House Standing Committee on Consumer Protection & Commerce

Good afternoon, everyone. We are convening the Committee on Consumer Protection and Commerce. It is Wednesday, March 12, 2025 at about 2:10pm in Conference Room 329. In order to allow as many people to testify as possible, there will be a two minute time limit per testifier.

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Such behavior may be grounds for removal from the hearing without the ability to rejoin. All right, first up, we have SB 102, SD2 relating to restaurants. Just one testifier today. Victor Lim in support. Not present. Yes, we have no testifiers. Sorry, Members, no questions then. Moving on, SB 1367, SD1 relating to installment loans.

Lots of testifiers for this one. DCCA. First up in support.

Dwight Young, Commissioner of Financial Institutions. We stand on our written testimony. I'm here if you have any questions.

Thank you. Next up, we have Board of Psychology in support.

Good afternoon, Chair, Members of the Committee. My name is Christopher Ferdinand.

I'm sorry, am I on the wrong. Wrong one, wrong run? Sorry, that was DCCE. It was just one of you. Man, these are going real quick. All right, anyone else here to testify on SB 1367? SD1 Members, any questions? Okay, moving on to SB 1373, SD2 relating to administrative licensure action against sex offenders.

First up, we have DCCA, again in support.

Good afternoon, Chair, Vice Chair, Members of the Committee, I'm Nadine Ando, Director of DCCA. We stand on our written testimony in support of this measure and will be available for questioning.

Thank you. Next up, Board of Psychology, who we know is here in support.

Good afternoon, Chair and Members of the Committee. Christopher Fernandez, Executive Officer to the board. I'm here to stand on the board's testimony, supporting and offering comments. Thank you.

Thank You. Next up, we have Board of Physical Therapy in support.

Good afternoon, Chair, Vice Chair, Members of the community, my name is Rochelle Araki, Executive officer. The board stands on its written testimony in support. Thank you.

Thank you. Next up, Board of Naturopathic Medicine in support.

Thank you, Chair. The board stands on its written testimony supporting this measure. Thank you.

Thank you. Next up, the Board of Chiropractic. I feel like we're missing a word there, but. Sorry. In support.

The board stands on its written testimony in support. Thank you.

Thank you. Next up, Board of Dentistry in support.

Good afternoon, Chair, Members of the Committee, the Executive officer of the board. The board stands on its written testimony and support.

Thank you. Next up, Board of Massage Therapy.

Here again. Thank you, Committee. The board stands on its written testimony in support. Thank you.

Thank you. Board of Nursing. Next up, in support.

Good afternoon. Alexander Pang, Executive officer for the Board of Nursing. We stand on our written testimony. Thank you.

Thank you. Next step, Board of Speech Pathology and Audiology in support.

Thank you, Chair. And the board stands on its testimony supporting the measure. Thank you.

Thank you. Next up, Board of Optometry in support.

Good afternoon, Chair, Members of the Committee, Kerrie Shahan, Executive officer for the Board of Optometry. The board stands on its written testimony in support of the measure. And since I'm up here, Kerrie Shahan, Executive officer of the Board of Barbering and Cosmetology. The board stands on its written testimony in support of the measure. Thank you.

Thank you. Next up, Hawaii Medical Board in support.

Good afternoon, Chair, Vice Chair, Members of. The Committee, Chelsea Fukunaga. On behalf of the Hawaii Medical Board. The board will stand on its written testimony in support of this Bill. If it's okay, can I send in. Support for the acupuncture board as well? The board was done on his written testimony and support. Thank you.

Take you out of order. All right, HPD. They cut you in line. Give her a ticket. Next up, HPD in support. Oh, you got away with it this time. All right.

Hi. Good. Hi. Good afternoon, Chair, Vice Chair, I'm Major Carlene Lau, HPD. We stand on our written testimony in support of this Bill.

Thank you. Anyone else here to testify on this measure? Okay, Members, any questions? Okay. Seeing none. I want to backtrack real quick since I got turned around to SB 1367 SD1 relating to installment loans. I did have one question for DCCA. This measure allows them to charge $5 for debit card payments, correct?

Is that $5 per debit card use?

Yes. So let me just explain a Bit. If they did a normal ACH payment or send a check in and the check bounces, the consumer would be hit with a return check fee from the bank as well as the lender at a point of sale. Debit card transaction, it's a one time thing. So the transaction gets rejected.

The $5 wouldn't be assessed. If the transaction is approved, it'll go right through. They paid a $5 convenience fee.

Okay. At $5 a transaction, that seems really high for the use of it. I understand comparing it to checks bouncing. Yes, and that's maybe a fair comparison. But $5 seems like kind of an extraordinarily high payment for just every debit card use.

