash flow funding looks at all your income and expenses over the next 30 years. So your reserve contributions, your future repairs. It applies to inflation, applies interest earnings on the money. It gives you the ending balance, telling you how much you have in reserves.

So long as under cash flow for the next thirty years, you have positive balance for your ending balance, you're considered fully funded, not 100% funded, meaning your plan for contributions and expenses based on all the criteria gives you full funding for the next 30 years. Component method which uses percent funded. The requirements under national standards are you have to calculate each item separately. And you would think that.

Think of it this way. You have two components. A paint job and 3 years of 30,000 and a roof job in 10 years of 70,000. Forget all the inflation, the rest of it. So likely you need $100,000, right? 30 in the next three years and 70 the next 10 years.

Well, if you collected $10,000 under cash flow and used 100% of the money for the paint and then 100% of the money for the roof, you'd be considered fully funded. You're collecting enough to pay for these things that they come due. Under percent funded, you have to calculate each one separately. So one third of 30 is 10,000.

One tenth of 70 is 7,000. So under percent fund, you need to collect 17,000, not 10,000. Oh, but the Hawaii law says we only need the 50%. That's 8,500. Well, 8,500 3 years from now is 25,500.

You're $4,500 short for the pay paint job, and you're also 10,500 short of what you should have put in for the roof. Which means by law you have to assess everybody $15,000.

Believe it or not, it's hard to achieve 50% funding because there's so many components, so many lies, and so many changing things that nobody uses because it's very erratic. It's a litmus test kind of a thing. We have to just follow what's going on in the world, United States and Hawaii, that everybody is leaning towards cash flow.

So all these percentages I tell all my clients, take an enema of the mind on percentages, never mention it again because it's very irrelevant to the whole scheme of things. Hope I answered your question.

Yeah, interesting. Thank you.

Any other questions, Members? Tam.

Hi, I have a question for the Real Estate Commission.

Hi, Rep. Tam.

Hi. So based off of what you know right now. The reserve study can, reserve funds can be used for operating costs. I thought it was only for repairs and maintenance.

Yeah, at the moment it's unclear just because that there was a rule. Well, I guess there is a rule, 16107, but the statutory authority of that rule is repealed. So we just don't want to get into the situation where suddenly associations can no longer use that because statutory authorities appeal. They're like, oh, okay, well that rule can only function as guidance and not an option.

But we're open to considering testimony brought up to address the cash flow concerns in any language and commission will look at that just so it functions more as really just to continue to allow the flexibility in the event that that old rule is only really just as guidance.

Yeah. You know, a follow up question like, you know, because of that, you know, I thought it was only just for repairs and maintenance.

Is there any concern that if a condominium were to or association were to go this route where they use these reserve funds for a loan to pay their insurance, that insurance companies will see that and that they're not using their funds for maintenance and repairs and therefore increasing the risk for the Condominium Association and thus raising costs for everyone else.

Is that a concern that has come up in these meetings?

Yeah, I could see that as a possibility. I don't think that was explicitly noted. But yeah. When the, when the rule and the statutory authority is unclear, then I guess the question could come up is is it legally enforceable? So we just want to prevent that from ever coming up.

Okay, no further questions.

Thank you. Any other questions, Members? Seeing none.

May I add one thing?

Would anyone like to ask?

Yeah, please. I might ask follow up questions. So be careful.

Currently on the active agenda of the Real Estate Commission of the State of Hawaii is adoption of the replacement rules, which provides the same borrowing authority under the rules that were repealed under 514A.

We're within my opinion, months of having that same rule and that same authority being vested by the replacement rules, which will be under 514B, not 514A. So it's active on the agenda of the Real Estate Commission currently. It's currently before a committee for the task force that adopted the replacement rules actually did it 10 years ago.

And so the committee that was established by the commission is evaluating because laws have changed to make sure that the current rules are updated. So I think this is a very short term problem. And I don't think it, no matter how you look at it, you can't use percentages. Nobody's going to screw the whole industry up.

