Senate Standing Committee on Transportation and Culture and the Arts

Welcome to this hearing with the Senate committees on Economic Development and Tourism and our good friends from Transportation and Culture in the Arts. Today is Thursday, April 4, April 10, 2025. This is our 1:00 p.m. agenda. We are in Conference Room 229.

This hearing is being streamed live on YouTube and the unlikely the unlikely event that we must abruptly end this hearing due to technical difficulties. The Committee will reconvene on Tuesday, April 15th at 1:01 p.m. in Conference Room 229. The Committee has gone through all gone through the one testimony or two testimonies.

So we encourage you to stand on your written testimony and if you'd like that comments, you will have one minute to do so. This agenda has one House Resolution. So we'll go ahead and get started with HCR142. First up testifying we have interim President and CEO Caroline Anderson. Hoy turns Matari comments.

Next up, Angela Young testifying for cares. Hi Angela.

Angela Melody Young testifying on behalf of CARES in strong support of the Hawaii Tourism Authority and Department of Transportation Initiative for for the airport Greetings program to display art with a collaboration of the neighbor island airports. Because the goal of what we can do as a community to encourage keiki and youths to learn about art.

Art competitions for public display is critically important to building the foundation of education for youths for their understanding of life, community and culture. And art teachers use a wide variety of valuable skills including creativity, expression, vocabulary building and building a creative skill set.

So integrating these different topics of art, creative expression, Hawaiian music, cultural activities as a pathway to develop economic development. As we anticipate growth in filmmaking sector and the music related activities in Hawaii. This is going to help keep things in sync, right?

So that when people come to Hawaii they're greeted with such friendly gestures and they're like okay, yeah, we wanted to invest. Thank you, Angela. Okay, thank you.

Aloha. Aloha. Anybody else wishing to testify? See none. Members, any questions? See none of okay, moving into decision making. Okay. Each year at 142 urging the White Tourism Authority in Department of Transportation to expand the Kahea Airport greetings program to display KQR in all neighbor island airports. Recommendation is to pass as is any discussion. Seeing none.

Vice Chair for the vote. Chair goes Aye.

I vote yes. [Roll Call] Chair, your recommendation is adopted.

Thank you.

Thank you. Committee on Transportation, Culture and the Arts. Same recommendation. Chair Go.

Chair's recommendation on the Committee on Transportation and Culture and the Arts is to pass HCR 142 unamended. [Roll Call] . Measures adopted. Mr. Chair.

Thank you.

Thank you. And with that, we are adjourned.

Aloha and welcome to the hearing with the Senate Committee on Economic Development Tourism. Today is Thursday, April 10th, 2025. This is our 1:01 PM agenda and we are in Conference Room 229. The agenda has two resolutions, so we'll go ahead and get started with HCR 102.

First up, test—on testifier list—we have Director James Tokioka from Department of Business, Economic Development, and Tourism, in support. Next up, Justin Vermonth from ARDA Hawaii, in person. Oh, hi.

Good afternoon, Chair DeCoite and Chair—Vice Chair—Wakai. My name is Linda Rodrigues. I am testifying on the behalf of ARDA. We advocate obviously for the timeshare industry. We have over 15,000 units and we are urging the support of the translation of the real estate exam in Japanese.

I'm standing on my testimony but did want to add these comments and share with you some of the reasons why we see this as a huge opportunity for the State of Hawaii to be able to secure Japanese visitors in the future.

Our Japanese timeshare owners love Hawaii and return every year and we're seeing a much stronger return if you compare timeshares to hotels, and we believe by growing the amount of timeshare sales each year, there'll be a positive impact on the economy, in addition to our industry.

I also wanted to add that by us being able to accelerate workforce planning and be able to onboard sales professionals quicker, we're able to ramp up sales in Hawaii and be able to reap the benefits sooner. Any questions?

Thank you. Next up, Robin Suarez, testifying for Merit Vacations Worldwide.

Hi Chair, Vice Chair. We stand on our testimony in support. Thank you.

Thank you. Next up, Derek Yamani, Real Estate Commission.

On behalf of the Hawaii Real Estate Commission, stand on our testimony in opposition.

Thank you. Anybody else wishing to testify on this measure?

Thank you, Senator and the Chair. Good afternoon. For the record, Russell Homa with APAC Hawaii. I just, yeah, I support this House Concurrent Resolution.