If it was A$5 to get a debit card, I could see that being a little more reasonable. What, what is the fee actually paying for here? Is it truly 5? I mean, is it really costing these companies $5 per use?

Probably not.

Do you have any idea of what it might cost?

Because I feel like typically a merchant transaction is, you know, 3%, 2% to 3%. So I would imagine a normal loan payment might be 100 bucks. So yes, I agree it is a little high. But the alternative being they don't take the debit transaction. They force through ACH or take a check from the consumer and it bounces.

You're talking 25 bucks from the bank, 25 bucks from the lender.

But why are we making it, why are we making it so high? I guess, I mean, I'm more inclined to set this at maybe a dollar. I mean even a dollar seems a little excessive. I pause when taking money out of an ATM for two bucks or three bucks and that's very cheap.

But you know, I feel like most people don't want to. If it's every time you use your debit card you're getting charged five bucks. That seems kind of extraordinary. Do you think that there's going to. If we do move it down to $2 or $1 per transaction, which again I still consider fairly high.

Do you think these companies are going to pull back on issuing debit cards?

We would have to talk to industry on this maybe, possibly because it might not be worth their while, but we can, we can speak to industry and get back to you.

Okay. So making a dollar on every transaction. Anyway, if you could speak to industry, I'm probably going to amend it down significantly just because I feel like that's doing a disservice to our consumers. But if you can get. Yeah, please contact industry and let me know. We'll do. Thank you. All right, let's move on.

SB 1142 SD 1 relating to insurance proceeds. First up, we have DCCA with comments.

Dwight Young, Commissioner, Financial Institutions. We stand on our written testimony.

Thank you. Next up, we have counsel for Native Hawaiian Advancement in support.

Hi. Aloha. Maikako. Madelyn McKeague on behalf of the Council for Native Hawaiian Advancement. We stand on our written testimony and support and just want to emphasize the number of underinsured homeowners we saw after the Lahaina wildfires and that this is a very easy fix to amend that sit or at least ameliorate it for future disasters. Mahalo.

Thank you. Next up, we have United Policyholders in support. Says in person. Are they on zoom? Okay. United Policyholders. Okay. Anyone else here to testify in this measure? Members, any questions? Right. Next up, SB 1044 SD 2 relating to the stabilization of property insurance. First of all, first up, we have Hawaii Green Infrastructure Authority in support.

Good afternoon, Chair, Vice Chair and Members of the Committee. Gwenyama Morolao, The Hawaii Green Infrastructure Authority stands on our written testimony and support. Thanks.

Thank you. Next up we have Department of Attorney General with comments.

Good afternoon, Chair, Vice Chair, Members of the Committee, Deputy Attorney General Andrew Kim. We provided written comments just noting our concern that the bill makes an appropriation. From the General Fund to provide a loan to the HPIA without any conditions on the loan. So we provided some written comments on suggestions on how to rework that language.

Thank you. Next up we have DCCA Insurance Division with comments.

Thank you.

Good afternoon, Chair, Vice Chair, Members of the Committee, Jerry Bump, Acting Insurance Commissioner. You have our written testimony, but I just want to summarize it just a couple key points that we've notated. One, we have we do know of the concerns of the money.

So we have reached out to the AG and we have drafted some a potential General Fund. General obligation bond language that could be inserted into the bill as an option instead of a direct loan. And then additional language those bond proceeds. Would have to be issued to a.

State agency which would be HHRF and then HHRF could then loan. If this language is inserted, they could loan funds to HPIA. I also wanted to noted that at the previous version of the bill, the Attorney General correctly noticed that there was an incorrect section being referenced and they asked to delete actually shouldn't have been deleted.

It should have been changed to the correct section. So we've inserted language and asking that to be reinserted. And then lastly we know that A change also was made to clearly identify domestic insurers as the ones that should service these the entity. We do have concerns about that and we've sort of detailed that in there.

So available to answer any questions that you may have.

Thank you.

Thank you.

All right, next up, AARP in support.

Good afternoon, Chair, Members of the Committee, I'm Audrey Suga Nakaga from AARP and we stand in strong support of this measure. Thank you.

Thank you. Next up, State Farm with comments. Thank you.

Chair Matt Sujimore. On behalf of State Farm, we'll stand. On our written testimony offering comments.

Thank you. Next up, we have Hawaii Bankers Association in opposition. That's surprising, not on Zoom too. Okay, next up, Hawaii Realtors in support.

Aloha Chair, Vice Chair, Members. Lindsay Garcia from Hawaii Realtors. And we stand on our testimony and support.

Thank you. All right, a couple of individuals to testify. First up, we have Gregory Masakian with comments.

