House Standing Committee on Economic Development & Technology

Okay. Now we are convening. Okay. Welcome to ECD. We're at room 423. 10:00am It's January 20th. It's January 30th. Okay. So in order to allow as many people as possible to testify, there will be a. We're not gonna have a time limit we haven't had.

Anyways, moving on to the next one morning hearings must adjourn prior to the new floor sessions. All testifiers may not have the opportunity to testify. In that event, please know that your written testimony will be considered by the Committee. If you're on Zoom, please keep yourself muted and your video off while waiting to testify.

And after your testimony is complete, the Zoom chat function will allow you to chat with the technical staff only. Use a chat only for technical issues. If you're disconnected unexpectedly, you may attempt to rejoin the meeting. If disconnected while presenting testimony, you may be allowed to continue if time permits.

Please note that the House is not responsible for any bad Internet connections on the testifier's end. And in the event of a network failure, it may be necessary to reschedule the hearing or schedule a meeting for decision making. In that case, an appropriate notice will be posted.

Please avoid using any trademarked or copyrighted images, and please refrain from profanity or uncivil behavior. Such behavior may be grounds for removal from the hearing without the ability to rejoin. And I should also mention that we have a new microphone system which is very sensitive and is sort of omnidirectional. Okay.

So please be aware of the things that you're whispering to your friends and colleagues, especially if it's not nice. Okay. But we're going to begin first with HB 1829 related to Marine Affairs. And our first testifier flower is Mary Alice Evans, Director of the Office of Planning. Is anyone else from the Office of Planning joining us?

Okay, we'll move on then to Wendy Gaty from Agribusiness Development Corporation. Okay, thank you. We have testimony from Nelha from Sa, from Laurent Sobadier, the Deputy Director.

Aloha. We stand on our written testimony. Thank you.

Okay, thank you. We have Gabriel Honohano from Hawaii Pacific Drone Solutions. Move on to HTDC, Trung Lam.

Trung Lam, Aloha Chair Ilagan, Vice Chair, Hussey, Members of the Committee. HTDC stands on our written testimony. But I'm very excited as this is my first hearing in my new role as HTDC Executive Director. And there's a lot of folks in the ocean community who are very happy to testify.

So I would like to give Them the time to speak Possible.

Okay, thank you. Pacific Economics in support. Okay. Anthony John Esasa from Pacific Impact Zone. Jim W from High Plan. We also have testimony from Feng Yang small kind farm. Nicholas Alm from Hawaii Ocean Power Solutions llc. Grant takara from gt scientific. Chenoa Farnsworth from Blue Startups. Ronald Tardif from 1000 Ocean Startups.

Noah Pentaklovich from Pohonu, Gregory Wong from Hawai Home llc. Duncan Lajowski from Hawaii Ocean Power Solutions. And then I think we have Johnny Chenkhamene. I'm sorry if I mispronounce your name. From Builders DC. Yes, sir. Standby. Okay. How do I pronounce your name? Properly? Okay. My apologies. Thank you.

Neil Anthony Sims from Ocean Era also in support. Kelsey Kim from Havoc AI and support. Veronica Rocha from Essential Leap in support. And then I think we already have Nel Hunt. He says twice. Grants. Sorry. Grace Iwashta for Hawaiian King Candies in support. We have Purdy Cole, Limited in support. Charna Ray Niole in support.

Forest Frazelle in support. As an individual. George Yarbrough in support. Brennan Yamamoto in support. Doreen Wong.

I am supportive of the south bill tonight.

Okay, thank you. Natalie Piper in support. Thank you. We also have testimony from Charlie Field in support. Jimmy Freese and in support. Okay, thank you. Valerie Harmon in support and Meredith Welch in support. Would anyone else like to testify in this measure? Please introduce yourself.

For hearing this message. Measures today My name is Kyoan DeFranco and I'm testifying in support of HB 1829. As a resident of Hawaii and a Director at the Purple Mai'a Foundation, I strongly support this bill which establishes an Office of Marine affairs and Marine Affairs Coordinator under HDDC.

By creating a dedicated office and leadership role focused on marine affairs, this measure will help strengthen Hawaii's capacity to steward our oceans in a way that reflects both our local needs, the urgent challenges facing marine ecosystems.

Establishing this office recognizes that our economy, culture and well being are deeply rooted in healthy oceans, marine resources and aloha for organizations like Purple Maya foundation which are working on ocean related innovation, sustainability and regenerative economic practices.

Having an integrated Marines affair structure at the state level means better coordination, cleaner strategic vision and stronger opportunities for collaboration between government, community partners and Native Hawaiian practitioners. This will help ensure that policy and investment decisions about our surrounding oceans are guided by expertise, community input and long term stewardship values. I urge you to support this Bill.

Mahalo Nui.

Thank you. Anyone else would like to testify in this measure?

I know I mentioned earlier.

Aloha everyone. Mahalo to the Chair Ilagan and Vice Chair Hussey for being here today. My name is Dorian Wong. I've been working at the cross section of Technology, Innovation, Business and Policy and I've sit on different organizations at the global, regional and also local levels.

And and to me, I've been helping in support of the ocean tech and innovation ecosystem here to really help shape their Blue Economy efforts. And why is this bill important? So this bill is one showing that the Blue Economy is important to Hawaii, especially surrounded by the Pacific Ocean.

We have over $10 billion that contributing to our state's GDP. We also have over 100,000 jobs being supported as well. And so by prioritizing this, this bill helps to provide the infrastructure and support for an Ocean cluster. So one may ask, what is an Ocean cluster?

So an Ocean Cluster is a way to bring collaborative network of governments, academia, entrepreneurs and communities together to solve important problems, especially with what we saw over the summer with some of the tsunami warnings. And so it's really important for us to have this integrated and public private sector working together to address these challenges.

