Senate Standing Committee on Agriculture and Environment

Okay. Aloha and welcome to the Joint Hearing. The Senate Committee on Economic Development and Tourism and the Committee on Transportation and Culture and the arts. Today is February 13, 2025 and this is our 1:00 p.m. agenda and we are in Rome, Conference Room 2 to 9. This hearing is being streamed live on YouTube.

In the likely event that we must abruptly end this hearing due to technical difficulties, the Committee will reconvene as soon as possible with several different agendas to get through, as well as meeting the 10 p.m. deadline today in our 90 minute time slot. I do encourage everyone to stand on your written testimony if it's submitted in writing already.

We have reviewed all the testimony, but if you would like to make comments, you have one minute to do so. We have four bills on this agenda and we'll be starting off with Senate Bill 817 relating to out of state offices. First up, testifying on behalf of.

Well, first up, Senate Bill 817 relating to out of state offices. DBED Director Tokioka Aloha.

Chair, Vice Chair. Dennis Ling, for DBED. DBED stands in its written testimony supporting the intent of.

Thank you. Next up, Melody Ajuha testifying on the behalf of Oahu Filipino Community Council in support, Amy Albayani testifying for you. Friends of Civil Rights in support. Sandy Ma in support. And then Ellen Awai with comments. Anybody in the room wishing to testify on this measure? Seeing none. Members, any questions?

DBED, please.

DBED, please. Senator Kim.

So I see here that you folks are asking for amount $200,000 fiscal year 2526 and appropriation and amount of 175,000 is needed fiscal year 26-27 thereafter on a recurring basis.

Yes.

So that's the entire cost for how many people in office?

One and a half. Normally our Executive directors are half time and we have a office manager full time.

Is it an intent for DBED to open up offices in all different locations?

No, it isn't. No, it isn't. As a matter of fact, I think we have to reassess some of the existing offices. We do have to.

Where is the rest of the offices?

Beijing and Taiwan.

Okay, so you're going to reassess that, but you're moving on new ones?

Well, in regards to the Philippines, because of the strong cultural, social as well as government to government, as well as potential trade and investment opportunities, we see it as a good fit.

But isn't that true for a number of other cultures as well?

True, yes.

Okay. I mean, don't get me wrong, I'm Filipino and certainly support that. But I also have a policy that if we do for one, we gotta do for all. And is this something. This is a policy and we're going to do this across the board. And are we going to be able to sustain this?

I think, you know, some markets it would be infeasible to do so. For instance, Japan, we already have representatives there. And it's an expensive place. Right.

But I mean, it's. And it's not saying what might happen in the Philippines as well as expense wise. But on. Okay. I just hope that we think these things through and it's not a piecemeal. So if it's a policy across the board, but if it's piecemeal, then it's. It's difficult to.

For us to vote for one and not move for another.

Understood.

Thank you. Dennis, what is the current numbers of Filipino tourists coming to Hawaii?

About 11,000.

A year on the average.

Tourists?

Tourists. Tourists

A year?

Okay.

Okay. Any other questions? Seeing none. Moving on. All you Transportation, sir.

Thank you. Thank you. Moving on to Senate Bill 1578 relating to international affairs. Testifying first is DBED.

Stands in its written testimony supporting the intent of this measure.

Thank you. Up next is the Attorney General online.

In the room, Deputy Attorney General Randall.

Thank you. We also have testimony from four individuals in support. That's everyone who had signed up to testify. Is there anyone else wishing to testify in this measure this afternoon? If not, are there any questions? All right, thank you. Let's move on to the next measure.

If Not Senate Bill 1639 relating to Hawaii Beach Day, which establishes Hawaii Beach Day. Testifying first is DLNR.

Good afternoon, Chair. Michael Cain, on behalf of DLNR, we've submitted comments and are available for questioning.

Thank you. Thank you. Next is Hawaii Tourism Authority.

Aloha. He has made written comments stating that the HDA currently contract services with community organizations that develop similar projects and we can support these organizations through our destination stewardship.

Thank you. We also have testimony, one in support, one in opposition to two individuals. That's all the testimony we have. Is there anyone else wishing to testify in this measure? If not, are there any questions? All right. If not, thank you.

Let's move on to the next measure, SB582 relating to the Department of Business, Economic Development and Tourism. Testifying first is the Department of Accounting and General Services. Thank you. Up next is the State Foundation on Culture and the Arts.

Committee.

Thank you. Up next is Department of Business, Economic Development and Tourism.

Aloha. We stand by a written testimony in. Support of Senate Hill thank you.

We have additional support from two individuals. That's everyone who had signed up to testify. Is there anyone else wishing to testify on SB582? If not, are there questions? All right. Seeing none. Thank you, everybody. I'm going to turn it back over to our illustrious cooker.

So. Yeah. Okay, we'll string to decision. Take us away. Okay, first up, Senate Bill 817 relating to out of state, out of state offices. We will be passing with amendments. We'll do it with an SD1 and make any necessary technical amendments and defect effective date to July 1, 2025. Any discussion? Seeing none. See none.

Vice Chair for the vote. Chair goes Aye.

[Roll Call] Chair, your recommendation is adopted.

Thank you. Thank you. TCA Committee, same recommendation.

The Chair's recommendation on the Transportation and Culture in the Arts Committee on SBH17 is to pass with with amendments.[Roll Call] Measure is adopted. Mr. Chair.

Thank you. Moving on to Senate Bill 1578 relating to international affairs. Like to recommend moving us on to the Ways and Means Committee with amendments addressing the AG's comments by removing way Green Growth section on White Green Growth and its references.

Secondly, making sure the Commission is subject to Senate confirmation, making technical amendments, blanking fees and adding in a defective date. And I'll just note, I think, to the discussion that was had earlier about international partners and where do we focus?

I think part of the intent of this is to make sure that there's an analysis by DBED to look at the scope of our international partnerships and figure out a plan for really what comes next and what does make sense. So any discussion on that? All right.

If not for the Committee on Transportation and Culture and the arts, TIR's recommendation to pass SB 1578 with amendments with five Members present. Any voting with reservations and no votes. No measure is adopted. Mr. Chair.

Thank you.

Okay. Committee on Economic Development, Tourism, same request for sure for the vote. Chair goes Aye.

[Roll Call] Chair, your recommendations adopted.

Thank you. Thank you. Moving on to Senate Bill 1639 relating to Hawaii Beach Day. I'd like to recommend moving this forward with amendments. Just adding in a defective date. There's no discussion. And Vice Chair.

Okay. A Chair's recommendation on the Committee of the Transportation and Culture and the arts Committee on SB 1639 to pass with amendments with five Members present. Any voting with reservations. Any no votes Hearing None. Vice Chair Chair Aleem Motion is adopted. Thank you.

Thank you. Committed Economic Development Tourism Same request. Vice Chair for the vote Chair votes Aye.

[Roll Call] Chair your recommendation is adopted.

Moving on to the last measure on the agenda Senate Bill 582 relating to the Department of Business, Economic Development and Tourism to recommend moving this forward with amendments to the Ways and Means Committee adding sections 23 and 4 from SB 1577 which was previously heard by the TCA Committee regarding clarifying language enabling performing arts to be authorized by Sfca switching the SFCA positions and programming to General funds restricting the works of art Special Fund to the acquisition of works of art and the planning, design and construction of works of art and related appurtenances making technical amendments and adding in a defective date.

Thank you.

In short, in addition to the transfer, we're going to backstop and hopefully provide an option going forward in case there's changes in potential federal funding and other uncertainties and as well expand the SFCA scope to include performing arts.