Aloha Chair, Vice Chair, Members of the Committee. My name is Greg Masakian and today I'm testifying as an individual. I do currently serve as the first Vice President of the Kakua Council, a Director of the Hawaii Alliance for Retired Americans and a Member of the Waikiki neighborhood.

While the intentions of SB 1044 SD2 are good, and many who hear about a Fund to help condominium owners and homeowners think it's a great idea, the reality is that this bill will do really nothing. It's not going to help substantially to provide any funds to any condominium associations. And the reason is this.

If you just look at the fir at the main sentence or one sentence of the Bill that actually is substantive that talks about how to access funds, it says specifically, any applicant for insurance from the Fund shall provide proof to the satisfaction of the board of the inability to obtain hurricane property insurance from insurers licensed to transact businesses in the state.

So what's been very clear from the many people that I've spoken with is that as insurance premiums are skyrocketing, they were all offered hurricane property insurance. The ones that I'm aware of, everybody's been offered hurricane property insurance for an extremely high spiked rate. So people aren't being denied coverage.

And unfortunately, what's going to happen is that due to that, no one's going to be able to access this Fund. So while our legislators are marketing this, and I mean, I'm not saying you're marketing, but many people are marketing this, it's being pushed through legislation. You're talking about it today.

So I refer to that as, in a sense, marketing. There's many people speaking on it outside. There's not going to be real access to it. And the Hawaii Green Infrastructure Authority appears to also be trying to steer new roles under their responsibility. And in my opinion and others, this is out of scope of their mission.

So just to summarize, I'd ask that you actually look at the testimony specifically from the Department of Budget and Finance that was the most compelling for me. And I can only say this.

I truly pray that you listen to the opposition testimony and you listen to those that are raising concerns, because ultimately, with these bills that really aren't going to do anything, homeowners are going to end up losing their homes to foreclosure because maintenance fees are going to continue to spike.

Assessments are going to continue to be given to homeowners, you know, one time assessments or on a payment plan and our kupuna and those who are financially not able to come up with those payments are either going to lose their properties to sales or to foreclosure.

So I ask that you do more when you look at this and hopefully you can amend this to make it something much better. Thank you.

Thank you. We have one other person, Jessica Herzog, in support.

I actually was in support with reservations. Thank you all for your time and letting us come to these meetings on Zoom. It's greatly appreciated. For people who have to work for a living, it's very difficult for homeowners to even understand this process.

This is my first year coming here to submit testimony after going through, you know, a very unpleasant condo experience involving embezzlement. So in regards to this insurance, I absolutely agree with the last speaker that these bills need to be looked at as a holistic issue across all of the condo problems that we're having.

And I requested in several of my testimonies that the legislative body create either a task force or some sort of citizen Committee so that you can actually hear the problems from people like me and others at associations and try to drill down to the core issues of why we're suffering.

There's systemic corruption, there's, you know, issues with insurability, and we're not thinking out of the box and we're not trying to create a comprehensive solution with these piecemeal bills. So that is what I'm asking of all of you is to go back to the drawing board and put together a proper task force to address condo issues.

Because there are so many issues and there are hundreds of thousands of people in the state suffering under The. I don't know what to call it other than mismanagement of the situation by everybody involved.

And everyone who's getting paid to do the work for these condos is truly interested in filling their pockets, not what's best for these owners. So to have them be your primary advisors is not fair to the hundreds of thousands of us that are subject to the rules that are being created.

I thank you for your time and I just hope that you can kind of dial it back and look at this from a large perspective. Thank you.

Thank you. Anyone else here to testify on this measure?

Chair Matayoshi. Vice Chair Chun. Member Iwamoto. Apologies. We thought our testimony had been submitted. I'm Mike Onofrietti, Chair of the Hawaii Insurers Council. We are supportive of the measure. As we all know, this bill was developed by a joint Executive legislative task force on property insurance formed after the 2024 session.

HIC has been very active in serving on this and other working groups in an effort to try and help what's going on. As we know, climate driven insurance losses will continue into the future and our ability to appropriately manage these new large and increasing risks imperative.

We believe climate driven losses will impact housing and the financial markets in Hawaii and could drive an even greater exodus. Excuse me. From our state. This Bill provides amendments to two existing states funds, HPIA and HHRF and it's been amended from the 2024 version as a result of the task force. Their task force's efforts.

We want to acknowledge and thank the leadership of everyone involved for this very important issue. And we stand ready to answer any questions. Again, apologies if the. The testimony was not submitted.

That's fine. If you have a copy of it, you can give it to us too.

I will get it to you.

Okay, thank you. All right, anyone else here to testify in this measure? Okay, Members, any questions?