And so by establishing this Office of Marine affairs and HDC as well as a task force made up of Members from across the public and private sector that will enable us to really help collaborate and meet more on a regular basis to support the ecosystem.

That being said also too, this also helps create and stand a point that the Blue Economy is a state priority. We already seen this in a lot of other regions including San Diego, Washington, Alaska, Maine, New England, Florida and many others as well.

And so this helps us to help create that stance and also help shows that our priorities is focused on the Blue economy. And so this collaboration is important to me and would love to see this as, you know, as a younger generation growing up here, would love to help provide jobs and opportunities for others.

Thank you.

Mahalo.

Thank you. Anybody else?

Hi. Thank you Chair Ilagan and Vice Chair Hussey for allowing me to give this testimony in support of this bill. My name is Alexi Drouin. I represent, I do Blue Program operation for Blue Startups. I'm the Assistant Director at Hawaii Angel. I'm also an ambassador for Hawaii Tech Week and a supporter of HTTC in general.

I'm not an ocean expert or a researcher, but I am an entrepreneur and an investor.

And what this means for us specifically at Blue Startups is we are, you know, we've listened to HDDC's recommendation of having these sectors specifically in space and energy, healthcare, but also ocean and since we are a blue startup and it is on brand, we are definitely looking at focusing on energy towards supporting the blue economy.

So having a cluster here would be very supportive. We're adding on to our already very successful accelerator program, a two week intensive specifically for an ocean track. So that will be our specific initiative to contribute to this initiative and momentum.

And as additional information from Hawaii Angels, last month we just closed a round for a million dollar for Pacific Hybreed, which is a company out of the big Highland island that does ocean tech. And this month we're actually seeing Jimmy, that's another one that potentially we can invest in.

So this is how the momentum of having a cluster here can work. So that not only do we have startup companies that we can bring up, but that investors can also support into bringing them to the later stage so that they can create jobs in the economy. So thank you. Thank you. Anybody else? All right.

Chair Iligon, Vice Chair Hussey and Members of Committee, I submit this testimony on behalf of AI Fish and strongly support House Bill 1829 related to marine affairs. AI Fish is a Hawaii based technology company. Using artificial intelligence, powered computer vision and electronic monitoring system to support sustainable fisheries management, efficient commercial fishing operations and marine conservation.

We develop and deploy technology that helps fisheries operate more sustainably while improving data collection for science and management. I spent decades building technology companies here in Hawaii and I've seen many well intentioned initiatives come and go. But this one makes sense in a way that others haven't. We're not trying to be the next Silicon Valley.

What we are doing is leaning into what Hawaii is actually positioned to lead. Our university is world class in ocean science. We sit at the center of the largest U.S. exclusive economic zone and our culture has deep connections to the sea and is growing federal investment in marine innovation that Hawaii is well positioned to capture.

The foundation is here and HB 1829 gives us the structure to build on it. Thank you.

Thank you. For the record, what's your name?

Jimmy Freeze.

Okay, thank you.

Any anybody else would like to testify, Just want to mention that we do have a long agenda for today. So if you do have written testimony that you like to stand on, we encourage that. Thank you very much. Okay, we're going to move on to our next bill 1615 relating to HDDC.

First up we have Gabriel Honohano from White Pacific Drone Solutions and support and then Trung Lam from HDC. Would you like to speak?

HDC stands on our written testimony but got a great ecosystem and I'm glad they're here to support. Thank you.

Thanks, Anthony John Escasa, Pacific Impact Zone in support. Sherry Manoa from Chamber of Commerce in person.

Good morning, Chairman Speake Chair of the Chamber of Commerce. And we'll stand on our return.

Thank you very much. Okay, we also have Jim Wyban, Fung Yang, Nicholas Ulm, Grant Takara from GT Scientific, Sonora Farnsworth from Blue Startups, all in support. Ronald Tardif Hohonu, Hawaii Ocean Power Solutions, Waihome llc, Purple Mai'a foundation, all in support. Builders DC. Johnny, we stand by our original testimony. Thank you. Thank you.

And then Jimmy Friess in support. Thank you. That's great. Kelsey Kim from Havoc AI and support Ocean Era Essential Leap, Namaka Algae, Pacific Economics, Hawaiian King Candies, all in support. Pretty Co Island Princess, Copies of Hawaii, all in support. Let's see. Forest Frizzell, George Yarborough, Keone Defranco, Brandon Yamamoto and all in support. Doreen. Okay, thank you.

And Charlie Field in support. Would anyone else like to testify in this measure? Okay, thank you very much. Now we are on HB 1613 relating to HCDC. We have Zach Hernandez in support via Zoom, I believe. Not present. Okay. Gabriel Honohano and Garrett Marrero, all in support. Trung Lam.

HTC stands on his written testimony. And also there's a lot of advanced manufacturing projects happening right now even as this Bill is passing from sessions. So if you have any questions about it. Happy to answer any questions.

Thank you. David Holt, Blue Startups, Coltrane Kubo, Anthony John Eskasa, all in support. Sherry Menor.

The chambers stands on its written testimony...

Okay. Thank you. Lauren Zirbel on Zoom.

Good morning, Chair, Vice Chair, Members of the Committee. I'm Alexis Chapman for Hawaii Food Industry Association. We stand on our testimony in support and be happy to answer any questions. Thank you.

Thanks. Michael Bennett from Hawaii Tech Week. Fung Yang, Nicholas Ulm, Grant Takara, Shanoa Farnsworth and Blue Startups, all in support. Alexi Drouin in support. Would you like to.

Yeah, I stand also in support to that. Also want to say it's a great initiative from a marketing and branding perspective that Hawaii is such a great brand out there that to translate that to our tech industry would be something that would support and elevate the entire ecosystem.

Thank you. Thank you. Namik Kukak from Simone Pietri in support. Johnny from Builders VC.