Thank you.

Okay, thank you. Let's move on to the next measure, House Bill 1049. We have just one testifier, DCCA in support.

My last one. Winnie Groves on behalf of Dwight Young. We'll stand on our written testimony.

Thank you. Is there anyone else wishing to testify on this measure? Seeing none. Members, any questions? Seeing none. Let's move on to the next measure, House Bill 1052. First up, we have DCCA. Yeah, we just finished 1049.

Good afternoon. Chair, Vice Chair, Members of the Committee. The Department stands on its written testimony in support of this bill. Available for any questions.

Thank you. Next, we have the Public Utilities Commission in support.

Aloha. Good afternoon, Chair Matayoshi, Vice Chair Chun, and Members of the House Committee on Consumer Protection and Commerce. My name is Andrew Okabe. I'm here on behalf of the Public Utilities Commission. We stand in strong support of HB 1052, which is administrative measurement. I'm available for any questions the Committee may have. Thank you.

Thank you. Next, we have the State Council on Developmental Disabilities in support.

Thank you, Chair, Vice Chair, Committee Members. Daintry Bartoldus, Executive Director for the Hawaii State Council on Developmental Disabilities. We are in strong support of this measure. It stands in line with our mission to provide self determination and equal access to individuals with disabilities. Thank you for this opportunity to testify.

Thank you. Next, we have the National Federation of the Blind of Hawaii in support on Zoom. Not present. That's all I have who registered to testify in person or on Zoom. Is there anyone else who wishes to testify in this measure? Go ahead.

Gavan Abe testifying on behalf of Director of Human Services Ryan Yamane. We support the measure, provide comment, and defer to the Public Utilities Commission. Thank you.

Thank you. Is there anyone else who wishes to testify on this measure? Seeing none. Members, any questions? No questions. Okay, let's move on. Next bill we have up is House Bill 1055. We have the Public Utilities Commission in support.

Aloha, Chair, vice chair, members of the committee, David Richmond, on behalf of the PUC. We stand on our testimony and strong support available for questions. Thank you.

Thank you. Next, we have Hawaiian Electric in support on Zoom.

Hello, chair, vice chair, members of the. committee, my name is James Abraham, testifying in support on House Bill 1055. We'll stand on our written testimony and I'm available for any questions. Thank you.

Great. Thank you very much. That's all I have who registered to testify in this measure? Is there anyone else who wishes to testify on House Bill 1055? Seeing none, members, any questions? Seeing none. We're moving on to House Bill 1054. First up, we have DCCA in support.

Good afternoon, Chair, Vice Chair, Members of the Committee, Dean Hazama, Deputy Director. The Department stands on its written testimony in support of this bill.

Thank you. Next, we have Honolulu Police Department in support on Zoom.

Good afternoon, Chair and Vice Chair. I am Carlene Lau, Acting Major of the Records and Identification Division of the Honolulu Police Department. We stand on our written testimony, and I'm available for comments.

Okay, thank you. Next up, we have the Board of Physical Therapy in support.

Good afternoon, Chair, Vice Chair, Members of the Committee. Chelsea Fukunaga on behalf of Rochelle Araki, who's the EO for the Physical, Board of Physical Therapy. The Board stands on its written testimony in support of this bill. Thank you.

Thank you. Next, we have the Board of Dentistry in support.

Good afternoon, Chair, Vice Chair, Members of the Committee. Sheena Choy, Executive Officer for the Board of Dentistry. The Board stands on its written testimony in support. I'm available for any questions. Thank you.

Thank you. Next, we have Board of Psychology with comments.

Chelsea Fukunaga on behalf of Christopher Fernandez for the Board of Psychology. The Board will stand on its written testimony offering comments. Thank you.

Thank you. Next, we have the Board of Naturopathic Medicine, comments.

Chelsea Fukunaga on behalf of Christopher Fernandez for the Board of Naturopathic Medicine. The Board will stand on its written testimony offering comments on this measure. Thank you.

