House Standing Committee on Consumer Protection & Commerce

Good afternoon everyone. We are convening the Committee on Consumer Protection and Commerce. It is Wednesday, February 18, 2026 2:00pm in Conference Room 329. First up on the agenda we have HB20 relating to lava Zone insurance. Take it away, Vice Chair.

Thank you. Before we start testimony, I have a two minute timer here and just ask you to be mindful. I won't. I'll try not to cut you off right away. But if it starts going off, I'll ask you to wrap up your remarks. Okay. First is State of Hawaii Department of Commerce and Consumer Affairs Insurance Division.

Afternoon Chair, Vice Chair, Members of the Committee, Matt Sujimore on behalf of the Insurance Division, the Insurance division respectfully opposes HB20.

While we acknowledge that there is an affordability and availability issue with regards to lava zones 1 and 2, the reason for that is simply that lava zones 1 and 2 are the highest rated risk among the USGS zones.

To be to be building in this HB20, while it would offer a subsidy to property owners within those zones would not actually do anything to affect the underlying risk or the underlying potential cost of a loss in those lava zones.

Additionally, on top of that, you know the division, the Department feels that subsidies for for this specific hazard would lend itself to questions being asked. Well, why don't we provide subsidies for other types of hazards?

Why don't we provide subsidies for flood zones for hurricane zones, which that would slowly add up to the point where we would essentially be subsidizing a good chunk of insurance across the state. And lastly, the Department is concerned that the Bill would run afoul of HIC B Lingual. Primarily.

The concern is that Section 2 of the Bill would divert funds that currently go into the CRF and it would repurpose those funds to be going into this Lava Zone Insurance Fund, which debatably runs directly in conflict with the ruling under HIC B Lingual with regards to the use of a regulatory fee.

So on that note, the Division is happy to answer any questions. Thank you.

Thank you. Next is Kenneth and Donna Walker in support? In person. Okay. Is there anyone else in person or on Zoom who'd like to testify? Just noting that There are also 37 individuals who submitted testimony in support. Any one individual who submitted in opposition Members. Any questions?

I have one.

Rep Ilagan.

Thank you. Could I have the Insurance Division come up? So Matt, what's going on in lava zone 1 and 2? What are homeowners experiencing with the lack of insurance or is it the high cost of insurance?

I think it's a combination of both, Representative, I think the admitted market, I believe, actually, there are no authorized insurers currently writing homeowners property insurance within lava Zones 1 and 2.

For the simple fact that it is essentially not a matter of if but when a loss will occur and the loss in lava zones 1 and 2 is generally considered a total loss versus other losses that might happen from water damage or other types of damage or partial.

So the first thing you said was that there's no insurance available in the authorized market. In the authorized market, then what is available?

HPIA and the surplus market.

So with HPIA, what is the average insurance cost for a typical homeowner? Is it around 500?

That I don't know that I would have, I would direct that question to the HPI board.

Well, I'm not talking about HPIA. I'm talking about an average. Throughout the state, a homeowner who has a single-family home, maybe two bedrooms like a typical average people are paying around 500,000 a year on insurance.

I would. Well, I don't know the exact answer to your question, Representative. I would caution against taking a total average because each home is different and the risk is different and the underlying insurance policy for a home is written specifically for that problem.

Let me ask you this. Before, the eruption in 2018, how much were families paying for insurance, home insurance in that area? Because from, from what I was getting from my constituents, it's around maybe 500 to 1000 on average range.

I don't know the exact figure off the top of my head. I'd have to get back to you.

Well, that's what they were telling me. Now they're paying around 2,000, 4,000, as high as 8,000 with HPIA at those numbers, a common numbers that you've heard or have you not been following HPIA? I don't know those specific numbers. I'd have to get back to you on that.

Wow, you're in the insurance division and you don't know the numbers that HPIA

HPIA is different.

HPIA is actually not even housed under the insurance division. It's a separate entity, non profit, so.

Right. But you govern them and oversee them and you approve their rates like their rates

We do approve.

So if you don't know what they're doing on the approval or the rates, how are you even justifying what rates to improve or approve?

Like the fact that, the fact that you're the agency that govern the hike increase for HPIA, you have to know how they're basing their rates Right. As a insurance agency who govern HPIA.

Yes, that's correct.

Okay. So you should know how much those rates have gotten up with their increase that they asked for. Yeah.

And the division does have those numbers. Representative I just don't know them off the top of my head right now. For you, I can get those to you in your office.

Okay. So you mentioned that we shouldn't do any targeted relief for families or homeowners. Do you. I think the whole state, looking at the big picture, we have a housing crisis, and if they're not able to afford insurance, do you feel like there's options for these homeowners to go to?

Representative, I don't know that is an accurate reflection of what I was trying to communicate. If that was a miscommunication on my part, I apologize.

But essentially where the Department stands is that to offer subsidies for this specific subset of the community would open the door to essentially asking, well, why wouldn't we offer those subsidies across the board?

I believe, you know, the concern is that again, lava zones 1 and 2, as rated by the USGS, are the highest volcanic risk area possible. And the cons, the underlying principle of that is that if you live there, the property value is low because the possible risk is extremely high.

And so the reason why the insurance is so high is exactly because of that. It's because it's based on the underlying risk. And unfortunately for lava zones, and it is not a matter of partial loss, it's a matter of total loss. So again, you're talking about paying back out the entire value of the entire property.

And so while the homeowners may save on the property side, they're ending up having to pay that out on the insurance side later.

So to go to your question, I mean, I think the Department is appreciative of the fact that there is a shortage of housing for people, but I don't know that that necessarily falls within the scope of what we were trying to communicate in our written testimony with regards to HB20.

My last question is that HPIA was created legislatively a while back, and it's to assist the families who are vulnerable in these geographical areas. I wanted to ask, what is the insurance division right now planning, helping, assisting these local families who live in lava zone 1 and 2?

Are there any plans, any assistance from your division in trying to figure out some sort of solution for these communities in these areas?

Yeah, I think overall, the division is always looking at trying to find ways that will attract authorized insurers back into the market. And right now, particularly with regards to Lava Zones one and two, there aren't a lot of. There's not a lot of headway being made in the discussion with the authorized insurance market.

And so, you know, while we're continuing to have conversations about what would it take, quite frankly, we're not getting a lot of positive feedback, if any at all, with regards to if this, then these guys will come back. Because ultimately it's the competition that will drive the price back down.

With the lack of competition, the prices will be as high as they are. And so we're trying to work on that competition portion of it, but it's proving to be not an easy task.

Well, this is my solution. If you have some solutions, I would love to have those exchange of ideas. Happy to work with your office. Thank you.

Thank you. Can you distinguish between the Hurricane Relief Fund as a. Is that considered a subsidy versus what this Bill is trying to do?

Yeah. So the HHRF is. It's the Hawaii Hurricane Relief Fund. It's meant to provide hurricane insurance policies in the event that a single family homeowner or a condo owner or association, I should say, is unable to procure hurricane insurance. So the HHRF is specifically only hurricane insurance policy

Is that's the only. That's the only. You're just saying one is hurricane, one is lava, and that's.

Well, the HPIA, if you're referring to HPA or this Bill. This Bill. So this Bill is simply a subsidy for homeowners. And lava zones 1 and 2 versus the HHRF is not a subsidy. It's actually an insurance company that issues policies for hurricane insurance across the state to single family homes in Congress.

Got it. So the homeowner still needs to shell out the premium.

Yes. Yes.

And that's the difference. Okay, thank you.

Just for the previous question. HPIA is similar to the Hurricane Relief Fund in the sense of it's the last resort because there's no other insurance companies willing to authorize insurance in that area. Is that correct?

Yes. The HPIA and HHRF are the insurers of last resort.

And if HPIA, let's say they had some sort of disaster, that happens, HPIA has a guarantee that taps into all the insurance.

Is this relevant to the Bill at hand? Because if you guys want to discuss a different Bill concept, you're welcome to, but we have like 17 bills on the agenda. We got to get going.

So my, my point is just stating that. If it's possible, can we use Hurricane Relief Fund money for a Subsidy for lava zone 1 and 2.

If to respect the Chair's comment just now, that's a different issue that I'm happy to discuss with you. But as, as the Insurance Division, technically we're not commenting from the perspective of the HHRF board since that is also a separate entity.

But I can tell you that the division has submitted testimony to the effect of any bills that are using HHRF money. We are opposing those bills simply from the fact that it is an insurance company that is currently writing policies and it needs all of its corpus to do so.

So I'd be happy to discuss that with you if that's enough. Something you'd like to talk about further. Great. Let's move on.

Okay. Moving on to HB 2612, relating to mortgages. Clarifies that the mortgage does not exist independent of the debt it secures and shall not be independently enforceable from the debt. First up is Hawaii Bankers Association offering comments on Zoom. Nope. Okay. Hawaii Credit Union League in person in opposition. Thank you. Hawaii Financial Services Association in opposition.

Representing for HFSA. We stand on our testimony in opposition.

Thank you. Bianca Isaki, individual in support on Zoom.

Good afternoon, Representatives. Thank you for hearing this bill. I'm in strong support. This bill puts in clear, plain language what Hawaii law has been since the Great Depression. Since 1939, Hawaii, in Hawaii, a mortgage and a security interest. It's not like owning land, it's a lien. Like if a contractor builds your house, they could put a lien on your house. So if you sell it, you have to pay the debt.

The contractor has a security interest there, a lien. They don't get titled a part of your house. So what the Supreme Court did and this decision called White is they upended this by taking a 20 year statute of limitation from an adverse possession law and said, well, that law deals with real property. Mortgages deal with real property. So we'll give the banks 20 years to foreclose.

But that's a big mistake. Because Hawaii debt collectors, before this, they had six years to sue you to collect on a note, a debt. And that's plenty of time for a bank to sue you. Like if you are late on a mortgage payment, the banks are right on top of you.

But when, when is six years not enough? It's when the note is shady, when the bank can't show how it got the note, doesn't have it. There was fraud, predatory practices. They're trading around the debt for six years for pennies on the dollar.

So, and to put it another way, if you're owed half a million dollars, something's not right if it takes you 20 years to do anything about it. So the six year limit was there to filter out bad cases, protect from stale claims, and to resolve disputes while evidence is still fresh.

Now, the banks, even though they're in strong opposition, also say White didn't change anything because it's based on cases from 100 years ago. But the Legislature, you changed the law in 1939 to make Hawaii a lien state. Lien state. That's why the Supreme Court reached back to pre-1939 cases.

It's not the case that it's been this way for 100 years. Now why is 20 years a bad limit now? That which is what we now have under White. 20 years, sorry, is what title states have. And those title states, they also evolved different consumer protections that Hawaii doesn't have. So White gives this confused hybrid of a long period of foreclosure without protections.

And this is a windfall for banks who can now foreclose on mortgages dating back to like 2007, including those from the subprime mortgage crisis, when they made bad loans to people who couldn't keep up payments with designs on taking their homes. Like, I know people have said, well, people borrowed money, they have to pay it back. But first, this is not always the case. And also, what do they owe?

