House Standing Committee on Consumer Protection & Commerce

Good afternoon, everyone. We are convening the Committee on Consumer Protection and Commerce. It is Tuesday, February 3, 2026, about 2:00pm in Conference Room 329 here at the Capitol. A number of items on the agenda today. First, I'm going to read this thing.

In order to allow as many people to testify as possible, there will be a two minute time limit per testifier. I'll try to let you conclude after the two minutes, but when I ask you to conclude, please try to actually do that or I'm going to cut you off.

For those people 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 talk to the technical staff, but please use the chat only for technical reasons. If you are 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 the House is not responsible for any bad Internet connection on the testifier's end. I may also try to circle back to you guys on Zoom if we have time at the end before we vote, if you're disconnected,

In the event of network failure, it may be necessary to reschedule the hearing or schedule a hearing, schedule a meeting for decision making. In that case, an appropriate notice will be posted. Please avoid using any trademarked or copyrighted images. Please refrain from profanity or uncivil behavior.

Such behavior may be grounds for removal from the hearing room without the ability to rejoin. They don't have something on it. So, we have new mics here. They're right there: the green glowing things. So, no more mics for us in front. No more mics for you guys at the podium. You can just talk.

But just be warned that it does pick up a lot. So if you're talking to each other, it may pick that up, too. So, either write a note to each other or you can whisper. Same for us...honestly. We're all going to get used to it. They said that they've been fine tuning it over interim.

I guess there's only one way to find out. All right, first up, HB 1991 relating to the liquor tax. First up to testify, we have State Department of Taxation with comments.

Good afternoon. Chair, Vice Chairman of the Committee, Clinton Piper, Department of Taxation. We'll stand on our written comments available for questions.

This is great, right? Because they don't have to come up to the podium anymore. They can actually just speak over here and the people on YouTube can - maybe that's why they put these things in. All right, next up, Tax Foundation of Hawaii with comments on zoom.

Aloha Chair and committee members. Colleen Teramae, Tax Foundation of Hawaii on behalf of our President Tom Yamachika, stand on the comments in our written testimony. Thank you.

Thank you. Next up, we have Lanikai Brewing Company in opposition.

Hi, Chair and members of the committee. Thanks for the opportunity. You know, when we talk about pricing people out of Hawaii, this bill is kind of one of those examples that potentially could be an industry killer for us.

And I'm not trying to, you know, scare the living daylights on it, but as a local producer myself, when I look at the taxation of this, it's something that could easily put us out of business and clearly stop other people from coming into business.

You know, since 2021, the cost of goods have gone up 20%, rent 17%, utilities 22%, minimum wage 41%, shipping cost 30%. And all of this since COVID where we had very little relief and kind of all surviving past COVID.

And now if this taxation comes in, this is just an additional burden that's on our local companies that are here. You know, we already pay some of the highest tax rates in the nation already and understand that this is old taxation, but this is stuff that could easily close down and prevent new businesses from opening on here.

The downside of this is, you know, normally as business people, what we do is try to seek new opportunities for us to go make more income so we can pay more taxes.

There's nothing in here that kind of allows us to have a proportionate upside for the local businesses and the margins that we would erode away and our margins have eroded down to nearly single digits at this point. So, there's very much survival if this. So, we're in opposition to this bill.

However, if it does need to pass, we would highly suggest putting into a Class 18 smallcraft producer cap. Class 18 is codified under HRS. It's a liquor.

Anybody that has invested into a manufacturing facility into the state of Hawaii like we have and invested in our communities simply just says we put in a tax benefit for those that have Class 18 and maybe put a cap up to 60,000 barrels, and that would allow the industry to continue to stumble along on its way and allow the smallest, most fragile producers that are here to still have a chance to make a business and continue to employ people.

I'm one of the smaller producers and I have about 75 employees and some of the other members testifying today go into the hundreds. So, we're really talking about supporting local manufacturing, local jobs, and we're already happy to pay our proportional taxes. Thank you very much. I'm here for any questions you might have.

Thank you. Next up we have Maui Brewing Company, opposition.

Aloha Chair, Vice Chair, members of the committee; thanks for the time today. You know, as Steve mentioned, the tax rates have been unchanged since 1998. I would argue that 1998 they were ridiculously high. These are already the highest taxes in the country, bar none.

There's no other state that charges more for us to produce here in the state of Hawaii, save for a couple of states that do offer the small producer rates: so, a high rate and a low rate. While tax rates might not have changed, local producers have absorbed massive increases in labor, energy, shipping, compliance.

These increases have been far beyond inflation, as Steve mentioned: 20, 30, 40%. An alcohol and ABV based tax would further compress these margins and disproportionately impact the smallest of our producers in all of us. This hurts consumer choice.

You know, we would start to look at beverages in what's the cheapest thing to make, what's going to be taxed less? This already happens around the world in ABV based tax systems. If you go down to Australia, you can't get a 6.5% IPA at a fair price because they tax based on how much alcohol is in there.

So, you really drive a lack of consumer choice, not an increase to consumer choice. Further, it's going to drive the prices up because the taxes go up so significantly. In our case, on a case of beer, you're talking about an almost 10% increase.

But on draft beer that we all love and enjoy from our local producers and all of our visitors that come here to enjoy the wares of our local brewers, it's a hundred percent increase on a draft beer. I'd argue too high. A 16% cap goes to 330% increase while a 15% cap only goes up 250%.

I think this shows that the the problems with an ABV based system. This would be a major departure from any other state in our country. And ignoring over 100 years of history in alcohol taxation. I'd argue we're not even equipped to handle this. ABV based, while we have some equipment to test for ourselves, will the state allow us to test for ourselves?

Is there a third party that will have to send out for testing, probably on the mainland? This would cost $50, $100 per brand. And what do you all love and enjoy about small craft producers: the sheer amount of variety that we produce.

So, you're talking thousands of dollars just to test to find out how much more tax we have to pay. So, I think there's issues with the administration and the execution of that plan. One thing between beer, wine and spirits, we can't equate them all.

Beer on a percentage basis costs a lot more to make per unit of alcohol than wine and spirits. And here in Hawaii, space and electricity costs a lot more than anywhere else. So, we have to store our beer cold to keep it fresh for you all to enjoy.

So, these are just some of the many reasons that we believe an ABV based system is not the way to go.

And as Steve mentioned, if there is a need to increase, which we understand, we support heavily, a bill like SB 2912, which includes a small producer classification and corresponding tax rates based on what we produce. This is about protecting local jobs.

And frankly, without us, with this bill, it starts to put us in high danger of having to close and we would see oneness across the shelves as opposed to variety. Thank you for your time. Appreciate you.

Thank you. This is an example of a very long conclusion.

Always. I knew the warning was for me.

Hawaii Public Health Institute, in support, should be by zoom.

Yes, thank you. Good afternoon, Chair, Vice Chair and members of the committee. My name is Rick Collins. I am a Director of the Hawaii Alcohol Policy Alliance, which is a program of the Hawaii Public Health Institute. We are in strong support of HB 1991 for a number of reasons.

First, the science is really clear that a alcohol tax is one of the top three best buy strategies that communities can put in place to reduce the harms associated with alcohol and the cost of alcohol. Alcohol related harms are the third most preventable cause of death in our community. And a 2010 CDC study showed that.

And so you're talking, gosh, 2010, it's so long ago. Already a long time ago, they estimated that alcohol harms cost the state $937 million annually in costs. And so, this is a way to begin to have alcohol pay for itself by raising this tax.