Thank you. Chair for Mr. Onofrietti. So you heard the testimony of Mr. Mosakian regarding the fact that a lot of these condo associations are. They're actually finding insurance is just unaffordable for many of them or they're finding it unaffordable. So will they.

Who will be able to take advantage of this Bill if in fact no one gets a complete absolute rejection of insurance?

So it's a great question and I've got a lot of sympathies for condo owners. We have a lot of different situations. We have situations where a building has had significant water damage claims and is basically uninsurable. They may be able to get coverage today at a very, very expensive rate.

In many cases, HPIA would be able to charge something a little bit lower, not a lot lower. Reinsurance costs are going to be the same for everybody, but HPIA will not have a profit motivation as would a surplus lines insurer. So there'd be some savings there. I'm not saying it's going to be inexpensive.

I cannot put that on the table. Premiums will never go down to where they were in 2019 or 2020. That's just not possible. Similarly for HHRF, sort of the same dynamic. Surplus lines premiums are surplus lines coverages are available.

Those premiums have decreased over the last year as other insurers have come to the market, but they are still expensive. Our position is we need the safety net to have availability not only for condos, but for single family residences as well, especially while climate change continues.

So just to clarify, Chair, what you're saying is that you would consider people who are offered just really high rates, that this Bill would allow HPIA to consider selling insurance to a building that actually can purchase insurance, just do so more cheaply.

I don't see a particular problem with that. Most. So let me step back really quickly. The way it works for surplus lines companies is they have to have rejections from. It's either two or three admitted carriers in the, in the market. I don't see a problem if HPIA has the same sort of thing if it's admitted markets.

Everyone knows that surplus lines companies, because they're not regulated, they were going to charge much higher premiums. So, and I don't have the bill in front of me, I don't recall if it says specifically admitted markets or any market because there is a difference there.

So you're confident that these insurance, you're confident that these condominium associations will get rejection letters, that there's no one out there who's going to be willing to sell them insurance at even 1300% higher rates?

Well, in the admitted market, to my knowledge, there are only three companies that even currently write any new policies at all for condo associations. That's a pretty small number.

Can you can. Would a condo Association say, hey, admitted market insurance carrier, we can only pay this much and then they say, no, we reject your offer. Consider this a rejection. Is that how it's going to be? Like what needs to happen for them to get triggered? Like it's not a rejection?

No one's going to issue a rejection.

Well, so what typically happens is an agent is involved with condo Association and they go to whatever markets they have available to seek coverage. Those markets would tell the agent, we're not willing to quote on this specific building. And that serves as the rejection.

Okay. And it's, and it's in writing. And you take that or is it an attestation by the agent?

It's essentially an attestation by the agent, I believe. But the agents, you know, the agents have an incentive to get an insurer to sell the product. So they don't do that capriciously.

Yeah, this already, this, this method already exists for surplus lines too, right? Correct. So this isn't, we're not making this out of whole cloth. That's right. I mean, they do need to get rejected or have some documentation from admitted carriers already for surplus lines. We're just mimicking that in this bill.

So this bill opens up or it's, it's putting new, two new players into the game, I guess, or bringing an old player into the game as well. In your opinion, is there a lack of capacity right now in the current admitted market, admitted carrier market, that this would add capacity to that?

100%. With respect to hurricane coverage, those three markets I mentioned, one of them has a sub limit on hurricane. I believe it's 10, $10 million, which for most high rises is not particularly useful. They're valued at 75 million and way, way up from there.

For HPIA, I would say that right now the market is okay for non hurricane coverage. But after Lahaina, more and more insurance companies are trying to understand what their wildfire risk. So they're looking at homes that are insured in proximity to wildfire areas as mapped out by the Hawaii Wildfire Management Organization.

And some insurers have been non renewing customers. Unclear where they will be able to find a home at this point in time. You know, where will they be able to place their insurance? So HPIA will serve as a backdrop in the event that capacity is not available.

So would you say it's fair that one of the main purposes of this Bill is to kind of expand availability of the market or capacity of the market?

That's correct.

Okay, thank you. Members, any other questions? Okay, let's move on. SB 253 SD2 relating to condominium reserves. First up, we have Hawaii First Realty in support.

Afternoon chair, Vice Chair and Committee Members you may remember, I'm Richard Emery. I come with a strong Reserve background. And I don't know about you, but I'm somewhat frustrated by the continual complaints from condo owners about special assessments, Reserve funds and the things that we see happening in some locations.

In 2023, the Legislature adopted a Bill that became Act 199, signed by the Governor that said, look, if we can mandate more disclosure to buyers of units, owners of units, it would be a catalyst to get people to change and address these things more appropriately.