I have a client who, he got $25,000 and then now he owes $2 million, a $2 million house. Because they rack up the fees, attorney fees, late fees. I mean, and then now they're demanding $2 million. This is what equity stripping looks like, and it's happening to Hawaii residents. So I'll stop there. But thank you so much for hearing me.

Thank you. Daniel Kanahele, individual in support on Zoom.

Yes. Can you see me and hear me?

Yes, we can hear you.

How much time do I have to testify? I've got three minutes of testimony.

You have two minutes.

Two minutes. Okay. My name is Daniel Kanahele. I strongly support this bill. My family has been the victim of predatory lending. After nearly 15 years in court, I believe our lives were finally getting back on track. Then a new financial institution sued us again, the third, trying to enforce what is now a zombie mortgage.

This bill would correct the Hawaii Supreme Court's decision in Bank of New York Mellon versus White. That decision allows the mortgage to be enforced even when the note it was meant to secure can no longer be enforced. Last year, Wells Fargo filed yet another foreclosure.

This time they stated they were not enforcing the note and were seeking only to foreclose on the mortgage. We moved to dismiss because the time limit to enforce the note had expired more than 11 years ago in 2014. Before a dismissal hearing, the Hawaiian Supreme Court issued its decision in Bank of New York Mellon v. White.

Even though Hawaii has long filed the rule that the mortgage follows the note, the court ruled that a mortgage can still be enforced after the note is no longer enforceable. Now in this third foreclosure lawsuit, the new financial institution is again refusing to provide discovery.

They argue that because the note is no longer enforceable, they do not have to respond to claims that the mortgage resulted from predatory lending. They want to enforce the mortgage while avoiding any review of how the loan is created. This bill restores the basic rule that people understand and has been the law and Hawaii since 1939.

If you can't enforce the debt, you should not be able to take the home. Without this fix, lenders can wait out the time limit on a note and still foreclose years later, shielded from scrutiny about how the loan was made. Please pass this bill to prevent more families from facing zombie mortgages like mine. Please don't defer it or kill it in committee. Thank you.

Thank you, Mr. Kanahele. Is there anyone else in person or online who'd like to testify on HB 2612?

Good afternoon. My name is Charles Prather. I submitted written testimony of behalf of the Collection Law Section. Yeah, we just stand on our testimony in opposition.

Okay, thank you. We have your testimony. Anyone else who'd like to testify? Members, any questions?

Question. Ask you a question real quick. So if a matter is timely filed under the six year statute of limitations, but is goes through a very long appeals process. If it's eventually dismissed without prejudice, do you have a window of time to refile even if the statute of limitations has passed?

No. I think at that point there's an argument that can be raised and I think it's an effective argument that the statute of limitations is closed and we're no longer able to pursue or the foreclosing mortgagee is no longer able to pursue foreclosure as a remedy. And I think that's part of the issue is, you know, these cases do take quite a bit of time. They can't go through an appeal process.

I don't want a speculative thing. I mean, this must have happened before. Have you tried an equitable tolling argument or is there any safe harbor provision that allows you to refile within a certain amount of time, even after the statute of limitations has passed if it was timely filed initially?

I think you can make an equitable tolling argument. You can also argue that if there's a subsequent missed payment, that's a new default, which allows you to refile. But with the current 20 year statute of limitations, I can tell you, typically the practice is six years has already elapsed. Then what will happen is new foreclosure action will be filed with the clarification that no personal money judgment's being sought and that they're only seeking to foreclose.

Okay, so you don't get any money more if the note is greater than the sale. But you could still, you are still going after the, at least the sale price of the foreclosed house. Is that compromise?

That's correct. We're still pursuing the foreclosure action. And if whatever is realized at the auction or confirmation of the sale is less than what is foreclosing mortgagee, then the foreclosing mortgagee in that case will concede that it's not entitled to pursue the borrower individually for the money judgment.

Do you have any precedence for the equitable? I mean, it's an argument that must have been made at some point, I would think. I'm just wondering how it's turned out in court.

Personally, I haven't pursued it. I'm obviously aware of the theory. But like I said, typically lenders don't pursue deficiency judgments. And so with the 20 year statute of limitations, what happens is they strictly pursue the remedy in waive any sort of deficiencies.

How long has it been 20 years?

Going back as far as 1904.

Can you actually come back up? I know you... In Ms. Isaki's written testimony, she talks about how if foreclosure can proceed after the note become delay becomes strategy rather than risk.

And in the examples you've given, mortgagees pursue a foreclosure before the statute of limitations, like, well before the statute of limitations, and then that is dragged out by the appeals process. But are you at all, do you at all share those concerns that this could...

This would encourage delay up until like the very end of the statute of limitations? Says a creditor can wait out the limitations period on the debt, generally six years, especially where the note is questionable, voidable, or difficult to prove, then proceed only against the home itself.

I think the fear is that if the statute of limitation remains to be 20 years, that, you know, some lender is going to wait 19 and a half to pursue foreclosure, and the reality is there's no incentive for the lender to do that.

And if, for whatever reason, the borrower feels like the lender has dragged out the process, it hasn't pursued the remedies, you know, this is a judicial foreclosure process where the borrower is welcome to show up in court, present any defenses, counterclaims, third party claims they feel is necessary to reduce the amount of debt that's being claimed by the lender.

So, you know, it's not just a case of the foreclosing mortgagee coming into the court, you know, at the 11th hour and saying we're owed all of this and just getting it. I mean, those amounts still have to be proved, and we still have to go through the, you know, the judicial process and deal with any defenses that are raised.

So I think the fear was not that. Not that they're going to wait 19 years to enforce the foreclosure. But that if the underlying note has any deficiencies that, just like the previous testifier said, they'd wait to file till year 7 or 8 and then try to sweep the deficiencies under the rug by not necessarily enforcing the underlying note, but by enforcing the mortgage and the underlying amount owed. So is there any water to that argument I guess?

I don't think so because this is kind of a separate standing issue when it comes to foreclosure cases. So as part of proving your standing as a foreclosing mortgagee, you have to show your ability to enforce the note. That you had possession, that it's endorsed in blank, or that's specially endorsed to you.

So even if you're just pursuing the foreclosure remedy and you've waived your deficiency judgment rights, you still have to show that you have the original that you're entitled to enforce. So waiting 7-8 years, say if the statute of limitations is six...

Show you're entitled to enforce after the statute of limitations is run up the note?

Because you still have to show that you're in possession of the original note.

Possession. But do you have to show your ability to enforce the note as well? Because how could you do that after the statute of limitations has passed?

Because the mortgage secures the note. So you have to show that you're in possession.

So you're enforcing it through the mortgage rather than enforcing the notice of breach of contract as...

As a personal liability. Yes.

Thank you. Question for Bianca. I just wanted to give you the opportunity to elaborate on whether you've seen any of these predatory practices here in Hawaii or maybe happening in other states that have an extended statute of limitations on foreclosures.

And honestly this is not my main area of law. I just got into it when I, I mean because of the equity issues involved. And yes, there has been predatory practices. I've seen, I've seen banks that, or lenders that played family off of each other.

Like, I mean like I, like I referred to my client who like they only borrowed $25,000, but like they didn't know what they were signing. And then it was like it was the debt was traded around for many years. We tried to find out what happened in those intervening years.

And I'll just say like, and some it's not the case necessarily that like people don't want to like have equity here. Like if someone only paid like $5,000 for a debt and now maybe some of these borrowers would pay that month, pay that back. But that's, but the banks, their processes are very clandestine.

And like we haven't, and I think they have to be accountable for that too. Because, and I mean, and I just want to make, I want to like react to one thing that the last testifier said, which was that I think he referred to a case like from 1910. Again, like, I mean the law has evolved in Hawaii since 1939 because that's when the Legislature changed.

So referring back to those cases pre-1939, like they're trying to join up to things that won't work except for the banks. So and I do agree with him that yes, you do need standing to enforce the note in order to also enforce the mortgage. But what they're trying to do is extend that period where they can like keep going after people for a foreclosure like past six years.

Like so the reason why you have that six year statute of limitation, like I said earlier, is kind of because there are these other considerations, like people pass away, like the evidence of fraud and that kind of thing falls away. And so that's why. So why give them, like this bill only helps the banks and all the people that were, that have, that have relied on the Hawaii is a lien theory state are kind of losing out for no reason.

Thank you, Bianca. Members, any other questions? Okay, moving on to HB 2459 relating to food and product. Oh, I'm sorry, I skipped one. HB 2404 relating to cooperative associations establishes a General Cooperative Associations Act, provide a unified, flexible legal framework for cooperatives to form for any lawful purpose.

First up is DCCA Business Registration Division offering comments

Ty Nohara DCCA Business Registration Division. We stand on our written testimony offering comments. Happy to answer any questions.

Thank you Alliance for Progressive Action in support.

Just FYI guys these microphones are okay, but if you're too far back, if you can't hear yourself coming out of the speakers above you, then it's not going to be heard anywhere else. So just a good rule of thumb

Enlivened Corporation in support on Zoom.

Aloha Aloha Chair, Vice Chair and Members of the Committee My name is Kelly Teamey. I'm the Director and co founder of the Enlivened Cooperative in Hilo and I'm also a co founder of the Hawaii Cooperative GUI. I am testifying in strong support of this Bill.

HB2404 cooperatives are collectively run businesses that are member-owned, member-controlled, and member-benefited, and for the last three and a half years, I've supported more than 20 cooperatives across five of our islands across all stages of the supply chain in agriculture and aquaculture, housing, energy and water.

In 2025 I helped co organize a first statewide cooperative gathering with more than 65 Kamaina from 15 established CO-ops and 20 emerging CO-ops. The demand for Cooperatives is real, it's growing and it's and it's and it's statewide. However, in spite of the demand, our current statutes have not kept up.

Chapter 421c is designed for consumer co-ops, which means that worker-owned, agricultural, producer, and multi-stakeholder must work around the statute's stated purpose use it. Legal professionals I've engaged with have repeatedly flagged concerns about forming non-consumer co-ops under the structure, adding confusion, risk, and cost for the communities that stand to benefit the most.

HB2404 addresses this by updating Chapter 421c to allow for the specific incorporation of worker-owned, producer, multi-stakeholder, and other cooperative types, not only consumer co-ops. This gives communities a clear, unified legal pathway to organize for any lawful purpose across our food system, housing, energy, and worker ownership.

There's a lot of research that shows that, and I've seen that co-ops keep wealth, jobs, resources, and decision-making in local hands. HB2404 provides a foundation our communities need. I respectfully urge you to pass this Bill. Thanks for this opportunity.

Thank you so much. Hawaii Co Op Hui in support

Aloha Chair, Vice Chair, Members of the Committee. My name is Keoni DeFranco, managing Director of Purple Maiʻa Foundation and co-founder of Hawaii Co-op Hui. As Kelly said, we've been doing a lot of work on Cooperatives. There's definitely growing demand. We have over 60 active Members and our hui as of last year. This year about 80.

