Senate Standing Committee on Agriculture and Environment

Aloha and welcome to the hearing with the Senate Committee on Economic Development and Tourism and on Water and Land. Today's Tuesday, March 18, 2025. This is our 1:00pm agenda and we are in conference room 2 to 9. This hearing is being streamed live on YouTube.

In the unlikely event that we must abruptly end this hearing due to technical difficulties, the committee will reconvene on Thursday, March 20, 2025, at 1:01pm in conference room 2 to 9. We have a one-minute time limit for all testifiers and we as we have various agendas to get through this afternoon.

It is okay if you want to stand on your testimony. We do have your testimonies in front of us as well. The agenda has one bill, HB 504 relating to environmental stewardship. First up for the testifiers. This we have Will Kane with Office of the Governor.

Hello, Chair, Vice Chair - Chair, excuse me, Office of the Governor. We'll stand our written testimony. We have some proposed amendments and I'm here for any questions you have.

Thank you. Next up, Department of Business Economic Development, our Director Tokioka.

Good afternoon, Chair, Vice Chair, and members of the Committee. We stand in support of this bill, House Bill 504. We did also recommend some amendments and in a testimony, it's listed in 1 and 2. So hopefully both of you can or other committees can consider the amendments that we asked for this bill. Thank you.

I'm here for questions if you have.

Thank you. Next up, Director Chang with Department of Land and Natural Resources.

Hello Chairs. Hello, Vice Chair. Members of the Committee, Ryan Kanaka'ole, First Deputy, Department of Land and Natural Resources. DLNR stands on its written testimony and strong support of this measure. We believe that this is a critical investment in our natural, cultural and natural resources.

And we've already identified for the next fiscal years, two fiscal years, about $440 million in projects that would go towards, you know, either sustainable tourism, health safety mitigation, hazard mitigation or climate, climate mitigation. So, thank you. We're here for any questions.

Madam Chair, can we ask the testifiers to let us know what portion of the bill they're speaking to? Because there's two parts to this bill. So, can you guys tell us what part of the bill you're speaking to?

As to section one in particular. Section two, we don't have any comments on, but we understand that it is a vehicle for investment in, you know, the, the funding to allow more funding and we support.

No, it doesn't say that.

Yeah. Thank you.

Thank you. Next up, Department of Taxation, Gary Suganuma. Thank you. Next up, Director Salaveria with Budget - Department of Budget and Finance.

Good afternoon, Chairs, Vice Chairs, members. Luis Salaveria , Director of Finance for the State of Hawaii. I'm here to speak on the provisions in part two of the bill, specifically as it pertains to the establishment of a reimbursable general obligation bond special fund. We do have some concerns.

We do understand the need for part one of the particular bill, but we do recommend that some work be done on part two of the bill, specifically turning it into a regular special fund and the proceeds of part one being essentially the money that would be put into that special fund. Thank you, Chair.

I'd be happy to answer any question.

Thank you. Next up, Danny Nāhoʻopiʻi for HTA.

Aloha. Danny Nāhoʻopiʻi, interim CEO of the Hawaii Tourism Authority. Aloha, Chair and two Chairs and the Vice Chairs. The HTA stands on its testimony in support with comments, particularly to ensure that there's a nexus to tourism, since this is related to the TAT tax increase.

And we have been working with various agencies to identify projects that we know are in line with tourism marketing, working on environmental areas that are impacted by visitors in resort areas, as well as infrastructure projects that will help the environment. Mahalo.

Thank you. Next, Craig Nakamoto with Hawaii Community Development Authority.

Good afternoon, Chair, Vice Chair, members of the committee. Executive Director of HCD; we stand in support of the measure and provided specific comments on the bill. Thank you. Thank you.

Thank you. Next up, Collin Lau with Deputy Attorney General.

Good afternoon. Good afternoon, Chairs, Vice Chairs, and members of the committee. My name is Deputy Attorney General Collin Lau from the Attorney General's Office. Our office offers comments on the bill.

The reason is that Article 3, Section 14 says that the title of a bill has to have only one subject, and the addition of part two to the bill in the last draft seems to violate that particular provision. Our office suggests that we delete part two. I'm available for questions.

Can I ask question right now, since you're here? Thanks. Appreciate it. Okay, so you're part two on the current HD 2. Okay, thank you.

Thank you.

Thank you. Next up, Gwen Yamamoto for Hawaii Green Infrastructure Authority, in support. Leah Laramee, testifying for Climate Mitigation and Adaptation, in support. Hanna Lesiak, Hawaii Ocean Legislative Task Force, in person.

Aloha Chairs, Vice Chairs, and members of the committees.

My name is Hanna Lesiak and I'm here on behalf of the Ocean Legislative Task Force in strong support of HB 504 and you have our written testimony, but just briefly, I wanted to highlight that our task force is comprised of over 120 individuals from numerous organizations which care deeply about our aina and our oceans.

And we believe that this bill will provide a crucial safety net for our environment and the climate impacts to come. And I want to be clear that these climate impacts are not a question of if, they are a question of when. And so, we urge you to pass this bill. Thank you.

Thank you. Next up, Blake Oshiro in opposition for American Resort Development. Ted Boland, Hawaii Reef and Ocean Coalition.

Thank you. Chairs, Vice Chairs, members of the committees, Ted Bolan for the Hawaii Reef and Ocean Coalition and the Climate Protectors of Hawaii. I want to you have my testimony. I want to emphasize strong support for this bill, but a concern that the money that comes in for this bill go to environmental purposes.

We have a huge under payment of underfunding of environmental needs and, and this should not be the bill to throw everything else into. So, I'd like to see a dedicated fund. I don't necessarily want to cut the Legislature out of the appropriation. I think there's a way to do both.

But let's get some money to the environment now because it's security as safety as well as keeping things green. So please pass a virginist bill that supplies plenty of funding for environmental purposes. Thank you very much.

Thank you. Next up, Jeff Mikulina, Autism and for Hawaii Climate advisory team and support. Maka Gibson, Resources Legacy Fund.

Aloha Chairs, Vice Chairs, and members of the committee.

My name is Maka Gibson and I'm a Program Officer at Resources Legacy Fund, a nonprofit where I lead our environmental equity and justice work. I grew up in 'Ewa Beach, but I now call Kaneohe Home. Mahalo for hearing HB 504.

We are in strong support of this bill, and we know what is most important is that it creates dedicated funding for natural resource stewardship and restoration. Next week I'm going to Moku o Keawe to visit Kaʻupulehu for the first time.

And earlier I was reflecting on the tri-weight model and how it's a perfect example of the community reciprocity that our state needs to adopt. For tourists when they come to Hawaii, how can they malama and aloha our aina. Mahalo.

Thank you. Next up, Chair for Aina Now Coalition.