Any discussion for the Committee on Transportation and Culture and the Arts Chair's recommendation on SB 582 to pass with amendments with five Members present. Any voting with reservations. Any no votes? No vote. Is that the court? Yeah. Measure is adopted. Mr. Chair thank you.

Thank you. Committee Economic Development Tourism Same request. Vice for the vote. Chair goes Aye.

[Roll Call] Chair your recommendations adopted.

Thank you. Thank you. And that is the last measure on our 1:00 p.m. agenda.

Okay.

Welcome to our hearing with Senate Committee on Economic Development Tourism. Today is Thursday, February 13th. This is our 1:01pm agenda and we're in conference from 2 to 9. We have two bills on this agenda and so we will start off with Senate Bill 1589 relating to the stadium development special Fund.

First up on the test of Fire list we have the Department of Attorney General on Zoom all here.

Thank you. Good afternoon. Chair Vice Chair Members of the Committee Kevin Tongg, Deputy Attorney General. The Department has comments and we have concerns that section of the three Section three of the bill is unclear and we propose an amendment to help make it more clear. I'm available for questions.

Thank you. Next up, interim stadium manager Chris Tadiasu for stadium and Department of Economic.

Thank you. Anybody else wishing to testify on this measure? Seeing non Members Questions?

Yes.

Questions Senator Kim.

DBED. Is it DBED or Or? Yes.

Thank you, Senator.

So this is just a ceiling or you're asking for the 4045. $49.5 million.

The 49.5 is deposited is in the stadium special Fund.

It's already in the stadium? Yes. So you just need the ceiling to spend it and the. And you're going to expend it for.

Consultant consultants for construction management in quality assurance and contingency.

The 49.5 million came out of the 250 million that we gave.

It was a General Fund appropriation.

Okay, thank you, thank you, thank you.

Any other questions?

Senator Wakai.

I'm trying to understand your question about Section three. Section three is just the, the appropriation for the 49.5 million. So what. What, what is there to question about that language or.

We just felt that the wording was unclear. Specifically the proviso. The current language says, provided that all monies remaining in the special Fund that are not expended or encumbered by the Nualoha Stadium entertainment district is terminated before completion shall lapse to the General Fund.

I'm not really sure what that means, so I propose an amendment to help clarify the wording.

We're looking at the same section three. The section three in the Bill on page four just talks about the ceiling. So. Okay, so the latter half of that paragraph needs to be clarified.

Yeah, the second paragraph was Section three and the proviso in that paragraph.

Okay. Any other questions? Seeing none. Moving on to. Moving on to SB 1629 relating to taxation. First up, DBEDT.

Thank you. Next up, Gary Suganuma from Department of Taxation, Vice Chair.

Aloha Chair, Vice Chair, Members of the Committee, Winston. The operative part of the taxation Department standards testimony and will be available for questions.

Thank you. Next up, Chris Lee, University of Hawaii in support. Next up, Olia Consentino.

Aloha Chair, Vive Chair, Members of the Committee. Stand in strong support in particular of the ET and manufacturing definition and the amendments proposed by the MPA and offer two suggestions for strategic growth with targeted uplift as well as targeted exemption.

Thank you.

Thank you. Next up, Ricardo Galindez with Island Film Group.

Nice to see you all again. Two quick things. One, if you haven't had the pleasure of reading the Reed Travel industry report showing tax revenue based on film related travel of 121 million. Hopefully this can alleviate any concerns about the tax credit program for Hawaii showing 120 million in tax revenue and 500 million in wages.

That's not including what we actually spend in film and TV support. We are in full support of this bill. We did ask for you to look at something that's currently in the administrative rules, but to be able to reallocate the tax credit so we can support local films. Thank you.

Thank you. Next up, Daniel Rosner, Hawaii Media in person, maybe not in support, Mauricio Elmore, Psych AFTA in person in support, Twee Scanlan, Vice Chair, Members of the Committee.

2 Young Scanlon, President of IATSA 665 IATSE International Trustee. We send a strong support and Senator, thank you.

Next up, General Holly Guadal Rama, Teamsters Local 996.

Hello Senators, good afternoon. Chair, Vice Chair, Senate I would like to thank you for the opportunity to speak this afternoon. My name is Holly Golaran, Business Agent for Hawaii Teamsters. On behalf of Hawaii Teamsters Local 996, we oppose bill SB 1629.

The cause and effects of SB 1629 will have a ripple impact to a lot of local businesses in the State of Hawaii. The point is we can all agree that the film industry needs to at some point raise the tax credits and maybe in the near future release the cap altogether.

However, with absolutely very little oversight and accountability to the existing offices and individuals who supposed to be making sure that there are checks and balances within the film industry. We sit here today with very minimal attempt to even give the smallest answer ability to the previous tax breaks that's been given over the years.

If the law is passed only for production employer to be exempt from paying GE state taxes, shouldn't the question here today to everyone be what about the local farmers, local fishermen, owner operators, local mom and pop grocery stores and all the local people? The list can go on and on forever.

It's totally disrespectful to every hard working tax paying individual sitting in this room online out there right now struggling to make ends meet. Thank you for any questions and concerns.

Thank you. Next up, Kiran Polk, Oikapoli Chamber of Commerce.

Good afternoon Chair, Vice Chair, Members of the Committee, Kieran Polk, CEO of the Kapoli Chamber of Commerce. We do stand in strong support of this measure. I just want to emphasize the positive, very positive impact that elevating the film industry and that tax credit will do for West Oahu and our economy.

With the Academy of Creative Media and all the other facets. It's just extremely important to us. So thank you for.

Thank you. Next up, Melissa Palpasik on Zoom.

Yes, thank you Chair Dacoit and Vice Chair Wukai and Members of the Committee. My name is Melissa Patak with the Motion Picture Association. We are in support of the bill and the amendments. I will in the interest of your time stand on our testimony. And just to note that this bill is not an exemption from the get.

It's to bring some rationality, certainty and predictability and consistency to the application of the get and to return film, the classification of filmmaking as manufacturing. Thank you and I'm happy to answer any questions.

Thank you and my apologies for pronouncing your last name. That's Listen Attack.

And also thank you to Senator Fukunaga for being the author of this bill.

Okay, next up, Pamela Tumpa from Maui Chamber of Commerce in support. Randy Perera, AFL Cio in support. Paul Eman for Eamon Productions also in support. Michael Guesto in opposition.

Good afternoon Vice Chair Makai Restaurant Committee.

I'm Michael Guesto. I'm here to representing myself today for this bill and I stand by my testimony in opposition of this bill. This bill is so vague when it comes to the exemption of General excise tax. Also we have multiple film tax credit bills in legislation right now.

The entire bill, first half of the bill is already submitted I believe SP732. So therefore, I mean I gotta look at it from common point, common sense like the reason for this bill is just to exempt the employer from General excise tax. Does that have the potential to help the film industry? Maybe.

How is that money going to be. How is that money saved? How is that money going to. It's so vague, it doesn't put anything. I mean are we still going to run this on the honor system? Like how things have been for years when it comes to the film office and this kind of stuff.

And furthermore, if we're going to be giving out tax, General excise tax exemptions, I can think of 10 local farmers, local fishermen, local planning, local business that maybe going to address our affordable housing crisis and all our, all those, those other issues be self sustaining and stuff. Once again, I'm Michael Guesto. I stand on my.

And I'll be available for any further questions or comments.

Thank you. Next up, William Meyer in support in person. Okay. Vanessa Fenari in support. We have about another 20 something more people in support. Anybody else wishing to testify in this measure. Please. Any, any questions from anybody on Zoom?

Okay.

Oh, thank you.