And so this build came out of workshops with been doing and gatherings we've been doing. There has been a lot of legal insight that is not possible to create a work of cooperative right now. And so after spending time with the dcca we submitted an HD one.

I'm not sure that it made it onto the website in time, but happy to speak with the commissioner a little bit more and make sure what the way that we're approaching this makes sense but in general what we're doing follows an update in California.

And so that evolves our 421C Consumer Cooperative association to an overall cooperative association and therefore promoting the incorporation of worker Cooperatives, multi-stakeholders, and others as well. But we're seeing rising demand, happy to answer any questions.

Thank you. Hawaii Farmers Union United in support on zoom

Chair Vice Chair Committee Members Hunter Heaivilin here on behalf of the Hawaii Farmers Union which itself is a local chapter of the National Farmers Union, which little factoid is officially the Farmers Educational and Cooperative Union of America was its title when founded well over a century ago.

So Cooperatives have been a key piece of organizing in the agricultural community, the benefits of which are difficult to overstate. We stand in strong support of this Bill. Have provided a proposed amendment based on some feedback from some agency.

Feedback that I believe would streamline some of the rule changes and modifications while addressing some of the concerns that popped up in the myriad outreach that some previous testifiers have referenced.

I think a simple corollary is the current statute says something to the effect of you can have a consumer LLC, and we'd like to have a statute that just says you can have an LLC. Of course, replacing LLC with cooperative in that. Happy to answer any questions submitted, along with our testimony is the proposed HD1.

So Mahalo for the opportunity to testify and we hope we'll pass this measurement.

Thank you.

Can everyone make sure their phones are silenced? That's the second one that went off. Thank you.

Anyone else in person or on Zoom would like to testify. We also had 24 individuals submit testimony in support. Members, any questions? I have a quick question for Hawaii Co Op. Who can you explain the importance of having those different classifications of co ops under this general?

Sure. Yeah. So Cooperatives are member-owned businesses. So that can be consumers of a business, like a grocery store, Kukua Market is a good example of that. You can have a producer-owned cooperative like the Ulu cooperative which is a properties around the product production of Ulu themselves.

But right now there's no clear statute and way of incorporating a worker-owned cooperative for a multi-stakeholder. So the worker cooperative model would mean that the farms that are collectivizing around the production of their or the processing of their Ulu can now be owned by the workers themselves.

And to folks like us, that philosophy is the original intention of Cooperatives. Its ability for democratic one-member, one-state decision-making and inside of a business. And so I would say the state of Hawaii has actually never fully attempted the full philosophy of Cooperatives across our paa'aina.

As a Kanaka Maoli, this is a return to management stewardship, co stewardship of shared resources. The ability in which we were collectively ensuring that our water flowed from Auka to Makai. And so that is the way that our culture, you know, enforced its culture kind of by the original laws of this China.

It's bringing that philosophy back into the workplace. It's something that we should be also bringing back into schools. Collective decision-making around how we run businesses and also how we redistribute the surplus value. And so that's where we see a lot of exploitation in businesses right now.

A boss makes a tremendous amount of profit and they basically pay themselves a large, large bonus. And a worker cooperative, the member winners are able to then vote and decide on how that surplus value is redistributed between members and reinvested into the business.

Thank you so much. Any other questions Members?

So in our previous discussions you had mentioned that the more general HRS421c is able to be used to do a lot of the things that are being requested in this Bill and I believe in the HD1 version in testimony as well. Can you speak to what the previous testifier has said they want to do with co-ops? And is that possible under the existing statute?

Sure. So with reference to the proposed HD1, we have reviewed it and the current 421C. I believe there's nothing in there that would prohibit anyone from creating a worker co op or a multi state co op, because all the specifications would be written in the bylaws. So you could still do that in the bylaws.

I would only, I think to avoid any confusion in the title of 421C is called Consumer Cooperative Association. So deleting consumer.

And I think there's two other references to consumer within that statute would then really truly make it the general co op statute that I think really would provide all the means to have flexibility for any of these general co-ops.

Okay, so just for the lawyers, their lawyers, they can do it already and they just need to put into the bylaws. Is that DCCA's opinion? Thank you.

HB 2194 relating to lay or HB2194 HD1 relating to lay requires and establishes benchmarks for each state Executive agency to ensure that a certain percentage of layers. Oh, I'm sorry, scratch that. We're on HB 2459 HD1 relating to the Food and Product Innovation Network. This requires the Food and Product Innovation Network to integrate a coordinated food safety and regulatory framework.

First up is the State of Hawaii Department of Health in Support.

Good afternoon. Chair Matayoshi, Vice Chair Grandinetti and the Members of the Committee. My name is Michael Burke. I'm with the Hawaii State Department of Health, Food and Drug Branch. We submitted written testimony in support. Stand in our testimony and I'm available for questions. Thank you.

Thank you. Next up is Hawaii Community Development Authority offering comments in person.

Offering comments.

Next Agribusiness Development Corporation in support.

Good afternoon. Chair, Vice chair, Members of the Committee, first of all, I want to say thank you for the position that you gave us last year. Here she is, the Climate Resilient Food and Product Innovation Network manager. She's the person that's going to pull this all off. We stand in strong support.

This is incredibly important in order for for us to hit our food mandates. We're here for any questions. Thank you.

Is there anyone else in person or on ZOOM who'd like to testify? Seeing none. Members, any questions? No?

Okay, moving on now to HB2194H HD1 relating to lay requires and establishes benchmarks for each state Executive agency to ensure that a certain percentage of lay purchased by that Executive agency consists of lay made entirely of natural objects and plant materials grown, harvested and assembled in the state.

First up is Hawaii Department of Agriculture and Biosecurity in support.

Aloha, Chair, Vice chair, Members of the Committee, I'm Esther Reichert, the Pesticides Branch Manager on behalf of the Department of Agriculture and Biosecurity. We stand in support. We stand on our testimony in support. Thank you.

Thank you. State Procurement Office offering comments on Zoom.

Afternoon, Chair, Vice Chair, Members of the Committee, Bonnie Kahakui, Administrator, State Procurement Office will stand on our written testimony providing comments. Mahalo.

Thank you. Hawaiian Council in support.

Aloha Mai Madeline McCaig on behalf of Hawaiian Council, standing on our written testimony in strong support, Mahalo. Thank you.

Anyone else in person or on Zoom would like to testify? Seeing none. Members, any questions?

Moving on to HB 1880 HD1 relating to pesticides beginning January 12027 prohibits the use or application of a pesticide containing 1,3 dichloropropene as an active ingredient. Hawaii Department of Agriculture and Biosecurity Offering Comments.

Chair, Vice Chair, Members of the Committee, once again, I'm Esther Reichert with Pesticides Branch Manager, on behalf of the Department of Agriculture Biosecurity. We stand on our written testimony offering comments, and I'm available for questions.

Thank you Hawaii Alliance for Progressive Action in support.

Good afternoon Chair Vice Chair Members of the Committee HAPA is in strong support of this Bill. So since Pursuant to Act 45 which was passed in 2018, RUP data has been mandated to be reported since 2019.

Since then HAPA has actually ue put and analyzed the RUP available data from 2019 through 2021 while the Department of Agriculture and Biosecurity does county-wide summaries by active ingredient.

We've been able to actually examine the data parcel by parcel or by TMK and actually map the data and what we have found over three years of more granular analysis is that and then also statewide data or the countywide summaries is that consistently fumigants are the Most heavily used RUP across the state and by large T loan or 1 3D is the most heavily used RDP in the state.

However it is only used by one to two applicants and I believe nowadays it's only one applicant that uses it. It is a known carcinogen, it's highly prone to drift. The most heavy application occurs between Waialua to Wahiawa. There has been some heavy use in upcountry Maui as well.

The use of this particular RUP poses poses both acute short term impacts but also long term chronic impacts.

We know in addition to being applied over£100,000 per year for all the years that we have been reported to date, it's also applied on a very frequent basis over half the days a year, a third of the days a year.

And so in terms of acute exposures we can see things like skin irritation, respiratory issues, nausea, headache and extreme cases death. The long term chronic exposures however are more likely to lead to things like cancers. This is currently banned in 40 other countries. Happy to answer any questions about our research. Thank you.

Thank you. Hawaii Public Health Institute in support.

Aloha Chair, Vice Chair and Committee Members. I'm Kris Coffield from the Hawaii Public Health Institute and we're in support of this Bill as well. When we know That a chemical causes harm. We can't wait to take action. And the science on this is clear.

As you just heard, the active ingredient in Telome is classified by the EPA, the National Toxicology Program and the International Agency for Research on Cancer as a probable or possible human carcinogen.

It's a volatile fumigant, meaning that when it becomes a gas, it doesn't stay where it's applied, it moves through the air, exposing farm workers, families and especially our keiki to a chemical that's been linked to respiratory illness, organ damage and long term cancer risk. And in Hawaii, where schools, homes are, agricultural fields exist side by side.

That exposure is not abstract, it is real. It is preventable in public health. It teaches us that prevention is essential because it is always the most vulnerable communities, the most rural communities in our keiki who bear the greatest burden of environmental exposure. So from our perspective, this Bill really isn't even just about science. It's about stewardship.

It's about stewardship of our land, our water, our food supply and the truly regenerative practices that nurture our next generation's fundamental right to health. When a substance is known to cause cancer and respiratory harm and safer alternatives exist, the only ethical choice is to put people before profit and take action to protect the lands that sustain us. Thank you so much.

Thank you. Dole Food Company, Hawaii in opposition.

Yes, I'm Daniel Nellis from Dole Food Company and we're strongly in opposition and I did submit a written testimony. We follow all the EPA regulations from sourcing it to applying it to follow up afterwards. Annual training for all the people who work with it. Department of Agriculture and Biosecurity certified pesticide applicator licenses for our managers and supervisors.

This is not a product that can be replaced. Without Talone, we have no other usable nematicide that will allow us to do commercial pineapple. We have 200 people that work out there and that's 200 families. And at the very least we need to have much more time to find an alternative.

The only attempt to do organic large-scale pineapple farming was Maui land and pineapple about 10, 12 years ago. And because of nematodes, they gave up. Nematodes attack the root system which results in a plant that is failing. Small fruit, uneven-looking fruit, unmarketable fruit. And our market is Hawaii.

If we go out, then anybody who wants pineapple in Hawaii will be getting it from a foreign country where they use much less regulated. They don't have the US down into foreign countries.

So we're following all the regulations, and we ask that this Bill does not pass and at the very least that if it does, it should have an amendment that suggests when a viable alternative is on the market. This is the only one registered for us for pineapple, for nematode fumigant.

And we put it in 20 inches deep, we cover it, we don't touch it for seven days, all per the label. And the EPA scientists are the scientists who have done all the work on determining what's safe for the US and what's not. We're nowhere near schools, we're nowhere near houses.

And I just want to remind you that we'll be nowhere near producing pineapple in Hawaii if we are forced to just give up on Tilon on January 27th. We apply it once in three years. Thank you. Just so you know, only once every three years does it apply? Yes, it's a continuous.

Because every week we're planting, but we don't continuously apply it in the life of the crop.