Aloha Chairs, Vice Chairs, members of the committee. My name is Carissa Cabrera. I get to represent our coalition of over 65 organizations and small businesses working on the front lines of environmental stewardship in Hawaii. They also represent hundreds of employees and volunteers in their networks. You have a written testimony, but I just want to emphasize the urgency for this bill this year.

We've been organizing for years and still our aina remains unfunded. And if we want to protect the resources that both visitors and residents rely on, will need to take bold action together this year. Thank you.

Thank you. Next up, Elizabeth Benyshek with Nature Conservancy. Thank you. Next up, Nicole Galassi on zoom.

Yes, she is here on Zoom, Chair.

Thank you.

She may be having technical difficulties.

We'll come back to her when you guys get her up and running. Next up, Tom Yamachika, Tax Foundation of Hawaii on zoom.

Good afternoon, Chairs and members of the committee. This is Jade McMillan on behalf of the Tax foundation of Hawaii; we've submitted some comments on the measure. Within our comments, we also questioned the need for the reimbursable general obligation bond debt service special fund. Under the criteria for special funds, they should be self-sustaining.

And this special fund does not seem to have a means of support. Thank you.

Thank you. Next up, Jocelyn Herbert, Resources Legacy Fund, also on Zoom.

Aloha. Chairs and Vice Chairs and members of the committee, good afternoon. My name is Jocelyn Herbert, testifying from Hawaii island today on behalf of Resources Legacy Fund, a member of the Care for Aina Now coalition. We are in strong support of this bill because it offers visitors the opportunity to contribute to natural resources stewardship and restoration.

And also, it provides a durable and dedicated funding source that Hawaii agencies and community groups need to do the work to reduce increasing impacts of wildfires, floods, and coastal storms. As you heard, Hawaii is facing a $560 million annual shortfall to fund natural resource stewardship work that is needed to safeguard our communities.

And from recent polling, we know that 76% of visitors are willing to pay an annual fee like this if they know the funds will go to protect and restore land, water, wildlife, and cultural resources. And that number increases to 85% among repeat visitors, which I know are some of the industry's most important customers.

Hawaii cannot afford to wait to advance these new sources of funding to address these needs, and we urge you to pass this bill. Thank you for the opportunity to testify. Mahalo.

Thank you. Next up, Mackenzie Chase testifying for Expedia Group on Zoom.

Aloha. Thank you so much for the opportunity to offer comments today. My name is Mackenzie Chase. I'm here on behalf of Expedia Group, a family of brands that includes Expedia, Hotels.com, and short-term rental leader Vrbo. We stand on our written testimony.

But very briefly, we are supportive of the proposed investments in Hawaii's natural resources, and we do not object to the proposed increase to the transient accommodation tax. However, we have significant operational concerns about Section 2, subsection F of the bill.

A tax based on the foreign of payment is totally novel and would be very, very challenging to implement. So, we are hopeful that that portion of the bill can be taken out. Thank you very much. Mahalo.

Thank you. Next up, Kekoa McClellan for American Hotel and Lodging Association.

Chairs, we stand honoring testimony offering comments and some proposed amendments for your consideration. Part one.

Thank you. Next up, Mufi Hanneman, Hawaii Lodging and Tourism Association, in opposition. Jerry Gibson, testifying Hawaii Hotel Alliance, with comments. John Pele, in opposition with Maui Hotel Lodging. Stephanie Donoho, Kohala Resort Association, opposition. Joshua Hargrove, Western Maui Resort and Spa, in opposition. Jon Kimball, testifying for Marriott International Hawaii, in opposition. Caitlin Miller, Maui Vacation Rental Association, opposition.

Kelly Lee Astro Oahu in opposition. Jennifer Wilkinson, Hawaii Mid- and Short-Term Rental Alliance in opposition. Laurel Briar, Kauai Climate Action Coalition, in support. Melissa Pavlicek, Care for Aina Now Coalition Leadership, in support. Madeleine McKeague - oh, sorry. Yeah, sorry. Melissa.

Mahalo. My name is Melissa Pavlicek. I'm here today on behalf of the Leadership Committee for the Care for Aina Now Coalition. And I just wanted to emphasize in our testimony that the leadership committee did commission a study which established the gap in funding for natural resource protection and restoration.

And it is so important for us to support this measure for many of the reasons that we've already heard, and we strongly support it. Thank you.

Thank you. Madeline McKeague, Director of Advocacy for Council for Native Hawaiian Advancement, in support. Jodi Robinson, Hawaii Alliance of Nonprofit Organizations, in support. Pauline Sato, Malama Learning center, in support. Chris Cofield, testifying for Coalition Earth, in support. Ted Kefalas, testifying for Grassroots Institute of Hawaii, in opposition. Olan Leimomi Fisher, Kua Aina Ulu Auamo, in support.

Kamala Tumpa, Maui Chamber of Commerce, in opposition. Fredrick Nicely, testifying for Council on State Taxation, with comments. Alika Peleholani Garcia, Kuleana Coral Restoration, in support. Devin Redmond, Ribbon Rock Maui, in opposition. Sonny Cave for Honu Hawaii, opposition. Debbie Bettencourt, testify for EGF LLC, in opposition. Marcy Cortice, Lee Resorts, in opposition. Greg Nelson, Napilikai Beach Resort, opposition.

Cedar Kehoe, in opposition. Cedar Kehoe, are you here? Is that you, Cedar? Okay, please come. Yep, yep.

This is testimony in opposition of HB 504 requiring the $20 a night transit accommodation tax to be levied per night. If that's no money exchanged, I believe is wrong.

When you are going to realize your actions will be killing those of us who are seniors and who live on property and who want to travel and to get income for our lives. We will continue - you will, we...you all continue to disregard the differences between those properties that are owned and occupied by the property owner and those properties that are not.

An excellent example is the 30-day rule; the ruling of Judge Watson required that DPP's Director should enforce based on the 90-day minimum for properties that do not have an owner living on site.

The DPP Director expressed that this was more work than they could take on and would take away for more productive work against the 30-day illegal renters. That's simply wrong. When she is allowed - when she is allowing everybody to do the 30-day rental, this then flooded the market with 30-day rentals.

Can you wrap your testimony up? Your time is up.

I'll point out the important point. All property owners who live on site should have the same rules as those adjusted by Judge Watson. The enforcement should be 90 days for those that are not protected by it. A DPP should actually do their job and follow the rules of the judge.

And you should stop enforcing additional fees on tourists. They're just not going to come. There's got to be a stop. Sorry. Thank you.

Next up, Aaron Mcgee.

Aloha. My name is Aaron Mcgee. I'm speaking in support of HB 504. In addition to my submitted testimony, I want to highlight that a visitor fee is not a new concept on Oahu.

And in 1990, before I was even alive, Hanauma Bay implemented a visitor fee to help protect and restore an area that was being overrun by 3 million annual visitors. Without that fee and the conservation efforts it supported, Hanauma Bay would likely be a degraded site today. Hawaii visitor fees a simple idea.