Act 199 defines seven specific disclosures that had to be made to the owners as a part of their annual budget. It's in Act 514B148. My practical experience in working as a consultant is that many associations do that haphazard and not very well, meaning that the disclosures we had hoped to initiate to make change aren't being done.

This Bill does one thing, it simply enforces the existing law that if you don't do this disclosure as required by the existing law, then you lose your good faith exemption. And we were hopeful that such a catalyst would create the change necessary to get better Reserve funding, better disclosures, better understanding of reserves.

Thank you for the opportunity to testify.

Thank you. Next up, we have Hawaii Realtors in support.

Hello again, chair, Vice Chair and Members. My name is Lindsay Garcia from Hawaii Realtors and we stand on our testimony in support.

Thank you. Next up, we have Phil Nerney in support.

Thank you, Chair, Vice Chair, Committee Members, my name is Phil Nerney. I apologize, there was a mix up. CAI did not submit testimony, but I am testifying on behalf of CAI as well as an individual. The points that were just made are entirely the points that we would want to emphasize.

This is existing law and it's simply to make it clear that this is an enforceable obligation. In opposition, some people have indicated that it increases the exposure of associations to liability and I don't favor that.

But the power and the remedy is in their own hands because the budget summary consists of a number of items that are largely objective, like did you use budget or accrual method of accounting? So it is really not unduly burdensome to meet this obligation.

Another point that's made is that the burden of proof is put on the Association. Existing law places the burden of proof on an Association with respect to 514B148. Thank you.

Thank you. Next up, Greg Misakian in support.

Vice Chair and Members of the Committee. Again, as you know, my name is Greg Misakian and I have been advocating for the rights of condominium owners in Hawaii since 2021 when I realized how much misconduct there is and corruption within condominium associations throughout Hawaii. This also goes to the management companies.

There's been numerous articles that have been written, written about stories that we've read in the news about numerous large management companies that are involved in this. As we know, as many as up to a third of the population of Hawaii lives in condominiums, including many legislators and their friends and families.

It has been shown, with evidence to support, including many news stories and a great deal of testimony, that condominium owners are being subjected to abusive and predatory practices, often at the direction of the condominium Association's President and board, with management, company agents and Association attorneys being willful participants.

While I support SB2 53 SD2 and its intentions, owners still have the burden to go to court for enforcement, which can be very costly. The only real solution to address serious issues with condominium associations and their proper management is to have enforcement with the laws that you enact.

I ask that you please read and support HB 890 and SB 1265, Companion Bill. Neither of those were scheduled this year. We hope they get scheduled in 2026. Those are for an ombudsman's office for condominium associations. And please remember, the people of Hawaii are counting on you.

And so far this year, I have seen nothing substantive that will provide the much needed help condom condominium owners have been waiting for for a very long time, including with this pass Bill that we just discussed regarding insurance. Because if you clearly read the Bill, if you are offered coverage, we gotta.

Keep the testimony on this Bill, that's.

Fine, but it's part of the whole story. But if you are offered coverage, you wouldn't be able to get coverage. So I appreciate that time and that extra plug on that, because I listened to that and I was concerned about the misinformation. Thank you very much.

Thank you. Next up, Jessica Herzog in support.

Great, thank you. Aloha again, Jessica Herzog, condo owner. I am also a board Member. I'm also an advocate for fair housing and transparent condo governance here in Hawaii. I do support the intent of SB253. But again, I urge this Committee to take a step back and consider establishing a proper condo task force, one that includes actual homeowners.

Because the system that you're trying to fix is riddled with loopholes that paid professionals continue to exploit at our expense. You know, we just heard experts saying that they're sick of, you know, hearing the owners whine.

Well, it's because we continue to be subjected to professionals who get paid to protect us, stealing from us, you know, which is my case. And it's, it's a profitized system that is so Unfair to put people underneath a sub government within the United States government already. That's the first problem with this. We have one government already.

We shouldn't be creating new governments for people to live in housing associations. So we need to get back to the basics and enforce the laws that you guys have already created. We need a HOA office. We need someone who will enforce the laws that are on the books. That I do want to.

I do want to keep this topical to this Bill.

Sure. Thank you. Well, I just again, wish that you would take a step back and look at this Bill along with all the others that had to do with condos. There was over 50 presented this session, and to me, that deserves a task force. Thank you.

Thank you for all testifiers. Please keep your remarks confined to the Bill at hand. I don't want to have to enforce that, but I will. All right, any other people? Anyone else here to testify on this measure? Members, any questions? Okay, seeing none. We'll move on to SB 825 SD2 relating to eviction mediation.

First up, we have the Judiciary in support.

