House Standing Committee on Consumer Protection & Commerce

Sounds louder than normal. Good afternoon, everyone. We are convening the Committee on Consumer Protection and Commerce. It is Tuesday, 03/17/2026, about 2PM in Conference Room 329. Vice Chair, take it away.

Yeah. Thank you. Just a reminder to folks that we have a two minute timer for testimony, and I have a little timer here. When it goes off, I will slightly ask you to wrap up your remarks in the interest of time in speaking to our agenda. So first up on the agenda is SB2948 SD2 relating to insurance fraud.

This bill increases the scope of insurance fraud and search and defenses, augments defenses by contractors and insurers during declared emergency, clarifies penalties and adds protection for insurance fraud whistleblowers, finally authorizes the insurance commissioner to establish a centralized database for authorized agencies to track insurance fraud data. First up is DCCA Insurance Division with comments.

Good afternoon, Chair, Vice Chair, Members of the Committee. My name is Shelby Atkinson. DCC Insurance Division, and we're gonna stand on our written testimony. He'll be available for any questions.

Thank you. Department of the attorney general with comments on Zoom.

Oh, in person. Yes. Good afternoon. Deputy attorney general Christopher Hahn with comments on the bill. We're just asking for a housekeeping amendment since this bill, bill deals with criminal penalties. We recommend it serving a savings policy for safety issues. Thank you.

Thank you. National Insurance Crime Bureau and in support on this.

Hi. My name is Mary Smith. I am the director of strategy policy and, government affairs director. And, we did submit testimony in support of this bill. We really support the anti fraud measures, specifically, and I am here to answer any questions that you might have. Thank you.

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

Yeah. Chair, Chair, I had a question, but I don't know who to ask, Skip, because that's to do with the, the definition of fraud felt really broad. Insurance commissioner? Maybe insurance commissioner.

Someone else would rather answer this question.

Yeah. So we can just jump in. So the definition of fraud, it seems like it has it's unverifiable. There's an unverifiable claim. But my understanding, a lot when you go into a when you open a lawsuit or begin a lawsuit, oftentimes, it's to go into a where you're trying to look through information that you can't from the other party, and you can't get access to that without initiating a lawsuit.

But this says initiating a lawsuit that relies on unverifiable claims is would could be construed as fraud. And so I'm just looking at it from a litigation point of view and the way you access information that the other person has so that you can turn on and verify it. Do you know what I mean?

Like, it feels circular and That actually might be an edgy question. I'm thinking more of, like, a fishing expedition discovery kind of thing.

I do wanna just practice this, that when it comes to investigating insurance fraud in particular, I think insurance division might have more expertise on this. But I'm trying to fund it back then, but I just I just wanted to preface it with So to address your question, just more in general terms and this kind of litigation procedure, usually, that would be prefaced by the government exercising its investigative tools. So the AGs, for example, we can issue investigative subpoenas or civil investigative demands As to the particulars of how insurance division exercises this price, I'm not as familiar, but there are I suppose what I'm trying to say is there are investigative tools so that before we bring on an actual claim, we have more concrete information.

Right. I, so I again, just clarify if I may.

This presumably, can you point them to the page and find the document too? Just so I'm locking that up.

Is it claims harvesting and solicitation? I'm trying to put on the page.

Like sorry. Because I don't print it out, I did, didn't highlight it. Oh, here. It's on page five of mine 18. What ends on line 18?

Litigation related insurance fraud. No person shall initiate finance support or maintain litigation arising from an insurance claim using false inflated or unverified information. It's the unverified information thing that feels overly broad because oftentimes, my understanding is that when there's a litigation that commences, you'd like to get the discovery, to get the verifiable information. But you started off maybe with less verifiable, but you hope to gain more verifiable information. No? Isn't that I think

that depends on the investigation, who's running it, and the degree of comfort that the person prosecuting it likes to have before they pursue a claim.

I, I just wanted to make sure that this bill didn't inadvertently have a chilling effect on legitimate claims. That's because there isn't verifiable information. But, like, I we suspect this is it, and we'd like to see your documents. Do you know what I mean? Is that I

I see what I, so I see where she's going with this. I don't want to necessarily come at it from a government perspective only. I'm assuming you could do a private right of action for this sort of thing to it. Correct me if I'm wrong. You guys might have invested in your powers that could find out more information, pre-discovery or maybe pre file a complaint.