Chair, Vice Chairman's Committee. Tom Yamachika from Tax Foundation. We did submit late testimony. Sorry for it being late. We, we generally align with the position that DBED has taken and we understand that the get exemption is to reinstate. It's not an exemption, it's reinstating the tax treatment that we understand was in place prior to 2021.

If there are further questions, I'd be happy to help answer them. Thank you very much for the opportunity.

Thank you. Anybody else wishing to testify in this measure? Seeing none. Any questions from the Committee? DBED, please. So, Georgia, to get the addition of 5% in tax credits on top of the current 27%, are there any qualified productions that do not use qualified production facilities located within the state?

Some do this. Georgia Skinner, Head of Creative Industries, DBEDT. There are some that are location only. For example, Rescue High Surf is a production that has storage facilities in a small mill, but doesn't really shoot on a stage. It's a rarity though.

It's really an exception to the studios that do come for long term television and streaming production who do need facilities.

Okay, so if there are just a few, wouldn't most of the qualified productions Qualify for additional 5% tax credits?

Only if they're using a qualified facility. However, the language in the Bill currently says it has to be for facilities that have been built after December 2024. So that is your, your barometer, I guess, if you like to look at that. I think it's in there purposefully so. But after that. Yes.

So in terms of your projections for out years, it will affect that? Yes.

Okay, thank you. Senator Fukunaga.

Perhaps I can add to that discussion. The provisions relating to production facilities built after 2025 was really intended to respond to some of the City Council comments when they adopted a real property tax exemption for new production facilities to be built in the West Oahu region, where I believe currently they're looking at a specific location.

Yes, University of Hawaii does have an awardee and they're in the final stages of coming up with a final agreement.

And I think from the City Council standpoint, they felt that if the county was going to offer some sort of real property tax exemption for construction of those facilities, that, that the state should also offer some sort of enhanced film tax credit as kind of a partnership.

And so it's really intended to build upon that request from the county.

Thank you. Any other questions? Yes, Senator Kim.

So as I was mentioned by one of the testifiers that there are multiple film credit bills. So what, what makes this one different? Is the 5%?

Yeah, the, the difference in this particular measure is that it's adding something for the studio development that's built, as Senator Fukunaga said, a purpose built studio facility on up to 30 acres, I believe, and that it does complement what the City Council has already passed. So that is the difference though, with, with other measures.

So this is more. Is. Is this just geared towards one developer, one project?

Well, I think that anything that's built after, that's why the suggestion of maybe less than 10 acres, maybe there's a purpose built studio that may be developed just for local development. So you have to look at that as well.

So that's why we had made a recommendation that the 10 acres also consider 7 to 10 because of that component, which is something that seems like we're.

Just doing it for one project on one developer. I don't know that we should be giving a tax break for one specific developer.

Understood. And so I like to respond to that in a way that I think puts the context of where we are in the industry and unfortunately because of the lack of production in the United States and also what's affected us here.

If we can't incentivize now productions to be able to use the existing facilities and improve some of the other elements of the credit, in particular the manufacturing definition which does require a tax, it's just not the get tax. So to answer your question, perhaps it is prescriptive in that way.

So what about the studios that we heard about at Kalaioa?

Yes.

What studio is that? That's not the same studio we're talking about at UH.

No it's not. So we have two facilities that the state manages through dbed. One is the Hawaii Film Studio which is DLNR oversight. The other is the license agreement that we have on a month to month basis with the Navy for the facility that's been in place since 2017. Incentivizing that would certainly be great.

As well as the private entity that's in Kaka'ako which is a smaller footprint. But all of those to suggest that maybe the date is a little prohibitive within the. It wouldn't exclude people from developing studio space after December 25th.

Well, I just raised this because I remember being in Wham and we talked about the Kalaloa facility and I asked about uh, and was just brushed over that. So technically we could have two studios in that area.

Yes. And that becomes then a hub in a sense that you have a concentration on the Leeward coast. It's very important because of our community that lives there and the jobs that we want to bring to that area.

No, I understand that. But also if you have a lot of the filming going on in, in Honolulu, Waikiki and all that area, then it makes more sense if we have multiple students, that is studios in different areas. And I just hate to think that we're doing a bill and a tax credit that's geared at one. Understood.

Yeah.

I think you always. We don't even know a whole lot about it. It's not been discussed as far. Far as I. I know. So. Yeah.

Perhaps concerns. Yeah. Perhaps the people that are working on it could provide the Committee with some more information.

Well, I think DBAD needs to. Yes. Step up and also give us a broader picture of what's going on instead of again, we're piecemealing. It seems like that's all we do. We have a knee jerk reaction and we piecemeal everything.

Thank you.

Yeah.

That's definitely not the intent. Thank you.

So in that regards, I did send you an email and I and got our response on trying to figure out how many of them where they're located so we can kind of reel them back in again, so. Exactly. But Senator Fevella.

Georgia, just a couple of things. On top of this bid that was given out a while back, had a meeting with Gilbert. I don't know if he's here.

I had a meeting a while back and he was grumbling to me about all these film companies coming in, flying by night, giving their lip service and not having anybody to put money where the mouth is. So I had a gentleman that was going to do that.

If you guys go look at this, you guys should go pull them up. I'll take this to the Attorney General and have them investigated.

This thing that was put out was only crafted for one person and one person be able to put in every other bidders that came out to bid could not bid on this is because the provisions that you guys have in here was very strapped.

And I know one of them that had a provision in here that had a lot to do with it is Chris Lee, the person with the film studio. So the question I have for you, knowing that the 30 acres was going to cost the state zero money, why are not we looking at somebody to cater?

Because you guys saying, oh, we're not going to attract. We did attract, but we never give them the land and we never give them a long term lease. Zero money to the state and the city. This was conquered up in the city to try to give tax breaks to build a studio.

People that was coming to build a studio for us wasn't going to ask for any breaks. Georgia reason why I'm bringing this up, I want to let you guys know and the Committee Members know by going to have a meeting with the Committee Members.

I'm going to play on video, Georgia on you Guys contracting and try to kill Senator Duques Bill last session to come up with what you guys coming up with now. The one that we had that was gonna do. I was gonna do the thing. Good. For the people.

You guys will meet with Donnie Dawson and another group of people. It's gonna be in the video and I'm gonna play it for this Committee to hear. Tibet. Yeah. Tell the Chaim be careful because she's the one with the rest of them trying to undermine this, to give special treatment for these guys. And that's wrong.

I just gonna tell you right now. You know, I know. You know. I know. I tell you right now, this is the reason why I'm upset.

Because all the stuff you guys said and all the other unions that came inside my office and made all these things, like how we're talking Hilo, all that is here for this one guy, this one group, they're gonna build a studio on 30 acres. And that's not fair. Georgia, I don't support this Bill, but I cannot vote.

I don't support them because we're gonna give tax breaks for them. What about the rest? Yeah, we would have told the other studio guys, we'll give them all these breaks from the city and state. Because I remember Kelvin said this, we not go put nothing in the games unless the state puts skin in the game. Right.

Pressuring the state and the city to give money to a developer that never needed money. All they needed was land and we never give them. For whatever reason, Calvert was right there. The guys came, said here, who are you going to write the check out to? You know what Kelbert said? I don't want my receipt book.

You know, the guy told Gilbert, I trust you. No deal. You insist to put this out. Why? So that's what I'm saying. So that's why I said, just really think closely, because when this come out, it's going to go to the media again on how you guys orchestrated with Daniel Holt to kill that bill. Be very careful.

Thank you.

Senator.

