House Standing Committee on Economic Development & Technology

Okay. Good morning. We're here for Economic Development Committee hearing. It is February 18, 2026. It's 9:30 am, we're in Room 423. Let's see. Because morning hearings must adjourn prior to floor session, not all testifiers may have the opportunity to testify. In that event, please know that your written testimony will be considered by the Committee.

For those on Zoom, please keep yourself muted and your video off while waiting to testify. After your testimony is complete, the Zoom chat function will allow you to chat with the technical staff only. Please use that chat only for technical issues. 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 that the House is not responsible for any bad Internet connections on the testifier's end. In the event of a network failure, it may be necessary to reschedule the hearing or schedule the meeting for decision making. In that case. Inappropriate noticeably posted.

Please avoid using any trademarked or copyrighted images. Please refrain from profanity or unsub behavior. Such behavior may be grounds for move from the hearing without the ability to rejoin. We're joined this morning by Chair Ilagan, Representative Gedeon, Representative Templo. I'm Representative Hussey. Okay.

We're going to start first with HB2410 relating to the Hawaii Technology Development Corporation. Our first testifier is Trung Lam from HTDC.

Good morning, Chair, vice chairs and Members of the Committee. Trung Lam with the Hawaii Technology Development Corporation. And I stand on my written testimony.

Thanks. I forgot to mention, sort of assume that everyone's standing the written testimony. I'll just ask if you. If you'd like to add anything and if not, then it's fine. Sherry Menorah, Chamber of Commerce. Do you have anything like that?

We'll stand on a written testimony as well. Thank you.

Let's see. Lauren Zirbel from these. She's from Hawaii Food Industry Association. She's on Zoom.

Not present.

Okay, all told, we have seven testimonies in support. None in opposition, none with comments. Would anyone like to add anything or would like to testify in this measure? Do you have any questions or comments from our Committee Members? Chair.

Could you come up? I didn't find an amount. It's banked out, but how much were you requesting for funding?

Currently, for this year, we do have a million from the Governor for SBIR. But the other two programs were vetoed. And in the original proposal for the biannual, it was 1 million for each program.

So you're requesting 1 million for each program. So a total of three.

Correct.

Thank you.

Thank you.

Any other questions? Okay. And no other testifiers. All right, move them to HB 2235 HD1. This is related to the Military and Community Relations Office. For this measure, we have foreign support, none in opposition, none with comments. Would anyone like to add anything to their written testimony? Would anyone like to just testify? Okay.

I'm happy to.

Sure. Please.

I'm Laurie Moore. I'm the Executive Director for the MACRO. And we ask that you please consider this additional funding. We are otherwise funded federally, but this funding will allow us to, I think, provide some greater support for our local businesses and education to career initiatives that we want to do statewide. Open to any questions. Thank you so much.

Thanks. Are there any questions for any of the testifiers on this budget? Chair.

Same question. I didn't find an amount for this.

1.3 million total. Yes. Anything else? All right. Thank you.

Okay, thanks. If there's another question, we'll move to HB 1904. This is related space operations. Okay.

For this measure, we have three in support, one in opposition, none with comments. Would anyone like to add anything to your written testimony? Would anyone like to testify this measure? Any questions, comments from our Committee Members? All right, we're going to move then to HB2201. Relating to state enterprise zones.

This Measure, we have 12 in support, none in opposition, one with comments. Would anyone like to add anything to written testimony or to testify?

Aloha chair, vice chair, committee members, ... We stand with written testimony

Okay. Anybody else?

Thank you. Chair. Vice Chair. Members of the Committee just wanted to. Acknowledge the support and the well run program in BDS day for enterprise zones. And this is really enhancing the rest. Of our initiatives this session introduced by. The House and the Senate to help. Enhance and make more competitive our film industry for the state. Thanks.

Just for the record, could you please see your name?

Oh, excuse me. I'm so sorry. Hi. Georgia Skinner, Creative Industries, Department of Business, Economic Development and Tourism. Thank you very much.

Anyone else like to testify? Yes. Someone on Zoom? Okay. Mr. Yamachika.

Thank you. Vice Chair. Chair. Vice. Members of the Committee, Tom Yamachika for Tax foundation of Hawaii. We will stand in a written testimony providing comments and be available for questions.