Protect the things that attract people to our islands. Today, Hanauma Bay continues to thrive despite its $25 fee. And a similar statewide initiative will not deter tourism. If anything, it will enhance the visitor experience by ensuring Hawaii remains a world class destination.

We cannot afford to prioritize tourism at the expense of at the expense of the environment that makes Hawaii special. AB 504 is a step in the right direction, and I urge you to pass it. Mahalo for your time.

Thank you. Nicole Galase on Zoom.

Thank you. Chairs, Vice Chairs, members of the committee. Nicole Galase on behalf of the Hawaii Cattlemen's Council; I apologize for my video not working. We support this measure and agree that there is not enough funding for environment stewardship. The transient accommodations tax is a way to bring in much needed funding.

But we also need to point out that the ranching community strives for the same goals of stewarding the land for future generations through providing ecosystem services while producing food which provides an economic driver.

We recommend that the state recognize this and ensure that the active ag lands that are under DLNR are supported to continuing agriculture by transferring them to the Department of Ag.

If these leases stay with DLNR, they will not get renewed for agriculture and that would be 11,000 acres that will continue to be managed by the rancher rather than DLNR needing to develop a plan and produce funding and personnel to manage it. Thank you.

Thank you. So, we have 23 individuals in support, 179 individuals in opposition. One individual also with comments. Anybody else in the room wishing to testify on this measure?

Chairs, Vice Chairs, members of the committee, Jolene Garridan Prietzo on behalf of Kohala Coast Resort Association. We submitted written testimony offering comments, but we would like to provide additional comments proposing two amendments particularly to Section 1.

Add language to ensure that the TAT is collected on all accommodation types as these additional revenues could be used to address legislative priorities, including climate change initiatives. And the second is to add a new section to establish a working group with the Department of Taxation and all counties to ensure equitable application of the TAT.

Thank you for your consideration of this.

Thank you.

Anybody else wishing to testify this measure?

Hello. Vice Chair and Chair and other members of the committee. My name is Makana Halakonui and I am a social work student at the University of Manoa and I've been a land steward since I was four years old. I'm testifying in strong support of HB 504.

Since its inception, the tourism industry has been significantly harming Hawaii's unique and delicate ecosystems. This industry continues to put our coral reefs, marine life, native flora and fauna, waters and other natural resources in danger.

While the denigration of Hawaii's aina is taking place at the hands of this industry, grassroots efforts and nonprofit organizations are severely underfunded that are dedicated to combating this issue.

I have been working with Malama Aina organizations my entire life and a consistent problem felt by the entities has been the lack of investment in our crucial work. Increasing the transient accommodation tax so that more efforts to further support and advance our precious and finite natural resources is a necessity and will help in mitigating the tourism induced harms. Mahalo for your folks time and the opportunity- opportunity to testify. Mahalo.

Thank you. Anybody else wishing to testify on the measure? Seeing none. Members, any questions? Senator Fukunaga.

I guess this is for HLA. There was late testimony submitted, I guess offering suggested amendments. And I guess of the amendments that were being proposed, HLA was referencing commercial port visits.

That's correct, Senator. We support the idea that the transit accommodation tax should be applied equitably. And in looking at the visitor counts from our cruise ship industry; it appears that they have more than recovered since COVID And we noted in our testimony that, in 2024, there were 900...and let me get the exact number here for you.

Over 970,000 unique passenger arrivals at different ports under the Department of Transportation where there is levied a fee for the use of the ports, but no equitable fee for the provision of those staterooms or cabin rooms and the accommodations there.

And so, the idea would be to broaden the definition of the transit accommodation tax to include cabins and staterooms on commercial passenger vessels when they port at a DOT facility.

I see. So, your - your recommendation is for the $20 per room, per -

Our recommendation was to replicate the idea that in 504 to apply a $20 fee, but supply that $20 fee to a TAT where it's not currently being assessed. You'll note that for points and miles programs, the TAT is paid. And so, we tried to clarify that in previous testimony around sort of how that was constructed.

But the idea of ensuring equitable application of the TAT, wherever there was a transient accommodation was one that we were trying to support in this bill.

Okay, thank you.

Thank you, Senator.

Thank you. Senator Inoue.

Yes; presently, all - no, that's for you. Presently there is a fee, correct, that passengers are present, correct?

Yeah. Correct.

And if I remember, I don't know where is DOT here. And I believe, well, it's kind of dated and I believe it was a dollar and 50.

It's more than that now.

It's more than - what is the cost now?

I believe it's $4 and $6, Senator, and depends on the port. I mean, under Section 266, the fees are required to be spent within the harbors division. So, it's effectively for the use of the harbors.

And so, this would, you know, broaden that and allow the use of these funds to the general fund for the legislature and the governor's intended purposes.

Okay, wait. Now you're talking about the use of that funds, but the use of the funds is for the present port entry fee that they're paying.

Correct. Under 266; correct. The funds that are collected are limited to harpers.

Okay. And the distribution for the new $20 fee because we're making the changes from the original 504. Do we identify that in the use of the $20?

We are kanalua on the legislature's decisions around that, Chair.

Okay. Attorney General. Why don't you stay?

Yes, Senator.

Okay. Because we're deleting Section 237 and I think it was FSN Frank of the present bill and we are incorporating a new to the same section, 237D-2F, as in Frank, we're imposing the $20 passenger fee. So do we, because we're also deleting, I guess... yeah, we're considering that. Page 8 with regards to F. We're considering deleting that.

So, with the imposition of the new $20 fee, do we need to - would that be addressed and taken care of? If we look at, I guess I assume Section 3 and 4 on the distribution; would that suffic? Because a $20 fee now, we need to ensure that distribution.

- "and to replace it with language that would levy a $20 TAT for cabin and staterooms above commercial passenger vessels and to amend the definition of transit accommodation to include staterooms and commercial passenger vessels."

Sorry, Senator, I haven't seen his testimony so it's hard for me.

Yeah. Because it's new. Yeah. And I understand, you know, there's going to be questions but at least if it's addressed here, the bill is going to hopefully will pass with the recommended amendments, then it still goes to Ways and Means.

Now when it goes to Ways and Means, I would assume if there's new additions to a bill that is not being heard on the amendments we're going to be doing today. So, when it goes to Ways and Means and if we don't do a clean measure and it goes to Ways and Means, they don't hold a hearing.

But just decision making. I'm just kind of concerned about that. So probably Ways and Means, you would think that they would hold another hearing.

So basically, the ask of the ag was to delete the section out: section two because it's not unconstitutionality.

Part two. Yeah, right.

That's the ask. Anything else is there would be, you know, recommendation other than that he's not pretty much going to be able to answer the rest of - that'll be wham to have the rest of.

That's true. Thank you, Chair. Thank you.

Okay. Okay. Sorry.

Yeah. Well, I have a question for DOTAX, at the appropriate time.

I have a question for the AG though. A question for the AG.