I know I testified in the House at that measure and supported a measure and I just one reservation I mentioned. I know the Japanese are here since the 1970s and 80s and they roughly own 90% of Waikiki Hotel back then. So, I know there's a lot of impact Japanese investors here with—even with the timeshare.

But to me, representing APAC Hawaii, I would like to have all other nationality including Chinese, Korean, Filipinos, then they're willing to come to Hawaii and invest as well. You know, so maybe the state Real Estate Commission can looking at, you know, including other languages in there—Korea, Chinese, Filipino language as well.

Because they're the market and they're willing to come here. And that's what we—Hawaii stands for—with all nationalities. Thank you for giving the testifying.

Thank you. Anybody else wishing to testify on the measure? Seeing none. Any questions? Real Estate Commission please. Thank you. So, do you guys currently administer any limited real estate salesperson's license of the sale of timeshare?

No. What they do issue are sometimes conditional licenses based on maybe a criminal background history or something derogatory based on the licensee's history. And the condition basically is saying hey principal broker, you, if you sign this person on be aware that they may owe money here or they had some criminal background.

So, so if you guys, if you guys did regulate this type of license and if they wanted to sell other real, you know, would they want, if they wanted to sell other real estate products?

It wouldn't stop them. Not according to this result. It doesn't, yeah. So, you would think that the next principal broker who would be supervising this Japanese speaking individual would want to be a Japanese speaking or understanding Japanese. But there's no limit there, so there would be no protection.

Yeah. Any, any, any questions? Senator Wakai. ARDA, please.

Yes, sir.

The realtors are against it for a few more reasons. I didn't realize, I thought this is just translating a test into Japanese. But there's 20 hours of continuing education classes that are necessary and they don't have the resources to have someone do 20, that 20 hours.

Would the ARDA and the timeshare industry be willing to pay for all of whoever is going to be conducting this continuing education class?

The continuing education classes, we, as well as the course, we would like to still have it, you know, facilitated in English and just to simply provide the option to take the exam in English or Japanese. Many of our team members have to take the exam up to five times before they can pass.

And obviously, we just want to be able to offer that as an option. They would still have to do their continuing education and take the course in English. So, we're not really asking to translate the, all, the entire curriculum.

But if I'm not well versed in English as a Japanese national, but somehow I get to take the tests in Japanese, but then there's still for the length of my career selling timeshares, I need to do 20 hours of continuing education.

Then that means that you're going to let someone in the front door and 20 years later, things and laws and whatever may change, and that person will not have the opportunity to be aware of these changes because they don't have proficiency in English.

Correct. And, you know, that's what, that's something that we should consider. However, there is a very limited amount of questions on the exam and in the actual real estate course and all the other continuing education that is actually relevant to the sale of timeshares.

Okay, I just think that—I understand what you're doing is trying to make it easy for a Japanese national to initially sell timeshare, but it's this, this resolution doesn't take into account years later how things may change.

And that Japanese national might, because of their lack of English proficiency, might not be aware of things 5, 5 years down the road that have changed the way you process transactions.

Well, keep in mind, our sales professionals do speak English. We do not hire, you know, anyone that is not able to speak English. So they're currently taking that course today in English, and then they're simply going and taking the exam in English and having to take it multiple times. The business is conducted in Japanese.

They do facilitate their sales presentation in Japanese. But however, the—everything else that they do is they're interacting with staff on site that speaks English, and it's a requirement for them to be bilingual. This is simply an accommodation for someone who is taking the exam multiple times and not able to pass.

To be able to offer them that accommodation, I think is very powerful. We would attract a lot more real estate professionals to Hawaii. And, you know, it is definitely the beginning. And of course, you know, after we pilot something like this, we can actually consider all the other opportunities, such as continuing education.

I mean, you're saying these people are bilingual, but you're saying that some people have to take it five times. That shows that perhaps they're not as fluid as we would like them to be.

And I just think that they're missing out on the 20 hours of mandatory continuing education classes if they aren't proficient enough in English to pass the English exam on the first crack.

Well, the continuing education—I'm not suggesting that we stop continuing education. They still will need to complete their continuing education in order to maintain their license. I'm just simply asking for an accommodation for the exam after someone has taken that exam several times and failed.

I guess to get a sense of the order of magnitude, how many individuals are you aware of, you know, that this would cover or this would help increase the number of applicants and those taking the exam.