Thank you. Next, we have the Board of Massage Therapy in support.

Good afternoon again. Sheena Choy, Executive Officer for the Board of Massage Therapy. The Board stands on its written comments in support. Thank you.

Thank you. Next, we have the Board of Optometry with comments on Zoom.

Kerrie Shahan, Executive Officer of the Hawaii Board of Optometry. The Board stands on its written testimony, and I'm here for questions, if you have any. Thank you.

You may want to stay there because next we have the Board of Barbering Cosmetology.

Kerrie Shahan, Executive Officer of the Hawaii Board of Barbering and Cosmetology. The Board stands on its written testimony in support of this bill, and I'm here if you have any questions. Thank you.

Thank you. Next, we have the Board of Nursing with comments.

Good afternoon. Alexander Pang, Executive Officer for the Board of Nursing. The Board stands on its written testimony. Thank you.

Thank you. Next, we have the Board of Chiropractic in support.

Chelsea Fukunaga on behalf of Rochelle Araki for the Board of Chiropractic. The Board will stand on its written testimony in support. And I'm just going to stand up here because I think I'm doing the rest.

Okay. We have the Hawaii Medical Board.

Chelsea Fukunaga, Executive Officer for the Hawaii Medical Board. The Board will stand on its written testimony in support of this bill.

And then the Board of Acupuncture.

Chelsea Fukunaga on behalf of the Board of Acupuncture. The Board will stand on its written testimony offering comments.

And finally, we have the Board of Speech Pathology in support on Zoom.

Chelsea Fukunaga on behalf of Christopher Fernandez for the Board of Speech Pathology and Audiology. The Board will stand on its written testimony in support of this measure. Thank you.

Thank you very much. That's all I have registered to testify online or in person. Is there anyone else who wishes to testify on this measure? Seeing none. Members, are there any questions?

I have a question.

Representative Iwamoto.

Thank you, Chair. This is for DCCA.

There's like eight of them here.

Oh, sorry. So I imagine that... So this asks for permission to revoke, but is there a middle ground? Just like the registry, is there an opportunity to post. You know how a lot of times you post your license that you're licensed in a certain profession? Can you also post that you're a registered sex offender? So that, I guess my concern is that how are these individuals going to survive?

How are they going to live? I mean, how do they... If they're, if they serve their time or whatever consequence now, how are they going to pay their rent and feed themselves and or their family or take care of their elderly parents? I don't know. Yeah, again, like some kind of alternative, like put a notice up. And I do want to... I'm sorry, it's a long question, but I also do want to state that I do understand.

Obviously if you're in a very one on one private touching kind of thing, it might be a different situation. But I mean, imagining getting my hair cut by someone who has a cosmetology license, I wouldn't feel that vulnerable at a salon, you know what I mean?

So the Board has discretion as to the different actions it can take. It'll range from, obviously, revocation to non-renewal or suspension or something like that. So the Board does have that discretion. And the bill also allows for the licensee to appeal the Board's decision within 10 days.

But do you... I'm sorry. To follow up, do you have the discretion to say we're not going to revoke but you do need to put... Does the law, as it's written, allow you to require posting that they're a registered sex offender at their place of business? Like does it allow you that room to not revoke but have this other space?

No, we don't have the latitude currently in this bill to post it in a place of business. I'm assuming that's your question.

Yeah, I mean that's where you're interacting with your customers.

Any other questions, Members? Seeing none, we've come to the end of the agenda. So we're going to take a short recess to get ready for decision making.

Recess.

Reconvening, we've a number of items on the agenda. First one up is HB 565 relating to mandatory prior written notice and consent in contracts to provide cremation services. Chair's recommendation, we've got a number of amendments here.

The chair's recommendation is to amend subsection 2 on page 6 to say that after written notice the purchaser has 30 days to claim the precious metals recovered after which it may be sold or recycled by the mortuary, cemetery, or pre neat funeral authority.