But would someone else who is pressing a insurance fraud claim necessarily need to have verifiable information in order to press the claim or could they in their complaint just state their claims and the complaint and then rely on discovery to get, yeah, you know, further information about that.

I'm not familiar with the mechanisms for individuals in Hawaii. Some states might have it. I, I could be wrong.

Pretty sure you can't.

So, yeah. You know, I yeah. I'm afraid I'm not quite sure myself.

And what rep would be able to get that to there because you cannot initiate proceedings in order to get the court's powers of discovery unless you have verified verified information. I think the false inflated one is probably pretty easy to prove, but the verification, that part does disturb me a little. So but maybe we could hear from the insurance guys rather than for this one. This is broader than

I think the, the fraud division within the insurance division would have more information on that, and I don't wanna give any wrong information. But I do know that within 412 there's a mandatory reporting department for insurers, and any suspected fraud can also be reported to the commissioner at that time. And then there is authority to investigate those claims. I don't wanna go any further without, you know, confirming what the process actually would be when something is received, but I do know that that is already provided.

Any other questions?

Yeah. That one for insurance as well. So you're asking us to take out the fraud database because you're saying that you already have powers to to do this or the, the reporting is already required. Is there anything in the bill that would give additional powers or, or authority to for this database that you don't already have?

I think what this bill does, that that particular section you're referring to the confidentiality in the best database, that that portion, is the collection of all that information in a centralized database and the ability to share that with other agencies, which we do already have, but I think this formalizes the more general authority that's already given to the commissioner in the code. So we just feel that it might be it's a little redundant.

These redundant or prescript?

Is, is it overly prescriptive? Or, I mean, what what is it what is the issue with it? Because if it's not codified and you want, I mean, this, this would solidify your authority to do that. It doesn't necessarily seem conflicting if it's not already unless it's already codified in a different statute that it's conflicting with. But, I mean, what if I guess, I'm wondering why you guys don't want this power codified unless you don't unless you need more flexibility.

We I mean, flexibility is always nice, but we also do feel that this is already provided for. Perhaps so perhaps it could be less maybe any potential overlap or confusion could be addressed if there were more, if they were tied in more to the existing code instead of a standalone provision possibly. I don't wanna speculate on what the fraud division might prefer, but I know that they felt this was did overlap.

Okay. So if we do take it out, you're you don't foresee any problems with continuing to do this.

So there I think in 43122 so 2409 of the insurance code, the mandatory reporting provision does provide that the information provided for purposes of investigation or suspected fraud is protected. So there there are confidentiality provisions. There's also refer referral to records and reports. That's 4312209, and that gives the commissioner authority to protect that information and also disseminate it to some of the agencies that are also referred to in this provision. So I think one of the, the big differences is that this actually codifies a database and it kinda links into that other portion of the bill that talks about the data analytics potentially.

So they kinda seem to work hand in hand together. And that was the other portion that we were kind of concerned about because we're not certain that it would be feasible.

Okay. Thank you.

Thank you. So I read the preamble, and I understand there's some context. But do we have specific situations here in Hawaii that we've been recording information of runaway, fraudulent claims that were that this bill is trying to address. Like, is this happening, or is this kind of preventative conceptual?

I don't have the exact information. That would be something I'd have to get from the division. But I know I can't remember which provisions it was, but there was something we had discussed this, and it there was some concern that some of these things don't happen much in Hawaii. But I can't remember exactly which type of fraud of crime it was. So I'm not gonna go further about that. So I would have to get more information.

Any other questions, Members? Okay. Moving on to the next measure, HB2757 SD2 relating to digital asset charters. Establishes within the Department of Commerce and consumer affairs, division of financial institutions, a digital asset charter program for licensing, regulating, and overseeing digital asset companies and digital asset business activities. First up is DCCA division of financial institutions with comments.

Good afternoon, Chair and Vice Chair and Committee. Dwight Young, Commissioner of Financial Institutions. We stand on our written testimony. I'm here if you have questions.

Thank you.

Actually, that was it. Do we have anyone else in person or online who'd like to testify on this measure? Okay. Seeing none, Members, any questions?

Jay, do I, could, could you come up here and just talk about the federal efforts to to more do a more national, yeah. Of this.