Okay, hang on. Yeah. Let him do DOTAX. Oh, sorry.

Okay, just really quick. If we're talking about violations of the measure based on the title and so forth, even though we make a change here, if it's a material change, even though we do it now cleanly, goes to Ways and Means, doesn't it supposedly still have to have passed three readings on the House side or reading on the House side?

It probably will not be a violation in these particular circumstances because these are parts of the measure that had previously been introduced in the House.

So, you're just amending what the House did. The difference between that and part two was part two was -

No, I know the difference between part two, but I'm just saying if we're adding in a tax that the, a new tax to a new, new segment that wasn't discussed and never went to a public hearing on the other side of the House; what's the opinion of the AG?

It should be okay. Given that I don't really, I haven't really seen that particular change until just now.

Right. That's why I'm bringing it up.

So, it's hard for me to really say for sure until we've really digested it back in the department.

Yeah. Well, the question then is if it's an additional tax, a new tax on a segment that has not been discussed previously on the outside, even though we put it in now, does that violate our rules or what the Supreme Court ruled?

That's a very difficult question to answer until we see the subsequent -

Why don't you go back and then report back to us by the time we get to Wham. Thank you.

Thank you.

Can I add, since you're here. I appreciate that. And I, and I think we're looking at - the questions are reasonable. So, there is a $20 current per night charge on the present bill. So, it's not like a new tax because. But we're deleting it, you know, and I think that's the question. Yes, there's a new charge.

So basically, the new add on per the per testimony from Kekoa was to add on the $20 tax to cruise ship. The existing $20 is on the point situation on how they doing the reservation system through points.

That's it. As I said before, it's a difficult question to answer. It might be because of the substance. It might be something for DOTAX to address just because they're here and they might be more familiar with it than. Right.

- Supreme Court saying how many readings a measure, new stuff is introduced.

Right.

You take that back.

Okay, thank you.

Senator Elefante.

Yes. Request for DOTAX. Thank you. Good afternoon, Deputy Director. So, I have a question regarding page six in terms of miles points rewards. In your testimony, there were concerns that you offered comments in terms of how to enforce that. So, can you explain a little more in detail? Would that be an enforcement issue?

Would you need to hire more people if the language still existed?

Sure. So, our testimony was focused on the fact that right now the TAT is imposed based on income. So that's easy for us to verify in books and documents. However, the points would be a change in how we currently audit and assess. And there are different types of points that are offered from what I understand.

There are points that are given directly from the hotel's points through third parties. So, it would just be something that we're not currently doing that we would have to figure out how to do. And we're not thinking that right now. We need positions, I think more it's a training issue and an understanding of how to go forward with enforcement.

Thank you.

Was that your testimony during the hearings? Because this is a house bills language.

Yes, I believe we -

Was your testimony as well there?

I believe it was. Yes.

Senator McKelvey.

Yes. This may be for AG. It's a lucky day, isn't it? Curiosity on the $20 charge on cruise ship rooms. I mean, just to put Google to refresh my memory, we states cannot apply a hotel tax on cruise ships. So how are we able to do this if that's generally the case?

It sounds like it could be an issue. I don't really know.

Because I mean, this has come up in the past with Lahaina and other places which were inundated by cruise ships and applying a TAT or an impact fee. And at that time Dpbor said we couldn't do it.

There's federal laws on the books and so far what the state can do with cruise ships and it had to be limited to port fees to address the reasonable, I guess, impacts of the port. So, this application of a new TAT on cruise ship seems to violate federal law.

I appreciate your comment. That sounds like it could, and until we see the actual suggested language, I can't really offer much more than that. But you probably brought up a valid issue.

Yeah, it's a pretty blanket thing. I mean, sounds like the language all you want you start being preemptive by the Federal Government. Right.

You're, you're probably right.

So, and then one other quick question and this may not be in your wheelhouse but is it the $20 for free point stays? It's kind of an odd number. I mean wouldn't it be better just to apply the TAT on the rate of the room normally or where I guess where do the $20 come from?

And it could be - could be visited arbitrary? Or I...

I don't think it's arbitrary. I do agree that it would be complicated to assess it through points and loyalty programs. That's something that I was discussing outside before this committee convened. It's - we don't really know how it's gonna be done and I think DOTAX has some real questions about how it's gonna be assessed.

Well, thank you. I appreciate you being - thank you Chair for allowing me that.

Thank you. HCA, please.

So you know, with the the bill as it stands, what is the impact to the tourism industry negativity? If the TAT is to increase, do we see a decline and if we do, what kind of revenues we're looking at.

So we haven't calculated the exact amounts on the impacts of 1% increase in the tax. However, we do know as costs increase and we are one of the highest costs or tax destination as indicated by a lot of the business travelers.

However, one of the requests that we are asking in our comments is that additional funding be put towards marketing to address some of those issues. So if we know we are a very high cost destination and it will take additional marketing funds in order to overcome that barrier.

If we continue to increase the cost of the tat, we can go back and work with Reed and DBEDT to do calculations on tax increases from historical numbers. We don't have the data at this time.

So in your existing makeup of HTA as we put the impact towards those fees.

I mean because you know, if you look at the reservation systems, you know, you have those that have come into Honolulu or any destination of Hawaii and you have residents that come and stay at the hotels, you know, being hit with one fee that they're not going to parks and so forth, yet they come here to doctors and they being hit with a feed.

I mean I think the young man said earlier Hanauma Bay was a perfect example of a fee at Hanauma Bay to address, you know, those changes. Is that what we're looking at or since you guys also are part of the dmapping over.

We have been tracking costs, increasing costs just in general in terms of inflation itself has already put us very high in terms of the total amount that a visitor has to spend in their purse and their, you know, the disposable income that they can use here in Hawaii.

However, we continue to approach the high value visitor and but we are reaching into the upper levels and increases in taxes will be very difficult to overcome some of that impression of us being an overpriced destination.

And as I mentioned, that's why we need to work on this both on the marketing side as well as controlling additional expenses that may continue to impact the visitor's experience.

Thank you, Senator Kim. Yes.

So you're saying that to overcome the fact that we're highest tax and the tourists that just giving you more marketing dollars, you're going to be able to somehow smoke and mirrors to let them know that we're not more money after that and that's going to cost US more money, too, by giving you more money for marketing.

So it seems kind of ludicrous that you're saying that we can overcome and by giving you more marketing dollars.

I think that is our responsibility and our Juliana is to market the destination to show that there is value. And it, of course, we have the high prices. So we continue to market to show where they can get the best value for the amount of money that they're going to spend here in Hawaii.

But you do that now with your marketing. So what are you going to do with more money that go. I'm just saying, you know, let's be realistic. At some point, you know, they don't want to pay more taxes. I don't care how much you market, they may not still want to come.