I'll select to amend Section 2 such that this bill will only apply to contracts entered into on or after 10-01-2025. Adopting Rico's proposed amendments to the definition of precious metals. Amending to give OCP authority to pursue an enforcement action per OCP's testimony adopting DCCA cemetery and funeral trust programs.

Proposed amendment striking the word cemetery from page 5, line 18 and defecting the date to July 1st, 3000. Members, any comments? Vice chair for the vote.

Okay members, we are voting on House Bill 565. Chair's recommendation is to pass with amendments. [ROLL CALL] Chair, your recommendation is adopted.

Thank you, members. Moving on to HB 208 relating to intoxicating liquor. I really went back and forth on this. It seems like a problem that needs to be addressed. I don't think that this bill adequately addresses the problem unfortunately.

The testimony that from Scarlett was good, but I think that it needs to be integrated into a different version of this bill. So I'm hoping that they do come back at a later date or next session with a modified version of this Bill. But we're going to be deferring this at this time.

Moving on to HB 939 relating to alcohol. Chair's recommendation is to move it from 85 cents to 93 cents. I want to note, oh and add a three year sunset date. In the Committee report, I'm going to note the proposed amendment from doe tax making to make the effective date and of the tax and the bill to 1-1-2026.

But we will be defecting the date to 7-1-3000. Members, any comments? Seeing none. Vice chair for the vote.

Members, voting on House Bill 939. Chair's recommendation is to pass with amendments. Noting the excused absences of Representative Kong and Lowen. Are there any members who wish to vote no? Any members wish to vote with reservations? Any other reservations? Seeing none. Chair, your recommendation is adopted.

Thank you, members. Moving on to HB 979 relating to summary possession. We're going to defect the date to 7-1-3000. But also in the committee report, note that the effective date per the judiciary's testimony should be changed to 7-1-2026. Members, any any comments? Vice chair for the vote.

Voting on House Bill 979. Chair's recommendation is to pass with amendments. Noting the excused absence of Representatives Kong and Lowen. Are there any Members who wish to vote no? Any reservations? Seeing none. Chair, your recommendation is adopted.

Thank you, members. Moving on to HB 808 relating to the Procurement Code. We will be deferring this measure. Just it's my own bill, but it seems like there are issues that cannot be addressed now.

But I do encourage, I will be working with SPO and the comptroller to develop some other method to make sure the state is not constantly paying for our construction defects by other parties. It's very disappointing. Moving on to HB 809 relating to procurement.

We're going to be deferring this to a later hearing date so that the parties we talk to can further discuss it. But we will be picking this up at a later time. Moving on to HB 1277 relating to digital finance to digital financial Asset.

Chair's recommendation is to change this from 2000 down to $1000 and to defect the date to July 1st, 3000. Members, any comments? Seeing none, vice chair for the vote.

Members, voting on House Bill 1277. Chair's recommendation is to pass with amendments. Noting the excused absences of Representatives Kong and Lowen. Are there any members who wish to vote no? Any other no's?Any reservations? Seeing none. Chair, your recommendation is adopted.

Thank you, members. Next up is HB 1047 relating to interest on, interest on insurance proceeds related to a mortgage loan. We're going to be deferring this to a later hearing date to work on language with HBA on narrowing the items that can, that the interest amounts can be used for, if any.

Moving on to HB 1048 relating to installment loans. I do want to put a, chair's recommendation is to put a three year sunset on this, technical amendments, and defect the date to July 1st, 3000. Members, any comments? Seeing none, vice chair for the vote.

Members, voting on House Bill 1048. Chair's recommendation is to pass with amendments. Noting the excused absences of Representatives Kong and Lowen. Are there any members who wish to vote no? Any reservations? Seeing none. Chair, your recommendation is adopted.

Thank you, members. And moving on to HB 1053 relating to Condominium Association's operating budgets. Chair's recommendation is to adopt the proposed amendment from the Hawaii Real Estate Commission to prevent associations from engaging in cycles of borrowing. I'd like to also amend subsection G3 to clarify that the board members fiscal.