Okay.

Are there any questions from our Committee? Okay. We're going to move then to HB2349 related to the DCCA. Okay. For this measure we have six in support, none with opposition, one with comments. Would anyone like to testify? Or add a feature written. ... Okay, thanks. ... Would anyone like to ask any questions?

I have one. Marylin. All right. So why aren't we doing this already.

We currently, as explained in our testimony, do have a program wherein we provide an access to those who register with the business registration division. This is both for newly registering entities as well as current entities that file reports with us, such as their annual reports and other required filings.

So your program is providing them the resources that's available. But this Bill particularly is integration between departments with DBEDT

to be more accurate. We are providing them information to connect to DBEDT so that they can learn more information, if they're interested, from DBEDT directly and establish the relationship with DBEDT. So we're facilitating.

Right you are. However, I think you may not be understanding DBEDT with the data that you're already receiving. They may be able to do their own outreach with that information. And I'm just curious, why won't you just integrate with DBEDT and just allow that information to transfer to another Department?

Certainly, if that is the request of DBEDT, we would, and the will of the Legislature, then we will certainly cooperate and assist with that. But here, up till now, the request from DBEDT has been to provide a link and information to their programs. And we've agreed to do that and offered our assistance in that respect.

As explained our testimony, we've also included the specifically designed DBEDT link in our communications as well as in our website on the Business Action center web pages. So to the extent that there are the will of the Legislature for us to do more, we'd certainly cooperate with that.

We've outlined some of the issues and challenges that we'll need to address, such as adoption of new rules to allow for the collection of certain information that's required the Bill and also the funding that may be necessary in order to retain a vendor that will allow us to collect this information, revise the forms, and be able to transmit the data in a form that DBEDT requires to do their outreach.

Okay, thank you. Thank you very much. DBEDT. Please say your name.

Dennis Ling with DBEDT.

So are you satisfied with just a link provided to DCCA? Would it benefit your Department to have the data that you requested in this Bill?

The responses we got from the link is not very much. I think if we had something where we could reach out initially with information and resources that we have that would provide us with.

Have you communicated with DCCA your needs?

I think in the past, yes. In the past, how this was worked out between the two parties, it was that when the registrants register, upon getting notification that their registration has been completed, they would include contact information for DBEDT directing them to the link to our website. And that's the response that we've agreed to.

We feel that perhaps more could be done given email addresses, names and that we can reach out more proactively and.

We can even just make it optional for them to input that information and not necessarily required for just additional. Like for example, a disclaimer could be in the business registration that says this information will be shared with DBEDT to share resources that's available from the state.

So what I'm trying to say right now is are you willing to do some cost share? Because DCCA is stating that it's going to take some resources to accommodate this request. Is DBEDT willing to cost share some of these expenses to get this data?

I think DCCA is funded through the fees that are generated from registration cost sharing. You know, it depends on the total amount, but if we receive the funding directed towards this effort, definitely.

And the reason why I'm saying that is typically when you need data, you still have to purchase that data from somewhere. So it's similar to purchasing data from another Department. And in this case they should just give you the data.

But if their position is that they won't do anymore unless we mandate them to do it, I think you should communicate with DBEDT to see if they're willing to do some sort of cost share and see, I mean communicate with DCCA to see if they can do some sort of cost share.

Okay, I think I understand what your needs are. I, I just want to leave with one more question. What's the greatest benefit of having this extra information? Because I, I think I have it in my mind. But I just want to hear what DBEDT is thinking with this additional data that you would acquire.

Well, we can ex. We would have a mailing list and they would be put on our mailing list. And it's not just a one shot deal. It's continuous.

That we advise them of conferences and trade shows and missions and other opportunity opportunistic programs that they may want to avail themselves of as they come up and as we find out from other resources.

How big is your mailing list now? 9,000. And potentially how big could your mailing list be?

Well, I don't know how much DCCA gets in registrants, but I think doubling that amount would be very conservative.

Okay, thank you.

Actually, I have a question for.

Yes?