At the federal level, the Genius Act passed in, I can't remember, December. It's gonna be effective January 2027. Basically, it sets a federal framework for stable points. It does allow four states to do some regulation. However, my personal opinion is that it's very preemptive.

K. So a couple of reasons why I feel it's preemptive is one is it allows a single state to charter a stable coin company. And then that charter is good throughout the country, just like a federal charter would be. It seems to set a floor for standards. So if you put up any state rate state regulation, it would have to be approved by the federal regulators.

So basically, they're looking for uniformity across the country. The second thing out there is a clarity act, and that's gonna take into account all the other cryptocurrencies, like Bitcoins. And they will probably be tucked under the SEC as well as the CFTC. So there's recognition that those types of cryptocurrencies are investment oriented. And I also feel that those will be very preemptive as well.

So you think that we're a little jumping the gun here after maybe next session after everything sort of settled down, we can come back in.

Genius act, it's gonna be effective, January 2027 or a 120 days after final committee rules issued by the federal regulators. We haven't heard anything about that coming up yet, so we don't know when that's gonna come up. But when it does, I, I think it will be preemptive. So any state efforts could be for now. K.

Thank you. Thank you.

Any questions? Seeing none, moving on to SB 3016 SD 1, relating to privacy. This bill amends the definition of personal information for the purposes of notifying affected persons of data and security breaches; includes telecommunications carriers among the businesses deemed compliant with security breach notification or notice requirements. First up, DCCA, Office of Consumer Protection, in support.

Good afternoon. Mana Moriarty, Executive Director, Office of Consumer Protection. Article 1, Section 6 of the Hawaii State Constitution recognizes the fundamental right of the people to privacy, requires the legislature to take affirmative steps to implement this right. 2006, the legislature took affirmative steps to implement this right by passing a data breach notification law. Law gives you the right to receive notice from a business when your Social Security number, driver's license number, or other account number that would permit access to a financial account is lost.

The law requires the business to inform you what personal information was lost and what you can do to protect yourself. When it was enacted 20 years ago, this law was state of the art. A lot has happened in 20 years. Biometric data, such as fingerprints and detailed facial images began to regularly be collected to unlock our phones or access apps on our phones. Businesses began to opt to collect DNA samples.

In 2007, the Hawaii Supreme Court decided Brende versus Hara and recognized that sensitive medical information is protected by the right of privacy. The core of this bill is simple. Its purpose is to expand the types of information that are reportable when they're lost in a security breach. With one exception, the testimony on the record before you does not object to expanding the categories of reportable information. The exception is the Consumer Data Industry Association.

The testimony states that there is no need to expand the categories of recordable information because the loss of this information presents no added risk to any person in Hawaii. We respectfully disagree. When your medical diagnosis, the sample of your DNA, or a detailed fingerprint sample is stolen by an unknown third party, your constitutional right to privacy is breached. If that were not enough, those actions enhance the risk that you could be targeted for identity theft or another scam. We support this bill. The amendments that other parties have requested do not fundamentally compromise this bill. We urge you to pass this bill, breathe life into the right of privacy. Thank you, and I'll be available for questions.

Thank you. State Farm, offering comments on Zoom.

Aloha. Blake Oshiro, on behalf of State Farm. We've submitted our written testimony with comments. We do have a proposed requested amendment that we'd like you to consider, so I'll be available for any questions. Thank you.

Thank you. Consumer Data Industry Association in opposition.

Stand on our written testimony in opposition. Thank you.

Thank you. Hawaii Bankers Association with comments.

Stand on our written testimony with comments. Thank you.

Thank you. Hawaii Financial Services Association in opposition.

Good afternoon, Chair, Vice Chair, and members. Marvin Dang with Hawaii Financial Services Association. Our testimony is in opposition to this bill as drafted. What this bill does is it creates a new requirement for redacting Social Security numbers. As you know, Social Security numbers have the first three digits, then the middle two, and then the last four.

In redaction, in a number of statutes--and I cited about 15 statutes in my testimony--in redaction for the courts under the court rules, for financial institutions and in other places, you redact down to the last four. What this bill would do is it would require redacting just down to the last three. As a matter of policy, and we've been testifying on this for--now this is the seventh legislative session--to state that, okay, if you're going to do that, what about all of the other statutes which allow and permit four, the last four to show?