And the difference with Panama Bay and this tax is that tourists have a choice. They don't have to go to Hanauma Bay. Right. They don't want to pay the fee. They don't have to go to Hanauma Bay, but they don't have a choice about going to a room. They need a hotel room. So that's a big difference.

And it's mandatory.

So, yeah, all fees across the board will at some point create a barrier to travel here. Their overall cost of their trip here. Right. Including, you know, they want to come to do experiences. Right. So. So, you know, in our statute, it is to control and monitor that excessive cost does not become a barrier.

We feel at this point we can still market this destination, but if we continue to keep adding this fee and this tax and, well, as other fees, there will be a point that we will have a difficulty. But right now we feel marketing can help.

We don't know what that point is at this point, however. Right. But to say that we're going to need more marketing dollars, I guess I take issue to that. So.

Thank you, Senator Wakai.

Thanks, Daniel. I recall like a dozen years ago, we had the same issue about raising the tat by 1% that was to Fund rail at the time. And the same arguments were put forth by the hotel industry that this is going to decimate tourism. And what it. What happened was tourism continued to boom. Right.

I think at 2012 time period, we had like 7 million visitors, and we topped out at 10 million in 2019. So all of this discussion about an increase in the TAT hurting tourism, that never materialized in the last time we contemplated a move like this. Correct, correct.

But at the same time, we did increase the amount of effort we did on getting the information out, both on leisure and business. So addressing some of the market issues, ensuring that there are alternatives that they can have savings, have different experiences and still stay within the purse of their allowable disposable income.

So it takes effort on our side in order to continue to address some of the costs of this destination.

I don't recall that. I mean, at a certain point, I think in 2019 or so, your budget actually got cut, right? You have the dedicated funding and all of a sudden got cut and down to like $72 million or was it covering at 90 million that went down during that time.

So after that point and of course, yeah, we did see actually a collapse. And now we are having difficulty bringing visitors back to Maui because experiences are, are not there.

And that will take additional information, training with travel agents, addressing some of the concerns and issues and developing new products and experiences that can be reasonably priced while here. And that's our role as a marketing organization for the state.

In this room, I'm hearing just two incongruent ideas. One, that we got to go cheaper. You know, this increase is going to get us a smaller number of tourists and there's fear of that. But at the same token, we have this mandate through HTA that we have to go after the higher spending visitor. So what is it?

Are we going to, as a community going to chase higher spending visitors, which this will add to that mission, or are we going to go after the kind of the cheaper wholesale visitor and try to put Hawaii on sale? I don't quite understand how we can juxtaposition both of these arguments at the same time in this room.

Right. And I agree with you. Our stance at Hawaii Tourism Authority and our marketing strategy is for the higher value, higher spending visitor, which we'll get.

If we put this 1% on. We're going to make Hawaii more expensive. But that's exactly the church.

More expensive does not mean a higher value visitor. We still have to go to those who are affluent, who have the spending and the budget. So at some point, even rich people, they get rich because they know how to spend their money wisely. So there is a point of diminishing returns on this.

Thank you, Senator. Yes. Governor's office. Thank you, Daniel. The governor's original bill and the recommendation as well, you had stuck with it during your testimony in the House, correct? Yes. Okay, so when you look at. And when we all look at the tat increase on the governor's proposal, it was only 1.1% now. Yes, yes, correct.

And that would address all of the issues with that message to take care of as well the title of the bill, because the intent and the title of the bill is an act relating to environmental stewardship.

So it's, I think from the current $10 that we're already being received on the tat to the 1% would increase it to the 11.25%.

And with that discussion, how do you see the recommendation from the Committee is not to look at the $20 that the House measure had called, but the $20 to apply to the ship, the passengers. So do you see that as charging more than to a visitor, but only looking at that destination visitors?

Because if you're on the cruise ship, if, if the ridership declines, then we may not reach a goal.

So would you think that the $20 we're doing for the passengers on cruise ships would address the issue with regards to the title and the concern that the Governor had with regards to addressing the impacts of our, the natural resources to be continued as a testimony has been here, making sure that we address all of the issues we're already experiencing that we don't have income or General Fund monies to and to address our resources.

Got it. So, sorry, let me go back. Just make sure I'm understanding. So if we're talking about the $20 fee, so the Governor believes that, you know, all of our visitors should be, you know, paying whatever, you know, fees or contributing to, you know, the impact, excuse me, that we have in our natural resources.

So this is also new language, but I think it's, you know, it's indicative of the issue of that we're trying to look at the short term rentals, the cruise lines, all these folks that come in. So I think in that respect we are supportive of that. Whether the $20 and all those, you know, details actually play out.

I think we just have to have a little bit more discussion. This has come up, you know, rather quickly, but again, we are supportive of that as far as how it relates to the title. I, I'm not a lawyer by trade, so I would defer to our Attorney General, those things.

But in my mind as a layman a little bit, if we're talking about environmental stewardship, that covers a wide variety of areas. Right. So it's, it's mitigation, it's preparing these things. It's, you know, the environmental side of, you know, our parks and all those things too. Right. So it runs the gamut.

And I think this, in my mind, this funding can be used for all of those things, including resources that are located within resort or Tourism areas so that we can address issues separate and apart from marketing. That's a different discussion.

Well, I like the discussion with regards to all of those BNBs and those vacation rentals that are doing illegal business. But it seems like we're trying to address that issue in an amendment version in this case.

Right. And Senator, I would say, you know, I think those are very important. We've been working closely with dotex and industry to figure out a mechanism that we can, again, for those folks that are supposed to be paying these taxes to capture that.

But I think part of this is, you know, that's a process that's going to take time for a variety of reasons. And I think we're at a point, because of what's happened and what we're facing, that we need to invest in our mitigation efforts now. And so we can't wait another how many years to do this.

And I think this, this gets us there a lot quicker.

Okay, so when you look at 504 and you look at 1396 on the Senate version on the amendments that went to the House with a clear amendment to the original 1396, what is the governor's position and your position?

So, I mean, 1396, we kept your.

Tat at 1%, correct?

Yes. Right. And actually, just to be clear, we have been asking 1.75% and hearing the concerns from the industry, we offered to, you know, to the Legislature for consideration to reduce that to 1%. So I think we're kind of there. Right. So what was sent over to the house was a little bit cleaner to some extent.

But the one thing I think was missing from this, and I think I expressed in our testimony prior, was there was no mechanism to grow that money, a special Fund or all those things.

And this bill it came over, while it may not be workable at this time, we offered some language to amend the special Fund to make it a little bit more in line.

I think the BNF Director at 1.0 mentioned this in line with a standard special Fund, we would still look at that to capitalize that Fund and then be able to possibly bond off of that.

And then we could, you know, increase those funds that are coming in so we don't have to look at additional General Fund appropriations.

Okay, thank you. Thank you. Any other questions? So. Well, you know, I, I heard what you just said, that you guys want all visitors should be paying. Right? All visitors should be paying, which I agree. So, you know, Ryan, if you would come up, please. Ryan, you know, while we looking at all visitors paying.