Would you be satisfied if we were to amend if, if instead of there being an automatic transmission of, of contact information from DCCA to DBEDT, if it were to Be opt in for. For the register. I'm just like, I'm one of those people. I have like 15 corporations registered DCCA.

I'm not excited about the notion that of my information all being, you know, available to the General public. Yeah. I'm curious and I'm sure there's a lot of other people in the community who feel the same way.

Right. Opt in is fine.

Okay. Yeah.

Thank you.

Thank you.

Any other questions?

Go ahead.

This is just to clarify.

Yeah, let's. Let's ask the questions he had. Would you be open to the op in?

That would certainly be an option that we would consider and perhaps it may even address the concerns of personal email addresses being made public so that parties that register are aware that their information is out there and that they can do something about it.

If they choose not to release that information to the public, work to any other agency besides for the purpose of registering for visits.

I also thought having an optional column there where they can put their email address if they want to. And if they do this is knowing that this is going to be shared with DBEDT to receive resources.

And I would suggest the same also goes for telephone numbers because often registering entities use personal phone numbers or numbers that they don't wish to disclose as well as email addresses.

Would this be a expensive modification in your system that's needed or is this can be built in into your current procedures?

Well, it is a modification of the system because currently, while we do collect or require entities to submit their mailing addresses and addresses of their agents, we currently don't have any requirement by statute to collect phone numbers or email addresses.

So that needs to be changed both on paper, the paper forms that are filled out, as well as online when parties prefer to register through our online portal. In addition, there needs to be systems involved in collecting that information, harvesting that and preparing it in a form that would be readily transmittable to deepen.

But getting back to an earlier issue that you had raised, you are correct that the Business Registration Division is funded by the fees that it collects. And to clarify, Reg is not position is not that we're only doing something if we're asked to do it, but rather we are bound by a ceiling.

And so if there are additional services and, and vendors that we need to retain in order to accomplish this, then we request that our ceiling be raised in order to Fund these additional services.

What's your ceiling right now? Is it a ceiling in your special Fund?

Unfortunately, I'm not on the financial end of that.

I can find that information Out, I believe in the earlier budget briefing that had been discussed by our Director. But specific as to bread, we do have a set ceiling that will need to be approved by the Legislature. We are going to require additional services.

Who's your vendor right now?

Who does your web services? Again, I hate to speak out of turn. I will need to confirm who that vendor is. It's an outside vendor working in conjunction with our computer service. I don't even know what they're called. It's ISCO, but I don't know what that acronym stands for.

Okay, thank you.

Thank you. Thanks very much. Okay, Any other questions on this measure? All right, we're going to move down to HB1972HD1. This is related to taxation. For this measure, we have 31 in support, none with opposition, three with comments. Would anyone like to add anything to your test, to your written testimony or to testify in person?

Aloha, Chair Iligan and Members of the Committee. I'm Kaylie E. Lopez, State Director for AARP Hawaii. Thank you for hearing this measure. Just wanted to reinforce the understanding that family caregivers are the backbone of Hawaii's health care system.

Many people are able to remain in their homes as they age and this is because their family caregivers keep them at home. A good example for me is my mother in her 80s, had a stroke. She was able to remain her in her home in Nanakuli because five of us took turns taking care of her 24/7.

What this Bill does is it recognizes that many family caregivers, about 1 in 4 people here in Hawaii as a family caregiver, caring for their loved one results in them not having to be in a very expensive care home, which is actually tax subsidized.

So we believe this really, I would say, you know, reasonable request for these caregivers. They spend about $7,200 of their own funds to care for a loved one, whether it's transportation, modifying their home, adult resident, I mean, adult daycare, those types of things.

So we really think it's time for Hawaii to recognize the great work and really the heroes in family caregiving. Thank you.

Thank you. Anyone else like to testify?

Hello, chair, vice chair and Committee Members. I'm Chris Caulfield from the Hawaii Public Health Institute. As many of you may know, the institute has as one of its programs the Kupuna Collective. So this measure has become very important to us and we want to support AARP as much as we can.

And trying to push this across the finish line. Just to put some additional Data points on this Bill, there's about 154,000 caregivers providing unpaid care across the state. 144 million hours each year. That's care that's valued, that would be valued at $2.6 billion annually if it was actively paid.