While there's arguments that the tax is going to hit the consumer in a big way, one estimate of excessive drinkers puts it somewhere around under $20 additional cost a year for excessive drinkers and non excessive drinkers, less than $5 a year for the tax adjustment. It's also going to obviously bring additional revenue into our state.

Over the past more than quarter of a century, we've lost the tax benefit in our state year over year from the alcohol excise tax. And this would help to generate tens of millions of dollars for our state revenue.

And also just that, you know, this, this would save lives, obviously, and this would prevent a lot of those unintended injuries associated with alcohol: motor vehicle crashes, sexual violence, unplanned pregnancy, alcohol poisoning, and the like. So, thank you for allowing me to provide testimony. I'm here for any questions. Yes, thank you so much.

Thank you. Next up, we have Wine Institute in opposition.

Good afternoon, Chair, Vice Chair, members of the committee, Mihoko Ito on behalf of the Wine Institute. We do stand on our testimony and opposition. And I'd just like to highlight from the wine industry perspective some of the impacts that this bill would have. We do think that this would result in really significant tax increases for wine.

And just to give you some examples, 335% increase on red wine, 27% tax increase on white rose and certain red wines, and then 18% tax increase on cooler beverages.

I think that where we're talking a lot about cost of living at the capitol and through many other bills. This is a really significant tax hike and really inconsistent with how the rest of the country, both state and federally treated liquor taxes, which are based on not just the abv, it is a factor, but it's the ABV plus the raw material of the producer.

So that's why you have these tiers, right: beer, wine, spirits. So, we are concerned, you know, the wine industry is also still recovering from the pandemic-era. There have been a lot of inflationary pressures, supply chain issues, and increased transportation costs since that time. The tariffs also.

So, we are concerned about the cost increase and the magnitude of it. And for those reasons, we oppose the bill. Happy to answer any questions. Thank you.

Thank you. Next up, Hana Koa Brewing Company in opposition via Zoom. That person... they're in person? Lahaina Brewing Company in opposition. Should be by Zoom too. Hawaii Food Industry Association in opposition. Zoom?

Good afternoon, Chair, Vice Chair and members of the committee. I'm Alexis Chapman for HFLA. We stand on our testimony in opposition to them. I think some of the previous testifiers have kind of covered it. This would hurt local businesses. It would hurt the local economy. We have amazing thriving local brewing industry here in Hawaii and local distilleries.

And that didn't actually happen by accident. There were legislative changes that happened 12, 15 years ago that enabled these businesses through their hard work, their creativity, their passion for these craft products to grow and thrive.

So, we really don't want to see the legislature come in and kind of take the knees out from that industry now because it's been doing amazingly and it's such an important part of our local culture and our local economy. So, happy to answer any questions. Thank you.

Thank you. Last we have Brittany Cass, individual, in support.

Hi. I bring a unique perspective. I just want you to picture someone you love, your spouse, your child, your best friend getting in the car and never make it at home the same. Picture a phone call that stops your world. Picture sitting in a hospital room surrounded by machines, wondering if the life you knew ended.

That is not hypothetical. That was my reality. And here's that picture. This is a picture of me in a coma because a drunk driver entered the highway going the wrong way. We collided at a combined 120 miles an hour.

I stand before you today not as just a statistic, but not as a case number, but as an isolated tragedy, but as a living reminder of what happens when impaired driving is treated as a risk instead of a certain. In an instant, my life was divided into before and after.

One moment I was driving, thinking about ordinary things. My family, plans for the future. And next. My world shattered. Metal crushed. Glass exploded and my body went limp. And my life has never looked the same. I survived, but it came at a cost. Recovery has not been quick or simple.

It was 10 surgeries. I've learned how to walk again, use my body again. My injuries are visible, but the trauma is not. Drunk driving didn't just break my body. It changed how I slept, how I drive, and how I live. And it didn't just impact me.

It rippled through my family, my community, my kids, and the people who loved me as they watched helplessly as my life was again divided before and after. All of this because of that choice. Drunk driving is not an accident. It is not bad luck. It is 100% preventable. And that's why I'm here.

The CDC recommends alcohol tax increase as one of the strongest prevention strategies to reduce underage drinking and excessive alcohol in communities. Reduction to underage drinking would lead to less alcohol related violence in our state. When legislation is discussed, it's easy to focus on these numbers: VAC levels, enforcement, penalties.

But behind every number is a story like mine, is a face like mine, a family like mine, a life permanently changed like mine. I am standing here because I was fortunate. Many others are not. Many never have the chance to get to tell their stories like I do. I'm not asking you to remember us.

I'm just asking you to consider in support of HB 1991. Thank you.

Thank you. Anyone else here to testify either in person or on zoom on this measure? All right. Members, any questions?

Thank you, Chair. For the Brewers.

Which one?

Oh, the...Steve. Sorry. So how many - what percentage of alcohol is in your beer?

What percentage of alcohol is in our beer?

Yes.

It varies. Fermentation gets you up to about 16 to 18% on the max load. But alcohol can also be considered a flavor. But most beers, for example, a lager is in the 4 to 5% range.

Okay. Because, yeah, I noticed that the first category was like 0.5 to 10, 9, which, I mean, I don't know if you actually suggested this, but would you be open to a lower amount? Like even breaking that first category into half and then changing, tweaking some of the numbers?

I mean, if the numbers are tweaked, well, could we get it closer to where it's not so impactful, or are you just opposed to this kind of scheme altogether?

Great, great question. You know, I think overall, you know, when I entered the industry or when any of us did, the existing tax rates were in place. So, just to speak just, you know, clearly about beer, packaged beer is 93 cents a gallon, draft is 54 cents a gallon.

And to provide an example, the state of California charges $0.08. So currently we're paying 10 to 12x over what other states are currently paying. Understanding it's, you know, it's old, it's 30 year old taxation rate, but, you know, our expenses have driven up and our profitability is not due to the expenses within the state.

So while we've considered that, we considered other things that both Garrett and I introduced, that it might make more sense to take a more broad approach and to carve out the Class 18 small class producer credit. That would be for - anybody is eligible to get a Class 18 in the state of Hawaii.

That's somebody that's investing in manufacturing in the state, hiring locally, creating jobs and things like that. So, if Budweiser wanted to open a Budweiser plant in the state of Hawaii, they would do so under class 18, and they would enjoy those same tax benefits that it could.

So, that would also take away any disparity between wine, liquor, and beer. So, there would be less infighting between it and just make it level based on the license class that's already codified under HRS.

So, just to be clear, you're kind of asking for an exemption from this current scheme, so that you would say that if you're a small local brewer, then you would be able to be exempt from these particular numbers.

Only up into a certain level. And this has also been recognized federally, the federal level, that they're all, you know, it's not local producers, it's small producers. So, it's been federally recognized.

And you know, just as it was kind of brainstorming on today, this might be the best approach to it because it's still potentially preserving the local industry and the local jobs and allowing us manufacturers that do manufacture here locally to still have a chance and to not completely kill the industry.

Whereas as it's currently worded, without particular potential exemptions or carve outs on on behalf of that, there's no way that the industry will survive and be able to do it. And I'm not trying to like, you know, say sky is falling, but in this particular case, it favors manufacturing on the mainland and shipping to Hawaii.

So, it favors corporations, mainland based jobs over Hawaii jobs and Hawaii manufacturing, the bill as it's currently written.