I think we are mechanism. I believe that in the event of we look at invasive species, good stewardship, which is truly what this bill is about, stewardship. Why hasn't it been moved faster with the transfer of the lands from DLNR moved faster to the Department of Ag? Because the best stewardship we got right now is the ranchers.

So why haven't you guys moved that out so we could look at less manpower trying to clear up lands that you guys are putting into conservation that have been taken over by invasives. Why has that not happened yet? To get those lands moved out while we're trying to incur and address environmental stewardship?

I think as far as the progress for Act 90 goes and the impasse that has happened over the past 20 years, I can't speak for the past 19 years but I know in the past year we've doubled the amount of acreage that has gone over to Department of Agriculture.

But you folks have taken away lands that ranchers have maintained and managed properly for the overgrowth of invasive species of which whether it be biosecurity, whether the environmental stewardship that we're charging the price tag to everybody now, whether they're coming in as a visitor or they're coming in from the neighbor islands to come to Oahu or whatever island for doctors and the necessity of things.

So your guys Department has asked us for a chunk load of monies try moving that over and let them deal with all the invasives and the overgrowth of Albiza and everything else.

You know I'm, I think each parcel and the issues that kind of we have to address on each parcel they're different and I, I don't know the specific, you know, parcels we're talking about here. I know generally all of act not.

It was all of those lands that has been there for over 20 something years. In fact I believe Senator Inouye was the one who instigated it. But every bill that I've looked at on your guys request have been about stewardship, has been about fire mitigation.

And these ranches that have taken very good care controlled fireweed would have been the fire mitigation that we would have had and the protection would have been Lahaina or any other place.

But we move into this other area because we want the federal money so that we can grow trees that after yesterday's meeting with the ranchers have died. So what kind of stewardship are you guys doing? And you guys asking us for money in your, in your testimony which just blows My mind away how you guys.

If you guys want to address something, look at the guys who's doing a good job.

So I just will say that stewardship goes beyond the lease, the agricultural lease.

Issue, but start somewhere. You guys want to like do everything. If you just start someplace, I think that would kind of help. But in the meantime, we taking them away. We're expecting them for grow food. We're expecting everybody for buy local. We like the schools have local in there. But you guys have been on blocker for that.

So how, you know, you guys just got to start addressing areas that you know you can help and those that you cannot. You know, you got to focus elsewhere. But to do this and ask for us to do the taxes on some of this stuff is beyond me.

Especially when you get groups like Careful Ina now that have volunteered their times with dad and fish ponds and Lois. I don't even know where you guys coming from half the time.

Yeah, just for those out there, because we're tourism people, more or less. Yesterday's hearings were had to do with agriculture lands on DLNR and the Forestry Division. There's four ranchers that are already existing that we're taking away as a example. Most on the Big island. As an example, Rancher has like 6,000 acres and in two parcels.

And Forestry wants to take one at 3,000 acres away from a rancher who needs to survive. But there's an issue that goes beyond. It's taking lands away from current cattle ranchers to address the role that forestry wants to increase. Forestry. And so that's the division that our chair is very concerned as well. Okay, thank you, chair.

Senator Kim.

So, Dion, I'm looking at the bill on page seven where they're talking about where these bunnies and these funds that are going to be spent. And we're looking at 1% being approximately $90 million that we're looking at. Okay, so $90 million and with the intent not to come in and ask us for General Funds. Right?

That's the intent.

That's it. Correct.

Dedicated funding. Okay, so we're looking on page seven on the bottom, starting on page 17. And I'm just concerned as far as what are the priorities going to be and is it going to supplement your current budget or what?

Because it says here, protect, restore, enhance states natural resources, including native forests, native plants, animals, aquatic resources, coastal lands and freshwater resources, and promote economic development relating to tourism industry. So that's a whole bunch of stuff, right? That's possibly what you supposedly already do. Then that's only Number one.

Number two, address climate change impacts, including projects that mitigate adapt to increase resiliency against climate change. These projects may include vegetation management, reduce wildlife risk, wildfire risk, coastal environmental, man, and so on and so on.

Okay, now number three, promote a sustainable tourism model and destination management to reduce visitor impacts in the natural environment and then finally, ensure that the state's natural resources are maintained for future visitors. So it seems like $90 million, you're not going to be able to do all of this. Right. So what are you going to prioritize?

Because I agree that invasive species is not even spoken in this and invasive species very much impact not just the visitor, but all of us and will be the death of us probably before climate change. So how do we address that?

Because it's easy to get dedicated funding, easy to say you want 90 million, you want to take care of climate change, but let's just see how it's going to be delivered. Because I have been here long enough to see that we give you guys a lot of money and a lot of things don't get done.

I mean, we've been fighting invasive species. Yesterday we talked about it in Committee. How many years it's going to take you telling us maybe not till 2027, that we're going to have these tested. Take us nine months to even test one thing for, for sewer and cesspools. So how are you going to.

What is the plan to deliver this so that the people sitting out there don't are not fooled when their projects are not addressed?

So, Senator, can I answer the first part? And I'll let. I'll defer to DLNR on the invasive species. So what we propose in our testimony, I think you're correct that the ability of one Department to move out these projects in multiple areas is probably challenging.

And decides what gets going first. I'm sorry, and who decides what gets addressed first?

Right, exactly. So I think what we've proposed here is that we look at multiple expending agencies if we want to get into. I mean, we have climate mitigation resiliency work happening with.com DLNR Department of Defense, you know, so it's across the board.

And one of the things that we heard from the Legislature prior was wanting to have a say in how some of those are prioritized and appropriated out of there. Right.

So, you know, we have been working on, which are going to be transmitting to the Legislature a initial plan of several $100.0 million in projects across multiple departments to address these three distinct areas broken down by expanding agencies. So that's. I mean, that's hopefully to address that concern that will these projects move in a timely manner?

We hope so. With this. With this structure.

Well, I fear that a lot of this will go to consultants and so many millions of dollars go to consultants and does not actually go.

That's what it seems is going in this bill. Yeah. Consultants, personnel contracts and administrative costs.

So at the end of the day, what's left to actually address all of these issues and just don't be fooled, you guys, by the fact that we've got this money.

And just to remind everybody, we're looking at a House Bill and House language. So just to make that correction as well.

Senator Awa, are you guys done with dealing or.

Yep.

You guys off the hook? Ag, please.

Thanks, folks. Thank. Thanks, Ryan. Thanks. Will.

Senator. Awa.

This is just a general question that's specific to this, but since we're on. The topic, can Kamaena be exempt from. Tat.

Tax has got to be equal.

Yeah. Got to be equal. Yeah. Cannot discriminate.

I. I hesitate to answer that particular question. I don't know what circumstances that you're thinking of in particular, but under equal protection. Yes. They would not be able to be exempt.

Exactly.