Yes, we stand by written testimony in support.

Thank you. Valerie Harmon from Namaqua Algae, Jennifer Derose, Charlie Field, all in support. Any other testifiers?

Aloha Mai, Chair, Vice Chair. Keoni DeFranco, for the record, on behalf of Purple Maiʻa Foundation. Yeah. We stand in support of HEDX. This measures important investment in Hawaii's technology innovation ecosystem, advanced manufacturing, cybersecurity are critical to building the diversified economy, creating highway jobs, strengthening workforce development across the state. We stand in support. Mahalo.

Thank you.

Would anyone else like to testify on this measure? Okay. In that case, we're going to move on to our next Bill, HB 1607 related to public procurement. Our first testifier on this, I think, is on Zoom from the Attorney General's office.

Morning, Chair, Vice Chair, Members of the Committee. I'm Deputy Attorney General Zheng Charles Lee for the Department of Attorney General. We submitted our written comments for this. Bill and I'm available for your questions.

Thank you. Bonnie Kahakui from the State Procurement Office.

Good morning, Chair, Vice Chair, Members of the Committee Administrator, on behalf of the State Procurement Office....

Thank you. Benson Medina from the County of Hawaii Department of Research and Development. In support. Deborah Zysman from the Office of Economic Revitalization.

Good morning...

Thank you. Gregory Kim in support by Zoom.

Yes. Good morning, Chair and Vice Chair. Thank you for allowing me to speak. I'll try to be brief. I'm with the Economic Revitalization Commission of the city and county, and so we submitted testimony on behalf of the commission. So we stand on the testimony.

Just wanted to add a few things, to add some color. On the question of legality, I didn't have a chance to add to our testimony yet, but I will in the future. It's been litigated in other parts of the country, these preferences. And there is a distinction when the state and the counties are the purchasers of the products and services and they're given more latitude. For example, SBA programs are an example. Second, I appreciate the procurement offices suggesting that a 5% flat rate.

The reason it's graduated is that we feel like the smaller contracts need a little bit more boost and the dollar amounts would be smaller if they were offered a higher percentage. And I don't think the implementation should be too bad because if you implement one percentage, then you've got to have some kind of system for tracking that.

And then finally, I would say that the additional cost, which we try to balance against the need for competition on cost, is worth the benefit. And I think maybe some number crunching may be in order. But for example, if the state spends an additional $2,000 on $100,000 contract because of the preference, the state gets $100,000 of revenues that would have been out of state and you can do the math on that with the tax effects as well as the job creation.

And so we've been working on this at the OER for the last two years and done a lot of research. So I'm happy to share that in the future. And I'm a practicing attorney, corporate lawyer, so so thank you very much.

Okay. Lauren Zurbel or Zirbel from the Hawaii Food Industry Association.

Good morning again Chair, Vice Chair, Members of the Committee. I'm Alexis Chapman for HFIA. We stand on our testimony in support. Thank you.

Thank you. Matt Perlberg from Holomua Collaborative.

Aloha Mai Chair, Vice Chair, Committee Members. Matt Perlberg on behalf of Holomua Collaborative, local non profit founded to advocate for policies to keep local working families in Hawaii by making sure that they can afford to stay here and we stand on our written testimony in strong support.

Thank you. Trung Lam from HTDC.

Chair, Vice Chair, Members Committee. HTDC stands in ... of the testimony. Thank you.

Thank you. There's also testimony from Kapolei Chamber of Commerce, the Maui Chamber of Commerce, the Title guarantee of Hawaii, HPM Building Supply in support as well as Eliza Talbot and Glenn Kagamida. Would anyone like to testify on this measure? Okay, very good. We're going to move then on on then to 1772.

Also relating to procurement first testifier is Bonnie Kahakui.

Chair, Vice Chair, Members of the Committee. My name is Keari Shibuya and I'm the current Small Business Procurement Coordinator under the Small Business Assistance Initiative. The State Procurement office stands on our written testimony and I'd like to briefly add that over the past year working on the initiative I've seen firsthand how critical this program is for small businesses at every stage of development.

I've connected with entrepreneurs who are just starting out and need basic guidance navigating the procurement system for the first time. At the same time I've connected with well established businesses that have the experience and capacity to perform state work but face challenges competing against large, well resourced state companies.

This program helps level the playing field by providing technical assistance, outreach, policy and ongoing support for these businesses. That is why we strongly support continuing this work through the Small Business Procurement Program. Mahalo. And we're available for questions.

Thank you. Deborah Zysman from OER.

Good morning... on our written testimony in support.

Thank you. Derek Sakaguchi, Native Hawaiian Community Development Corporation in support. Eliza Talbot. Gregory - I'm sorry Eliza Talbot in support. Gregory Kim on Zoom.

Thank you very much. Chair and Vice Chair and representatives, strongly support this measure it... submitted and we need to place more emphasis on building small business. And we can and should do that. And I think Keari and her group has done an amazing job. So strongly support this. Thank you very much.

Thank you. And then Khalil Robinson in support. Would anyone like to testify on this measure? Okay, thank you very much. We're going to move then to 1636 related shopping carts. First we have Hawaii Food Industry Association.

Good morning again, Chair, Vice Chair, Members of the Committee. Alexis Chapman for HFIA. We are in opposition to this measure. I won't go through our whole testimony, but this would mostly negatively impact small locally owned businesses that are selling food in the urban core. So I think that those are the type of businesses we don't want to be negatively impacting in the economic climate that we have right now. I'd be happy to answer any additional questions about our testimony.

Okay, thank you. Toby Taniguchi from KTA Superstores is KTA here. And then Dave Erdman from Retail Merchants of Hawaii.

Vice Chair Hussey and Members of the Committee. Aloha and good morning. My name is Dave Erdman, Interim President and CEO for Retail Merchants of Hawaii. I'm here today in opposition of HB 1636 on behalf of the retailers across the state. If I could offer a couple of key points why we are in opposition.