Yeah, that's that - okay. So, you're saying importers would not pay this tax? I'm sorry, are you saying beer that was imported from California would not pay this?

No, it would. They would still be, according to how the bill is written, they'd still be applicable to pay those taxes. But when you produce in the mainland, you have cost efficiencies from your utility costs are nowhere near what Hawaii's utility cost is. Taxes are lower, everything's labor costs, and then production size is significantly bigger.

So, you achieved economies of scale and, and manufacturing. So, kind of this alcohol percentage approach seems to be very complicated. And it goes against federal and all the other kind of ways that taxation has been addressed in the alcohol industry. I hope that answers the question.

Anyone else? Any other members have questions?

For Garrett: you raised issues with ABV testing. Is that something that's not already tested, like for labeling purposes?

That's a great question. A lot of the local producers, so if the beer stays in the state of Hawaii, it's exempt from TTB COLA, the certificate of label approvals. So, it's actually not required to test.

If we export, as we do at Maui Brewing and some of the other brewers in the state, you do test because you're crossing state lines. It is also only required if you state the alcohol percentage on the can. But we do not have label requirements that require us to put the alcohol percentage on the can.

This is where I think Steve was trying to go as well, is that we are adamantly against an ABV based system.

So the system that you spoke of really should be based on beer, wine, spirits, because frankly, for some of the largest spirits producers, they have a huge financial incentive in this bill, saving over $11 a case savings, not additional payment based on an ABV based system versus a beer, wine, and spirits system.

But the labeling only requires if it leaves the state and you put the label on it. And this is specific to beer. The wine people would be better to speak about wine. Yeah, not required.

And the testing is, you know, for us at the federal level, we test through a lab and I can tell you it costs between fifty and a hundred dollars per test per beer. In any given year we make 60 different beers.

So DoTAX would have on our case at least 60 different line items for different ABVs, if it was crossing the percentage of beer. Vast majority of beer sold in Hawaii is under five and a half percent alcohol.

Thank you.

Sorry, Garrett, I want to follow up with that. How many breweries in Hawaii for beer, if, you know, just give me an approximation that don't test for their alcohol content? Would you say pretty much all of them do?

Yeah, I would say, you know, we had some testimony from Alexis earlier. 15 years ago I was here. I've been here for 21 years with Maui Brewing, writing some of those bills that gave birth to this industry. I would say there were four of us back in the day, none of us tested.

As we grew, we put in the lab and we test everything. Out of the 30 or so breweries, I would say 90% don't test as there's no requirement. And it's because most of the beers are general in category. I think that's probably fair for our friends from Budweiser to say as well.

I would guess the give you an idea. The equipment costs 50 grand if you want to do it right. So, you can imagine we do it for some of the others when they have problems. But it's - I would imagine in an administrative system like this, you're going to require something that we can't do.

So, it's about a hundred bucks for a type of beer, so not per batch? You're testing, you're testing for - if you're making some kind of specific lager, you'd have to test that recipe and then. But you're not testing every barrel or anything?

That's a great question, sir. Fermentation: yeast is a natural organism and it behaves differently. Every degree of variance can provide a different beer to us both in flavor and alcohol percentage. So, I would argue if I was the administrator on the other end, I might require every batch to be tested because it could have a variance.

The federal government gives us a 0.3% ABV variance on beer. And keep in mind beer is malt based beverages or sugar based beverages because there's a disparity between vodka based seltzer and malt based seltzer. You can see how complicated this gets, which is why beer, wine, spirits make sense.

But yeah, I would, I would argue probably, understanding the laws of Hawaii for the last 21 years, I would bet it's going to be every batch every time.

But you have to test it for federal; you surely don't test every batch, right?

Not required. We make sure we stay within the variance.

It's much like hard kombucha or non alcoholic.

How much do you test them?

We are testing- well, we test in house every single batch, every time. And then when we have a new label approval we do send out for testing so that we have, we know we're within a range.

So if we say 4.8 on the label, it's going to fall between 5.1 and 4.5. That's going to be our variance.

See, do you guys, can you come up? Do you folks test every batch too or how often do you?

We test on export with new products, but we measure, and I think kind of a fair point would be everybody measures. And the difference between testing and measures, testing is going to be like a certification, like something is gluten free, it's certified, you know, by lab or whatever.

Measurement is something that you do in alcohol production because you're essentially measuring your starting and your finishing sugars to determine what that alcohol is. So, we do a variety of different tests and whether that's alcohol pH and a number of tests.

But certified measurements, we only do that if we export.

So, judging by the sugars left before and after, you can kind of gauge what percentage that beer is?

Within a tolerance. That's correct. And that is going to change batch by batch. That's correct.

You don't need any special tools for that to give kind of an approximation?

Any producer that is currently producing is going to have those tools in house already because it's part of the scientific, you know, beer is scientific to make. So, it's part of that scientific process.

And with the bill as it stands is there are levels. I'm assuming that if you tested and it was at a - unless it's near that level and you might fear going over, which is quite a bit I don't know what beer has 10% alcohol by volume, but if you're kind of more in the middle or I'm assuming there's no possible way it could accidentally get over that if you're tracking the sugar level?

You could. As Garrett mentioned, you know, it's a living organism and yeast can behave differently. So, it depends on the pH, the environment, how many generations of yeast you went through. So, you can put in an identical amount of sugar into a batch and expect certain results.

And it can vary because you can't control how yeast behaves generation after generation. So, that's why the testing is there and that's why the TTB on the federal side allows some variance within that is because it's expected for it to behave that way.

You suggested the mine better for a local smaller producer be 60,000 barrels. But did you mean gallons or, I mean, what's the conversion here?

Yeah, my thought is that that ties into some, some federal standards on where that that comes in.

How many gallons are in a barrel?

How many gallons are in a barrel is the question? 31. Yeah. Beers is - barrelage is a beer specific term? Yes, it's 31 gallons per barrel.

And then that can be distributed under draft or package, either one, depending on what the demands are by the market.

Okay, is barrel a defined unit in your field?

Yeah, it's how we all speak within our field on, you know. What size or how many, how big is this particular batch? So, you know, gallons can be used in different things. The beer industry uses the term barrel.

Okay, I have other questions, but I'll open it up again. Anyone else have any follow ups? Okay. DoTax: So, there's a definition of unit price. Do you - we were thinking about getting rid of it. It seems kind of a sigil. Do you know if that unit price definition is used anywhere else?

I would be able to do some research on that and get back to you. Get back to us. I do not know off the top of my head.

Thank you. And I have one more for Mihoko.

Thank you.

So, you had described red wine as going up 307%. But I'm assuming you're talking about if the red wine breaches the 15% level, then it would be that high. If not, if the wine is below 15%, then it wouldn't be as high, right?

Yeah, my understanding is because many wines do reach that level.

Okay, how many wines do you. Because when I was researching it it seemed like very few wines go over the 15% level. I'm not saying that they don't exist, but it just doesn't seem very common.

I'm happy to look into it and get back to you. I can get you an answer on that. I just don't know off the top, offhand.

Okay.

But I do know that it does create this - there are wines that do.

But do you? I guess would you admit that there are many wines that fall below 15%?

No, I don't know. I'm sorry, I don't know the answer to that. But I'm happy to get back to you. I know there's some that are low and some that are above, but I can't get you the proportion between them.

But my understanding is that we set the 15% because to try to be inclusive of most wines. I mean nothing's gonna be perfect. If you have a proposal of where else to move that mark to encompass most wines, I'm not saying all wines, but the majority of wines, then I'd like, like that information.