It's the board member's fiscal duty that is being violated. Technical amendments. Excuse me. Defect the date to 7-1-3000. I'd also like to note in the committee report the cash flow issue for the next committee, which will be finance to deal with. Sounds like a finance problem. Hopefully they can deal with it. Members, any comments?

Thank you, chair. I will be voting with reservations. I appreciate all the work that you're putting into it. I appreciate the Real Estate Commission for introducing this bill. I understand that it's a major problem. And I would like to see it move forward. And let's continue discussion as well. So thank you.

Thank you. Seeing no others. Vice chair for the vote.

Members, voting on House Bill 1053. Chair's recommendation is to pass with amendments. Noting excused absences of Representatives Kong and Lowen. Are there any members who wish to vote no? Other, I have Representative Tam with reservations. Are there any other reservations? Okay. Chair, your recommendation is adopted.

Thank you, members. Moving on to HB 1049 relating to the Money Transmitters Modernization Act. Chair's recommendation is to defect the date to July 1st, 3000. Members, any comments? Seeing none, vice chair for the vote.

Members, voting on House Bill 1049. Chair's recommendation is to pass with amendments. Noting the excused absence of Representatives Kong and Lowen. Are there any members who wish to vote no? With reservations? Seeing none. Chair, your recommendation is adopted.

Thank you. members. Moving on to HB 1052 relating to the Universal Service Program. Chair's recommendation is to apply technical amendments and defect the date to July 1st, 3000. Members, any comments? I see none. Vice chair for the vote.

Members, voting on House Bill 1052. Chair's recommendation is to pass with amendments. Noting the absence, excused absences of Representatives Kong and Lowen. Are there any members who wish to vote no? With reservations? Seeing none. Chair, your recommendation is adopted.

Thank you, members. moving on to HB 1055, making an emergency appropriation to the Public Utilities Commission. Chair's recommendation is to blank the amounts and note them in the committee report. Defecting the date to July 1st, 3000. Members, any comments? Rep. Pierick

Okay. Thank you, Chair. So I'll be voting no for a couple reasons. When we think about the UPC trying to get more outside perspective from a consultant, they can save money and not use tax dollars by simply asking their own employees, hey, what do you guys think?

They can knock on the doors of their neighbors and say, hey, what do you guys think? They can just do a public service announcement, go on social media and say, hey, what do you guys think? Versus spending $700,000 of our tax dollars on an outside consultant asking their opinions? So I think this is wasting tax dollars. I'm gonna be be voting no.

Okay, thank you. Anyone else voting no?

All right. Members, voting on House Bill 1055. Chair's recommendation is to pass with amendments. Noting the excused absences of Representatives Kong and Lowen. Are there any member, and noting the no vote by Representative Pierick. Are there any members, other members who wish to vote no? With reservations? Seeing none. Chair, your recommendation is adopted.

Thank you, members. Last item on the agenda, HB 1054, relating to administrative licensure actions against sex offenders. Chair's recommendation is to amend page two, line five to reflect the Hawaii Board of Optometry's current name.

Page three, line nine to change "has been" to "is" so this does not apply to people no longer required to be registered and revising all of, all subsection G2s, to make it clear that the patient, to make it clear the patient or client is the victim. And for the first two amendments to make sure that, that's made throughout if necessary.

This bill repeats itself a lot. Members, any comments? Okay. Seeing none. Oh, I'm sorry. Did we defect the date? Oh, yeah, sorry. We will also be defecting the date to July 1st, 3000. Any other comments? Vice chair for the vote.

Right. Members, voting on House Bill 1054. Chair's recommendation is to pass with amendments. Noting the excused absences of Representatives Kong and Lowen. Are there any members who wish to vote no? With reservations?

With reservations.

Any other reservations? Seeing none, chair, your recommendation is adopted.

Thank you, members. We are adjourned.