Thank you. Klayton Kubo, individual and support on zoom.

Klayton Kubo, Waimea, Kauai. I need to remind you guys, back in the year of 2023, increased fines for repeat offenders of pesticide violations became an act. I'm still waiting on the Department of Agriculture to implement that, but in a way, like the dole guy just said, we follow all guidelines. We follow the label is the law

And this and that. Well, I tell you what, you guys better go check that. The increased fines. That one there was 80-something pages, if I'm not mistaken. Correct me if I'm wrong, with 80-something pages, okay? Anybody can say whatever they want, but the proof is in that document. I've been waiting for how long? Please.

Sir, can we testify on the merits of the Bill, please? Thank you.

What are you doing? I try to make sense to you guys so you guys understand.

Mr. Kubo. Is there anyone else in person or on Zoom would like to take testify on this measure? Please introduce yourself.

Aloha. Keoni DeFranco, Purple Mai'a Foundation. I stand in strong support of this measure. Don't believe we should be supporting agricultural practices for imported crops that sacrifice the health of our water, our land and our Ohana.

Thank you. Anyone else who'd like to testify on this measure? Seeing none. Members, any questions?

It seems like you collected a lot of data about this particular use of carcin. But when it enters our, you know, it doesn't just stay, I guess, in the dirt where they put it 20 inches. It does when it rains, does it move into the streams and then ultimately into the near shore waters?

Yeah. So most of the studies that we've been looking at come from California where they do much more extensive drift monitoring through their Department of Pesticides Regulation. And there have been many incidents where with multiple fumigants.

But this one in particular, they have found it's drifted because most fumigants are highly volatile and prone to drift even when tarped. They found off target drift up to seven miles of Hermkole at harmful rates. Yeah.

So that would lead to nearshore waters.

It's also a known water contaminant as well.

Okay. Because I know like Mr. Kubo was earlier on another Committee, but basically it was about protecting our aquatic fish life, you know, the endangered species. And so it feels like it has greater reach than just a school near a field.

I think the problem with a lot of the regulatory framework is it often it often looks specifically more at acute harm rather than long term chronic exposures. And so often that's not incorporated. And so that's why we see chemicals that are registered and allowed in the market often get banned after decades.

Long studies that show long term chronic exposures actually do cause harm because that's not accounted for in the initial testing.

I have a quick question for you. Yeah. What's going on with 2022? Is that a reporting issue? There's zero pounds applied in the state.

I'm not sure. There are a lot of issues with the reporting that we found. For example, we found many instances where we couldn't actually gis map the data because it wasn't attributed to a tmk.

There was pretty extensive work done to actually like a lot of the, you know, just issues with the reporting being, you know, maybe missing a digit in the tmk. So there's a lot of just kind of like human error as well. So I'm not sure if that was an error in reporting.

It's hard to know from our analysis.

Thank you. Do you guys come up for a sec? You said that you apply this 20 inches down. Is there any chance for it to get into the air, for drift through the air when you apply that like that?

If, if you don't seal the soil properly. But we do seal the soil properly with the equipment called the cult, the packer.

And is there a half life or some kind of time where the T alone would break down or something?

I mean, I'm not sure. Yeah, I'm not certain about that. I do know that it does not last into the next crop. The nematode population comes back. Our crop is 18 months and followed by a second crop 14 months. Then we knock down and we fallow for approximately a year.

And then we disturb and plow again. And at that point we have to treat for nematodes again.

Okay, and one for Department of Ag and Biosecurity. What kind of alternatives are there out there for. Pronounce it wrong.

Tilon, so I haven't looked into the alternatives. As mentioned before, there were only one to two users right now, as far as what they're using it for and what crop and how they're using it would be up to them to determine what product they want to use for their crop.

We can provide a list that will, depending on the situation of what they want to use the product for.

Let me ask other people too. Is there an alternative that's safer? I mean, I don't want an alternative that's worse. Is there an alternative that's safer that's on the market right now? What do the other 40 countries use?

That's a really good question. I'm not sure, but I know that there was another conventional pineapple grower that has transitioned away from using it. So they might be. I'm not sure what they've transitioned to using, But I know one thing about fumigants in general is they tend to sterilize the soil.

So one of the challenges can be just they kill a lot of the beneficial organisms in the soil as well. So I'm not sure, you know, I know in like, more regenerative systems, it's like more about building soil health.

So people will use like rotations of other crops will help discourage nematodes, but I'm not sure if that would be viable in a conventional. Thank you.

Chair. May I?

Sure, yeah.

All of the agrochemicals that are used have to be specifically approved for a crop. Taylone is the only fumigant approved for pineapple that's available today. And again, we're always looking to see if manufacturers will come up with something else. Less toxic, cheaper. There's nothing on the market for us.

Is there anything in the pipe?

Excuse me?

Is there anything in the pipe?

Not at the moment, but we keep talking to the manufacturers. Unfortunately, pineapple in Hawaii is a small industry comp compared to the worldwide agrichemical use industry. So they're not motivated, although we keep prompting them. And many countries do not need to fumigate from nematicide. It is a geographical thing. Thank you.

Thank you. Just wanted to note 45 other individuals submitted written testimony in support. Now moving on to HB 2284, HD 1, relating to energy assistance. Establishes the Hawaii Home Energy Assistance Program within the Department of Human Services to assist qualifying households in paying their energy bills. Department of Human Services in support.

Elisa Furtado-Fischer, Financial Assistance Program Administrator. The department stands on our written testimony. Here for any questions.

Thank you. DCCA Division of Consumer Advocacy in support.

Afternoon, Chair, Vice Chair, Members of the Committee. Michael Angelo for the Division of Consumer Advocacy. Stand on our testimony in strong support. Available for questions.

Thank you. Public Utilities Commission in support.

Good afternoon, Chair, Vice Chair, Members of the Committee. Ashley Norman on behalf of the Public Utilities Commission. We stand on our written testimony in support. I'm available for any questions.

Thank you. Catholic Charities Hawaii in support on Zoom.

Aloha, Chair and Vice Chair. I'm Betty Lou Larson from Catholic Charities. We strongly support this bill. We really have a concern for our kupuna, our ALICE families that we work with. They're particularly struggling and electricity is one of the basic needs that they're struggling with to survive. We see that by 2023, there'd been a huge increase in disconnections.

And that's just not what should be happening, people losing their electricity. In addition, our very low income people are paying an extremely high percentage. Those below poverty line are paying maybe 20% of their income on electricity. So we really support this bill and hope that you will move it forward. Thank you for listening to it.

Thank you. Anyone else in person or on Zoom who would like to testify? Seeing none. Questions?

Is PUC here? Is there already a program in place either through HECO or some other means to assist people who can't or have trouble paying their electricity bill?

Well, if you're referring to other disconnections related programs, that's...

Any kind of subsidy. I'm just kind of curious what's out there.

Sure. I mean, well, as far as bill relief, I know there's like a special needs program that HECO overseas as an example for like medical support and medical needs. There is energy assistance support available through Hawaii Energy, which is an energy efficiency program that's overseen by the commission that is in service of HECO's customers. There are... There's the LIHEAP program, which of course is at a federal level. And then this program of course is meant to support at a state level.

Are they effective?

It's my understanding that yes, they are effective. But we're looking for new and innovative ways to also support customers. Like for instance, the commission right now is exploring a long list of initiatives within this disconnections policy realm through our disconnections docket. So it's, you know, examining ways that this type of bill relief could be improved for the energy...

My question was actually bad. It's my fault. It's not that they're not effective because I mean money getting to people who need it, it's going to help them. But how easy is it to identify who needs help and how much administrative burden is associated with those programs, if you know?

How are they determined in terms of need? Is that your question?

Need or just finding people that, I mean sometimes we'll, you know, set up a state program and you have to get the word out and it's difficult to get people to even apply. Are these programs effective in that way?

I mean, I guess I can only speak to the Hawaii Energy Program specifically because that's something that the commission oversees directly and is much more involved in. And I would certainly defer to HECO to address any of their specific programs. But yeah, I mean there's extensive outreach that's an involved with the Hawaii Energy Program.

But community level, customer level, they definitely year over year are providing customers direct benefits both with their like trade up programs and energy assistance at a community level, when they actually get in, can offer like an entire neighborhood an upgrade program. So I mean, I think they have been very effective both from like a marketing standpoint as well as community direct engagement.

Any other questions, Members? Okay. Moving on to HB 1969, HD 1, relating to colorectal cancer. Requires and appropriates funds for the Department of Human Services to develop and implement a public assistance program offering state funded colorectal screenings for certain persons. Department of Health offering comments.

Good afternoon, Chair and Vice Chair, Members of the Committee. I'm Lola Irvin representing the Department of Health. So the Department of Health offers comments. We do have public health data that shows that for age 45 to 54... We have new data, by the way, 2024 data that we just recently published.

53% of those who qualify at age 45 to 54 received colorectal cancer screening. Overall, in 2024, 70% of people who were eligible received screening. And so from a public health perspective, we know that effective detection is important. And so in March we will be releasing a new colorectal cancer screening campaign. The first time we've ever done that as a messaging campaign.

And we're letting primary care physicians know, knowing that they're the first to talk to their patients about colorectal cancer screening. And so we will be doing that and hopefully encouraging those who are 45 years and older to get screened. Because colorectal cancer screen, colorectal cancer is now the leading cause of death for those under age 50. And so it is important, and so we appreciate the opportunity to provide testimony.

Thank you. Department of Human Services offering comments.

Aloha, Chair, Vice Chair, Members of the Committee. I'm Meredith Nichols on behalf of the Department of Human Services. We stand on our testimony, and I'm here for any questions.

Thank you. American Cancer Society Cancer Action Network in support.

Thank you. Aloha, Chair, Vice Chair, and Committee Member. Cynthia Au on behalf of American Cancer Society Cancer Action Network or ACS CAN. We're testifying in strong support with amendments to this measure. Mahalo for considering this very important bill. Colorectal cancer is one of the most preventable and treatable cancers when caught early.

Yet it remains the second leading cause of cancer death in Hawaii for men and women combined. These deaths are preventable with timely screening. Cost remains one of the most significant barriers. Everyone in Hawaii should have equitable access to preventive care.

Uninsured adults are far more likely to be diagnosed at late stages when treatment is more complex, less effective, and expensive, often exceeding $100,000. As Hawaii anticipates an increase in uninsured adults, establishing a public assistance program to ensure access to these screenings become even more critical to prevent cancer, catch it early, and reduce avoidable health care costs.

Department of Health just talked about the where 50 and under is now, colorectal cancer is now like the leading cause of cancer deaths. Last week, actor James Van Der Beek passed away at the age of 48 from colorectal cancer, a tragic and public reminder that this disease is striking younger adults at alarming rates rates.

His story emphasizes why Hawaii must expand access to early screening and ensure no one gets delayed due to cost or lack of insurance. We also strongly support codifying federal guidance requiring no cost follow up colonoscopies after a positive stool based test.

This ensures that patients can complete screening process without financial barriers. Our recommended amendments align Hawaii laws to with existing federal ACA protections. We respectfully urge the Legislature to support these amendments and also fund the public assistance program. Thank you.