Chair, Vice Chair, Senators Aloha, Jeff Crabtree from the Judiciary Center for ADR. We're in support. I'm going to rely on the written testimony with just one brief comment. An issue has arisen in some of the testimony about the fact that this bill does not have any appropriation for rent relief.

And you know, of course it's true if there was a rent relief component, namely a pot of money to go to the landlords, then that would make life easier for everyone. No question about it. But that's a totally different issue from whether pre eviction mediation works. It does work. It works even without rent relief.

So it's true what the other side is saying, but it doesn't take anything away from the value of this bill. And if you need any details on that, it is in our written testimony. Or I'll be glad to supply it. Thank you.

Thank you. Next up, Mediation center of the Pacific in support. Mediation Center of the Pacific. Not here. Okay. Next up, Hawaii Realtors with comments.

Lahage again, Chair, Vice Chair, Members of the Committee, Lindsay Garcia with Hawaii Realtors. So we do support effective and efficient mediation. Ideally, we'd want to increase education to tenants to reach out early before they decide to stop paying rent at the first sign that there may be an issue.

And that's the most ideal situation to work with housing providers in order to keep folk housed. I also want to, I mean, highlight that a lot of the success of the COVID program in the past that this bill is modeled on was due in large part to the rental relief for those who could not pay.

So if there was ever, if that is possible, I think as the judiciary was saying, that would have been that would be amazing to add to the bill.

But I understand if there aren't any funds, if this bill is to move forward, we ask that mediation can occur and conclude within one month of the initial notice to not create any further delays. Thank you.

Thank you. I will give a spoiler to everyone. There are no funds and they're not going to be coming, unfortunately. Anyone else here to testify in this measure? Okay, Members, any questions? All right, moving on to the last item of the agenda, SB 146SD1 relating to condominiums. First up, we have the Hawaii Real Estate Commission with comments.

Good afternoon, Chair, Vice Chair, Members of the Committee, Keating Klein, specialist with the Hawaii Real Estate Commission. Will send in our written comments and available for any questions. Thank you.

Thank you. Next up, Community Associations Institute in support.

Thank you, Chair, Vice Chair and Committee Members. My name is Phil Nurney. I chair the Legislative Action Committee for CAI. CAI supports this bill and thinks that it will help reduce the costs and create a more efficient alternative dispute resolution structure.

I take note of opposition to the bill and there is a fair point in that it is possible to make an argument that the attorney's fees provisions need to be clarified. So with that, I would suggest the opportunity to discuss possible amendments. Thank you.

Next up, Hawaii First Realty, Richard in support.

Richard Emery for Hawaii First Realty. I stand by my testimony in support.

Thank you. Next up, Jessica Herzog in opposition.

Thank you again for hearing my testimony. Jessica herzog, Condo Owner, Board Member, this is the the big one of the day as far as your opportunity to do something for the 300 plus thousand people that live in condos here.

And maybe not everybody who owns their condo lives here, but all the renters are also subjected to rising increases in costs that the owners will just pass along to them.

So to for all the folks who live here and have to struggle to get boards to be transparent, to give documents properly, there are so many simple infractions that if you did a proper audit of what's being complained about, you'd probably better be able to diagnose where you need to increase the enforcement.

From what we can tell, I've been working with a national organization that's trying to get HOA reform across the country because this is not an isolated incident here. They have a proposal of about 20 different points that have been vetted against, you know, different owners across the country for years to refine that.

And, you know, we tried reaching out to legislators before this session, but it's not easy to reach you guys. You know, it's not easy to bring the owner's concerns to you. And so we're trying to compete with industry experts that can get an appointment probably any day of the week.

SB 146 is a step in the right direction, but not really, you know, it gives the owners no protection. I was an owner. I found embezzlement at my condo. I went to law enforcement and I was told, come back when you have evidence. Well, fortunately, you know, we were able to get forensic audits.

And yes, there was embezzlement, but I already had really good evidence. It just hadn't been audited. You know, the ability for someone in charge to take the documentation that I had provided. They could have immediately gone into action and done an investigation and found the same fraud that I found.

But I was refused because it's a civil matter. And until our concerns are considered legal issues and there's an actual body to help us enforce our concerns, all the mediation in the world isn't going to help us fight the corrupt system that we're trapped in right now. And I really. That's been two minutes.

If you could start to conclude your testimony, please.

Thank you. I'm just begging you to take this seriously. This is the biggest root of the issue, is that we need enforcement, not more mediation. Thank you.

Thank you. Next up, Greg Mosakian in opposition.