We have provided written testimony, but a couple of key points. Shopping carts taken off property. Our retailers see this as not abandonment, but they are stolen. Once a cart is stolen, the business is no longer - the business no longer has control of that property. Many retailers already invest in retrieval services and anti theft measures.

But not all carts can be recovered safely or even realistically. HB 1636 would penalize the business twice, first through theft and then through fines or fees when stolen carts are found elsewhere. Shopping carts are actually really expensive here in Hawaii. They have to be shipped here. We have tariffs. There's issues with even sourcing them.

And replacing stolen carts is already a real cost of doing business for retailers. Additional fines or impoundment fees place an unfair burden on small and local retailers. And these added costs may lead to actually reducing the amount of carts, which is difficult for our shoppers. And lastly, I'd just like to say if the intent of the of this Bill is to address the nuisance or improper disposal, enforcement should focus on the individuals who steal or misuse carts and not on the business that are already victims. For these reasons, Retail Merchants of Hawaii respectively ask that HB 1636 be held. And thank you very much for the opportunity to offer this testimony.

Thank you. What analysts woukd like to speak on this measure.

Okay. Thank you. We'll move then to HB 1810 relating to charitable solicitation. We have testimony from the AG.

Good morning, Chair, Vice Chair and the Members of the Committee. My name is Eunice Park, Charities Program Administrator. And our Department offers comments. One, we were asking for delayed effective date to January 1, 2027. Because if this Bill is adopted, we need to make system changes to accommodate new reporting requirements as well as the appropriation, which will be coming from the Charity Special Fund. But additional possible staffing so that we can enforce this new requirement. Thank you.

Okay. Thank you. Jody Robinson from HANO, that was in support, Katie Chan from Goodwill Hawaii.

Hello, my name is Katy Chen. I'm the President and CEO of Goodwill Hawaii. Goodwill Hawaii is a nonprofit that was founded in 1959. We are an independent nonprofit that has supported the Hawaii community statewide since 1959. And we provide job placement, job training, job education services for many disadvantaged populations statewide.

We operate many donation accepting locations across the state as well as our community stores. And this, we are standing here strongly in support of HB 1810. This is about community trust. Right now what we see is there has been a dramatic increase just in the last couple of years of placement of donation bins.

They're publicly categorized as donation bins that are being operated by for profit companies. Goodwill Hawaii itself has seen a drop in its level of donations for three consecutive years to no small part of these donation bins that appear to be benefiting the community, but are not.

To the full extent that the community understands. Right now, when people go up there to donate to these community bins, they think that they are providing a fully taxed deductible contribution that will benefit the local community. That is absolutely not the case. So these collected donations, the donor is not.

Getting a full tax, full tax deductible amount because the charity that is supposedly benefiting from it is just getting pennies on the dollar as to they're getting paid pennies per pound for those collected donations. As opposed to when you donate to Goodwill, the donated good is 100% benefiting our charitable purpose. So this is very different.

And often they also are donating to these for profit collection sites, thinking that it will be sold locally. That's also not the case. These items are often being collected and not benefiting the local community, being shipped off island. And so we're here to ask that this Bill be passed.

To hold these for profit account, these for profit professional fundraising solicitors accountable for what they collect. It should be transparent so the community understands when they are giving to these donation bins, what is exactly happening to their donations and what can they expect as a reasonable tax deduction.

This, it's amending an existing law that has been around for a very, very long time. And it's just providing clarity to what the laws stand now with regards to what professional fundraising solicitors in this state need to comply by. So thank you and I'm available to answer any questions.

Thank you very much. We also have testimony from Tyler Kurashige from Big Brothers Big Sisters, Michelle Bartel from Aloha United Way, Maile Kawamura from National Kidney Foundation of Hawaii, and Mike Onofrieri, all in support, would anyone else like to testify on this measure? Okay, thank you very much. That was 1810.

Now we're going to move to HB 1782 related to artificial intelligence for the protection of minors. First testifier is from...Radji Tolentino, Enforcement Attorney from DCCA Office of Consumer Protection.

Good morning, Chair, Vice Chair, Members of the Committee, Radji Tolentino on behalf of OCP, we will stand in support of this Bill. If you have any questions, I'll be available.

Thank you very much. Next testifier is Superintendent Hayashi from the Department of Education...Thank you very much. And then we have Ashley Tanaka from the AG's office.

Good morning, Chair, Vice Chair, Members of the Committee, Deputy Attorney General Ashley Tanaka. The Department supports the intent of this Bill as we share the legislature's concern for the potential impact that artificial intelligence has on the mental health as well as the development of our state's youth.

And we also believe that there is a very strong government interest in protecting Hawaii youth from manipulative or unsafe or deceptive practices of artificial intelligence systems. We did provide comments that we have been discussion - we have began discussions with the Office of Consumer Protection about potentially sharing jurisdiction over enforcement of this new part.

We also added that we are considering whether appropriations and additional positions would be required to enforce this part. Lastly, we believe that it would be more appropriate to insert this into Chapter 481b rather than Chapter 28 of the Hawaii Revised Statutes. As this is a consumer protection Bill, having it in Chapter 481b would provide for broader enforcement. Thank you. And I am available for questions.

Thank you very much. Dr. Trina Orimoto, OWR.

Aloha, Chair, Vice Chair, Members of the Committee. The Office of Wellness and Resilience stands on our written testimony in support and are available for questions. Thank you.

Thank you. Tommy Noyes from Friends of Komalani and Lydgate Park, Ava Smithing from Young People's Alliance and Tina Andrade from Catholic Charities have also submitted testimony in support. We have Pierce Young from CivicNexus.