If you don't change those other statutes, you're gonna have an inconsistency here which requires that anything more than three that is shown is gonna be what's called a specified data element, which is part of personal information. Our position is because of the-- you cannot approach things in a silo. Because of other aspects that need to be considered, this bill should not pass with the wording in there. We suggest a proposed amendment that would at least align it with existing practice, and then perhaps in other sessions or during the interim take a look and see how we can harmonize everything. Thank you.

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

I have a question for Marvin from Financial Institution. Can I ask you a question about--yes, Martin--about the last four digits? So I recently met somebody who basically told me the first five digits of my Social Security number. Just because where you were born, what year-- like, it was shocking, actually, how easily it was. So when you think about getting the four that could be released, yeah, I think we definitely need to put some-- knowing how easily predictable those first five numbers are, we should have more guardrails around the last four, whether the guardrails, you know, making it three or more of a duty to report.

You know, I certainly agree with where you're coming from, and, you know, as you may know, as an attorney, for example, there is other statutes, four statutes dealing with recording a judgment at the Bureau of Conveyances and showing the last four. So if that concern that you raise, which people do point out year after year, that concern that you raise could be translated to bills that would deal holistically. We don't have a problem with that, but over the past seven years, the number of bills that have addressed all of those other statutes that I've kept on citing is zero. No bills. And so, if it is such an important issue, which I think it is, let's have everything harmonized and not inconsistent the way that this would be approached in this bill.

Okay. Thank you. Can I ask the Office of Community--

Yeah, let me ask Marvin one more before <unintelligible>. So, you are okay with the rest of the bill then if we could change the other 15 statutes, maybe give the courts a little time to change court rules or whatnot to adjust it to three? Then you're okay with it-- your only complaint is the consistency portion?

You know, I think that if you're going to go that route, you need to hear from others who aren't-- who have to testify specifically on that issue, the ones that would be affected that have been using the last four digits here. All I'm advocating is consistency, and whether or not that consistency is for another session, but for this session, if you're gonna move this bill forward, at least keep the status quo and then take a look at all of the, perhaps, intended or unintended consequences that will flow from changing all of these other statutes.

Okay. So, Rep Iwamoto, did you wanna ask someone else anything?

Yes. For the Office of Consumer Protection. Thank you. So what do you think about-- do we hold this until we fix every other statute at the same time?

Thank you. No, we don't hold this until we fix every other statute. First of all, it's not necessary to fix those other statutes. Those other statutes work fine. They also have to do with government records. Government records are already public records. They're not the source of information that is the subject of the security breach. If you've got a batch as a clerk at a title company, you got a batch of records that showed you Social Security numbers for the grantor or grantee, and you had a stack of 60 records on there, 60 Social Security numbers, would you be walking around in breach of this law?

No, because you have it for a legitimate business purpose. So if you look at our definition of security breach, it incorporates language to the effect of you need an illegitimate purpose for a security breach to occur. But I don't think we should hold this bill, more to the point, that the legislature has a constitutionally delegated right, responsibility, to take affirmative steps to implement the right of privacy.

We can accommodate concerns like our friend at the Financial Services Association. We can make the amendments that they are suggesting without compromising the fundamental purpose of this bill, which is to expand the categories of reportable information. That is what we need to get done. That is what the legislature needs to do in order to implement the right of privacy.

There are many amendments being requested, and of those amendments, I do not see an amendment that should thwart this bill or be an obstacle to moving forward. Those amendments are not fundamentally at odds with the purpose of this bill. In terms of interoperability requirements, our office is not gonna say that we know the interoperability requirements for the Mortgage Bankers Association. If they have concerns about three digits versus four digits, let's get a law passed that addresses their concerns.

If the issue arises in the future, we will deal with it at that time. Now, I wanna thank you also, this committee, for posting the testimony on this measure in advance. It is so appreciated because many times we come before committees and we have no idea where the questions are gonna come from because the testimony is not provided in advance. So I wanna really express my appreciation for that. It enabled me to look quickly through the amendments being proposed on this measure, and thank you.

Any other questions from members? Okay. Seeing none, moving on to SB 3255 SD 1, relating to currency. Requires retail merchants to accept cash payments in in-person transactions and requires cash transactions to be rounded up or down to the nearest $0.05. Requires cash transactions that total $0.01 or $0.02 to be rounded up to $0.05. Okay. First step is the Office of Consumer Protection.

Thank you. We'll stand on our comments.

Thank you. Next, Hawaii Restaurant Association, in support.