That's an outstanding question. I would say, and if this is a guesstimate, but I would say it would be a couple of hundred between industry wide.

And so, under the current conditions, if they're taking the exam on multiple, I mean on multiple occasions, have there been complaints that some of the information is not easily translatable or you know, are there other conditions that have been identified by the applicants other than the fact that the exams are in English?

Not specifically, but the course and the exam cover a lot of everything that's required to sell real estate, which is, you know, listing appointments and all kinds of, you know, requirements. And in the course itself, there's maybe, you know, three pages of content that is relevant to timeshare sales.

But I don't really know the answer to that question, but it's a very good question.

Okay, thank you.

So, what is the total pages if only 3 pages is relevant for them to, you know, because they have to go through the whole booklet, right? You just said three pages is basically what's relevant. How many pages are there that they need to go through?

It's that thick, right?

It's that thick, and for the most part, in terms of questions, it's a few questions and most of it is around the review period and the rescission period. You do have a rescission period of seven days to cancel your transaction.

Okay, thank you.

Thank you.

Okay, next up, HCR156 requesting Hawaii Technology Development Corporation to increase its focus on advanced manufacturing and cyber security to build a stronger diversified economy, create highway job opportunities and position Hawaii as a leader in innovation and national security in the Pacific. First up, DEBDT Director Tokioka with comments. Next, Sandy Kanemori, Hawaii Technology Development Corporation. Thank you.

Next employee, Military Affairs Council in support. Anybody else wishing to test the funds measure? Awesome.

Thank you. Chair. This is a very important resolution. I know we've been trying to diversify our account economy for the past 34 years. And I know besides tourism and with the high tech technology, I know when Senator Carol Fukunaga was the House of Representative we tried to the Milani Technology Chime Tech Manoa Innovation center.

And I know that we're all been trying to diversify and I know with all this stuff that's happening, things seem to been status quo and we need to move forward with the new generation of people with new technology, with artificial intelligence, especially with cyberspace and you know, we're all getting scammed and everything and losing, you know, our personal identity and all that.

I know that in military, I know the US Space forces have advanced and in terms of Department defense. So I know there have been our arms and legs for our cyberspacing. So I know that with the other National Guard, with the Air Force Reserves, their Air National Guard here, they could coordinate with the U.S.

space Force and within the Indo Pacific Rim and hopefully protect our State of Hawaii from all the cyberspacing. But in terms of manufacturing diversifying our economy, we need it. Even what Donald Trump says that we're going to bring manufacturing back to United States.

And I hope we can get that in Hawaii and maybe get some of these foreign investors to invest here.

And like I testified before, maybe we can tap into that, that meeting that iciba Prime Minister of Japan with, with Donald Trump and promised them that they're going to invest $1 trillion into the US soil and the infrastructure development. And I gave Prime Minister Shiba my book of my blueprint type to the meeting with Donald Trump.

So they're all very aware with our situation for Hawaii. So we got to play that stronghold and we're counting on everybody with the policymakers here. Thank you very much.

Thank you. Okay, any questions? Senator Wakai

For Sandy and Wayne. Wayne, you can come to me. State's been struggling for years about having this discussion about diversifying the economy. This resolution is in line with that aspiration and it promotes innovation.

But can you tell us about what happened recently that actually raises the importance of this resolution in terms of your ability to actually push innovation?

Yeah, well, I'll start and then Wayne can help out here. So recently, actually exactly about one week ago, we got notified by the federal NIST Department that our manufacturing Extension Partnership program, locally called Innovate Hai, has been discontinued. There are 55 centers across the nation. We have been hosting the local Hawaii Center for the past 20 years.

So it's really unfortunate that the Current Federal Administration has decided not to prioritize this in light of other priorities. And yeah, the program has been defunded and will not continue going forward. As many know, Wayne Inouye has been leading this charge for a MEP Center for 20 years as well. So it's been very unfortunate.

Advanced manufacturing aligns very well with HTDC. Its integration with technology, innovation, it's all part of advanced manufacturing. So it's a perfect fit moving forward.

So the 20 years of momentum that you built kind of went thud last week, right? It just kind of all stopped. And you know, I work with both of you on creating that manufacturing grant program that has shown a lot of success over the years. And now that that's Proof. Right. It's gone.

Yes. Senator.

Yeah. So all of the efforts that we've made from a state level in creating your program, funding your program just kind of, but it was federally funded, all went down the toilet last week.