And also there are studies that show that caregivers pay out of pocket up to $7,200 a year or more on average to support a loved one. Nearly 60% of caregivers are also working. When they have to provide care, they often leave the workforce or have to reduce their hours, and that obviously impacts their financial stability.

Research shows that a caregiver tax credit really helps families stay afloat, stay employed, keep loved ones at home, where people are often healthier and safer and more connected to their communities. So please don't ignore this invisible workforce. Let's honor it by providing economic relief that uplifts human dignity.

Thank you. Thank you. Any further testifiers? Okay. Zero, Tom. Okay, go ahead.

Yes, Tom. Thank you. Vice chair, Chair, Members of the Committee, Tom Yamachika from Tax Foundation.

We just wanted to suggest that because the amounts being paid out are relatively small, that it may be more efficient to do this with a subsidy program or a grant program as opposed to messing up the tax system.

We note that if you do a tax credit, you don't know how much you're spending and what exactly it is that you're paying for, whereas with a grant program, you would have more control over it. I'd be happy to answer any questions. Thank you very much.

Thank you. I also see Nicole Wu,

Aloha Vice Chair. Yeah, good morning. Aloha Chair. Vice Chair. Members of the Committee, Nicole Wu from Hawaii Children's Action Network speaks. We work closely with parents across the state and many of them are in that sandwich generation.

So this tax credit proposal would address the affordability issue that we're having with families not being able to make ends meet. So as the prior testifiers, Kaylee and Chris, were mentioning, this tax credit would reduce pressure on family budgets, also long term care facilities and our broader healthcare system. So thanks for hearing this Bill.

We support it strongly.

Thank you. Anybody else want to speak out on this one? Caroline Dotax, Alzheimer's Association. ... Okay, thank you. All right. Are there any questions or comments from our Committee Members?

Okay.

All right. If no one else is jumping up, we're going to move into HB 2007 HD1 related to the household Independent Care Services tax credit. For this measure, we have 47 in support, one in opposition, two with comments would anyone like to add to their written testimony?

Hello again, chair, vice chair and Committee Members. I'm Chris Cockle from the Wyette Public Health Institute. We're also in support of this, the Household Independent Care Credit. Buildings in front of you. Today in Hawaii, families are spending some of the highest child care costs in the nation.

Just to highlight some of those figures for you, there are studies that show that they're spending more than $24,000 a year on infant care, in many cases over $2,700 a month. That means that families are spending 13 and a half percent of their income on childcare, which is the highest share in the country.

And when families are forced to spend that much on child care, they often cut back on food, on housing, and on health care. So this is a public health concern for us as well. This is a fix to Act 163 from 2023. That measure sort of strengthened the household Independent Care credit by half.

What it failed to do was increase the so it increased the amount the taxpayers could claim under the household Independent Care Credit, but it failed to increase the percentage of expenses that could be claimed. And it didn't adjust the income thresholds to which the credit applies, which severely limited its impact.

So, we see this as an investment in the future of our state. We, as our cost of living continues to store working parents, really deserve our support. So we hope that you'll move this forward. Thank you so much.

Thanks, Chris. Anyone else? Kaylee.

Aloha again. I'm Kaylee Lopez, State Director for AARP. We also support HB 2007 HD1. We believe it's critical to continue providing support to family, Members and this particular tax dependent Household Independent care giver, a care service tax credit.

I just want to make sure it's clear that between the Bill we just heard before and this one, it's really you claim one or the other, right? So if you're already claiming your child or your parent as a dependent, you would not be able to file for the tax credit.

This, of course, I think, is really important because it's the beginning and really where most of family caregivers are doing this work, which is where someone is actually living with them and they're caring for them really quite more frequently. Thank you very much.

Thank you very much. Nicole from HCAN, did you want to speak out on this?

Yes. Aloha Again, Nicole from Hawaii Children's Action Network speaks my testimony and the online at least packet is on pages eight and nine. And I have some tables in there.

To kind of help everyone understand this tax credit, it was created decades ago to help people with child care and dependent care expenses, but it kind of got stuck behind inflation and also super high rising costs.