Thank you. Bob Toyofuku, individual in support in person.

Mr. Chairman and Madam Vice Chair. I'm Bob Toyofuku. Excuse me. Bob Toyofuku testifying in support of this measure. And the reason I'm here is personal in the sense that my father in law had colon cancer and they caught it early and he survived. I mean, he passed away at age 97 a few years back.

But currently my wife was diagnosed with colon cancer in August, and so she's just finishing up her therapy. I wanted to emphasize the importance, and others have said this as well, the importance of detecting it early so that it doesn't spread.

And lastly, I know that it's very difficult for the Legislature and legislators to pass something for an appropriation that is more preventative in nature, but this will eventually save lives and save costs as well. Thank you very much for allowing me to testify.

Thank you so much. Anyone else in person or on Zoom who would like to testify? 12 other individuals submitted testimony in support. Members, any questions?

American Cancer Society. Where did you go? You said that this is... You mentioned the ACA in your testimony. You seem to imply that the two amendments that you were proposing for a follow of colonoscopy to be included with insurance with no copay was already required under federal laws. Am I misreading that?

So In January of 2022, the federal tri agencies, the Department of Labor, Department of Health and Human Services, and the Department of Treasury issued clarifying guidance confirming that private insurance plans must cover follow up colonoscopies after a positive stool based test without cost sharing after a positive... I'm sorry. Cost sharing after a positive stool based test. This ensures that once the patient receives an abnormal non-invasive screening result, they are not burdened with out of pocket costs.

Which is great, don't get me wrong. But why don't, If it's already a thing, why do we need to put it in our statutes?

Just to codify into state law. Just to make sure that they're not, they're following the federal guidelines.

Bust them in federal though? If we, I mean they already have to do this. Right. I'm just a little confused why we're putting it here too.

I'm... That's... Well, yeah. I'm not sure if the insurance, anyone from the insurance companies here, but right now we do have...

Okay, Jack.

Yeah. Right now to my knowledge there is copay or, you know, whatever the, when a patient goes in, they have to pay like copay for it. So we're just making sure that in...

So copay in violation of federal law?

Well, if you put it in state statute wouldn't be. I mean. Yeah.

I just want to comment that I think the bigger concern for us is that there'll be a lot of people who are on the Affordable Care Act that will leave their insurance. They'll be no longer insured in this age group because of the tax credits issue that Congress has failed to address. So I think we may have a population of people that will not have insurance access, period. We'll have to be thinking about that.

That's fair. But I think, I mean correct me if I'm wrong, but the proposals that you're making are for insurance to cover it. So if you're uninsured, this wouldn't apply anyway. Right? The amendments that you're proposing.

So yeah, there's like two separate asks for the bill. Right. One is for the public assistance program and the second one is just to codify what's currently federally required.

But if you don't have insurance then it's not like... If you test positive but you don't have insurance, there's nothing to cover the follow up even though we put it into statute. Is that right?

So if I tested positive for colon cancer and then I needed a follow up colonoscopy. Even if we made the changes that you are proposing and even though it's present in federal statute as well, if I don't have insurance, would that colonoscopy be covered by some other means?

No, it wouldn't. So. Right. So for the public assistance program we're trying to catch it early. That's why it's preventable. Right. Because if you can catch it, if they can take the positive... Or I mean take the test and then it shows up as positive, then they know that there's something wrong and then they can get assistance for it.

Thank you. Actually I don't know if this is going to be for DHS or DOH, but I kind of wish insurance... Is insurance commission still here? Do you guys want to weigh in? How will this... Oh, I guess it's already federal law. So it's not... I just want to verify that if we were to make these changes to make it so that the colonoscopy after a positive test is covered with no copay, there's not going to be any risk to insurers leaving the market or raising premiums or anything.

So. Good afternoon. Great question. Justin Chu for the Insurance Division. So with respect to the issue just raised, I believe, I'm not entirely certain, but I believe that what the Cancer Society is referring to is the federal FAQs, which is a tri agency recommendations. So those are sub regulatory guidance. They're not actually law.

So it's a recommendation of how, it's an explanation of how the federal agencies will enforce the law, but it's not actually a federal regulation. And then so there's concern also that. So in the previous version of the bill, we were concerned that the statute referenced coverage, mandated coverage to the FAQs.

Our concern was that those FAQs can change without federal rulemaking. They can go up, they can go down based on the administration that's in charge. They can issue a new FAQ and create confusion in terms of what the coverage would be specifically as it relates to, like... It, you know, the preventive service is covered.

So the question is if, like, there's a colon cancer screening and then they find a polyp, would the removal also counted as the preventive care. And one of the FAQs says that it should be. But again, that's, it's not just a federal regulation, it's a FAQ.

Okay, thank you.

Moving on to the next measure. HB 2458, HD 1, relating to surveillance pricing. Prohibits retailers from using surveillance pricing in the sale of food that is sold or qualifies to be sold as part of the federal SNAP or Special Supplemental Nutrition Program for Women, Infants, and Children. State Department of Human Services offering comments.

Good afternoon, Chair, Vice Chair, and Committee. Ginet Hayes on behalf of the Department of Human Services. We stand on our testimony and are available for questions.

Thank you. DCCA Office of Consumer Protection offering comments.

Good afternoon. Radji Tolentino on behalf of Office of Consumer Protection. We will stand on our written testimony offering comments.

Thank you. Hawaii Public Health Institute in support.

Aloha again, Chair, Vice Chair, and Committee Members. Kris Coffield with the Hawaii Public Health Institute. We're in support of this bill. We're all familiar with those situations where Uber costs $10 and then you wait 10 minutes and it costs 25. So imagine that but with SNAP and WIC. That's essentially what surveillance pricing is.

Surveillance pricing allows companies to set prices based on personal information, purchasing history, browsing behavior, demographic data, what's left in your cart online. And it allows them to charge different consumers different prices for the same products.

There's a study that came out from Consumer Report that showed that there was a variation of as much as 23% for different consumers on the same goods. There's also been studies that show, specifically with regard to SNAP, with regard to programs like SNAP, that consumer advocates have found that this is happening when SNAP users most need it.

So, for example, at the beginning of the month when SNAP cards are fulfilled or at the end of the month when hunger needs are most acute, it can escalate when there's the urgency of meeting those basic needs.

Also, we want to note that this not only does it, you know, implicate, you know, have implications for financial stability and predictability of families. But this also corrupts our social safety net and our ability to allocate resources efficiently, which is distorted by these artificial algorithmic price fluctuations.

We're trying to make sure the dollars are received by families in a way that's predictable, both for the local families, working families, and for the state itself as we do our accounting. So we see this as a predatory practice, and we hope that you will move this bill forward to rein it in. Thank you so much.

Thank you. Hawaii Children's Action Network Speaks in support.

Aloha, Chair, Vice Chair, Representative Iwamoto. We support this bill because, first of all, SNAP and WIC are crucial to our state's families. More than half of SNAP recipients in Hawaii are in families with children, and nearly half of Hawaii is pregnant and postpartum women and children under the age of five are eligible for WIC food assistance.

Like Kris said, there have been studies coming out showing that this surveillance pricing is predatory. That depending on where you live, the time of day, you know, the prices go up and down. This is a special problem for neighbor island families.

We have the highest cost of living already, and a lot of neighbor island families or those in rural areas here in Oahu don't have a whole lot of alternatives. They would be especially vulnerable to this kind of predatory pricing that would worsen the affordability crisis for our families here. So we ask you to pass this bill. Thank you.

Thank you. Anyone else in person or on Zoom who would like to testify?

Good afternoon, Chair, Vice Chair, Members of the Committee. Daniela Spoto with Hawaii Appleseed. Thank you for taking my testimony in person. I wanted to add to what other folks have already said. We are in support of this bill. Hawaii is already experiencing the highest grocery cost in the in the entire nation of any other state.

And this affordability crisis that we're all collectively experiencing, whether we're on SNAP or not, has led to one in three families struggling to afford to put enough food on the table. Other folks have already mentioned that this is a predatory corporate practice. It's already rampant across other industries. It has no place in our food industry.

And gouging prices based on things like the time of day, time of month, demand, or personal data is an egregious overreach of corporate power that must be stopped before it becomes the norm. Once it becomes the norm, it's going to be too late. So we really appreciate the opportunity to testify and hope that this bill passes. Thank you.

Anyone else who would like to testify?

Chair, Vice Chair, Member Iwamoto. HAPA would like to stand on our testimony in support. Thank you.

Any other testifiers? Members, any questions?

I have a question for DHS. So in your testimony, you seem to say that doing this for just SNAP might be a violation of federal law by treating SNAP pricing differently than other pricing.

So for SNAP retailers, they are under the jurisdiction for food and nutrition service as far as their retail practice. They have to agree to all the conditions for them to be able to accept SNAP as a form of payment, and they're subject to equal treatment rules.

So any of the pricing that they offer for any of the purchases have to be equal to what a usual cash purchase would be. So if the egg price is going to be, let's say, $5.99 for dozen eggs, it has to be the same cost for a SNAP recipient versus a person paying cash for that same purchase. So that's all subject to that retailer as a condition of their agreement with.

So if a grocery store accepts SNAP, and eggs are part of SNAP, then they couldn't use surveillance pricing to alter the price of eggs for someone not on SNAP, because they'd have to keep it consistent with everyone on SNAP already.

Correct. So if I go to the cash register and I'm purchasing with SNAP, and you're behind me, and you're buying the same product and you're paying cash, the cost amount should be the same in terms of what they have.

Surveillance prices is effectively not allowed for SNAP products already, is what you're saying? If the grocery store abides by the SNAP...

That would be my understanding. Yes. The retailer cannot adjust the pricing based on my SNAP purchase versus someone else's cash purchase.

Gotcha. Thank you. DCCA, too. Why no loyalty program or why do you want to get rid of the loyalty programs?

We raised a concern about loyalty programs and surveillance pricing because these programs collect a lot of information about customers and this information uses individualized pricing.

So it's privacy concerns. It's not cost concerns here. It's privacy concerns, not cost concerns is what you're saying.

Well, no. Because they have this information, they can individualize the pricing for. Like when you have your Maika'i card or whatever, they know how you shop. So they know you shop this way, they might increase the price pricing for you. So.

But, you know, with that being said, we did appreciate the part in the statute that says that loyalty programs terms must be applied consistently and not be individualized for consumers. We're okay with that.

So you're okay with the loyalty language right now?

We just want to be sure that they don't practice this way of pricing.

Yeah, I think if they did, it would be...

With Delta Airlines. Yeah.

Literally violating the purpose of the bill. Right. Okay. Thank you.

Thank you. Any other questions? Okay.

Moving on to HB 1546, HD 1, relating to health insurance. This bill establishes a three year health coverage continuity pilot program within the Department of Human Services in consultation with DCCA to assist individuals who have lost Medicaid health insurance coverage and lack access to other health insurance options. DCCA Insurance Division offering comments.