So therefore this resolution is at least conveyed to the, to the business world and community that we still think that it's a worthy investment and worthy of our to try as best we can to continue the momentum that you and Wayne have created over two decades.

Correct. I want to also add, Senator, that this affected five staff positions. Some of our staff have been dedicated to supporting the manufacturing initiative for likewise 10 to 20 years. So it's very unfortunate.

Questions? I just get one question for you guys. So based on the resolution, how would the resolution help you increase your focus on advanced manufacturing and cybersecurity to build a stronger, more diversified economy, create high wage job opportunities and position Hawaii as a leader in innovation and national security in the Pacific?

So I'll talk to the cybersecurity portion first. So cybersecurity, it's so important for us to create resiliency going forward and it's important to protect our data infrastructure as well.

We know it's a national threat and I think everybody could agree that it's important to put some of our resources, or not some, but a lot of our resources into that to protect our intellectual property as well. However, I'll also talk about advanced manufacturing.

So in order to also increase our supply chain resiliency, especially with the increase of the import tax that's coming down the line, actually it's already been hitting. We need to also integrate advanced manufacturing technology and innovation into the process to help production increase as well for our local manufacturing companies.

So maybe just add as well. Senator, thank you for that question. But I think, you know, for advanced manufacturing, it does reside in a bigger blueprint that DBEDT has put out as well in different industries.

So we're hoping that, while unfortunate that our federal program was not renewed, we're hoping that the efforts that we've built over the last 20 years will get dispersed within other departments within the state, especially dbed and some of the resiliency that they're doing in fashion and aggressive.

So again, we're hoping that the great work that the community has done, not just HCDC, but the state departments, will continue the value of advanced manufacturing and use that as a tool to really have and build a sustainable economy for Hawaii.

So again, I'm very hopeful that other departments will carry on the initiative that we've started to really help the industry with supporting tech and manufacturing that we're doing.

So I don't want to put you on the spot, but I am.

Thanks.

National security, you know, I would think that the federal would be more prone to support it being that the head of national security comes from Hawaii.

Yeah. So it's very. You know, again, we've asked a lot of questions regarding security and the reprioritization of Department of Commerce and a very fluid response that we get. I mean, I think, as you know, things change day to day with the tariff and how that's going to impact our local economy here in Hawaii.

But as far as national security. Right. I think, you know, there is a lot of efforts currently going on here with our indopacom community here and really trying to focus on that.

So hopefully we can continue to provide the security measures here in Hawaii that will protect not only our defense forces, but also our local small businesses with cybersecurity tools. And, you know, again, we are the state and I think the community is also in partnership with the University, committed to making sure that we are nationally secure.

So just on the resolution itself, don't you feel that you guys are already doing what your Department calls for?

Yes, we are.

So. So is the resolution actually needed?

I think it's just bringing more focus to the efforts. Right. I think in prior years. Right. We. When I first started 20 years ago, there was very little focus on manufacturing.

But, you know, through the help of all of you and the community, that we've been able to grow the initiative and grow the focus on local Made in Hawaii products.

So I think this just brings added value to make sure that the community, our stakeholders understand that manufacturing and technology is a viable industry for the sustainability for the State of Hawaii.

And I support that because I think, you know, having challenges finding labor. Technology is what it's all about.

It's all about automation. It's all about trying to bring in new technology and to provide tools for our local companies. Right. Making sure that we equip our local small businesses, not parachute companies from the mainland to come in and take over. But it's really about supporting our local tech companies.

Thank you. Any other questions? Seeing none. Let's go straight into voting. Okay, thank you. Okay, first up, HCR 102. Recommendation is to pass as is. Any discussion? Seeing none. Vice Chair for the vote. Chair goes aye.

I vote yes. Senator Fukunaga.

This is 102?

Yeah. HCR 102.

Thank you. I have some reservations on this because it's, to me, it's, it's not clear that the solution and the problem are aligned.

Thank you.

Senator Kim and Awa excused. Chair, your recommendation is adopted.

Thank you. Next up, HCR 156, requesting Hawaii Technology Development Corporation to increase its focus on advanced manufacturing and cyber security to build a stronger diversified economy and create high wage job opportunities and position Hawaii as a leader in the innovation and national security in the Pacific. Recommendation is to pass as is. Any discussion? Seeing none.

Vice Chair for the vote. Chair goes aye.

[Roll Call]

Thank you. And with that, we are adjourned.