Thanks. I mean, I read it. I just wanted to hear it. Since we're talking about raising taxes on. Tourists and then locals will be forced to pay. You know, for anybody in the media. Watching, there's the answer.

Thank you. Any other questions?

Seeing on recess for decision making.

We are decision making on HB 504 relating to environmental stewardship. We are going to move this bill, pass this bill with an SD1 by deleting part two of the bills recommended by the Attorney General due to legal and constitutional concerns.

Also include the recommendations made by American Hotel and Lodging Association and the Hawaii Hotel alliance to make various amendments to the preamble in Section 1 to include commercial passenger vessels as well as the definition of transient accommodations in sections 237D1.

Delete the proposed language in Section 237 2F that raise concerns with DOTAX and incorporate a new 237D 2F to impose a tax of $20 per passenger per port entry.

Also include the two amendments recommended by the Hawaii Cattlemen's Council which will help us reach our goal of improving environmental stewardship as well as address invasive species and add a new section to establish a working group on the tat enforcement to be led by doltax and chaired by the Director for the purpose of ensuring that all transient accommodations subject to the TAT pay what is due.

Working group Members shall include a representative from the departments responsible for collecting the TAT from each of the four counties, representatives in the hotel and lodging industry, timeshare operator, a short term rental organization, other individuals that may be invited by the chair.

The working group shall report its findings and recommendations, including any proposed legislation to the 2026 Legislature and also incorporate in the Committee report the recommendations from the governor's office that related to fiscal matters that can be considered by the next Committee and make any necessary technical amendments. Any discussion?

Yes, Chair thank you, Chair, for working on this measure. I have some reservations with regards to the $20 per passenger per entry fee. When you think there's another consideration that this body, the Senate, sent over to the House on SB 1396 with regards to the governor's proposal.

And I think there were a lot of amendments to that measure as well, which we already sent to the House with the majority of the Senate's concurrent. So I'd like that portion of my statement be put into the Committee report.

I will concur to move this measure for continued discussions as well since it goes to the Committee on Ways and Means. With that said, but I think probably, I mean it's not probably the measure that we sent to the House was exactly what the governor's package included, the measure that was related to environmental stewardship. Okay.

With that said, we'll agree to move the measure with the suggested amendments. Hopefully that the Committee report will include the reservations that we should consider. SB 91396 thank you. Sounds good.

Any future Senator McKelvey, thank you so much.

I want to really thank you Chair, for working on this. You've made a lot of improvements to the bill. I still have concerns. One of them is the fact that most cruise ships are foreign flag vessels. I don't believe there are an American flag vessels be operating.

They're all built in France and thanks to the Passenger vessel Act of 1886, they're all foreign flag vessels. So I don't know if we have the legal ability to do this, although I guess the Federal Government is also looking to apply taxes to them. Thank you for getting rid of that second section.

But I guess another one of my concerns and I'll just be honest with you people and I look to my environmental friends because I've supported numerous bills and voted against bills because of the environment. But we got Medicaid is going to be destroyed soon. We've got kids who may not be able to get free meals anymore.

I hope as this bill moves that there could be strong consideration that the revenues raised for this will protect our state against these cuts. We gotta ensure our kids can eat. We gotta ensure our people can get medical care. And it's the Laszlo hierarchy of needs. So with that I'm going with reservation. Thank you.

Thank you. Any other discussion? You know, and that is the reason why I want to keep the bill alive is so that we can continue to have that discussion. We can weed out where we got to weed out on partners that we already have to address some of the concerns I think that we all shared today.

So with that being said, Vice Chair for the vote. Chair goes aye.

[Roll call]

For the Committee on Water and Land Chair's recommendation on HB504 House draft to to pass with amendments. Any discussions on water and land. Okay. Hearing none. Vice Chair for the vote. Chair goes aye.

[Roll call]

Thank you and thank you for joining us with that.

We are adjourned.

Hello and welcome to the hearing with the Senate Committee and Economic Development, Tourism, Agriculture and Environment. Today is 3-18-2025 and this is our 101 CM agenda. We're in conference room 229. This agenda is three House Bills and one resolution - Senate Concurrent Resolution. Personal agenda is HB 348 relating to single use plastics.

First up, Environmental Administration Department of Health with comments. Hanna Lilley, Hawaii Regional Manager, Surf Rider Foundation, in support. Ted Bolin with support. Laura Brear with support. Bernadette Lee at support. I have about 10 other people in support and with comments. Anybody in the room willing to, wanting to testify on this measure. Seeing none. Members, any questions?

Moving on. HB 496 relating to mamaki tea. First up, Department of Ag, Sharon Hurd, in support. In person, not, Brian Miyamoto, Hawaii Farm Bureau, in support. Anybody else wishing to testify in this measure? Any questions to nobody that came for testifying. Okay, moving on to HB 774 relating to value added products.

Establishes a food and product innovation network within the Agribusiness Development Corporation. First up, Department of Ag in support. Next up, DBEDT Dean.

Thank you. Next up, Wendy Gady, Agribusiness Development Corporation.

Good afternoon, Chair, Vice Chair, members of the committee. I 'm Wendy Gaty, and we stand in very strong support. It's a vote for food equity and economic.

Thank you. Going back to the Department of Ag who just walked in the door. You're up.

Thank you, Chair. The Department stands on in its certain testimony in support.

Thank you. Next up, University of Hawaii Systems Della Teraoka.

On behalf of the community colleges, Carlos Peñaloza, we stand on a rich testimony and support.

Thank you. Next up, Brian Miyamoto, Hawaii Farm Bureau in support. Next up, Laura Zerbel. Laura Zerbel testified for a food industry.

Not present on Zoom. Not present on Zoom Chair.

Okay; in support. Michael Munekata for Ulupono, in support. HFIA, Guy Sellier, in support. Julian Kiyabu, Hawaii Food and Policy, in support. Pam Tumpap, Mall Chamber of Commerce, in support. Glenn Agamida, also in support. Anybody else wishing to testify on this measure? Any questions?

Is there a cost to this program?

Cost?

Thank you, Senator. There's no cost to the program itself but for the facilities for the County of Hawaii and Maui, we're asking for planning funds: 350,000 total, which breaks down to 175,000 in per county so we can partner with UH to do the proof of concept and design of the manufacturing facilities.

Oahu is currently under planning right now and then future. We already have the site for Kauai. We'll ask for those funds later.

Just wanted to make a statement to UH because they always come in and say, yes, we support this, but as long as there's an effective budget, you need to tell us where you think the money should come from. Because it's got to come from somewhere. And trust me, it's probably going to come out of UH's budget.

So you should, when you guys testify and support, that's your priority then.

Great, thank you. Okay, any other questions? Seeing none. Moving on to SCR 141. Sorry.

NSR 159 urging the Department of Agriculture to collaborate with the agribusiness Development Corporation regarding grant funding opportunities with the U. S. Department of AG.