Good afternoon, Chair, Vice Chair, Members of the Committee. You have our written comments, but just to summarize. You know, we're ready to support the DHS to implement the pilot program.

Regarding the first group, we note that this group, our understanding is that they're for individuals who have income down or have gotten higher than Medicaid but yet are available for advanced premium tax credits. We just note that the ability to enroll in marketplace silver plans is controlled by CMS.

So we're just setting expectations that, even if they do no longer qualify for Medicaid and are eligible for the silver plans, that determination would be made by CMS. Second, the second group is, from what we understand, is those who lost Medicaid due to the community engagement requirements or verification requirements.

We just note that the deductibles for bronze and catastrophic plans are very high. They average about $6,700 in deductible for the bronze plans and 10,600. So they're quite high before health insurance starts picking up the bill.

And then finally we just ask for clarity for the term preventive care, which is the $1,000 substitution is to be used on. Currently, you know, bronze and catastrophic plans still are EHV plans under the Affordable Care Act, meaning they must cover preventive costs, preventive care services at no cost sharing. So we're just asking for clarity about what that thousand dollars is to be used for.

Thank you. State Health Planning and Development Agency in support with comments.

Aloha, Chair, Vice Chair, and Member. Jack Lewin, SHPDA. We support this program. We think it's great to start preparing now for an increase in the numbers of uninsured persons in relationship to the big not so beautiful bill, HR 1.

And it makes sense. We would just comment that back in 1990, the state health insurance plan the enacted and provided very, very low cost insurance to citizens here. We, our Health Day Advisory Council estimates we have about 50,000 uninsured persons now in the state.

We expect possibly 40,000 more uninsured persons due to the big not so beautiful bill. So I just like to keep in mind that, you know, given this could be cost hundreds of millions of dollars. It's a great program. We'd like to see it, like to have it be fully covered.

Insurance even with Medicaid is, you know, really on the low side. Three to $5,000 a year per person, and for more in the Obamacare exchanges. So we got to think about the how much money that would be if we want to provide coverage for people who need it.

We may want to be rethinking some of the ideas of just providing prevention services and primary care service, full prevention. They would have their colonoscopy or their mammogram. But that's only, when you average it out over a big population, $300 a year. And primary care is maybe less than $500 a year.

So we can provide, you know, lower cost insurance and most of the care we need and work with the hospitals on essential care like labor and delivery. So just want to think about how the state responds to this. Money is an issue. Thank you very much.

Thank you. Department of Human Services offering comments.

Aloha, Chair, Vice Chair, Members of the Committee. Meredith Nichols on behalf of the Department of Human Services. We're going to stand on our written testimony. But I also wanted to just appreciate the really good intent of this bill.

We share the legislators' concern about the impact that both HR 1 requirements that will change the way Medicaid does its eligibility, causing many more people to have to do their renewals once every six months instead of annually. That would be for adult, non-disabled population.

So that's a doubling of the amount of time people will have to renew their eligibility, which could cause people to fall off of coverage. Combined with the community engagement and work requirements, we estimate that between 19,000 and 38,000 adults could lose coverage as a result of those requirements We also know...

So there are multiple issues converging. Right. We also know that on the federally facilitated marketplace side, that the enhanced premium tax credits did not get extended at the end of the year, which made coverage on the marketplace far more expensive for most people who get their insurance there.

Hawaii has about 24,000 people who get their insurance there. We're still, we don't know yet how many people have not been able to continue. Kaiser and HMSA are two insurers on the marketplace. They receive that information directly. So they'll be able to let us know sooner rather than later what that's looking like.

But where we understand the problem, the problem is people will be without insurance. And so I think this bill is attempting to find safe harbor for people, find coverage for people. I just wanted to acknowledge that. And I'm here if you have any questions. Mahalo.

Thank you. Catholic Charities Hawaii in support on Zoom.

Aloha, Chair, Vice Chair, Members of the Committee. I'm Betty Lou Larson for Catholic Charities Hawaii. We just want to express our thanks to the Legislature for being proactive to looking at this issue. And it's going to be a huge impact on so many thousands of people, as just been expressed. So, you know, we're not a health care expert or health insurance expert, but we know that we have to do something.

So we appreciate looking at this for the people who will fall off, not only for their personal health care and the health care of the family. Whether they're workers or, you know, people who are homeless or kupuna. But also what the impact will be on our health care system if you have people without health care, again, having extreme chronic illnesses, having serious illnesses that have to receive care, but that will not be reimbursed for us.

So that can have a huge impact on our, not only on our rural health care is already struggling, but on all healthcare in Hawaii. So we appreciate that you're looking for that vital safety net for these Medicare and Medicaid people, and we support your intent totally. Thank you very much for hearing the bill and working on this issue.

Thank you. Is there anyone else in person or on Zoom who would like to testify on this measure? We had 31 individuals submit testimony in support and one in opposition. Members, any questions? For SHPDA. For, maybe for my own education, when in your testimony you talk about other approaches that might be considered, would you mind elaborating briefly?

Happy to. Obviously, we'd prefer to have full coverage for people, if we can afford to do that, who have lost coverage. The cost for that could be prohibitive for the state. Thinking about that. Back in 1990 through the subsequent 10 years, we had something called the State Health Insurance Plan.

We actually worked on an arrangement with hospitals, even though we cut the inpatient coverage back to three days per beneficiary per year, which allowed for labor and delivery and appendicitis and most orthopedic injuries. But we also paid for the emergency department visits that were legitimate and several of the upfront costs.

So hospitals were not losing money on this whole thing. And then we provided all the primary care and all the prevention to the population. The interesting thing was that for the people who are now the exchange folks for the Affordable Care Act, they paid their own premiums in this program back in those days.

Indicating that they will pay. Those folks will pay something. So I just wanted to bring this kind of an creative idea up to you all. If we come to a place where we don't think we can afford to go full coverage, there may be some options that could be fairly successful.

Rep Marten.

Okay. For the Department of Human Services. Thank you for being here with us. So I see in your testimony that you feel that this, the current draft of this bill kind of has two tracks. One for people who qualify for that federal subsidy, and you have a current program that does that for immigrants that don't qualify otherwise. And you say you could expand that.

But the other track, which is the one that we've been discussing, that has, you know, basically a straight up subsidy to do preventive care for people with a high deductible plan. You feel that that program, setting that up would be too time consuming for you at this time. And if so, like, what do you recommend instead for those people?

It's a very good question. And again, we appreciate the need. This is just our communicating transparently that we don't have a program that's similar to that right now. We don't have the experience in the Department of Human Services.

I know there's a lot of language in the bill that I would turn to our friends from the DCCA to help in terms of, you know, proper insurance language and backing. To stand up reimbursement, a pool of $1,000 per person to be used for preventative care.

There would be, I think, a lot of definitions that would have to be worked out. And so it's not that it's just a lot of work, because we're here to do the work on behalf of the people. It's more the complexity and timing. How would this work? How do we set it up? What resources do we have?

I think we also are very concerned with the fact that we know we're already facing HR 1 complications, and having to do a full system overhaul for Med-QUEST to change our eligibility criteria to include volunteer time, to include tracking people's work hours to make sure they're at 80 for the month.

So we know that with the pool of people we have, we're really tapped out. And so it's not that this is not a worthy idea. It's just being realistic about how would we go about implementing this. What more would we need in order to do something like this?

Okay. Do you think that the collaboration with other agencies within DHS would be helpful? I'm thinking like, DBEDT... Not DBEDT. BESSD is in the business of paying for people's bills through some of their programs. Right? Of, you know, providing direct payments to providers for, you know, housing, utilities, things like that. And this could be instead to healthcare providers. I wonder if there is that expertise there.

I'm just, you know, I understand your constraints. As you know, I'm very sensitive and want to help with those. But at the same time, I don't see how else to help this group if we don't go ahead and try to set up a program. And I just wonder if you think about BESSD being a partner in that and having those that practice already of providing financial payments on behalf of people.

I appreciate that idea. I think it's worthwhile for us to take a look at what might be possible in that way. Yeah.

Can we just put a thousand bucks for them in a health savings account or even just pay... What's the difference in cost between a bronze and silver plan?

It fully depends on your age, on your income. So the plans don't have really exact pricing. It's a matrix. The older you are, the more expensive your plan is. The wealthier you are, the fewer amount of subsidies you have.

So from what I've been reading, I mean, silver plans tend to include more preventive care. I mean, could the thousand dollars be just used as an option to bridge the gap between bronze and silver instead and not have to deal with a lot of the paperwork, administrative burden.

I think that the costs are quite a bit larger. The difference in cost.

Oh, yeah. I'm not saying you would totally close the gap. But if it's that or nothing, if you guys can't handle the plan anyway and implement it, then maybe the money would be better spent trying to get people into the silver plan by partial subsidy. I mean, are you telling us that you can't do that?

No, no. Not at all. You know, not at all. What I would say is, what adds to the complexity of this is our lack of control over the federally facilitated marketplace. So they have an open enrollment period that goes from November, and it ends in January.

And then it stays closed for the rest of the year. The only way you have entry to the marketplace is if you qualify for a special enrollment period. So for people who may have already purchased bronze plans, they don't necessarily have that access to buy up to a silver level.

This was all happening at the same time as that all those critical debates were happening in Washington, D.C. to push the need to extend the enhanced credits. That was the real ticking time clock. Because the marketplace, it's not like Med-QUEST. Med-QUEST, we are open year round. You can apply any day of the week, 365 days a year. That is not true of the federally facilitated marketplace.

There's a distinct open enrollment period for the plan year, and then it's locked out. So what we're trying to grapple through with reading through this and trying to think of ways that we can work on it is, while we can control what we're doing, we can't reopen the marketplace to have those options available to people again for this plan year, 2026.

And then the next open enrollment period for 2027 coverage should happen again in November. It will reopen in November. I want to note, though, that for folks who are, you lose Medicaid coverage. Maybe you got a raise and you're now no longer eligible for Medicaid.

Financially, you earn a little too much money now. You could have access to getting into the marketplace because loss of Medicaid coverage is reason to trigger a special enrollment period. So not all is lost. That could happen for those people who qualify out of Medicaid.

When we talk about the scenarios we're talking about in this bill though, when we talk about people who lose Medicaid coverage because they couldn't meet the work and community engagement requirements, if you lose Medicaid for those reasons, you are ineligible for for any premium assistance on the marketplace. So you don't qualify.

Any other questions, Members?

Moving on to HB 2161, HD 1, relating to pharmacy. Establishes the Daniel K. Inouye College of Pharmacy Special Fund to support pharmacist workforce assessment and planning efforts. State Health Planning and Development Agency in support.

Yes, we stand on our testimony, Chair, Vice Chair, Members. We think that we do this well for doctors at UH and for nurses. At this point we should do this for pharmacists as well because we were developing workforce shortages. Thank you.

Thank you. University of Hawaii at Hilo in support.

Good afternoon, Chair, Vice Chair, Members of the Committee. I'm Rae Matsumoto, Dean of the Daniel K. Inouye College of Pharmacy. We stand in support of this bill to create a special fund. It is important for a number of reasons.