I'd like to clarify for those watching and those in the room, and the Committee diva did not issue a request for proposal for 30 acres of land. That is the University of Hawaii that handled that. We had nothing to do with it.

Georgia. Yes. Yeah. You never put them out, but you have a hand in this. Okay, So I want to bring it up. You can say what you like when I have the video present.

And you're going to know that you had a part of killing Senator DeCoite's good bill to accommodate for what Fukunaga and Augie is putting together for this one studio group, Guys.

Okay.

Thank you, Senator Fevella. Thank you. Any other questions? See? None. Recess for decision making.

Okay, back for decision making. Senate Bill 1589 relating to the stadium development Special Fund. We're going to pass this with an SD1 and incorporate the amendments recommended by Attorney General to clarify language in Section 3 and also make any necessary technical amendments and defect the effective date to July 1, 2050. Any discussion? Seeing none.

Vice Chair for the vote. Chair goes aye.

[Roll Call] Chair, your recommendation's adopted.

Thank you. On Senate Bill 1629 relating to taxation, I can appreciate the comments, the support and the opposition on this measure.

I am going to move this with an SD 1 and incorporate amendments recommended by DBEDT in Section 2 to insert language to be inclusive of 7 to 10 acres which would help to incentivize productions in the short term to utilize existing private sector and state facilities until a purpose built facility on 10 acres or more is in place.

Also in the Committee report, incorporate comments from the Island Film and the Motion Picture Association on the proposals relating to tax changes so they can be addressed by the next Committee. Any discussion? Yeah. And defecting the debate and defecting the date of July 1, 2050. Seeing none. Vice Chair for the vote. Chair goes aye.

[Roll Call] Chair, your recommendation is adopted.

Thank you. And with that, we are adjourned.

Aloha and welcome to the Joint Hearing with Senate Committee on Economic Development and Tourism and the Committee on Agriculture and the Environment. Today is Thursday, February 13, 2025. This is our 1:02pm agenda. We're in conference from 229. We have one Bill on this agenda. And so we'll start off.

We will start off with Senate Bill 1396, relating to economic development. First up on the testifiers list we have Office of the Governor Josh Green. Anybody from Office of the Governor? Oh. Oh yeah, Will. Sorry, Will.

It's okay. We stand our testimony in support and appreciate any comments. And here for any questions.

Thank you. Next up, DBEDT. Thank you. Next up, Daniel Nāhoʻopiʻi for HTA.

Aloha. Daniel Nāhoʻopiʻi, Hawaii Tourism Authority. We stand on our testimony in support with comments...

Thank you. Next up, Mark Glick, Chief Energy Office. Thank you. Next up, Gwen Yamamoto Lau for Green Infrastructure Authority. Thank you. Next up, Gary Suganuma for Department of Taxation. Thank you. Next up, Mary Alice Evans testifying for Planning for Office of Planning and Sustainable Development. Thank you. Next up, Leah Laramee, Climate Change Coordinator. Thank you. Next up, Luke Meyers on Zoom for Hawaii Office of the Governor Recovery and Resiliency Unit.

Chairs, Vice Chairs. Luke Meyers. We stand in support, and if you have any questions, let us know. Thanks.

Thank you. Next up, James Barros, Hawaii Emergency Management Agency. Thank you, Ethann. Next up, John Cole, Deputy Attorney General's Office.

Thank you. Good afternoon, Chairs, Members. John Cole, Deputy Attorney General. I just wanted to point out that Section 2, which establishes the Climate Mitigation and Resiliency Special Fund, it includes in the monies to be deposited fees that are collected under the chapter. However, there's no authorization in the chapter to collect fees. So accordingly, we recommend to either delete that part of monies that go into the special fund or to authorize the imposition and collection of fees. And I have some suggested amended language in the testimony. Thank you.

Okay, thank you. Bless you. Next up, Dawn Chang for Department of Land and Natural Resources in support. Thank you. Next up, Chris Benjamin, Climate Advisory Team, in support. Hawaii Ocean Legislative Task Force in support. Jocelyn Herbert for ʻĀina Now Coalition Leadership Committee. Hello.

Aloha, Chairs, Vice Chairs, and Members of the committees. My name is Hanna Lesiak, and I'm here on behalf of the Hawaii Ocean Legislative Task Force and I'm also a member of the Care for ʻĀina Now Coalition. We stand in strong support of this bill, and I just want to say that now more than ever is the time to build a city safety net for our environment.

Thank you.

Aloha. Jocelyn Herbert on behalf of Care for ʻĀina Now Coalition. Happy to be here today from Hawaii Island. Thank you very much for hearing this bill. We stand in strong support as well. This bill does two really important things. It helps address a $560 million annual shortfall in dealing with our climate resilience issues, wildfires, floods, coral bleaching, and also creates an opportunity for visitors to contribute and invest in taking care of the island they come here to enjoy. So thank you for your support.

Thank you. Next up, Tom Yamachika, testifying for Tax Foundation of Hawaii on Zoom.

Yes. Good afternoon, Chair and Members of the Committee. This is Jade McMillen on behalf of Tom Yamachika for the Tax Foundation of Hawaii. We've submitted comments on the measure. Our comments are directed towards the establishment of the special fund. We note that the Legislature has establish requirements for the implementation of a special fund.

And we noted that there seems to be no indication that the proposed fund can be financially self sustaining and that the nexus between the means of financing being the tax on transient accommodation and the programs and activities being climate resiliency and economic revitalization are questionable at best. Thank you.

Thank you. Next up, Ted Kefalas in opposition. Olan Leimomi Fisher in support for Kuaʻāina Advocate. Stephanie Donoho in opposition. Olu Campbell, Hawaii Land Trust, in support. Beatrice DeRego, Coalition Earth, in support. Pam Tumpap, Maui Chamber of Commerce, in opposition. Kevin Faccenda, support. Jacob Wiencek in support. Anybody else waiting to testify on this measure?

Hello, Chairs. My name is Maka Gibson and I'm a program officer at Resources Legacy Fund, where I develop and implement strategies and projects for our environmental equity and justice programs. We are a nonprofit and a philanthropic organization, and locally we partner with community based organizations to promote natural and cultural resource protection and restoration.

What is most important about SB 1396 is that it increases funding for natural resource protection. One of my roles is to administer a federal grant program through the EPA called Thriving Communities to advance environmental justice programs and projects. And it's currently on pause, which underlines the importance of this bill and also highlights how a new funding source is really needed right now in Hawaii. Thank you.

Thank you. Anybody else wishing to testify? Seeing none. Members, any questions? Senator Kim. DBEDT, please.

So we're raising the TAT tax?

That is one... That is one mechanism to finance this fund. Yes.

So we're going from 10.25% to 11?

I believe so, yes.

And then it goes to 12. 12%?

Yes.

I wonder. So it's just interesting that there's no one here from the hotel industry or tourism industry. And HTA is in support of this?

Supports with comments, but specifically to, I think they have comments on the TAT itself. But overall, the bill, they support.

Okay, well that's really interesting because I know that they have thought increasing the TAT, and that's exactly what this is doing. So the percentage of 7.3% that goes into the Climate Mitigation Resiliency Fund as well as Economic Development Revitalization Fund is part of the increase tax or the entire 11%?

Because you're increasing it for next year to 11%. So it goes up 0.75. Right. And so on page 13, you talk about how the revenue collected will go into each of the funds. Right. 7.3% to the climate and 7.3 to the revitalization.

Yes.

So it's a 7.3. It says total revenue collected. Total revenue collected from the increase or total collective from the entire 11%?

The entire.

11% of that. Okay. Because what percentage of the TAT now go to the General Fund? All of it?