Good morning, Chair, Vice Chair, Members of the Committee. My name is Pierce Young. I work at a technology firm that does government relations stuff. Basically we use AI and I was just providing comments saying that you should consider modifying the definition of provider here. The definition of provider as written would encompass a lot of businesses who just want to simply implement a chatbot which is hosted and the main technology is hosted by a larger provider who has the resources to provide these kinds of protections.

Whereas small companies who want to improve services, small businesses who want to improve services won't necessarily have the resources to keep up with the monitoring of all of the safety and safeguards. The safeguards we think are great, but in general, just the definition of who's responsible for providing that we think is little bit overly broad. Thank you.

Thank you. Next we have Chris Caulfield, IMUA alliance and JB Branch from Public Citizen all in support. Dave Erdman, Retail Merchants of Hawaii, in person. In support.

Good morning again, ..., Vice Chair Hussey and the Members of the Committee. And my name is Dave Erdman. I'm with the Retail Merchants of Hawaii. RMH supports the intent of HB 1782 to protect minors from harmful or inappropriate uses of artificial intelligence, which we see is very important and appreciate the legislature's leadership on this issue.

We do have concerns with the scope of the Bill as currently drafted. The definition of conversational artificial intelligence service is very broad and could unintentionally include basic customer service tools that retailers use every day. Things like chatbot bots that answer store hours, track orders, or schedule appointments.

These are tools not designed to interact with minors in the way the Bill is trying to address, and they are not the bad actors this legislation is aimed at. We believe the Bill can be strengthened by narrowing the definition so it clearly targets harmful AI applications without creating unintended impacts on responsible retailers.

We've provided written testimony and we look forward to getting more information from our Members as requested. And we'll return to the Committee with some potential constructive language that supports the Bill's goals. Thank you very much for your time.

Thank you very much. Okay. Malia Tsuchiya from HCAN Speaks, in support. David Miyashiro from Hawaii Kids Can, in support. Osa Tui from HSTA, in support.

Aloha Chair and Vice Chair. I'm Sarah Milianta-Laffi and on behalf of Osa Tui Jr. and the Hawaii State Teachers Association, this legislation session, I have the honor of being your teacher lobbyist. So one teacher every year is let out of the classroom to come talk to you about what it is as a practitioner that we see. So honoring your time, we stand in our written testimony and also are always available for questions. But I did bring you two stories from my classroom.

I'm a computer science teacher, so I see this stuff in real time. And so when we talk about what we're dealing with, I teach middle school, and middle school is so beautiful because kids are becoming in real time who they are. And one of the things they're very preoccupied is getting a girlfriend, getting a boyfriend. And so one of my boys came in and said, miss, I'm not messing with girls anymore. I have the best AI girlfriend ever. And it seems wholesome, it seems sweet, but the messy communication of being human is how we become who we are.

And I also don't think a lot of our families always understand what they're dealing with in this space. Another group that I work with after school for many years, I've supported LGBTQ youth in an after school club, and some of them have used AI therapist bots in lieu of actually getting counsel or therapy.

And they feel that the bots understand them better than our school counselors do. And so I had one student over break who practiced coming out to the therapy bot and of course, the bot was programmed to be supportive, and it was very supportive of his work, of what he had shared.

But he didn't get the same support and was pretty devastated when his family didn't support the same way. So we just really have to understand these are things happening in real time to our students. And the technology is changing so quickly that even teachers can't keep up to support our kids and support our families. So thank you. We support this measure.

Thank you. Robert Boykin from Technet, in opposition. Okay. Lorna Holmes, Christopher Lachica, Ana Tuia Sosopo. Excuse me. Charmaine Doran, Allison B, Will Caron, Ronald Tran, Kaleo K., Rita Kama Kimura, Susan Pecola Davis, Anya Neville. All in support. Lourdes Vergara, Marcelo and Alana Nicole Dooley in support. Justin Lai from La Pietra in support. Then Jay Franzone.

Is Jay in the room? Okay. In support. And Ted Meehan, in support. Would anyone else like to testify on this measure? Okay. Very good. Thank you. We're going to move now to HB 1759 relating to theft. First up, we have Carlota Amarino. Offering comments. Hayley Cheng from the Public Defender's office.

Hi. Good morning Chair and Vice Chair, Members of the Committee. This is not a Committee that the Office of the Public Defender appears in front of very often. So I briefly just wanted to introduce myself as well as hope to inform the Committee about the mission of our office.

The Office of the Public Defender provides indigent criminal defense statewide. So our attorneys are in the courts daily at all levels, and we represent our clients on all criminal matters, ranging from petty misdemeanors all the way to the most serious felonies. I myself have been a practicing defense attorney for almost 20 years.

So that is just some of the background of our office and the position that we come forward with in offering our opposition to this measure. First and foremost, the Public Defender's Office sometimes gets the bad reputation of people believing that we are pro crime or that we support crime. That's absolutely not the case.

What we are in the business of is providing constitutional representation to those who are charged with crimes. And as part of that, what we do is we evaluate criminal bills, we look for things to make sure that those bills are constitutional. And I think that's really where we're coming from in terms of our opposition.

A lot of our arguments are outlined in our written testimony. But mainly I want to highlight for this Committee. We recognize and understand the issues related to theft and what I believe this Committee is characterizing as organized retail theft. I first want to lead with a portion of our testimony that does not oppose the creation of a task force. But as we stated, we believe our office and another criminal defense practitioner should be included.

The way that the Bill is drafted, it is all law enforcement and prosecuting agencies and there is no one to provide additional insight into the real life application of these crimes and the representation of individuals who may be charged with such an offense. So that is our comment for that portion of the Bill.

Secondly, we'd ask this Committee to recognize that there are so many laws already on the books to address this situation. The conspiracy laws, accomplice liability, even charging people as co defendants. I'd also ask this Committee to become very educated on what it means to create new felony offenses and what that does for the infrastructure of our criminal system. A felony offense at a minimum requires, as the law is written right now, a four year term of probation, at a minimum. It can lead.