Again, Greg Misakian, correct, in opposition. Not that I'm opposing, trying to do something that's going to be beneficial to condominium owners, but unfortunately, this is the wrong bill. So as I previously testified on this Bill, SB 146 is not well thought out. It's not the answer to help condominium owners resolve issues and concerns.

If you've already tried mediation and it didn't work the first time, why would you want to try it again and at a higher cost and higher risk, with more attorneys fees involved? Calling a mediation and any other, you know, another name.

Excuse me, Calling a mediation another name is just a creative way for attorneys to make more money. There are already two mediation options available, facilitative mediation and evaluative mediation. And evaluative mediation already does what neutral evaluation is suggested to do. So I really don't understand this concept.

Mediation has already proven to not be successful in the majority of condominium disputes in Hawaii. There's established data that's presented, it's been presented to our legislators. So continuing to go down this path is not in the best interest of condominium owners.

And excuse me, I'm just reading from my notes too because I've had a lot of testimony that I've been providing over the past few weeks and a question. Why are you striking out a very important section meant to provide accountability for board Members? There's a section I refer to in my written testimony.

I'm not going to read it, it's too long here. But I did reference it. It's very concerning that you're trying to strike out something that's beneficial to protect condominium owners and it's detrimental to the board Members.

HB 890 and its companion Bill, SB 1265, as I've already stated, would establish an ombudsman's office or an office to help condominium owners. Let's stay on track here. Okay? The person that just testified a moment ago spoke very well. I'm a bit exhausted, so excuse me if I'm little bit off on my language this evening.

You know, usually when I testified I'm pretty spot on, but tonight, or today I'm really exhausted. So with that stated, and I know I'll be seeing you tomorrow night. So with that stated, there's a big concern and you've got a very well spoken condominium owner.

I'm going through the same thing at my condominium Association with corruption, malfeasance. That's been two minutes.

If you can start to conclude.

I will. But that person, the last testifier is very well spoken. So I ask that you listen to us, help us do what's best for the constituents, the people that are coming to you, not the few people that are going up and testifying with, in my opinion, misinformation, misguided information. Thank you very much. Appreciate it.

Thank you. Just to clarify, that's on PBS Insights. You will be seeing me tomorrow night. Not socially. No conflict. Next up we have Paul Ireland. Oh, coffee now. In opposition. Coffee now. Nope. Okay, not present. Anyone else here to testify on this measure? Members, any questions?

Chair? Repp Iwamoto. Thank you. Mr. Masakian. What was the page? If you're looking at the bill number, the bill where has the pages and then all the line numbers. Which page in which line number are you referring to was stricken that I.

Have it cut and pasted in my notes here. I can read it to you. It's actually not that long. So this is what it says. It's very short, but I still didn't think we had enough time to read it earlier.

It says any violation by a board or its officers or Members of the mandatory provisions of Sections 514B 161 or 514B 162 may constitute a violation of the fiduciary duty owed pursuant to this subsection provided that a board Member may avoid liability under the subsection by indicating and writing the board Members disagreement with such board action or rescinding or withdrawing the violating conduct conduct within 45 days of the occurrence the initial violation.

So that's the whole statement. So basically in essence it's, it's meant to put the onus on the board Members but also give a board Member, in my case a rogue board. I was one of a group of board Members that was going against the malfeasance or misconduct.

But that gives that board Member the ability to make a statement to get out of it. So they're not liable. And it's very concerning if you know, all the board is liable. But that whole section was stricken. I'm not sure if there's any rewritten section or anything that covers it.

And I apologize, I don't have the particular line item.

Mr. Misakin. I found it on page 25 and it begins on line 13.

Thank you. Phil. You want to respond to that?

That language becomes superfluous If Senate Bill 146 is adopted because the enforcement mechanism disables anyone from having a viable opportunity to decline to participate in mediation. With respect to 162, that's non binding arbitration. And that is not going to, if this bill were to move forward, be a feature of the alternative dispute resolution regimen hereafter.

So it is. It is not in fact preventing owners from holding board Members to account. This bill requires enforceably people to engage in mediation.

Thank you. Thanks. Members, any other questions? Okay, I do want to roll it back a little bit because I see Hawaii Bankers Association is here now for SB 1044. Your testimony is marked in opposition. Would you like to testify?

Thank you. Chair, Vice Chair, Members of the Committee, Mihoko Ito, on behalf of the Hawaii Bankers Association, I apologize. I don't know why our, our testimony was marked in opposition and we actually support this bill. I double checked our testimony. It does say support. So we support this bill.

We served on the task force over the summer, worked on the language. We just asked for one amendment which is to look at the loan language that was added by the Senate and conform it to House Bill 807, which we worked on, the loan language there to tighten the criteria and everything with the green infrastructure authority.