If you could, do you think you could look it up by the time?

I can get back - I can try to get back to you today. Yep. Thank you.

Thank you.

Anyone else? Okay, let's move on. Next up on the agenda we have HB 1776 related to the residential landlord tenant code relating to. The first up we have DCCA Office of Consumer Protection with comments over Zoom.

Oh sorry, I'm here. Present Chair.

Good afternoon, Chair. Vice Chair. Committee Members, my name is Donnie Jenkarino. I'm enforcement attorney for the state of Wyo. Consumer Protection OCP Stamplines written testimony. It's available for any questions. Thank you.

Next up we have Hawaii Realtors with comments.

Thank you, Chair. We stand.

Next up, Hawaii Appleseed center in support.

Thank you, Chair. Vice Chair Arjuna Heim. On behalf of Hawaii Appleseed, I want to stand on our written comments and also kind of elaborate with a personal story, quite frankly that I think illustrates the importance of this bill.

When I was a renter, I had, you know, closed out my rental agreement was did my review with the landlord. The landlord was a registered agent in the state, well known. And I waited for my security deposit which needed to be returned within the 14 day period.

I waited, I waited a couple more days, I think maybe day 1520. I finally called him and asked, you know, where is my security deposit? I didn't get a notice about taking out extractions to repaint the place or whatnot. And they said, zero, okay.

We'll get it to you, but we're still going to remove the amount that we want to remove. They had not given me notice as I said and I said okay, I don't think that's legal. And I went back and forth. You know I like the same kind can navigate the legal at least landlord tenant code.

I checked the hrs, I called dcca, I called the landlord back and I said listen, I am owed the full deposit returned. And they told me, they said that's not our policy.

And I implored them to check with their legal Department and double check because the HRS and I can't name the chapter off the top of my head right now. I apologize says that after 14 days I'm owed the full deposit back regardless of if you had intended to extract it.

They quickly got back to me and I picked up my check within an hour. However, not everyone can navigate that system. Not everyone has the same access and knowledge that I do. And there are many more tenants in this state that would really benefit from this.

And it sounds like from my experience at least landlords would benefit from this as well. So thank you very much.

Thank you. Lastly, we have employee workers center support should be assumed.

Hi, this is Kay Miyamamoto from the Hawaii Workers Center. So on behalf of the Workers Center, we fully support the passage of this bill. In our line of work organizing low wage non union workers, we often get asked to help translate or interpret paperwork or other important documents in English for Filipino or Cofa Micronesian workers.

Not necessarily because they don't understand the language or they don't understand English, but because the notice itself is in. Is written in a way that's full of Jargon and difficult for people to comprehend. And these are folks who have lived in Hawaii for decades.

So to be able to push for accessible multilingual notice of tenants rights would be. Would serve, you know, the majority of the people here in Hawaii. And too often for us at Hawaii Workers center, we hear that workers make different decisions based on health, housing and employment without fully understanding the implications of their decision.

So this bill, we support it because it's one step towards allowing migrants, especially migrant workers in Hawaii, to give them the opportunity to understand and advocate for their own rights. Especially in a time when English or being born in a foreign country is under attack right now. Thank you.

Thank you. Anyone else here to testify in person or by Zoom for this measure? Members, any questions?

Thank you. For the Office of Consumer Protection. So your off. Your office is responsible for the website, I guess, where the landlord tenant code is posted, is that correct?

We do post it. It's not technically our sole responsibility to do it. For example, like before law school I worked at Legal Aid Society and now they post. Actually wrote the landlord tenant brochure. It's not our sole responsibility, but we do post it.

Okay, so is, I'm sorry, Chair is the, is the office that's responsible for. I guess it's for the land of tenant code. Would that be broadly DCCA? Are they here? Are you here representing DCCA?

So I think my understanding is within DCCAit is OCP's responsibility.

I'm aware of other nonprofits, etc. So how many languages is it currently available in?

So right now we're, we're trying to figure out, I mean we have a land tenant call center, so we review the data weekly to determine, you know, the most common issues, the most popular languages that would be necessary. And we're in the process of.

We haven't figured out the cost for who or what agency will do it necessarily, but we are working on that and appreciate the need.

I certainly understand. Do you think that, do you think that the concept of making sure tenants get it and they get it from a Landlord. Do you think that would be satisfied if it was given to the tenant when they're in the application phase?

Meaning like we put landlords posted on, let's say craigslist or apartments.com, wherever they post it, if they included a link to the landlord tenant code, do you think that might satisfy or does it need to be given in paper?

Ideally, it's a good question. I mean, I'm kind of shooting from the hip here, but at least with respect to. I keep going back to my experience at legally. I'm sorry, I'm missing a front tooth right now. It's an old talk injury. Sorry about that.

With my experience at Legal Aid, I was doing like HUD eviction administrative hearings. HUD used to just. They post one thing at the, at the housing office manager's office, but that's pretty much all the noise you get.

I don't, I don't know particularly how much difference it would make or if it checks the box, if they give a wink. I mean, consider how many people comb through in an application for, you know, an apartment. I'm gonna, you know, get my computer out, go to this link, read it.

I personally think maybe I'm old school, A paper copy would be better, but it's food for thought. And again, kind of shooting from the hip here.

Thank you.

Any other questions?

Oyster for ocp. Thank you. How long is the current landlord tenant handbook?

How long is it? I don't know off the top of my head in terms of pages. Don't know.

I do.

It's 36 pages long. So in my mind, this. You raised concerns in your testimony about the impacts on staff resources and workload. In my mind, this would be like an Executive summary, you know, a two page, maybe three page handout. Can you kind of, I guess elaborate on your concerns about how this would impact your staff?

Sure. So Office of Consumer Protection is pretty small and we're already doing this, so the concern is that it would be duplicative where we're already doing basically what the Bill is asking us to do.

And so to have another Bill that I guess requires it by law doesn't make, I guess, logistical sense in the sense of we update it whenever there's a new legislative change in the landlord tenant code and we make it available online and it's available for purchase as well.

I can agree with you that we need to have it in other languages and conform with the American Disabilities act, and we're working towards that goal. But what the Bill is asking OCP to do is Something that OCP already does.

This just kind of puts I guess the requirement that we have to do it every year, but we do that anyway.

So are you concerned that it's over the duplication or is it a particularly onerous exercise to condense it into two pages? And the reason I'm asking is because in some ways if it is, that's to me that speaks to exactly the need for it to be condensed for tenants.

If it's difficult for you folks to do, it's definitely difficult for tenants to understand.

Totally understand. Again, I actually brought something for you. It's something of an exhibit. I don't know if you're willing to look at it, but I actually, I wrote this when I was at legally as an AmeriCorps Member. It is a distillation of the landlord tenant code and they update it every year. It's on their website.

I printed out three copies if you're interested in looking at it. But it would be something like that. I don't think what you're to your point, I don't think it would be particularly onerous. It's just it's something that we already do. I guess short of providing a summary, like a one page or two page summary.

Still, even that kind of carries its own issues in the sense of okay, well what do we decide to put in the summary? You know what I mean? What is the most important issue that people want to know about or need to know about and what kind of effect will that have?

I think that would almost be like sending out almost like a poll that would entail probably because to distill landlord tenant code down into two pages or even one page, I know from experience is difficult.

If you'll humor me, this is just.