And as the Bill is drafted, we're asking for elevated penalties for certain actors which could lead to a class A felony. As the law is written right now, a class A felony, if a B is amped up to an A, is a mandatory open 20 year term of incarceration. So I'd ask the Committee to think about that.

An open year 20 term of incarceration. I think what this Bill might be responsive to is some of the things that we've seen in the news. Children, juveniles and young adults, 18 years old, 19 years old, getting charged or accused of committing like offenses.

I'd ask the Committee to think about what it means when we already have laws to address these criminal acts to create an offense that could potentially put an 18 year old or 19 year old in prison for up to 20 years without the possibility of court supervision, meaning probation. So I believe our other comments are articulated.

I think the Bill is in theory trying to be responsive to something that we see as a community issue. But there are measures on the books to do that already.

And we also worry about the constitutional challenges to a lot of the overly broad language that for sure, us as defense attorneys will challenge, which could compromise the veracity of the intent of the Bill. Thank you. And I will remain available for questions.

Thank you very much. My prosecutor's office. Okay. Daniel Hugo from the City and County of Honolulu.

Good morning, Chair, Vice Chair, Members of the Committee, Daniel Hugo for the Honolulu Prosecutor's Office. We're in support of this Bill with our recommended amendments. First, want to start by acknowledging the scope of the problem. As we point out in our written testimony, Hawaii per capita retail losses are 567% of the average of other states. Shocking statistic.

You can also look to the testimony from other constituents who have written it in support of this Bill and who at least see the scale of the theft problem. Or you can take a walk two blocks down here, the Fort Street Mall. I'm going to show my age here.

Does anyone remember the Liberty House that used to be there? Yeah. When I was a kid, that was like the crown jewel downtown. It's not there anymore. Became Macy's. Then it became Walmart and became empty. And there are a lot of empty shops around there. Walgreens has left and so has Ross and so has the Longs.

And if you talk to the merchants and you talk to customers, they'll tell you that one big problem was losses from theft, from just rampant theft. This is not an isolated problem of individual shoplifters. This is organized crime. We point out also in our testimony to a great New Yorker article from 2024 that goes through how organized retail theft plays out in Los Angeles. And the ties that many of these organizations have with to much more serious forms of crime, terrorism and corruption. The incentives at present for prosecuting organized crime are not immediately there.

In order to prosecute most organized crime, what you need is cooperation from people who have been participants in crime. And there's not a lot of incentive on their side to cooperate. And there's not a lot of incentive on our side to offer cooperation agreements because thieves make some of the worst witnesses that you can put up in court. And you have to extensively corroborate any information that you get from them. And that requires a significant investment of law enforcement resources. And so those.

The proposed changes to the Bill that we offer here are built on our successful use of the Habitual Property Offender Law. We believe that at the lower, lowest level, you should be looking at penalties that are similar to those for habitual property offenders.

And when you are looking at leaders, organizers, supervisors, you should be looking at very stiff penalties for these very sophisticated operations. The habitual property offender law, again, as I said, is one that we've successfully used. Just recently, we got a conviction at jury trial using the habitual property offender law.

So our recommendation to this Committee is to build on those theft statutes. And I think it's also important that in creating this, you create a measure that distinguishes organized retail theft from ordinary shoplifters. And so we would say preserve the current thefts, theft offenses and focus on creating something that is distinct and that is tailored to the organized nature of this crime. I am available for questions if the Committee has any.

Thank you. Laurem Zirbel from the HFIA.

Good morning again, Chair, Vice Chair, Members of the Committee. I'm Alexis Chapman for HFIA. We're in support of this measure. This is an issue that has been getting worse and worse for the last several years. It is a type of organized crime.

There have been federal reports on how bad it is, specifically in Hawaii dating back to 2022. So we definitely think that this is a step in the right direction to distinguish this, as the previous testifier said, from just ordinary shoplifting, since it is vastly different, much more costly, much more dangerous type of crime. And I'm happy to answer any questions. Thank you.

Thank you. Kings Oahu, Margaret Ben... in support. Jean Paul Gideon, JPG Hawaii in support. Dave Erdman from Retail Merchants.

Aloha again, Chair Ilagon, Vice Chair Hussey and Members of the Committee. Thank you very much for the opportunity to testify today. Retail Merchants of Hawaii is in support of Bill 1750 and really appreciates the legislature's focus on addressing organized retail theft, which is increasing concern for retailers across our state.

I have a few key points and then I'll wrap up. Organized theft today is very different, as was mentioned, than shoplifting. It involves repeat offenders, fencing operations, and online resale and online marketplaces. It also creates a real safety risk for retail employees and our customers. We support the idea of a statewide task force.

Coordination is important, and retailers want to make sure that the work leads to real enforcement and real outcomes, not just reports. One issue retailers see is many theft rings don't have people stealing together in a store. It could be one person who steals and someone else who sells it later.

They're clearly working together, just not side by side. We want the law to reflect how these crimes actually happen today. Another concern is repeat thefts spread out over time and across locations. Individually, they may look small, but actually it's part of a network and they add up to significant losses and ongoing safety issues.

Finally, when theft invades or involves threats and intimidation, it's no longer just property crime. It becomes a workplace safety issue and retailers strongly support stronger consequences in these situations. In closing, Retail Merchants strongly supports this Bill. We're available for questions. Thank you very much.

Thank you. Michael Kitchens from Stolen Stuff Hawai, in support. Mufi Hanneman from Hawaii Lodging Tourism Association, in support. Sherry Menor from Chamber of Commerce.

Hello, Chair, Vice Chair, Members of the. Committee, I'm Julian Kiawu testifying on behalf of the Chamber of Commerce and we are in support of this Bill. Standing on our written testimony.