I know it was changed. I think all of it does go back to the General Fund.

Because it used to go to special fund. Right. And then the bulk of the rest of it went into the General Fund. So now all of it goes into the General Fund, so this will come out of the General Fund.

The portion that's going to the General Fund.

So the entire 11%. How much money is that? Approximately, that It generates, 7.3.

Of the 11%?

I'm sorry, right now that's being generated?

No.

Yeah. Come up here, please.

Senator, Will Kane from Office of the Governor. So the 1.75% is expected to generate approximately $180 million a year.

Sorry, the one point? After the second year?

Correct. Like it'll in total generate 1.180 million approximately a year. And so we're proposing to bifurcate that, to split that. That 7.3%, that's of the total, so $180 million on top of what's already collected in the, in the GET now. Excuse me, in the TAT now. And then that equals out to 7.3% of the total.

How much is that?

So that would be $90 million. So approximately 90 million, 90 million for each special fund.

Okay, but the 11 million brings in how much? I mean, the 11% brings in how much?

I'd have to go check that. I believe it's, I think it's well over close to a billion or...

Yeah. So the 7.3 comes off of the 1.8, not off the entire 11%. Right?

Well, it adds to. So it goes to actually to 12% total. And then 7.3% of that would be allocated, which is...

But you told me it's the whole thing, 11. That's what you just told me. I asked you, is it only on the increase? And you said no, the entire 11%. Right?

My mistake.

Because that's a lot of money. That's why I asked you to come up because you know how much that is going to be.

Yeah, I was kind of whispering. I think I whispered incorrectly there. So, yes. So this is only on the increase. Right. So it's $90 million is approximately 7.3%.

Okay. Thank you.

Yeah.

Members, any other questions? So I guess for DBEDT, what will you guys do with the 90 million and the increased revenues from the TAT?

There is, there is a CAT report that the funding goes out in buckets. I don't have that copy in front of me. I had it in the house.

Sorry. I can answer that. So, okay, so we have the two funds, right? The Climate Mitigation and Resiliency Special Funds. So that's looking at how we can address the recommendations that were brought forth in the climate advisory team report as well as the FSRI report dealing with the Maui wildfires. So we're looking at a variety of uses. So we could be wildfire risk reduction, hurricane tsunami damage mitigation, minimizing the other risks. And then we can move into all these different projects that'll harden our resources to kind of like mitigate.

Can you send us that list of what you guys gonna do with the funding?

Sure. It's all put in the report, so we can send that to you.

Okay. DOD. Oh, sorry. Stay right there. Senator Kim.

So they allocated to the economic development by this fund is managed by who?

By DBEDT.

By DBEDT.

Okay. And basically it's going to go to...

Correct.

I'm gonna have to get back with you on the CAT report has the items in there, the different buckets and this will...

So yeah, so the economic revitalization would be geared towards to address the issues that's come up with with others with the nexus to the tourism industry. So it'd be a fund be able to use for these sort of resiliency projects, but also infrastructure projects within the tourism and resort districts as well as marketing.

Well, it's interesting because when HTA had dedicated funding, I believe they got about 80 million and it fluctuated and then it got cut down and it went back up. And so it seems like you're using this to then we put in that amount $90 million, what HTA had as dedicated funding. So this is like a dedicated funding?

Well, so it's a dedicated funding, but I think it's a little different. It does have some of those same aspects of it that it can be used for marketing, which if I'm not mistaken, previously could be used. But this is also looking at projects that the state is currently funding with CIP, with bond funds in resort and tourism areas that can now be paid for by the visitors. So shoreline restoration, seawall repair, you know, major infrastructure projects that we can now offset.

But you already said marketing. So isn't that supposed to be out of the HTA budget though? Is it double dipping in this sense? If we're going to give it to HTA for marketing, it should be clear it shouldn't be hidden inside this fund. I have some real problems with this.

Senator Richards.

Yeah. Thank you. For DBEDT. I get it. I know why you're asking for this to come forward. My concern is on the other end that we're going to be hitting a price threshold that we may start discouraging visitors. Has that been looked at and has that been figured in? Because if we take this up too high, my fear is going to have less people visiting and may be counterproductive.

Yeah. So, I mean, Senator, it has been looked at, and I think that some of the concerns have been brought forth by the tourism industry. And so we're mindful of that. I think, you know, there's a variety of factors that's going to affect that. Right. TAT is one of them. I mean, you know, all the other increased inflationary costs with travel, room rates, all those things also play into it.

I think we're trying to strike a balance between how do we find money to invest for projects that need to be mitigated for problems that we know we're already facing and are going to increase, but having the least amount of impact on our local residents and coming out of their wallets or pocketbooks.

So I think this is what we're trying to thread the needle on this is try to get our visitor industries and our visitors to pay a larger share of their impact on this while maintaining, you know, maintaining the resort areas and the economic drivers of the state.

That's where I'm concerned, because if we get to a price point where we're discouraging tourism, we may be actually driving it the other way. And that's where I have some angst.

Absolutely. And I know we're still working on our visitor arrivals, but they, I mean, they are up where our spending is up significantly. So, I mean, I think we always have to look at that balance, and we want to work with the visitor industry to make sure that we don't tip that balance. But in our mind, based on what we've looked at, that this provides that kind of, we're still in that balance phase.

Okay, thank you. Thank you, Chair.

Thank you. Senator Rhoads.

Thanks. So in that same vein, I mean, it seems to me like for a while now, Hawaii residents have been sort of of a of two minds on the issue. On the one hand, when tourism went way down during the pandemic, a lot of people were like, oh, this is great. There's no tourists around.

On the flip side, of course, when the numbers don't come back up as fast as everybody hoped, everybody's like, oh, no, we've lost all the tourists. But would it be... I guess the question is, do we actually have a conscious strategy on what we're trying to do? Are we trying to slow the rate of tourism growth and get a different kind of tourist? And if that is the case, wouldn't this kind of a bill help where the price point is a little bit higher?

So as far as what this bill is trying to accomplish is to determine funding mechanisms for our severely underfunded mitigation resiliency projects across the state. That's kind of it. Right. Without taxing our taxpayers even more. And so I understand where it could have those unattended, you could have other effects, but that's not the intent of this legislation.

Okay. All right. Thank you. Thanks, Chair.

Thank you. Any other questions? Seeing none. We'll go to recess for decision making.

Okay. We are back for decision making. On Senate Bill 893 relating to the economy. I'm sorry, hang on. Recess.

On Senate Bill 1396, relating to economic development, we are passing with an SD 1 and incorporating the amendments from the Attorney General relating to the collections of fees. We're also making technical amendments and defecting the effective date to July 1, 2050. Any discussion? Senator Kim.

1396, Correct? Madam Chair, I'm going to highly recommend that we delete out on page 13, lines 15 through 17, number 6. 7.3% of the total revenue collected pursuant to Section 237D2 shall be allocated to Economic Development and Revitalization Special Fund. And it's going to be managed by DBEDT.

They already have a budget and we fund them. And if there's projects that they need to have funded, then we can fund them. But this is a dedicated funding that we did away with a while, and why would we give them a pot of dedicated funding when they have to come in anyway? So it makes no sense. So I am concerned about the increase in the TAT. But this one measure, I think why would we do that?

Thank you, Senator Kim. And we will be including that in the amendment changes on the removal. Thank you. Any other discussion. Senator Richards.

Yeah, I am concerned about the financial side and the bump in the TAT, so I will support, but I'm going with reservations because I'm not quite there yet.

Thank you. Senator Fukunaga.

Thank you. Same. Same reasoning.