I don't know if you're even interested in looking at it, but this is directly from the Leelaid Society website. There's two faults. So I wrote that for Judge Tanagawa. Again, this is before law school, but if you go on the UA website that's available in Chu Korean, Mandarin, Tagalog, things of that nature.

So I think the resources already exist. I think OCP updates window tenant code using real, real data that it collects daily, yearly or even sooner. So I think, you know, I agree with the bill's like asking like personally I get it, but I think, I think the resources are there.

It's really a matter of like connecting dots where legally provides it. OCP updates it every year or whatever. And under 475 subsection 10, it's within OCP's authority, powers and duties to contract with nonprofits, federal agencies, state agencies to make this type of work happen. And perhaps that's something we could, I don't know, consider pursue as an alternative.

Thank you.

So this is great, but not exactly what we're looking for, I understand. As the breakdown, have you guys tried to use AI to summarize?

I mean, not that that should be the final at all, but just to take the first shot at it so that humans can later go in or subtract from what the important points are from a summary though.

So short answer is I don't know of any attempts that have been made using AI or otherwise to distill it down on a personal level. Just in terms of my own practice would probably not feel super comfortable using AI to kind of pare it down. Although, I mean it has its benefits.

Use it private practice all the time, honestly. I mean, license has its own AI if you really want to legal slat, but I feel like ChatGPT could do a great job. I'm also wondering if AI could be used to translate these into different languages.

Maybe with the caveat that it's not the pure legal interpretation of a kind of thing, but. Right. Anything's better than nothing, you know. Right.

With respect to the. So the, the theme that we're getting is the onerous issue. It's if you consider, let's say the Bill passes, if you actually consider what, what kind of effect it has on ocp, it's, it's just it almost slows things down more. Where we're already providing this service, although granted, it's not a distillation.

We're already updating it regularly and it would just add kind of more red tape where it's like I have to get approval from my boss and then he has to get approval from his boss to get this publication out. Does that make sense?

I have a question for Archie together for DCCA. Thank you. So I think one way of identifying what are the most important violations or transgressions regarding landlords, especially if we're looking at the tenants rights, looking at like we heard the example earlier about the landlord not giving it within a timely, you know.

And so is there a way to identify what infractions or violations of the landlord tenant code are the most commonly violated that people should know are the most impactful for tenants. Those are some other ways. Right.

I appreciate that idea. I think, I mean, we certainly have a good amount of raw data with our landlord tenant line. Sift through it. Imagine that would be something we could probably identify. I say that with the caveat that I'm not the one who wanted to be doing that.

So I don't know if that's really hard or not, but I imagine it's something there.

This thing through ChatGPT during this year. Any other questions?

I have a question for Appleseed. My understanding is that you folks are undertaking a sort of similar effort to put together a resource for tenants. Can you walk us through what that process has been like for you?

Yes, I will admit I took chair's suggestion before he suggested it. I have used ChatGPT to help with it and cross checking it myself against the landlord tenant code. Reaching out to people who are lawyers when I am not sure if I got it right.

And what are. I mean once that document is that resource is finalized what are your plans for outreach to tenants? Because part of the idea behind this bill I think is to make sure we know that Legal Aid Workers center there are tenant advocacy groups that are doing Know Your Rights trainings and creating resources like this.

But they don't have the power to, you know, make sure that every tenant has one at the signing of a lease. So what are. What are your efforts?

We also don't have the power to make sure every tenant has one at the signing of the lease. Which I think is why it's important that it is given to a tenant at the signing of the lease.

The best we can do is partner with other organizations that work directly with tenants, publish it on our website and create Instagram posts honestly. So but having it physically given to the tenant at the signing of the lease is the best practice.

They just follow up with me. They're playing how you need to or we're kind of running. Yeah no, I was just going to say and are. Well are you aware that the the lead contamination brochures is something that is also given from the landlord to the tenant?

So landlords are already in the habit of giving paper documentation or digital documentation to tenants. So the lead table things that said are you aware. I am aware. Yeah.

To get point I signed away that right when I signed for my apartment. So yeah, let's move on.

Next up we have HB 1897 relating to condominium alternative dispute resolution. See who we've got. First up Real Estate Commission with comments.

You might be too far away for people on YouTube to you they adjusted it for this way so I think the first row it kind of catches but if you go back too far it's not going to catch You. Good afternoon.

Chair, Vice Chair, Members of the Committee, Akiti Kleinheads here on behalf of Derek Emani and the Hawaii Real Estate Commission. Send out a written comment for any questions. Thank you.

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

Good afternoon, Chair, Vice Chair and Committee Members. My name is Val Nerny. I'm testifying on behalf of CAI in support of this measure. This measure made it as far as conference Committee last session, so it's been vetted in a number of ways. I am only aware of some of the other testimony.

I think that some of Ann Anderson's proposed amendments have merit and I'd be interested in working with her and the Committee to address those if there are matter mentioned. If there's any questions, I'm thank you.

Next up, Gregory Masakian, an individual in opposition.

Aloha, Chair, Vice Chair, Members of the Committee, my name is Greg Masakian. I would like to make one comment before I add some additional comments to my testimony that I provided in writing.

The testimony for this hearing was only posted 2 minutes prior to this hearing and I would ask for the future if we could get it posted at least the morning of the hearing. I realized, you know, it's 24 hours to get it in in time, but literally two minutes.

And I was able to review it in that two minute period because I just wanted to go through it as quick as I could.

So I did glean through it, but it's not helpful to the community if we can't kind of read through that before the Harry, I think if I were an attorney I would support this bill, but I'm not an attorney. And the reason I don't support it is I'm a condominium owner.

I also serve as a Director on my condominium association. I have a great deal of experience over the years with issues within condominiums, including being part of mediation with a board Member and another owner. That didn't go so well. We got no resolution from it. Very costly to bring in an attorney and to do that.

So while I support the intent of providing additional work, various versions of mediation and I realize this one's actually taking out the facilitative version and putting in just the evaluative and arbitration. So the evaluative mediation and arbitration, what I'm concerned about is that it's costly to homeowners if they have to bring a dispute to mediation.

It's also costly to associations which are collective homeowners that are part of the association. So the real solution in my opinion, to help the Residents of Hawaii is an ombudsman's office. I've put forward two bills, one bill, which is a companion bill in the Senate.

So we're not going to get off too off track. We're not. This is not an ombudsman. I don't want to.

I realize that, but. But this is the, this is the solution for that. So we're not talking about that to keep it germane to the, to the topic. The cost factor is not where we want to go. We want to go to some place where we can mediate at no cost or almost no cost, really.

No cost is what's been proposed and HB 2453. And if we have that version of some kind of an alternate dispute resolution, which is the best version you could possibly have, that's where the owners want to go. That's where the associations want to go too. Because nobody wants to go to dispute, not have a resolution.

And then at the end of the day you have to go litigate. That's not what we want in state of Hawaii. We want less of that and it's costly enough in the state. We all want could. Issues like that.

So appreciate that. Thank you. Next up, we have Paul Ireland in support. Should be by Zoom. Paul, if you're there, we can't see you or hear you, So I told you he is online. Just give us one second.

Okay, thank you. Representative Marioshi, can you hear me now? Yep, we can hear you. Okay, I apologize for that. So I wanted to mention that I am a condominium unit owner and as you know, I'm also an attorney. My practice is focused on condominium law. I. I've reviewed this bill very carefully.

I reviewed last year's version of this bill and I think this year has some great improvements for both condominium unit owners and the associations which are made up of condominium unit owners. As some points of clarity, I think that the testimony of Ann Anderson, which was.