Thank you. B.A. McClintock, in support. I'm sorry, Glenn Kagamita, in support. Cindy Ajimine, in support. On zoom. All right. Vernell Oku, Barry Lynn Sakamoto, John Pang, Katherine Collado, Carol Kamai, Susan Duffy, Katya Bed Pahema, Edna Kito, Sheila Medeiros, Lisa Bishop, Salvador Quezadas, Monique Pereira, all in support. Is Monique in the room? Okay. Jamie Detwiler, Andrew Chen, Peggy Regentin, LK Ewan, Lynette Honda, Lester Knipp, Lorraine Knipp, all in support. Angela Young on Zoom.

Aloha. Angela Young from Neighborhood Security Walk Kapalama. And testifying in strong support. So the retail theft task force for Laws specifically targeting organized retail crime has been enacted in 30 states. New York has frequent like theft that happens including theft of milk and food for babies and high priced food items like steak and shrimp. And in Virginia it was enacted in 2023, something that criminalizes organized retail theft. And it's resulted in high prices profile convictions.

And so you know, Hawaii has a unique problem which is a space for inmates. So I agree with the county's defense that testified also to consider like young adults with offenses and putting more people in jails that you're going to be utilizing jail space if you try to maximize the penalties to get more criminals to put into jail.

So I think perhaps there can be more focus on creating the task force to help with clarifying amendments for penalties to first congregate and gather the county's prosecuting attorneys and then also nonprofit that can provide advice. So we didn't see. And also grassroots movements such as Neighborhood Security Watch and Citizens Patrol.

This way you can gather data, coordination with teams can provide the data and then customize the legislation to Hawaii and empowers nonprofits to actively lead and it helps to reduce financial burdens and law enforcement resources when you create the task force or put into statue to empower nonprofits and grassroots movements to help you build the legislation.

And so, you know, oftentimes there is that skipping of a step where I don't think like many of the people who make the laws talk to the people who are working at the bottom in like Neighborhood Security Walk because like we notice a lot of things. We have kids who walk with us from schools and it's crucial for advising legislation to work with Neighborhood Security Walk because it provides real time ground level data and community insights to improve the lives of the citizens and to improve public safety. Thank you.

Thank you. Also we have testimony from Mary Smart, Eileen McGovern and Kim Santos all in support. Would anyone else like to ask to testify this morning? Okay, thank you. We're moving to the last Bill, HB 1798 related to property damage of critical infrastructure facilities. First testifier is from the Office of Public Defender.

Good morning again, Chair, Vice Chair, and Members of the Committee. Again, Hayley Cheng, First Deputy of the Office of the Public Defender. I think we've outlined our arguments fairly clearly. We'd ask the committee to take a close look at especially some of the footnotes that we have highlighted.

We definitely foresee a constitutional challenge to the vagueness of this bill, especially for the definition of damage. Also want to highlight that criminal property damage traditionally has been tiered and characterized by monetary amounts of damage.

So for this bill, as we've highlighted in our written testimony, is the intent of this committee that if someone commits $1's worth of damage to something defined as a critical infrastructure, that that person should be charged with a class C felony? If that is the intent, that's fine. But I'm just highlighting that as a disparity amongst the way that other criminal property damage offenses are outlined in our penal code.

We also, just as a footnote, want to mention as we are going to be mentioning throughout this session, every single time a committee or the Legislature passes a new crime, that is an individual who could potentially be charged and will need representation. The Office of the Public Defender is in charge of representing a majority of criminal defendants in the state and we are at our max capacity.

So we'd ask as a co-occurring issue that if this committee is incentivized and is going to continue to try to increase the criminal penalties or create new criminal offenses, that you be mindful of the representation that these people are constitutionally entitled to receive that our office is mandated to represent those and that we also will need more help and support and resources in order to do that effectively. So thank you, and I'll remain available for questions.

Thank you. Okay. Maui Department of the Prosecuting Attorney. Let's see. We have Daniel Hugo from the from the City and County of Honolulu Department of the Prosecuting Attorney.

Good afternoon, Chair, Vice Chair, Members of the Committee. Daniel Hugo from the Honolulu Prosecutor's Office. Our office offered comment on this bill. The first thing that we should note is that 708-890, which is the subsection that's cross section for critical infrastructure, also includes a definition of damage, but that comes from the computer damage statute.

So it's aimed at damage to data. If more generally the committee was thinking of damage in the way that criminal property damage is, you know, just general damage to critical infrastructure. There is an offense called criminal tampering which does focus on certain types of interference with utility services. That currently is a misdemeanor.

The committee may want to consider taking a look at that offense, and if it's intending to look at a broader version of damage, otherwise the computer damage statute would be the one to look at.

Thank you. Rebecca Lieberman from Charter Communications.

Good morning, Chair, Vice Chair, and Members of the Committee. My name is Rebecca Lieberman with Charter Communications. I stand on my written testimony in strong support and am available for questions. Mahalo.

Jeremy Crandall, CTIA. Jeannine Souki from Hawaiian Telcom.

Aloha, Chair Ilagan, Vice Chair Hussey, and Members of the Committee. My name is Jeannine Souki. I'm with Hawaiian Telcom. And we too stand in strong support of this bill. Available for any questions. Thank you.

Thanks. Glen Kagamida in support. Any other testifiers on this measure? Okay, thanks. We're going to go now into questions from the committee, stepping back through these gems. Okay. We're going to close off testimony, and we're going to go into recess.

Hello, Members. Thank you for your patience as we had taken a recess. Now we are back in our hearing. We're going to start off at the top of the agenda. We have HB 1829 and we also have HB 1615. The subject matter is very similar on those two. So we're going to first start off. Actually...

I do.

We're going to start off with HB 1829. Members, do you have any questions? All right, I just want to let everybody know that I believe these two measures with HB 1829 and HB 1615 are very similar. We're going to actually merge the two. So does anyone have any discussions regarding HB 1615?