Thank you. Any other discussion? Seeing none. Vice Chair for the vote. Chair goes aye.

I vote with reservations. [Roll Call] Chair, your recommendations adopted.

Thank you.

Same recommendation for AEN. Any discussion? Chair votes aye. Vice Chair.

Senate Bill 1396, Chair votes aye. Vice Chair votes with reservations. [Roll Call] Chair, you have four in favor. Motion adopted.

Thank you, Members.

With that, we are adjourned.

Okay. Hello and welcome to the Joint Hearing with the Senate Committee on Economic Development and Tourism and the Committee on Commerce and Consumer protection. Today's Thursday, February 13, 2025. This is our 1:03 pm agenda. We're in conference room 229. We have one bill on this agenda, so we'll start it off with Senate Bill 893. First up on the testifiers list, we'll have the Department of Commerce and Consumer Protection, Nadine Ando.

Good afternoon, Chair, Vice Chair, members of the committees. We stand on our written testimony in opposition to this bill and will be available for questions.

Thank you. Next up, Kory Young from the Attorney General's Office.

Good afternoon, Chair, Vice Chairs, members of the committee. We really appreciate the bill's desire to stimulate the local economy and generate tax revenue, but we have very serious concerns, as noted in our testimony, regarding the likelihood of increased crime.

While financial crimes, of course, you would expect to perhaps come out of gambling legalization, the increase in domestic violence, violent crime, and the potential for human trafficking were particularly concerning to us in the studies we cited to. We appreciate the opportunity to be heard by the committee and I will be available for any questions. Thank you.

Thank you. Next up, Aloha Stadium. Aloha Stadium, Chris Sadayasu. Wait. Comments. Next up testifying, Department of Budget and Finance with comments. Prosecuting Attorney General, Steve Alm, please.

Good afternoon. Chair DeCoite, Chair Keohokalole, Vice Chair Wakai and Fukunaga. I'm Steve Alm, I'm a prosecutor. We do stand in opposition. We share many of the same research outcomes the Attorney General's Office alluded to. The one thing that I'd like to bring up that scares me is watching football games. Now, half the commercials are on sports betting and gambling.

And there's research showing that in states that have legalized sports gambling, you have many more people getting in trouble and it's lower income folks. And so I don't even know right now how many people are sports, with their phones in the privacy of their home and that could create more problem gamblers. Having a casino would just give them another outlet. So I appreciate the chance to address you. Thank you very much.

Thank you. Next up, Boyd Gaming, with comments, Stanford Carr.

Chair, Stanford Carr, with Aloha District Partners. We stand on our written testimony.

Thank you. Next up, Roy Pfund, with Roberts Hawaii in support. Michael Yadalu in support. Eva Andrade, Hawaii Family Forum, in opposition. Bumpy Kanahele Pu'uhonua.

Chair, Vice Chair, members of this committee. I added an op ed to my written testimony I submitted yesterday. And one thing that I think can help Maybe the legislators is reconciliation the term reconciliation, because Native Hawaiians have never been part of, you know, these types of discussions and stuff. And we want in, we want to be on that table.

And I oppose especially like when you look at 893, it's kind of like putting a cart before the horse. You know, the working group was the other day and then, but they already got plans already, you know, so it makes sense to me. And with that said, thank you.

Next up, John Kealoha Garcia, testifying Nation of Hawaii, in opposition. Brandon Makaawaawa.

Chair Members, again following what our President said. I mean, full opposition of this bill because again, we just had the working group previous and then now we voted on 120 year license for something that we don't even know about yet. And I think again, like Malcolm iterated, you know, if anybody, you know, if we're going to push this down the line and we're going to have gaming because of the economic benefits, okay, But Hawaiians got to be involved because they're building this on Hawaiian lands. And we have not had a reconciliation process yet.

We don't get barely any benefits from any of these things. So, you know, maybe one day we can look into gaming. But I don't see pushing this forward anytime soon without actually understanding the pros and the cons. So I'm in opposition to this. But thank you.

Thank you. Next up, Jodi Akau in support, from Neighborhood Security Watch. Bulla Eastman, Free Inside Ministry in opposition. Allen Cardines in opposition. Joy Chinen in opposition. Oh, I'm sorry. Oh, yeah. Please come. Thank you. Hello.

Hello. Aloha, Senators. I stand opposed to, to this SB 893 because Hawaii is such a special place and we don't have gambling here. I feel that bringing this casino would totally ruin our beautiful land by ruining families. We've already seen what gambling houses have done to our communities and we had one down the street from us and there was nothing that the police could do about it. Gambling will only put people in poverty and it's going to keep them in poverty. So I do not see any benefits to our families. I do not see how it will benefit anybody. Thank you. Thank you.

Thank you. Next up, Ayman El-Swaify in opposition. Germaine Meyers in opposition on Zoom.

They're not present on Zoom, Chair.

Noela von Wiegandt on Zoom in opposition.

Not present on Zoom, Chair.

Kai Lorinc on Zoom.

Not present on Zoom.

Okay. Carol White on Zoom in opposition.

She's also not present on Zoom.

Okay. Shelby Pikachu.

Not present on zoom Chair.

Okay, so with that being said, there's 69 individuals in opposition, nine individuals in support. Anybody else wishing to testify on this measure, please come. Thank you.

Good afternoon, Chair, Vice Chair, members of the committee. My name is Dwayne Bautista. I work for the Ironworker Stabilization Fund. But today I'm going to testify on behalf of myself as a citizen or resident. I strongly support Senate Bill 893. The reason for it is Hawaii right now, we're in need of some kind of finance, especially what's going on from the federal side or what's coming down in the future. We need some kind of sort of revenue to help out.

Today I read the newspaper, it was sad that we have our teachers up in DC fighting for some education money that possibly could be cut. 11% is going to be cut if the federal funds is cut off. 11% equals up to $276 million for Department of Education. And that's our kids. And as you read it a little bit longer, USDA is going to cut too.

That's a federal program that helps out some food coming back to our kids. Hawaii needs help. Hawaii needs some kind of new revenue. I know a lot of people say about the crime and stuff like that, it's true we don't even have gambling yet and we just had something last night or the other day. But that is me as my testimony. I strongly support this bill. Mahalo.

Thank you. Next up, please.

Hello, Chair, vice chairs. My name is Cody Sula. I work for the Ironworker Stabilization Fund. On behalf of our managing director, we're in support of the intent of the bill. We do realize that a casino or gaming is a hot topic.

But given the fiscal crisis that we're in right now with the lack of funding, diversifying the economy has always been something that was always talked about in Hawaii for generations. You know, we talked about the newspaper recently. We talk about tourism isn't bouncing back the way it should after COVID.

Talk about the kids, school lunches have gone up to $9 and state needs to find funding. So we're in support of anything that will bring any new money into the state or help revitalize the economy. Because the truth is a lot of our local people, they've already left. We've had a steady population decline since 2016.

And the latest Alice report, they reported that 180,000 of our local residents are considering relocation. So our focus is to make sure how can we keep our people home, you know, and diversifying the economy is one of the most important ways to do it because we've seen. I came from tourism before this. We've seen how it's become unstable after COVID. Thank you.

Thank you. Anybody else wishing to testify? Let me start in the back. Come, please. Thank you.

Hi, committee members. Llasmin Chaine, executive director for Commission on the Status of Women. Thank you for giving me this opportunity to present testimony and comments. I stand in opposition of this bill given the commission's previous gender impact statement and current research that substantiates that gambling harms are increased for intimate partners and family members with casinos and gambling behavior.