Which proposes several revisions, would very much help for clarity, I had also proposed some additional language that deals more with what happens when that fine is reduced to a judgment and how will the association be able to collect that fine.

And my proposed language is to say that with respect to the application of payments, that the association should be able to apply a payment received from an owner first to the unpaid judgment, interest and principal that it obtains in court. Thank you, Representative Matiyoshi and Representative Kirk Grand Eddie and Members of the Committee.

Thank you. That's all the testifiers we have signed up. Anyone else here to testify in this measure in person or via Zoom. It's his whole face up there if anyone want to see. All right, any comments or. I'm sorry, any questions from the Committee. Rep. Tam.

For the Real Estate Commission.

Hi, Rep. Tam.

Thank you. Hi. I guess my question is, does the real. You said in your testimony that the Real Estate Commission does subsidize some costs for mediation arbitration. Is that correct? Yes, that's correct. How much do you provide and is. It on like income based level?

I think I do have the numbers.

Well, there's three options. So facilitative mediation, you subsidize an initial fee which is based on a sliding income scale. And then there's a $600 cap for the subsidy and then the evaluative mediation and voluntary binding arbitration that is in enumerated in statute, which should be 514 B161 and 162.5. 161g.

So the initial fee is 375 and then the total subsidy amount cannot exceed 3000. As for evaluate mediation and then voluntary binding arbitration, 514B 162.5 is the initial fee of 175 with a cap of 6000.

Now under this proposal. We're sorry, follow up question. The initial proposed initial fees is reduced. My question to you is, you know, there's been talks about providing at no cost. Is there any concern.

Has there ever been an instance where individuals have brought frivolous and bad faith complaints over that have caught the system because of reduced costs for subsidies?

Maybe it was received anecdotally. I don't have data. The purpose of the initial fee is I guess, quote unquote, to have skin in the game. Yeah. We received a lot of concerns about especially valid mediation in a 375. So they reduced 150. We're in support of that.

Thank you.

Rep. Iwamoto.

Thank you for the Real Estate Commission. Do you guys keep track of them? I'm assuming that a lot of the complaints you get from. From condo owners, I guess against a real estate license. Is that normally how you receive them? And is that how you normally receive.

Complaints against the real estate license licensee? We would refer them to dcca Rico. Okay. Because they have authority over. The real. Estate licensing law hrs Chapter 467.

But do you I guess take or hear or receive any kinds of complaints or filings from condo owners against associations?

Oh yeah. I mean that's part of our specialist daily job.

Perfect.

So do you guys keep track of what the issues are like can you guys say that there's a whole bunch that have to do with non compliance with laws or bylaws or. And then versus other kinds of conflict.

Not that specific of recordation of data.

Okay. Do you keep records of how successful arbitration is? If parties were able to come to an agreement or if arbitration was helpful?

Yes, mediation. Just to clarify arbitration. Right, sorry.

Yes, arbitration. It would just tell you. Yeah, sorry. Yeah. We published mediation case summaries and if you include arbitration, if the arbitration numbers aren't there, that means that probably the arbitration is still pending. I know there's two, but it's not published yet. Then that one's. Those two are still pending. Thank you, chief.

And then I have a question for the conduct owner. I have the one for you. Since you're up here anyway. What's the breakdown? How many evaluative mediations vs facilitative mediations vs non binding arbitrations do you do in a given year?

Let me see. It was provided in the real estate commission's annual report. I brought all this paper. Sorry, I gotta sort through my phone.

So if I recall an earlier discussion with you, it was something like 67 evaluative mediations and two facilitative. Does that sound right to you?

For. I don't know if there was that amount of facilitative.

Sorry, I'm trying to get. There. Could be completely remembering.

Please.

Sorry,

Maybe my memory did not serve me right. Please let us know.

Okay. Or would you like to just an email. Or I

I want the whole community here if you have it. Andy, You can also page 31. Thank you.

Facilitate mediations. 2025 fiscal year. There was 10.

Okay.

Mediations, 2025 fiscal year. Math here. 65.

Okay. Okay. So 65 evaluative. About 10. So evaluative is by far more. More preferred.

Yes.

Did anyone else have a question for Real Estate division? No. Okay. Rep. Iwamoto.

For the Conda owner for Greg. Thank you. Thank you. So I think in your testimony, Fave Rem. Remember correctly, you wrote something about it.

Would there would be a deterrence for condo owners when they feel that they were given incorrectly fined or if there was, if they have a disagreement that they wouldn't because of the costs involved in the attorney's fees.

Would this bill. Yeah, the language of the bill and the statute, even the current statute, when you're possibly subjected to attorneys fees and costs. And in this bill, it says reasonable attorneys fees, but it doesn't say reasonable costs and other charges or whatever. So those could be on top of it.

And outside of an attorney fee, it could be a collection agency, what have you. But it's a deterrent when people realize the mediations also aren't working. The majority of the money working. Mine was evaluative and there was no report.

We didn't have an evaluative summary report to go back to both sides to say this is what we recommend. And I was like, this is. This is the result of it. And this was through the DCCA's program. So, yeah, it's a deterrent when people see that they could actually pay these huge attorneys fees.

So why not just have a place. Where you can go where you don't have to.

That's why I was saying ombudsman. So sorry, if I say that word a lot. You'll hear it a lot this session. Anything else or.

Thank you. That's it.

Thank you very much.

Any other questions? Okay, let's move on. Last bill on the agenda, we've got HB 1900 relating to remedy. First time Realtors in support. PR Orton support.

Thank you, Chair, Vice Chair, Members of the Committee My name is Tracy Tanaki. I represent the Orton, Hawaii. We are testifying today in support of HB 1900. We appreciate the support last year on HB420 and the continued dialogue on remedies and the Contractor Repair act. And we believe that there's more work to be done.

We submitted testimony supporting for the amendments and in opposition of three of them and look forward to continuing discussions. Thank you.

Next up, we have Kasdan, Turner, Thomson and Booth in opposition.

Good afternoon, Chair, Vice Chair, Members of the Committee. My name is Chris Akita and I'm a partner in the Hawaii office of Kasdan, Turner, Thomson, Booth. We have a fully staffed office here in Honolulu and we focus on representing homeowners and associations in construction defect claims. I'm here to provide testimony in opposition to HB 1900.

As you may recall, HB420 was proposed last year relating to remedies for the construction defect claims. It was signed into law as Act 308 last July. Act 308 was a result of significant amount of work put in by both the legislators and interested parties on both sides of the Bill.

It went through five committees in the House and Senate, including this Committee, and hundreds of testimony was submitted during this process. As a result of the hard work of numerous interested parties in the Legislature, the Legislature was able to come out with a compromise Bill.

HB 1900 appears to be an earlier version of what was eventually signed into law as Act 308. It proposes amendments to the same statutes, hrs657.8 and hrs672E. It makes amendments to the same provisions as Act 308 including changes to the statute of proposed Notice requirements, the inspection process, and offers a settlement under the Contractor Repair Act.

There are multiple problematic provisions of HB 1900 which I've outlined in my written testimony. However, the main reason that HB 1900 should be deferred is that Act 308 was just signed into law just over six months ago and the parties and the courts are still assessing how these amendments apply.

This Committee should therefore defer HB 1900 to allow time for Act 308 to take effect and any further amendments these two statutes would be permitted premature at this point. Thank you. Thank you.