It will, at the bottom line, it will help to ensure that we have an adequate workforce in pharmacy. So trying to prevent shortages, or at least insurmountable shortages such as exist for physicians and for nurses. And then also to help improve access to quality health care. Notably, we are not asking for any legislative appropriations for this bill.

This special fund will be seeded by professional licensing fees from the professional pharmacy. But it is something that will help us as a profession create solutions for the state of Hawaii to ensure access to health care. So happy to answer questions. We also support the amendments that were proposed by the Hawaii Pharmacist Association.

Thank you. DCCA Board of Pharmacy in support.

Afternoon, Chair, Vice Chair. This is Christopher Fernandez, Executive Officer for the Board of Pharmacy. I'm here to stand on the board's testimony supporting the intent and offering comments. Thank you.

Hawaii Pharmacists Association in support.

Good afternoon, Chair, Vice Chair, Members of the Committee. I stand on my written testimony in support. I just want to add two additional comments. The fee structure that I proposed in my testimony, it's such modest increases and we're already among the most, the least expensive states to practice pharmacy in. So I don't see this being a deterrent to doing pharmacy or doing pharmacy business in the state.

The last thing I want to say to tie it all together is, when you compare pharmacy practice in our state to our neighbor states, specifically on the West Coast, like California and Washington state, they are leveraging pharmacy in a way that we are not here. So they're able to bill for clinical services.

They have pharmacists embedded in team based care models. And we think that the center is really the missing piece to continue to advance the profession as we continue to advance ourselves in statute, but really to drive sustainable models that we can scale across the center state. Thank you.

Thank you. Molokai Drugs, Inc in support on Zoom.

Good afternoon. This is Kimberly Svetin. I'm the President of Molokai Drugs, and we stand on our testimony. One thing I wanted to add is there are a lot of us in pharmacy who are preceptors for the Daniel K. Inouye UH College of Pharmacy in Hilo.

And one of our interns just started yesterday. This is training that we do for future pharmacists at no cost to the state. We actually volunteer our time. So I just wanted to add that to my testimony, and I stand on my testimony. Thank you.

Thank you. Anyone else in person or on Zoom who would like to testify? We also had 17 individuals submit testimony. Members, any questions? Rep Iwamoto.

Maybe for the School of Pharmacy. Sorry, whoever could speak to the shortage of pharmacists. Do we have a shortage of pharmacists?

Excellent question. Do we have a shortage of pharmacy? In the state of Hawaii, we don't have good workforce data. That's one of the challenges. Nationally, there's a lot of data out there where nationally they country is preparing for a shortage of pharmacies.

So as a pharmacy dean, I sit in a lot of meetings where what is the strategy, what are we going to do nationwide to ensure that there's not going to be so that we can mitigate this shortage that we're anticipating. None of those sorts of conversations are happening in our state.

Which is one of the concerns. And also a concern is that we don't have the kind of good workforce data for pharmacy in a lot of details, similar to the physicians and nurses. So we know that there's a lot of nuances. Right. So overall it may seem...

What my best guess would be is that overall it may seem like we're okay for now knowing the shortages coming, but we are already seeing in our state through anecdotal evidence and reports that in many underserved areas, in many specialty areas, employers are having a really hard time filling their positions.

So those are some signs that it's going to get better before it gets... Or it's going to get worse before it gets better because that's similar to the trends that our colleagues in other states are seeing where they do have the data.

So part of the reason for the center is that we can collect good data to help inform decisions and strategies for our state to mitigate shortages that would, if we just, you know, hope it gets better, may become insurmountable in the future.

Any other questions? Okay, seeing none. Moving on to HB 1721, HD 1, relating to housing. Clarifies insurance indemnification and certain certificate of occupancy requirements for purposes of expedited apartments. American Council of Engineering Companies of Hawaii in support.

Good afternoon, Chair, Vice Chair, Members of the Committee. My name is Scott Hayashi. I'm representing the American Council of Engineering Companies of Hawaii. We submitted written testimony. We're going to stand on that testimony.

But I would like to add that we're in support of housing measures across the state. Anything that's going to increase housing. I believe this bill, basically the proposed changes in this bill will help to increase the participation in the process. Thank you.

Thank you. Housing Hawaii's Future in support. Anyone else in person or on Zoom who would like to testify? Seeing none. Members, any questions? Moving on to the next measure. HB 1641, HD 1, relating to transportation.

Prohibits the lease or rental of a high speed electric device. Department of Transportation in support with comments on Zoom. Not present. Anyone else in person or on Zoom who'd like to testify on this measure? Okay. Seeing none.

So we can't ask questions?

Okay, moving on to the next one. HB2137HD1 relating to artificial intelligence. Part one prohibits certain uses of and mandates disclosure for realistic digital imitations generated by AI. Part two requires the disclosure of the use of synthetic performers in advertising. Okay. DCCA office of consumer affairs offering comments. Department of the Attorney General.

Good afternoon. Chair, Vice Chair, Members of the Committee. My name is Ashley Tanaka. I'm a deputy Attorney General. The Department did submit comments, written comments. We did identify some areas of concern in the bill that may be subject to challenge under the First Amendment of the United States Constitution.

Especially in light of the recent federal court case Babylon B versus Lopez here in Federal District Court in Hawaii. Did some suggest some proposed amendments to address those potential issues? Thank you. Available for questions. Thank you so much.

Department of Education and Support. Thank you. Office of Wellness and Resilience and Support.

Good afternoon. Chair, Vice Chair, Members of the Committee. Office of Wellness and Resilience. Done. Honor, testimony and avail for question. Thank you. Thank you.

Public Citizen and support on Zoom. Public Citizen in support on Zoom. You there? Okay. Moving on to Catholic Charities of Hawaii and support.

Aloha. Vice Chair this Catholic, Betty Lou Larson with Catholic Charities. So I will stand on a written testimony and support. Thank you.

Thank you. Young People's Alliance in support on Zoom. Young People Alliance. Sorry, here.

I'm sorry, I thought we supported. We submitted testimony for 782 not 2137. Just to clarify that.

Oh, I'm sorry about that.

No worries. Yeah. And I think the same was for Public Citizen as well. Just to clarify. As well, but to testify on 1782. Thank you.

Okay. I'm. My mistake. Am I sure? Yes. Same for you.

We also were testifying on 1782. I thought maybe you moved on and I missed it.

No, if that was my mistake, I was on the wrong page. Apologies. Okay. Hawaii State Commission on the Status of Women in support.

Good afternoon. Yes, we. Cheney for the Hawaii State Commission on Status Women. I stand on my written testimony in support of this measure. Thank you.

Thank you. Is there anyone else in person or on Zoom who'd like to testify on HB 2137? HDY. Great seeing none Members, any questions?

Question? Thank you. Chair for the Attorney General's office. As you're making your way up here, Chair, if you don't mind cutting me some slack. We didn't get the testimony for this Committee hearing until around 11:30 today. And I happen to be the Vice Chair of another Committee. So I'm doing all the.

The voting sheets and then the floor. And it was quite long and then lunch, so I didn't have a chance to go over the AGs. Do you mind if she walks us through her testimony? Yeah.

Okay. Okay. Yeah, go ahead. Let's try to keep it moving, though.

So we cited to A recent United States District Court, District of Hawaii case Babylon Bee versus Lopez. That case enjoined enforcement of a law that was passed two years ago in 2024 where that law was seeking to regulate the distribution of election based content that is materially deceptive.

So we saw a lot of parallels in that law and that the court ended up striking down that we think could potentially be struck down if this law were to pass as its creature. There were some potential over breath concerns, some potential vague concerns with some language.

There's some concerns about content based restrictions that would trigger strict scrutiny by courts. There were some portions that we thought were inconsistent with each other within the Bill. So, so we recommended some amendments that could potentially fix those inconsistencies. We saw potential speaker discriminatory restriction that would probably strict scrutiny by courts as well.

Respect to the section in the Bill that is requiring disclaimers for parody or satire. The court did address a similar issue in Babylon Bay, saying that trying to require disclaimers would kill the joke, end quote. And basically holding that requiring a disclaimer for satire and parody was impermissible.

We noticed some parts of the Bill that were subjective and ambiguous and potentially overbroad, which could lead to over censorship. And I believe that is basically the gist of things we pointed out that could be potentially problematic in the Bill as it's currently drafted.

Great. And so thank you. It sounds like you did offer some amendments that would make some parts be, you know, constitutional. But you didn't. But can I just clarify, there were some parts that you did not offer

amendments to that I believe with every issue. We did try to suggest an amendment, whether it's just to delete problematic portions of the Bill or to reword it, or to add definitions for further clarity.

Okay, thank you very much.

So while you're up there on the very last page, on page five, almost the very last section, the sentence of page five, it's. It says 5A1, so it reads A realistic digital imitation of an individual is used in violation of Section 2. Our HMSO guide is asking if you meant instead of is used to be is published.

You're using is published at other points in your testimony. Or did you mean to use the word used there? You seem to have corrected that or tried to correct that in other portions to the publication, not the use.

I wonder if we did intend to use the word used. But that is a fair question since in previous parts of the testimony we were suggesting using the word publish instead of words that are currently used in the Bill. But Publish would probably be also a good alternative.

Okay, so it'd be appropriate to use publish there instead.

I believe so.

Thank you. Thank you.

Thank you. Any other questions? Okay. Moving on to HB 1782, HD1, relating to artificial intelligence for the protection of miners, establishes safeguards, protections, oversights and penalty oversight and penalties for interactions between minors and artificial intelligence companion systems or conversational artificial intelligence intelligence services. And the DCCA Office of Consumer affairs offering comments.

Good afternoon again, Raji Tolentino. On behalf of Office of Consumer Protection, we will stand under testimony. Offering comments.

Thank you. Attorney General, offering comments.

Good afternoon. Chair, Vice Chair, Members of the Committee, Deputy Attorney General Ashley Tanaka. We did submit comments for this bill. We do support the purpose of the bill, but we did suggest some amendments to further strengthen the bill and protect it against potential First Amendment challenges. Thank you. And I'm available for.

Thank you. Department of Education and support, Office of Wellness and Resilience and support. Apologies. Thank you. Okay. Public Citizen in support on Zoom.

Hello, I'm Nick. I'm with Public Citizen. I work on state policy with artificial intelligence. I'm also a certified peer specialist. I'm testifying in strong support of HB 1782. So chatbots are technology that's designed to simulate human interaction. And this bill covers chatbots that are intended to foster emotional entanglement. These chatbots are becoming very widely used.

And just last year there was a national report that showed almost 75% of teens using AI companions and 50% were using them regularly. There are also AI toys for very young children, which gets these children hooked on these toys at a young age and this kind of technology at a young age.

And we've also seen many different controversies when it comes to these AI toys for children. But these tech companies, they design AI chatbots to maximize user engagement. And these chatbots will have the tendency to agree with everything the user says, even if it's something that's harmful.

And my experience as a mentor, I've seen that teens need pushback during these very high intense moments, but that's just something that AI can't do. It goes against their programming, which is to maximize user engagement. And the American Psychological Association has also expressed significant concern that this tech can harm children's social emotional development and cause dependency.