So if the Committee would be amenable to adding that language, that would be great. Thank you very much. Appreciate it.

Thank you. All right. Let's take a quick recess. Recession.

Alrighty. Reconvening a number of items on the agenda. First up, we've got SB 102 SD 2 relating to restaurants. Chair's recommendation is to just further defect this date to July 1st, 3000 to encourage further discussion and to put this into conference. Members, any comments? Vice chair for the vote.

Members voting on Senate Bill 102 SD 2. Chair's recommendation is to pass with amendments. [roll call]. Chair, your recommendation is adopted.

Thank you. Members. Moving on to SB 1367 SD 1 relating to installment loans. Chair's recommendation is to change page two, line 20 it says 0.83 cents, which is less than a penny. I think what they meant was 83 cents. They'll be changing that to 83 cents a day.

I'm going to be changing the $5 debit card convenience fee to $1 and adding into the committee report consideration to make it possibly even less, depending on DCCA's response, which we'll be- we will be getting later adding a three year sunset provision, technical amendments and further defecting the date to July 1st, 3000. Members, any comments?

Vice chair for the vote?

Members running on Senate Bill 1367 Senate Draft 1. Chair's recommendation is to pass with amendments noting the excused absences of Representatives Lowen and Ichiyama. Are there any members who wish to vote no? Any reservations? Seeing none. Chair, your recommendation is adopted.

Thank you, members. Moving on to SB 1373 SD 2 relating to administrative licensure actions against sex offenders. Chair's recommendation is to change the language of the House position, which is in HB 1054 HD 1. Members, any comments? Vice chair for the vote.

Members voting on Senate Bill 1373 SD 2. Chair's recommendation is to pass with amendments noting the excused absences of Representatives Ichiyama and Lowen. Are there any members who wish to vote no? Any reservations? Alright. Chair, your recommendation is adopted.

Moving on to SB 1142 SD 1 relating to insurance proceeds. Chair's recommendation is to make a fairly minor change on page two, line 12. There's a little bit of a gap if it lasts exactly 31 days. So we'll just change the language to 31 or more days to include the situation where someone is delinquent. Exactly 31 days.

I'd like to strike subsections J and K as they really don't relate to insurance proceeds, which is the purpose of this bill. Also, we're going to change the interest rate to a greater- the greater of a flat 2% or to the interest rate offered by that institution's money market accounts.

Further defecting the date to July 1st, 3000. Members, any comments? Vice chair for the vote.

Members voting on Senate Bill 1142 SD 1. Chair's recommendation is to pass with amendments noting the excused absences of Representatives Ichiyama 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 SB 1044 SD 2 relating to the stabilization of property insurance, we are going to be- Our Chair's recommendation is to change the house position to the language in or change the bill to the house positions language, which is an HB 426 HD 1. I'd like to also adopt the DCCA's proposed amendments to this as well.

Members, any comments? Vice Chair for the vote.

Members voting on Senate Bill 1044, SD two chair's recommendation is to pass with amendments noting the excused absences of Representatives Ichiyama and Lowen. Are there any members wish to vote no? Any reservations? Reservations for Rep. Iwamoto. Chair recommendation is adopted.

Moving on to SB 253 SD 2 relating to condominium reserves. Chair's recommendation is to further defect the date to encourage discussion on this measure to July 1st, 3000. Members, any comments? Vice chair for the vote.

Members voting on Senate Bill 253 SD 2 recommendation is to pass with amendments noting the excused absences of Representatives Ichiyama and Lowen. Are there any members wish to vote no? Any reservations? Seeing none. Chair, your recommendation is adopted.

Thank you. Moving on to SB 825 SD 2 relating to eviction mediation. Chair's recommendation is to insert the there's some incongruity here between when it says landlord or landlord and landlord's agent, so we're going to make that consistent for landlord and landlord's agent throughout. There's also a area oh, there's just a little bit of a confusion with the sunset provision.

So we're going to delete the reference to subsection B on page three, which would remain in even though B sunsets. And we're going to insert language into B referencing subsection A instead, just to simplify the repeal and replace provision, further defecting the date to July 1st, 3000. Members, any comments? Vice Chair for the vote.

Members voting on Senate Bill 825 Senate Draft 2. Recommendation is to pass with amendments noting the excused absences of Representatives Ichiyama and Lowen. Are there any members who wish vote no? Any reservations? Okay. Chair your recommendation is adopted.

Thank you, members. Last- Last item on the agenda, SB 146 SD 1, relating to condominiums. I appreciate all the work that's been done so far. This bill does still need more work before we consider it for vote, so I'm going to be deferring this measure until a later date to allow the parties to work on this a little further.

Alright, we are adjourned.