Next up, we've got Graham LippSmith in opposition.

Thank you, Chair, Vice Chair and Members of the Committee. I echo Mr. Akita's opposition to the bill. I do have one minor amendment to my own testimony which is to amend. We have a reference to HB420 in the last paragraph, full paragraph in my testimony, that's supposed to be a reference to HB 1900.

We all worked really hard to put our heads together on HB 420. We think that there should be more time allowed so that HB420 can be seen in the world and see what the compromise Bill did create for the courts.

A few issues on SB19 on HB 1900 that we do oppose is, number one, that it would appear to have retroactive effect or maybe interpreted to have retroactive effect.

HB420, which was passed expressly provided that it did not have any retroactive effect, so it wouldn't undermine pending litigation or pending appeals that have been going on for years and years.

We're also a little bit concerned that it may be construed by parties in litigation as somehow allowing for fraudulent concealment of claims, which is banned by 657 hrs. 657. 20. There's a legal tolling provision in Hawaii that says that if a.

If a tort FEASA or a party in a litigation hides the existence of a claim, that it cannot then escape liability just because too much time has passed while that party hid the existence of the claim. We don't think it should incentivize people to hide claims that are available.

And this is particularly dangerous in the building industry industry, where defects do take many years before they will manifest and can be long after builders understand what the problems are. We also think that HB 1900 undermines Hawaii's building codes and building code enforcement.

It seeks to limit claims to what it calls material building code violations or material violations of building codes. There are lots of reasons why building codes can diminish the value of people's properties severely, even if they don't pose some kind of danger to the people in the buildings or to the buildings themselves.

Finally, the dispute resolution procedures appear to promote more litigation, not less litigation.

The determination of what a reasonable offer is and the artificial setting of a damages claim to the amount of the claim at the time an early offer is made will create a lot of problems when people who go through years of litigation later have disputes over those early offers of whether they were reasonable and whether the amounts are appropriate to repair the products at issue in their homes.

My firm's been responsible.

Pretty far over two minutes. If you could start to wrap it up. Okay. I appreciate it.

There's not much of a timer here on my side, but we've done a lot of work to help people set up repair programs for more than approximately 6,000 homes in the state of Hawaii. We'd like to keep that going, and we think that we respectfully request that we reject HB 1900. Thank you.

Thank you. Last up, we have William McKeon in. Opposition on Zoom.

Aloha Chair, Vice Chair and Members. And welcome from Maui. Hawaii's housing crisis is not just about cost. It's also about safety, quality and consumer trust. The proposed change by this bill to add a material violation requirement of the building code is unnecessary and will not improve safety, quality or consumer trust.

Hawaii adopts nationally recognized building standards designed to protect life, safety and property. The nationally recognized model codes are developed by public safety officials from around the country, not by developers, not by builders, not by homeowners, not by condo owners, not by lawyers, but by public safety officials.

This is why courts in Hawaii treat the building codes as public safety standards. This is the result of a national consensus of thousands of government safety officials who vote through the council that produces these national model building codes.

When Hawaii juries enforce the building code, they enforce the collective judgment of the nation's fire chiefs, building officials and safety regulators from every state, including Hawaii.

Changes to the law that require a material violation, weaken the code, harm consumers by weakening the code, and will create situations where repairs are needed but not made because they were viewed as not being material, which is going to be inherently ambiguous.

The key is higher quality construction on the front end following the building code is the key. Not arguing after the fact if a failure to follow the code was or was not material. Higher construction quality on the front end is the key and requiring a material violation is unnecessary. Thank you very much.

Thank you. Anyone else here to justify about this matter in person or in Zoom? Greg.

To get testimony on this and I was unable to get it in, I just want to say that I also oppose this bill and I. I didn't review it. I just wasn't able to get my testimony and I had other ones. So I do put it on the record that I do oppose HB 1990.

Anyone else here testify in this measure? Members, any questions? Chris I've got a couple of questions. So part of your testimony was kind of what has to do with the Contractor Repair Act. Do you generally support the Contractor Repair act outside of class action lawsuits?

Yeah. I mean, the Contractor Repair act is a process, so I guess there's multiple factors. The Contractor Repair act does provide an opportunity for contractors to come in and actually do repairs if they're willing. To.

There are some things that I believe both parties got last year with the Act. 308. There are other issues that we feel are necessary for pushing the Contractor Repair act forward and making sure that it's a more effective process for us. A lot of it has to do with information.

It's a very one way process as it's written right now. So what it does is it requires the homeowners to provide all this information about what the defects are about what the issues are in the building. But it doesn't. But homeowners don't have, typically have all the information necessary. So they don't have the plan.

Oftentimes they don't have the plans. They don't have RFIs, anything that really provides information on how the building itself was built. So these are kind of some of the issues that we do see with it. I know that a lot of contractors and developers have issues on their side as well.

So there are a lot of issues with it. But I do believe that, you know, Act 308 is a step forward. And I think we do need to see how this process kind of plays out before we go forward and figure out, you know, what other steps to be made.

I mean, I'm kind of a fan of the Contractor Repair Act. I feel like it tries to keep things out of litigation generally. I don't understand why we would not want a developer or whoever built the house to try to repair it before litigation, even if it's kind of a large scale, like class action lawsuits.

I guess I'm failing to. In your testimony, you said that it might take years for the repair to effectuate, and that was kind of why you didn't want the Contractor Repair act to apply. But how long after the class action lawsuit settles or concludes does it take for all of those homeowners to get them repaired anyway? Typically?

Well, I don't want to speak too much because some of that's, you know, depends on the case. And some of those cases are in settlement. But oftentimes, you know, cases that we're involved with, there is a settlement and we are involved in helping the class conduct repairs. We try and get that process started right away.

But you know, repairs can take a while.

As is, we did give a two. Year time period for. I mean, you must have had something in your mind to give a two year time period for the Contractor Repair Act to conclude.

I guess if you were given, if you were given that option, do you think it would take the same amount of time on the other end after the case concludes for whatever scenario you were thinking of to give us that two year time period?

I mean, I guess what I'm trying to get at is if it's repaired before or after the litigation. I'm not sure the two year delay is quite fair since I think it would take a long time anyway to effectuate the repair.

So I don't see why we can't offer the developer the opportunity to simply make the repair if the effect is identified.

So I'm not arguing that developers don't have the opportunity to make a repair. I think that the Contractor Repair Act does apply to any. And it sounds like you're talking specifically about class actions. Sure. Okay. So specifically with class, I think it applies in all cases.

But specifically with class actions, I do feel that, you know, the contractors, the developers or contractors do still have a right to come in and offer to make repairs. What this by bringing. So there's multiple issues in the context of class actions.

But the primary issue that I see here is that the Administration of class actions does not, it doesn't fit quite in the framework of the Contractor Repair Act. So that's why we have HRCP Rule 23 is because really what you need in order to oversee a class action is a judicial oversight. Right?

There's certain issues that make it extremely difficult, if not impossible, to administrate a construction defect process or construction defect dispute through the Contractor Repair Act. And I'm not saying that it shouldn't go through the Contractor Repair act, but it does need judicial oversight. And CRA in and of itself does not allow for that. Because when you bring.

Because first of all, you can't bring a lawsuit under the CRA. I mean, sorry, you cannot bring a case into a lawsuit unless you first go through the CRA. So this is, as an initial matter, I feel like this is the wrong form in which to provide statutes related to construction defects in the class action setting.