So this is also something I've experienced as a mentor, which is where some of my mentees have actually expected me to behave kind of like a chatbot, which makes it especially difficult to help them, especially during these high intense situations.

So there are 19 other states that have taken a similar approach to HB 1782 by restricting the use of minors for this technology. But these safeguards are urgently needed to keep the children Hawaii safe. Thank you so much.

Thank you. Catholic Charities, Hawaii in support. Young People's Alliance in support on Zoom.

Hi, can you hear me?

Yes.

Great Aloha Chair, Vice chair and Members of the Committee. My name is Mick Tobin. I'm 23 years old and the co founder of the Young People's Alliance, a youth led bipartisan organization that empowers students across the country to reclaim the American dream. I'm here because I worry about the future of my generation.

We've already been isolated by addictive social media platforms and now those same big tech companies want us to give up on human connection altogether and replace our friends with manipulative AI companions. These companions are designed to make a young person believe that a chatbot is the only person who truly understands them.

The they pull users into emotional echo chambers that erode the skills we need to form real relationships, build communities, and live fulfilling lives. This is not the future my generation deserves. This bill establishes safeguards. It prohibits AI companion systems from using addictive and manipulative features with minors, like simulating romantic relationships or encouraging emotional dependency.

The bill draws a clear line between general conversational tools and systems designed to simulate emotional relationships. Between tools that use your data to make personal recommendations versus ones that say that they miss you and ask you why you have been gone so long.

My generation imagines a future where we can make friends, understand each other better, start families, and form meaningful relationships that shape our lives. Mark Zuckerberg is on the record advocating for a future where every person's best friend and romantic partner is a chatbot. Where instead of turning to the people around us, we turn to a screen.

And he is building that future right now. Young people don't have the luxury of waiting years for policy. While these AI companions are rapidly becoming normalized because of big tech companies forcing them onto children similar to how they they did the same with social media for the past 10 years with little safety guardrails.

As you consider your vote on a bill that affects young people, I hope that my voice and the 2000 plus students I represent paints a picture of why this is so important to us and why action is needed today. Thank you for your consideration.

Thank you. Transparency Coalition and support on Zoom.

Hi, my name is Jay Jessima and I'm representing the Transparency Coalition along with my colleague Steve, who will also be on in a bit. I just want to address two points. We work with multiple states, you know, over 20 states this year on passing similar bills.

We were also helpful in passing Senate Bill 243 in California last year, which was the nation's first first chatbot regulation for minors and others. I think the two things I want to flag.

One is a self reported study from OpenAI that was published in October of 2025 that showed that well over half a million people using Open OpenAI ChatGPT systems experience some sort of psychological episode and over a million had other types of psychological harms as a result of using chatbots as companions.

The other thing I wanted to address briefly was the First Amendment. I realized the AG's office has probably a lot more expertise in this, but we run into these arguments frequently. Last we checked, robots do not have free speech rights.

And hopefully just to keep in mind that in this case this is not a user speech that the chatbot is producing, but is generating based on an algorithm that is statistical in nature.

And then the disclosures that are being asked for in this Bill are also fall into, we believe, the intermediate scrutiny category that are uncontroversial, accurate and reasonably related to substantial government interests. I strongly urge you all to pass this Bill and thank you very much for your time.

Thank you. Hawaii Children's Action Network speaks in support.

Aloha. We support this bill. Our organization is dedicated to safety and welfare and healthy development of our state's children. And we are concerned, as many of you are, about AI chatbots and minors. So we mahalo you for hearing this bill and for getting ahead or catching up to this problem, keeping our children safe.

Thank you. Thank you. Anyone else in person or online to testify Members, any questions?

Yes, I'm online yet to testify. I'm also with the Transparency Coalition and would like to echo first off what my colleague Jay had to say. I just wanted to add on yet an additional piece of information that I know Mick mentioned earlier that Zuckerberg is testifying today in California and he of course is the CEO of Med.

And one of the things we need to keep in mind is that one of his points of testimony is that they've been doing a lot of work in this area to secure our children to ensure that their products are not addictive.

I think the preponderance of evidence that's being heard in that trial today speaks very directly to the impact that this type of technology can have on the most vulnerable in our population.

And I think it behooves the state of Hawaii right now to Consider taking action now, while it can, with some very effective legislation as we see it, to really safeguard our kids as they grow into this new landscape that's created with these chatbots and really put protections in place to make sure that they're able to flourish rather than experience harm at the hands of these tech giants.

Thank you.

Thank you, Members. Any questions?

Chair, Same questions for the Attorney General's office regarding the First Amendment concerns and then the recommendations. Do you mind just going over those?

Sure.

So I believe in page two of our testimony is where we cover some potential First Amendment concerns with this bill. We pointed to some parts of the bill that are attempting to regulate speech, so that that would probably trigger strict scrutiny by courts.

There was a U.S. Supreme Court case, Free Speech Coalition Incorporated versus Paxton from just last year, where laws try to prevent minors from accessing sexually explicit content would be subject to intermediate scrutiny instead.

So we did distinguish the sections in this bill that would probably meet only intermediate scrutiny by courts versus strict if they were trying to prevent minors from being exposed to or accessing sexually explicit content. Did note, however, that there weren't definitions for sexually explicit content or sexualized depictions in this bill.

So we did recommend that adding definitions would improve, clarify, and help with enforceability of this bill. That was most of the First Amendment concerns that we address in our testimony.

Thank you. Thank you. Yeah, I'm letting this go right now, but we shouldn't be asking people to just repeat their testimony, too. I mean, if you had a specific question about her testimony, their testimony is extensive and quite good. But if you have questions about it, that's one thing.

Asking her to repeat her entire testimony, I think is not appropriate. I don't think she's. Of our time.

Thank you, Chair. I don't think she actually did her entire testimony. Also. It is very dense, as you mentioned, and I only got the testimony at 11:30 today to read it, though, if you had specific questions, that's what this is for.

It's not asking people to repeat everything.

I didn't ask her to repeat everything, just the constitutional. Thank you.

Okay. Anyway, thank you for your testimony. If you specifically, in your testimony, you mentioned that heightened scrutiny is going to be imposed for basically trying to restrict certain kinds of free speech.

Is that applicable here, though, when the speaker, for lack of a better term, is a machine or is the speech attributed to the organization that is hosting or putting forth this chatbot?

It would be more attributable to the letter that you said the company hosting the actual artificial intelligence system or conversational service. We've seen in other cases that the courts have said that entities such as corporations, social media platforms do still retain First Amendment protected speech rights.

The platform itself does. But would the chatbot function in it, retain speech rights, or I guess, is the speech attributable to the company? And if it is, are they going to be liable for that speech as well?

I think that's a really fair question, and I think that is probably one of the biggest difficulties we're all facing now, trying to regulate these companies, these outputs, and how to best do it without triggering strict scrutiny by courts or just triggering challenges that we won't be able to defend in court.

I think it is a little gray area, but I think to err on the side of caution, it would be wise to see the potential for challenges in court. And even if it's arguably the chatbot's speech instead of the company hosting the chatbot, I think that that's still unclear.

So your suggestions here, because there are quite a few of them, it is really just erring on the side of caution rather than acknowledging free speech for a chatbot.

I mean.

I think that.

I think the source maybe isn't so much the focus as just laws trying to regulate speech. Just the output is more maybe the focus that that is going to be met with strict scrutiny by courts. Just that when states are trying to regulate. Regulate speech in whatever form, it's going to probably trigger some constitutional challenges.

Maybe we should invite them. I need to figure this out anyway. It's a difficult question. I appreciate your response.

Thank you for the questions.

Moving on to HB2360 HD1 relating to paid family leave by January 1, 2029 requires the Department of Labor and Industrial Relations to establish a family and leave insurance. Oh. Family and Medical Leave Insurance Program and begin collecting payroll contributions to finance payment of benefits. Department of labor and Industrial Relations in opposition.

Good afternoon, Chair, Vice Chair and Members. Joann Vidinhar representing the Department. The Department did add that it supports the goal of strengthening Hawaii's workforce through family and medical leave.

However, the bill moves ahead of work already directed by the legislators from last year's session under Senate Concurrent Resolution 145 and the appropriated funds to Fund a actuarial study and a legal analysis. These steps are essential to carefully design the financially sustainable program that aligns with boy's needs.

The Department has begun this process including securing a consultant to prepare a request for proposal for the actuarial and legal work. Until these fundamental studies are complete, we respectfully recommend that you defer this measure. Thank you for the opportunity to testify and I'm available to answer any questions.

Thank you. Hawaii Department of Taxation offering comments.

Good afternoon. Chair, Vice Chair, Members of the Committee Robert Availa, DOTAX stands on its written testimony providing comments. I'm here to answer your questions.

Thank you. Thank you. Hawaii State Commission on the Status of Women offering in support.

Good afternoon. Yasmeen Cheney for the Commission on the Status of Women. I stand on my written testimony and support. Thank you very much.

Thank you. Department of Human Resources Development offering comments. Hawaii State Coalition Against Domestic Violence in support on Zoom.

Yes. Aloha, Chair, Vice Chair, Committee Members. Angelina Mercado, Hawaii State Coalition Against Domestic Violence and we stand on our written testimony in strong support of this measure. Mahalo.

Thank you. Hawaii Public Health Institute in support.

Chair, Vice Chair and Committee Members. I'm Chris Caulfield from the Hawaii Public Health Institute. We're in support of this proposal. I'd like to personally thank Chairman Yoshi the work that he did when he's chair of the Labor Committee, which has significantly advanced this issue to the point that it's at today in a state that's rooted in aloha.

No parents would have to choose between bonding with a newborn and paying rent. And no worker should have to choose between caring for an ill loved one and keeping their job. And the evidence is clear about family leave. Family leave improves maternal and infant health.

It reduces premature birth and low birth weight, lowers hospital readmission to support healthier outcomes for both the parents and children. It also strengthens economic stability, reduces poverty risk, and increases household income during the most vulnerable time in a child's life. There's something that I learned recently that really crystallized the necessity of these programs this past year.

The most overrepresented age group in our state's houseless population is 0 to 1, and the next most overrepresented is 1 to 5. And that, I believe should stop us in our tracks when babies are facing homelessness. The issue isn't just housing. It is economic instability.

It's things like the lack of a social safety net that paid families need to provide. It's a system that doesn't support families at the very moment that they need it most. Family is not a luxury. It's a public health necessity. It's the infrastructure that allows our families to not just survive, but to thrive.

And I just want to say that in response to the Department of Labor, we think the working group's work is tremendous. We think it should be ongoing.

Our understanding is that this Bill takes a lot of the concepts that have been worked on in the working group and brings them into public light so that the public can provide comment and have a public conversation about some of those concepts.

So we hope that you'll keep this Bill moving forward so that we can continue having that conversation as session moves along. Thank you so much for the opportunity to speak.

Thank you. NFIV Hawaii Chapter in opposition.

Chair, we'll stand our written testimony in opposition. Thank you.