So as Chris mentioned, a few years ago, you and your colleagues and the Governor increased the amount that could be claimed for this tax credit, but the percent wasn't changed. So right now, if you make over $50,000, 50,000, $50,000 a year, you can claim only 15% of your care expenses.

So let's just say a family has, you know, cheap pre k and they're only paying $10,000 a year, they can only claim,$1500 of their child care expenses or, you know, if they have an adult family Member that they're caring for, only 15%.

So right now the credit really isn't meeting the need and it's honestly, I don't think doing what it was intended to do. So we're asking to have that percent raised and also the ceiling on the amount of income for, you know, claiming this tax credit.

And so it shows in this table on page eight that a lot of our lowest income families already get child care subsidies. And so they're not paying a whole lot for child care. But it's those Alice families. They're right above the subsidy level and even up to median household income.

People right in the middle, they're the ones who would benefit the most. They would get the biggest boost in their family budget from this tax credit. So that's why we really think this is important.

If you go to the next page on page nine, we have some alternative formulas just in case we know this is a tight budget year. If there are is a need to lower kind of the thresholds on income, maybe reduce a little bit of the boost. We have an alternative in the middle in yellow.

And even in our footnotes, it goes to a spreadsheet with like two other alternatives to sort of, you know, maybe target this a little bit more the way that the Legislature might want to go and maybe reduce the cost of it. So happy to take any questions. Thanks for hearing this Bill. Obviously, we support it very strongly.

Thank you very much. Any other testifiers. Okay, Tom.

Thank you. Chair, vice chair, Members of the Committee, Tom Yamashika from Tax Foundation. We do have a couple of technical concerns. One is that the, the formula enacted in this Bill makes the process of computing this credit a little bit more complex.

And we don't think complexity is a good thing, especially when we're talking about people of lesser means who have, you Know less access to things like computers.

Secondly, we know, we note that the Bill enacts what we call debarment provisions, where if you make a claim as disallowed, you can't claim any more for the next either two years or 10 years, depending on whether it's for fraud or not.

What the Bill doesn't address is when there's a partial disallowance, like if you, if you claim 10, 10,000 in expenses, you know, you actually had, you know, $9,800 in expenses because you added a couple of receipts wrong, does that mean the debarment provision hits you and you can't do any, any more claims for the next two years?

Well, I think this is an issue that needs to be addressed. Happy to answer any questions. Thank you very much.

Thank you. Any other testifiers, any questions from the Committee?

Is DOtax here. So. We had the tax credit report, and in 2022, this was claiming 6 million ish, this tax credit. And looking at HCAN's testimony with the current Bill, how much was it projected that this, this would actually potentially cost?

I don't have those estimates in front of me, but we are working on getting some of those figures.

Looking at the change, it's quite drastically higher from what I'm noticing. I'm not a numbers guy, so I'm just.

Well, I can't comment on how those numbers were calculated, but what I would say is if the intent of the Bill is to increase access to the credit, to open it up for more people to be able to claim it, then we would expect that there would be a greater cost.

So this 6 million potentially is the current figure that people are collecting. So we're looking at maybe twice, three times, four times,

potentially difficult to say. Like I said, we'd have to get those estimates for you. And we are working on estimating the cost impact of some of these bills, but I would anticipate it to go up. Yeah.

Okay. The alternative seems like a compromise in the sense of what the Bill is asking. And I mean, compared to all the economic credits, the social welfare credits are definitely needed. And trying to figure out how to support the cause and be reasonable with the amount is what we're trying to find.

So if you can give us that information, that'd be great. If you could look at the alternative as well and see how much that would cut the cost. Thank you. Thank you.

Any other questions?

No, thank you. So I had a question actually for someone else from ATM or HCAN Speaks, and the question is Regarding, I guess what's happening with the federal tax credit landscape right now with, you know, in this space. If you could provide sort of a. Some context for us. Appreciate it.

Oh, yes. So far this tax credit has not been touched by the Federal Administration. So there is a federal tax credit as well. And. But we never know what the other. What's going to come from Washington. There are some threats to actual child care programs like Head Start.

We were very lucky to get our annual funding before a bunch. Before the Federal Government decided not to provide a bunch of federal support for child care in General. So as we know, our state is facing a lot of uncertainty on that level.