Okay, what I'm gonna do is I'm going to defer HB 1829, and what I will do is insert language from HB 1829 into HB 1615. So with HB 1615, we're going to include the language declares the state is an ocean cluster.

We also established the Office of Marines Affairs under HTDC, transfers functions of the Governor's Advisory Committee on Marines Affairs to the Office of Marines Affairs, and establish the Marines Affairs Task Force. The Marines Affairs Task Force shall include another representative from the UH system, which is the dean of the aquaculture degree or designee in UH Hilo.

We will also amend the language to require the Office of Marines Affairs rather than HTDC to procure the services of consultant to support the declaration of intent of the Office of the Marines Affairs.

We will remove the language and instead add into the committee notes the 500k appropriation for consultant services and 150k for the one full time FTE for the Marine Affairs Coordinator position. This bill now becomes an established policy framework for marines affairs without any financial impact on the budget.

We will defect the date to 3000 and we will also make any technical, no substantive amendments for the purpose of clarity, consistency, and style. Any questions on the amendments? All right, Vice Chair, please take the vote.

Okay, so we are deferring HBA 1829?

It's already deferred. You don't have to vote.

Okay. Yeah. Right. So we're down actually 1615? Okay. Okay. So we're passing out an HB, an HD 1 for 1615 with amendments. Yes, HD 1. So Chair votes aye. Vice Chair votes aye. [Roll Call] Thank you very much. Chair, the measure passes, HD 1.

Thank you. We are now moving on to HB 1613. And Members, are there any discussions regarding HB 1613? All right, Members, there's going to be some amendments for this. What we want to do is to further the justification of the two full time positions.

We're going to reference HCR 156-2025 in supporting advanced manufacturing and cybersecurity for our state. Also, to further develop our workforce for advanced manufacturing and cybersecurity, the House passed HR 67-2025 to coordinate with the Department of Education and the University of Hawaii to establish a workforce pipeline and curriculum in advanced manufacturing and cybersecurity.

We will also blank out 2 FTEs and 2 appropriations of 100k each and add them to the committee notes. We will defect the date to 3000 and also any technical, non-substantive amendments for the purpose of clarity, consistency, and style. Any questions on the amendments? All right, Vice Chair, please take the vote.

Chair and Vice Chair vote aye. Any votes in opposition? Chair, your measure passes as amended.

Thank you. For HB 1607 and HB 1772, we're going to work further into making sure that we have a great program for our small businesses. And we're going to defer these at a later date for decision making. We have some questions and we want to figure out how to best make a bill that's great for small businesses.

So at this time, HB 1607 and HB 1772 will be deferred at a later date for decision making. We're going to move on to HB 1636. Members, do we have any questions regarding HB 1636? All right. For HB 1636... Well, we want to have some amendments.

What we want to do is make sure that the county is able to impound these shopping carts. But we also want to protect the food establishments that we have throughout the state.

So we are going to add some language to authorize the county to establish a policy for managing and impounding shopping carts that have been vandalized or no longer display an owner's identifying mark. That way, the county is able to create some policy for those carts that had identification but no longer.

A business establishment shall not be assessed any costs or fines by the county for shopping carts removed from its premises without the establishment's permission and later impound by the county. This will ensure that those stolen carts are not assessed back to the establishment.

We also want to add language that the county shall implement a buyback program for impounded shopping carts. The owner may recover an impounded cart upon payment of a buyback fee without any fines. That includes Impoundment costs and program operating costs.

You also defect the date to 3,000 and any technical, non-substantive amendments for the purpose of clarity, consistency, and style. Any questions on the amendments?

Chair? Yes, I would support your recommendation. I just want to note that this may be an unfunded mandate to the county. There's no testifiers in support too, so that's a little concerning, but I also...

Thank you. All right, Vice Chair, please take the vote.

Recommendation's pass with amendments. Chair and Vice Chair vote aye. Any votes with reservations? Any votes in opposition? Okay, your measure passes as amended.

Thank you. We are now on HB 1810. Members, are there any questions regarding HB 1810? I have some amendments for HB 1810, and what we want to do is we're going to clarify some things.

We want to add language requiring collection bins or containers to visibly display a sign stating by percentage how much of the donated property or items is donated to the charitable organizations. We want to also move all the language from 467B-9, section P to 467B-2.5 for the purpose of clarity and consistency.

All the existing language in the bill still remains the same and its intention. We also will add amendment from the AG on effective date of January 1, 2027. We will also add it to the committee notes that the AG is requesting additional staffing and resources to address increased reporting and review and enforcement workload.

We will defect the date to 3,000 and any technical, non-substantive amendments for the purpose of clarity, consistency, and style. Any questions regarding amendments? All right, Vice Chair, please take the vote.

Okay. Motion's recommendation pass with amendments. Chair and Vice Chair vote aye. Any votes with reservations? Any opposition? Okay. Hearing none. Chair, your recommendation passes.

Thank you. For HB 1782, there is some work that we need to do for this bill and there's also some AI bills that we want to hear. So we will defer this a later date for decision making. We are now moving on to HB 1759, and we...

I wanted to ask the Members, do you have any questions regarding this bill? All right. We're going to do one amendment on this bill. We'll defect the date to 3,000 and move it as is. Vice Chair, please take the vote with the bill with amendments.

Okay. Recommendation is pass with amendments. Chair and Vice Chair vote aye. Any votes in opposition? Any votes with reservations? Okay, Chair, the recommendation passes or is adopted.

Thank you. Moving on to our last bill, we have HB 1798. There are some amendments I want to make on this bill, but before we pass it out, I do want to figure out what we could do with the damages, and I need some time to work on it. So we will defer this bill at a later date for decision making. All right, Members, thank you for your engagement and participation. And we are now adjourned.