Hello, Chair. Thank you. Senator Gates here on behalf of the Department of Agriculture. The Department stands on testimony.

Thank you, Senator. EDC?

Good Afternoon, Chair, Vice Chair, Members of the Committee when meeting EDC. We stand in strong.

Thank you, Wendy. Hawaii Farm Bureau. Brian Miyamoto also in support. Anyone else wishes to testify on this movement hearing? None. Any questions?

Quick decision making. Okay, first up, HB 348 relating to single use plastics.

We are going to pass this with an SD1 by removing the reference to lotion in the definition of personal care product on page 5 and delay the effective date to July 1st of 2026 to enable lodging establishments to use up their existing stock of personal care products, making any necessary technical amendments and noting in the committee report the concerns expressed by the Department of Health relating to the need to provide funding so they can enforce this bill if it passes.

Any discussion? Seeing none. Vice Chair for the vote; Chair goes aye.

[Roll Call]. Chair your recommendation is adopted.

Okay. Same recommendation for AEN; any discussion? Chair votes aye. Vice Chair.

On 348 [Roll Call].

Thank you, members.

Next up, HB 496 relating to mamaki tea. We are - since the bill already has a defective date and a blank appropriations among, we are passing this bill as is. Any discussion? Seeing none. Vice Chair for the vote; Chair goes aye.

[Roll Call]. Chair your recommendation is adopted.

Same recommendations for AEN; any discussion? Chair votes aye. Vice Chair.

On 496, passing as is, [Roll Call]. There are 5 in favor to adopt.

Next up, HB 774 relating to value added products. The recommendation is to pass this bill as is. Any discussion? Seeing none. Vice Chair for the vote Chair goes aye.

Thank you, members.

[Roll Call]. Chair, your recommendations adopted.

Same recommendations for AEN; any discussion? Chair votes aye.

Thank you.

On HB 774 House Draft 2, [Roll Call].

Economic Development Tourism Committee, same recommendation for SCR 141...oh, sorry. Sorry.

Recommendation on SCR 151 SR159 is to pass with tech amendments. Any discussion? Chair votes aye.

On SCR 141 and SR 159 passed with amendments. [Roll Call]. There are 5 in favor.

Commitee of Economic Development and Tourism; seeing recommendation, Chair goes aye.

[Roll Call]. Chair, your recommendations adopted.

Thank you.

We are adjourned. To a hearing with the Senate Committee Economic Development tourism today is March 18, 2025. This is our 1:02 p.m. agenda and we're in Conference Room 2 to 9. We have one bill on this agenda, so we'll go ahead and get started with HB454 relating to the White Technology Development Corporation.

First up on the testifiers list is interim Executive Director Sandy Konori testifying for a technology development corporation.

Hello. Chairman. In coming supports this code and thank you for getting this.

Thank you. Next up, Joshua Wish Hore collaborative.

Sure. We'll stand on our testimony.

Thank you. Next up, testify for Chamber of Commerce, Sher Manor. Good afternoon, Chair, Vice Chair of the Committee, Town of Commerce standing our testimony and support your questions. Thank you. Next up, Brian Miyamoto, Hawaii Farm Bureau in support. Next up, Oceanid Laboratories, Patrick Sullivan.

Good afternoon, Chair, Vice Chair of the Committee, Judy Morris for Oceanid. I know you know, Oceanet, we're celebrating our 40th anniversary this year. And as you know, we, we do a lot of tech and research and development and so we really strongly support the small business research innovation grants. We have employed about 400 interns.

You know, the CIBR grant supports economic growth and diversification, employees economy launches new ventures and technology innovations, supports growth of the tech industry and the creation of intellectual property and innovation in the state. And also we always want our keikis that we educate in the mainland to come back so they can work for companies like Ocean.

Thank you.

Thank you. Next up, Art Testament for the Art Source Inc. Kent Unterman.

Chair, Vice chairs and Members of the Committee, Ken Unterman, the Art Source Inc. Strongly in favor for three key reasons. Number one, the HTGC has done a great job in helping small business. As a small business owner, I don't believe the state does enough for small business. And so this is a good thing for small business.

And number three, I'm very concerned about tariffs. With our kind of crazy President doing crazy terror things, it's going to hurt our economy, it's going to hurt small business and it's going to affect Hawaii a lot. On a positive note, just wanted to share our business started 38 years ago at the Aloha Stadium swap meet.

We have 170 employees. We measure our success by average hourly wage, which I'm proud to say was $34 in the fourth quarter of last year. Almost $70,000 a year for 170 employees. We just put $800,000 printer in place. It's the best printer in the world.

And we're going to be exporting $1.2 million of banners to hospitals on the mainland. Thank you very much.

Thank you. Right on the noes, Sue. $34 an hour. What am I doing? Working. Next up, Lauren Zerbo for Hawaii Food Industry Association on Zoom. Not available on Zoom. Terry. Thank you. Neil Anthony Sims for Ocean Era Inc. On Zoom.

My name's Neil Anthony Sims. I'm the founder and CEO of Ocean Era, Inc. Based here at the Natural Energy Lab in Kona. Our company strongly supports this bill. HB454. Yes, we understand there are short term budget constraints.

But the budget should also reflect the state's long term aspirations and the need to build Hawaii as a Center for small business innovation and economic development. And HTDC does a fantastic job of supporting this early stage R and D.

Their SBIR program has been invaluable to the success of our company and marine fish and limu farming in Hawaii. I speak some more about this in my written testimony. But I also provide there an example of how critically important the matching funds are for us to be able to build on that.

The matching funds allow us then to be able to bring in other federal dollars. So we're really grateful for your continuing support for this program. It really is critical to our success as a small business. R and D. Thank you. Aloha.

Thank you. Next up, Roz Funakoshi in support Demis Kanahele, Nicole Brent LC and support Jimmy Freeze. I Fish in support. I have. Oh she don't. I'm sorry. Okay.

Is that me? Yes. Hi, I'm Shenhua Farnsworth. I'm the managing partner at Blue Startups. Strongly support this bill. We would not be able to do all the great programs we can without the HTDC. Except accelerator funding is critical to our mission.

We just got back last week from a boot camp on Maui where we did a two day workshop for 25 small businesses on Maui completely for free. That is because we are getting support from the state accelerator funds so crucial to us to continue to do that. Good work. Thank you very much Stan on our testimony.

Thank you. Next up David Holt testifying for Blue Startups and support. I have about 15 other people in support and not sure if you guys on zoom. If you are show yourself if not anybody else in the room wishing to testify. Seeing non Members. Any questions? Seeing none. Okay, decision making.

Okay, first off and only up HB 454 relating to a technology development corporation. This Bill already has an effective date and a blank appropriation. We're going to pass this measure as is any discussion Seeing none right here for the vote. Chair goes Aye.

[Roll Call] Chair your recommendations adopted.

Thank you. With that we are adjourned.

Thank you.