This past November, United Nations Office on Drugs and Crime reported that in recent years, gambling and casino related crimes have emerged as significant challenges in our region. What's happening is criminal networks are utilizing casinos to engage in human trafficking and to launder the proceeds of drug trafficking. So I would encourage you to oppose it.

And if you choose to move forward, I have the following comments. Given that a number of our gender based violence organizations may be facing federal funding cuts that you consider appropriating state funds to support those survivor services and support prevention education that you consider.

Thank you. Can you give that to us for each testimony so we have something on record?

Yes. That you consider aligning with California's qualifications for the Gaming Commission members. Yes.

Thank you. Okay, next up. Thank you.

Hi. Aloha. Nice Chair. Chair. Thank you so much for allowing me to come and share. My name is Jared Yamaguchi. I'm a Keiki O Ka 'Aina community leader out of Mililani. Have four small children. I share from a place of experience with my father being addicted to gambling. I stand in opposed to this bill.

My dad would take us to chicken fights and to gamble on every sporting event that is under the sun and gambled away money that we didn't have to put our family at risk. We had to borrow money from family members and it destroyed our family. And I just don't choose that for my kids or any ohana in Hawaii. So I strongly oppose this bill. Thank you.

Thank you. Next up, you. Yeah. Sorry, please. Thank you.

Aloha, Chairs and senators. Thank you so much for giving us the time to share. I stand in opposition to this. My name is Calvin Chinen and I just come as a grandparent and someone who has loved Hawaii for all my life. If we propose and pass this bill, we know, we know there will be families that will be destroyed. There's no question. And all of you as lawmakers are making that decision, of course you could say, well, but we're keeping the people of Hawaii in poverty. I'll say no.

The greatest generation came out of the greatest needs of our country during the Great Depression. It created creativity in a generation and courage that we have not seen since. Being deprived can be the source of great creativity. I think that we stand on the verge if we invest in our families to see so much more. Thank you.

Thank you. Anybody else wishing to this way.

Hello. Good afternoon, members of the Senate. I'm here to express my opposition to SB 893. At the hearing before the House Committee on February 12 on the related white to legalize large scale gambling, the city and county prosecutor strongly opposed the bill and they quoted a study the case of access to support gambling was harming consumer financial health by increasing their level of debt. And they found that the likelihood of increase in bankruptcy of 25 to 30%.

And this is in addition to credit card and auto loan deficiency besides our high cost of living. And the state attorney general as you heard opposed the bill with and in their testimony they opposed the bill with grave concerns. And also you heard the Department of Commerce and Consumer Affairs also post bill with these three departments that are keepers and managers of our land and people and they are opposed to the bill. This bill should come to a screeching stop.

They are saying that it's not good for our island state and they are like boots on the ground. They know our community and the peoples in the land. They are saying that it's not good for our island state and they have grave concerns if it goes forward. It is imperative that we listen to them and not go forward with this bill. The life of the land is perpetuated in righteousness.

Thank you. And can you please state your name for the record?

Oh, I'm sorry. Susan Kawai.

Thank you. Next up.

Thank you very much for listening to us. I'm Rosa Maria Hearst. I'm coming from the North Shore Laie. I am strongly in opposition of this bill. I think gambling is just pretty much like any addiction like alcohol or tobacco or drugs. And it will be really detriment for our families, our kids.

And I understand that we need money in our island lately. We understand that they were. The President will put taxes on the bringing coffees and avocado for instance. And so we are producing great coffee in in our islands and also we produce a lot of avocado.

Maybe we need to put the money in agriculture so we can produce that and we can send our best coffee to the nation. So I please oppose of this deal. Please listen. Because our kids are important. Maybe the kids are not involved right now in that gambling. The parents have. Grandparents have. And like the young gentleman said, families are destroyed because they are gambling what they don't have.

Thank you. Next up.

I thank you so much. My name is Margaret Hannemann, and I oppose this bill because of, we're in our own business. Fathers and mothers for children. We're all about our kikis. We're all about saving our children, saving our families and saving the fathers. The fathers need to be in the home, but they'll take mothers and fathers and others out of their home, and they need to be there to take care of the children. So I oppose this bill. Thank you.

Thanks.

Aloha. My name is Art Hannemann. I'm, my wife, fathers, mothers for children. Strongly oppose this bill in terms of what it can do to families. We live in the country, lived here a lot. My family's been here for years. And people in Hawaii, they struggle. They struggle financially. They can barely make ends meet.

People are living from check to check, paycheck to paycheck. Studies have shown that people who are involved in gambling, they spend more than they were hoped to spend on gambling. They're always struggling to find money to pay their bills or their gambling debts, and they take out loans.

25% of the households here in Hawaii are led by a single parent. 10 people out of a thousand here in Hawaii, 10 marriages end in divorce. And the number one problem for divorce is finances. I believe that that number will be escalated, will increase in terms of those who will be going through divorce and the impact it will have on the family as a result of gambling. Just. I don't see any. She mentioned. The life of the land is perpetuated in righteousness. And I truly believe, as part of the Hawaii ohana, there is no righteousness in passing this bill. Thank you.

Thank you. Anybody else wishing to testify? Okay. Seeing none. Members, any questions? Senator Wakai.

So as I look at your testimony, it's based on the presumption that any kind of casino is going to increase crime. And many of the opposition here has this assumption that we're starting from zero when it comes to gambling here. But in fact, there's a lot of gambling going on in this state. They're called gambling houses.

I talked to Mike Lambert, who's now the new acting Director of DLE, former narcotics vice at HPD. Just to give me an idea of like, how much are we talking about in terms of gambling that's going on in our community?

He says on any given day, there's 60 gambling houses that are in doing their thing and each on the conservative side. He said each of them does like $10,000 worth of betting that goes through a gambling house. You do that for 365 days out of the year.

He estimates that right now there's $220 million of illegal gambling going on in this state. So the presumption that somehow this is going to bring crime here is first of all, there's already gambling here. And then when it talk about crime, a lot of these gambling houses are havens for drug deals.

There's assaults going on there, there are thefts. So it's not as if it's not here already, correct? Right. And so this bill recognizes that. And in the language of the bill, it actually puts aside a percentage of the revenues for gambling addiction intervention programs, which we don't even have here in Hawaii.

But if you're looking at the numbers and saying, well, you know, basically by instituting a casino or expanding gambling, since we already have illegal gambling, we wouldn't expect, expect an expansion of criminality. What we would point to is the study that was in our testimony regarding Makao. Makao had gambling.

Makao's had gambling for a long time, but when they expanded it, when they lowered some of their standards, again, crime increased consistently there too. So by arguing we have crime here already regarding gambling, we shouldn't expect to see an increase that's not been consistent with the studies we cited to in our testimony.

Well, the bill takes into account the potential of more addictive behavior and sets up a program to address that. So if, let's say if I'm a guy going to an illegal gambling house and then now there's a potential casino, I'm probably going to go gamble at the casino.

Why would I go back to that house stuck in, in Khalifa someplace and yeah, what. Just bring it out in the open. Get these people the intervention that they potentially need because we don't have a program for that. And then for the state, there's a benefit of taxing what is already happening in our community anyway.

There's always going to be a slice of the population that will engage in a behavior regardless of whether it's legal or illegal. Yeah, you pointed out drugs. So gambling is the same way. You know, there are people who are going to be willing to go to a gambling house and break the law and risk, you know, potentially having the house raided, whatever violence might occur in the gambling host.

But there are also a segment of the population who's not going to do that, who is going to drink alcohol instead of doing illegal drugs, because that is a legal choice. So you're going to have a segment of the population who is now going to this legal gambling, this casino, who might not otherwise have been exposed to becoming gambling addicts, who might not have been exposed to, you know, beating their partner because they lost in a gambling game, who might not be exposed to these other types of risks.