The way that the amendments are written in this bill, it would significantly also change how class actions are practiced by requiring every single homeowner to go through this process.

You know, they're, you know, the purpose of a class action really is to cut down on costs and allow multiple homeowners to bring claims when it would be exponentially expensive for them to bring individual claims on their own.

So what this bill would do is it would basically by requiring every single homeowner to bring a claim, it would make the process exponentially longer and it would also make the process exponentially more expensive for both parties. The other thing too is, you know, we've.

So we've seen this process play out and oftentimes There are some parties who do try and make this argument that every single homeowner has to go through this process. And, you know, oftentimes that doesn't necessarily lead to a settlement at the Contractor Repair Act.

You know, it oftentimes does have to go to litigation in order to get those done. But, you know, I, I'm not saying that developers shouldn't have the right to do, go through the CRA, but it should. This, the statute as written isn't. I don't believe is the proper way to do it.

Okay. And you also mentioned that recovery shouldn't be limited to the reasonable value of the repair. Can you expand on that? Sorry. You also mentioned in your testimony that recovery should not be limited to the reasonable value of repair.

Can you expand on why? So how the bill's written right now is. So I believe you're talking about the, the offer of settlement section. So what it does with the offer of settlement, how it's written in the bill, is if the developer makes an offer to repair some defect with money, that's one thing.

But if they make an offer to do a certain repair and they say we're going to repair it and we're going to repair it this way, then it provides the developer with an argument later on down the road that that was reasonable and therefore you needed to accept that.

But, you know, the association or the homeowner should have the opportunity to really look at that issue and make its own determination of what it wants the repair to be.

Could they have accepted that offer, though, to repair at the time? Could they have accepted the offer?

Yeah, sure. Any. In the Contractor Repair Act, it gives the homeowners the right to accept an offer. Correct.

So if they could have had the repair, but they refuse, I guess I'm struggling to figure out why they should be owed more money for a different repair later. If they had the repair offered to them, they could have just taken it.

It's a matter of what repair is the right repair. So just because, you know, an offer is made to repair it a certain way, it might not be the right repair. It might, you know, it might cause other problems later on down the road.

There could be a lot of different issues with.

But if it does, then the contractors will hook that too, right? I mean, if, if they make the wrong repair, surely they're not. They don't wipe their hands of all liability, do they?

No, of course not. But. So they, they could be responsible for that. And, but it gives. But A ,it pigeonhole it. It forces the homeowner to really have to make that assessment of do I accept or do I risk? Do I make the risk of limiting myself later on down the road?

And B, as a homeowner, you won't want to do the wrong repair because that just means oftentimes these defects, what they lead to is leak, constant leaks in the buildings. You know, backups, all these types of issues.

Contractor would have to repair those as well, right?

Yeah, but it prolongs that process.

Doesn't them rejecting the repair when it's offered to them prolong the process, too? Because, I mean, is the homeowner really in a better position to determine what the proper fix is than the person who built the building?

Through, That's why they get representation, right. That's why they get representation, who hire experts, who hire consultants to make sure that they can look through whatever offers that are made by the contractors to see whether or not those are proper and whether or not those, you know, would actually fix the problem.

Okay. Anyone else have questions?

So thank you. And also, I mean, for. For consumers, for people who own this property, they might. There might be some distrust around the contractor who did the original errors or didn't do it correctly. And then what is. And are they going to be resentful that they have to come back and do it? Are they.

You know, there's a lot, I would imagine that as a consumer, for anyone who's hired people to do work for them, and when they screw up, you're just, like, sick of it. You just maybe don't want them to do it. And that's kind of like, well, now it's going to be held against them moving forward.

Do you know what I mean? Like, it feels. No, it is. It is a question. But would that be some of the concerns of some of your clients?

We hear that very often. We do hear that there are concerns with, you know, the same contractors coming in and doing the repairs. Oftentimes something that's also proposed is that there might be a product that had an issue. There might be an issue with a certain product.

And then there might, you know, the concern would be some defendants or some contractors or manufacturers in these types of cases will come back and they'll say, we'll replace it with the same product. And so you get a lot of homeowners who bring up these concerns. There's.

Are you going to be putting in the same thing that was failing this entire time.

Which they would then be on the hook for, though, right, if it fails again?

Yeah, but then it just prolongs the whole process of, you know, the issues that these homeowners face on a day to day, you know, basis.

Okay, anyone else?

Okay, let's take a quick recess. Recess. Reconvening.

We're going to be voting on our measures. First up we've got HB 1991 relating to the liquor tax. Chair's recommendation is to make a number of changes here.

The first one is we're going to generally adopt Dotax's suggested changes for the wording to deal with any ambiguities from percentages that are sort of between the percentages that were listed. I'd like to add a provision.

We're going to create a separate provision for the small craft producer licenses, the Class 18S so anything under 60,000 barrels I think is the right word will be taxed at a.

For beer which we're going to amend the definition of beer too to make sure it's under 10% APV but that will be taxed separately at a rate of 75 cents per gallon. There are a number of the where we're going to be also amending the amount slightly. I think there was a typo.

The wine was listed at $1.75. It should be $2.75 for that APV range. We're also going to raise the liquor amounts up to. So that'll be subsection three. It's currently listed in the bill as $6 per gallon. We're raising that to $11.89 and the over 40% to $13 per gallon.

We also have some tech amendments to make defecting the date. And we will be just noting in the Committee report that the whole Bill should take effect on January 1, 2027. That's it. Anyone have any comments?

I'll be voting with reservations. I think I heard testifiers say that some of their beers go to 14% and so it would fall outside of beer. But it's beer, I don't know. So I'm not sure how this is going to work. It is beer, but that, that is a wide range.

So yeah, I think the vast majority of the beers don't go up to 14%. I would pretty safely say that.

Okay, so support with restorations.

Vice Chair for the vote.

Voting on HB 1991. Chair's recommendation is to pass with amendments. [Roll Call] Chair, your recommendation is adopted.

Thank you. Members. Moving on to HB 1776 relating to the Residential Landlord tenant Code. I do like this bill. I do want the two pager created to be also included as part of the landlord tenant handbook. Once that two major is created, I want to add a provision that landlord. I'm sorry, strike that.

I do want to add a savings clause to this bill and I want the landlord tenant code. We might just put it. We'll just put this in the Committee report. But I'd like the landlord tenant code to include a information related to the free landlord tenant hotline that the Office of Consumer Protection provides.

I think that's a valuable resource actually. If we could find out. We may want to add it to the two page later. Okay. Any comments on this one?

Vice Chair for the vote.

Voting on HB 1776. Chairs recommendation is to pass with amendments. Are there any Members voting no? Any with reservations? Chair, your recommendations adopted.

Thank you. Members. Moving on to HB 1897 relating to condominium alternative dispute resolution. I thought we had a good discussion on this. The testimony is has some points that I'd like to work in. We need a little bit more time to work on it.

Based on the testimony we received, we'll be deferring this Bill for now to a later agenda. Moving on to HB 1900 relating to revites. Chair's recommendation is to add back in HRS657.8B and restore subsection A of that section back to its original form.

We're going to undo the changes recommended for HRS672E3 subsection A2 and we're going to also undo the changes to HRS672E4 subsection C. Members, any comments?

I'm sorry, Chair. I'm sorry I couldn't keep up with some of the changes. I'm just going to vote no for now.

Anyone else have comments, Please?

Voting on HB 1900. Chair's recommendation is to pass with amendments. Any Members voting no? [Roll Call]