And then as far as the risk to human trafficking, the Hawaii State Commission on the Status of Women did assessment and found that we weren't talking about gambling houses when they did their assessment. It was in terms of a casino or casinos being brought in and the likelihood of increased human trafficking.

And that would be another aspect where I don't think the gambling houses will necessarily generate that type of business. What you're looking at with the casinos are bringing in populations of largely men and largely men with expendable capital. As part of the studies that we cited to in our testimony, there was the fact that a lot of these gamblers had also paid for sex within the last year of gambling.

So you do look at an increasingly bringing in an increased population of folks who might be victimizing, you know, the local population in terms of women for human trafficking and other crimes like that, besides the crimes that you've already pointed out do occur in these gambling houses.

Can I ask Stanford Carr? Mr. Carr, I want to focus more on the economics and particularly your role in the development of Aloha Stadium. And I know you're in the kind of throws of getting a project agreement signed. What would this, if this bill passed and allow you to put a casino next to the stadium, what would that do for your project and what would that do for the finances of the state?

Well, it would definitely make the project financeable. But before fully responding to that question, just to give you some background so people have context as to how long and how in depth we've been involved in this project. We first responded in 2019 to the letters of interest. We submitted a request for proposal in December of 2021.

So it's been a number of years. We expended a few $1 million in its pursuit. In 2023, Governor Green, they cancelled the previous RFQ RFP which required it bifurcated the development. One developer for the stadium and one developer for the New Aloha Stadium real estate.

And we kept advocating for just one developer in order to coordinate and properly finance a new community. In our response and working, formulating our response to the RFP and submitting it on July 31st of 2024, realizing that through all our due diligence in preparation and planning a new 21st century urban community, that the $350 million appropriated by the Legislature was very much insufficient to realize a stadium of quality that I think anyone would want to put their name to or one that Hawaii would be proud to have. And a stadium that has the amenities that could attract professional field sports.

And we are in discussions with professional rugby leagues, US Soccer leagues and there is an interest for the NFL to come to Hawaii to play preseason games. The LA Rams through Stan Kroenke. Kroenke Sports Entertainment just signed a two year agreement with HTA.

They're going to have their spring training in Lahaina, Maui over the next couple of years. They have a love for Hawaii and I'm sure that if we build an aspirational stadium, we can bring back the pro bowl here. Coming back to the economics, I'm sorry, coming back to the economics, you know, it was, the proposal was structured in a way that they felt that the developer will make money on the real estate sufficient to subsidize the cost to build an aspirational stadium.

Well, we went deep into the underwriting of financial feasibility that the consultants of the stadium authority hired and it assumed selling leasehold condominiums in the stadium district where Aloha Stadium is located at $1,200 a square foot for leasehold condos. That's what existing luxury condos in Kaka'ako sell for brand new and so fee simple.

And so the project, the feasibility is got a lot of shortfalls. We have 32 million relocation costs of existing infrastructure, $147 million in phase one infrastructure before you even start the vertical buildings. So that's you take that 180 million and add that to another 350 million or 700 million to be build a decent stadium that was envisioned back in 2017 when this all started to come about. The shortfall is over $550 million and you just can't make that up with the real estate investments. It's just not economically unfeasible.

And so we are pursuing every option, including other public tax exempt financing in order to realize it. And we're spending the time and energy because we deserve a new stadium and a new urban community with the attractions that will serve this community for the next decades or next century.

So passage of this bill would help you get the stadium that the public can enjoy, have some amenities, perhaps be larger than 25,000 seats.

Yes. And with the quality it will attract professional field sports. Yes. And it's more than just a stadium. We have manifested this opportunity, not a stadium centric community, but a urban residential community that is amenitized that will people live, work, thrive, and learn with active parks, passive parks, the home of the horse, Hawaii Music Hall of Fame, the home of the Hawaii Sports Hall of Fame, a museum, you know, ethnic markets. I mean a real gathering place that we really don't have today. Thank you. Sorry for the protracted explanation.

Senator Awa.

Yeah. If I can ask what happens if we don't have that extra revenue of a casino to the plan?

We right now, like I said, we're pursuing every opportunity in order to find a solution to realize a stadium that we deserve and that will attract other venues, including concerts. Realistically we would be pencils down and walk away from the project.

Thank you. Any other questions?

Question for the AG.

Senator Kim. Thank you. AG please.

Thank you. I just wanted to follow up on the gambling houses and from what I see in the newspapers, isn't it more of like slot machines and gaming machines or is it casino type house gambling houses? I've never been in a gambling house.

As we understand it, you're right, there are basically a bunch of different kinds of gambling machines. There's video poker, there are card tables and other types of illegal games. But there's a wide variety and it will differ from gambling room to gambling.

So it's more of that nature of machines versus actually casino.

There are live casino type games like if you wanted to play blackjack or poker or other games like that, there are those types of games available. It will depend on room to room. Like there are kind of back room gambling establishments in the back of some video arcades that are almost entirely, as you're saying, you know, electronic games.

Whereas in other gambling houses that are more in residential communities, you might see more card tables, you might see more other types of games. And then there will also be like usually at these places the ability to sports gamble or you know, have essentially bookies on the establishment.

When you talk about amount of revenue from that is being generated from these illegal gaming in Hawaii, what takes up the biggest amount? Is it more like sports betting? I know there's a lot of sports betting going on versus these illegal gaming houses or casino type houses.

We could try and follow up on that for you and try and get that information. But I would not know that offhand. And I don't know, other than by polling the illegal gaming community, how we would establish, you know what I mean, where the bulk of their income is coming from.

Because a lot of people bet on games among themselves. Right. And I don't know how legal that is, but yeah, you know, parlay, 65. I happen to know all those things, but. So that's a lot of that goes on. But not to say that they would.

Over home games and stuff, we have the law, right, where if there's no. Essentially no house or no house take. There's essentially not. It's not constituting illegal gambling. So, I mean, the home poker games, as long as they're not. You know what I mean, we're okay.

Okay, thank you.

Okay, I'm going to remind the members that we need to be stopping at 2:45. Any other questions? Senator Richards.

Attorney General. Sorry, I tried to grab you quick. You made a comment about, for Makao and if you lowered the standard, the increase in crime rate specifically. What are you talking about, lowering a standard?

As we understand it, Makao had certain, I guess, higher thresholds to even get into some of the casinos or for the casino gambling. So when they decrease the standards for actually like allowing more people into play and broadening the gambling base, it was less elite gambling and more just kind of population gambling. A wider array of people could gamble. They saw that increase in crime despite the fact that gaming had existed in Makao for, I want to say centuries.

Yeah, centuries, probably. Okay, thank you.

Thank you. Any other questions? Seeing none, we will go into decision making. So I want to just say this. You know, there has been a lot of testimony. Casino gambling has not always been our famous, our favorite subject. Irregardless, whether we're flying to Vegas or we go to any other place, you know, we've always had our challenges here in Hawaii. I can appreciate the discussion.

I can appreciate the, you know, the reasons why we do what we're doing, this is not a place where we want to continue to tax, continue to keep taxing and taxing the residents and the people in Hawaii. And while we want to retain our lifestyles of who we are, where we came from, and not to forget, you know, our core values. After reviewing this bill and the testimony received, we heard opposition from the DCCA, the attorney general, and the Honolulu prosecutor.

In addition, there was overwhelming opposition to this bill from other testifiers. For those who supported the bill, I considered and appreciated your points of view. For those reasons, I am deferring this bill indefinitely. With that, we are adjourned.