Good afternoon, Chair Matayoshi and members of the Office of Consumer Protection. Once a year we are all Irish chef. Happy Saint Patrick's Day. Even I'm Irish today. Very green now. But anyway, you know, it's very, very important that, you know, the Restaurant Association, which represent over 4,000 eating and drinking places, really supports many of the language in this bill, and we need something to be passed.

And I just wanna say that purely regarding rounding of pennies, you know, middle of last year, U.S. Treasury had stated that it would stop minting pennies because it costs three pennies for every one penny that they mint. And guess what? Today in Hawaii, in all islands, there is a penny shortage.

A lot of the banks are not giving their clients pennies to give change. So people are not able to make change correctly. If you look at our-- the state statue dealing with excise tax and stuff like that, we can round down but we cannot round up, okay? But if you look at the U.S. Treasury when they put the guidelines that came out late last year, they do have specific recommendations. Recommendation is basically one and two, you round down, you know? Three and above, you round up. It's basically what we learn in elementary school about mathematical theorem, you know?

I mean, it's pretty much simple common sense things that we need to do. But because we do not have a clear guidelines right now in our state, you know, people are doing different things all over the place. There is no one correct way of doing it, and a lot of the merchants that are doing it are afraid that, you know, somewhere down the line, somebody's gonna come and find it because they are doing something wrong. So without a clear guidance to the business community as well as to the consumers in the State of Hawaii, we are doing injustice to our citizenship.

So really, several guidelines that the U.S. Treasury did come up with, guidelines that they recommend, which is that, you know, if it's one or two pennies as the ending number, you round down. Three and above, you round up to the nearest five sets, right? Everything gotta be divisible by five pennies to do that.

It's been two minutes, Victor. If you could conclude your testimony?

So it's very, very important that we pass something in this session so that our people will know exactly what is the correct things to do. Thank you.

Thank you.

All right. Hawaii Bankers Association with comments.

We stand on our written testimony.

Thank you. Hawaii Food Industry Association in support. On Zoom.

Aloha. Good afternoon, Chair, Vice Chair, and members of the committee. I'm Alexis Chapman for HFIA. We are in strong support of the language in this measure to allow rounding. We were looking at it right before the hearing and realized that there may be an amendment that's necessary. This measure makes changes to Chapter 481B and it says notwithstanding any law to the contrary. The language in the HRS about misrepresentation of price that requires that the price displayed in the price charge be the same unless the price charge is lower, that's actually in Section 486.

So, there may be a necessary just to either move it to that chapter or make an adjustment to that language as well. But we're in strong support, and we really appreciate the amendments that were made to this measure and the committee for hearing it, and I'd be happy to answer any questions. Thank you very much.

Thank you. Hawaii Financial Services Association with comments.

Marvin Dang for the Hawaii Financial Services Association. We stand on our testimony offering comments regarding the rounding of the pennies.

Thank you. Anyone else in person or on Zoom who would like to testify on this measure? Okay. Seeing none. Members, any questions?

Got one for Victor. Well, first of all, are you guys having shamrock shakes today at McDonald's?

Oh, definitely. We have shamrock shakes. I cannot get one for you because I'm gonna get--

Oh, no, no. I know I would get in trouble. I'll go buy one. I'll go buy one. Okay. So the penny shortage.

Yes.

Is that because people are--or not people--but people or businesses are hoarding pennies? I mean, that-- when we did our research on how many pennies are out there, it's something like 80 per man, woman, and child in the United States. I mean, it's a lot.

Three months ago, I was on a plane flight to Washington, D.C. with CEO from First Hawaiian Bank, you know, and we're talking about it, and, you know, we laugh because it's pennies, you know?And then, you know, he said, you know, if every household, you know, check their drawers and their cupboards, I'm sure they're gonna find lots of pennies. But since the Treasury stopped minting and the Federal Reserve Bank stopped distributing, the pennies that are going to the banks and to the merchants are really totally diminishing. Waikiki to neighbor islands, retail people are not getting pennies from their banks.

Where are they going? It's not like a huge-- it's not like they started taking pennies back. I mean, it seems like such a drastic situation that happened so quickly. Do you have any speculation about what the source of the change is?

It's really because-- because it stopped printing and people stopped, just, circulating pennies, going back to the banks and stuff like that, that create a domino effect to everybody. And I brought it up to many legislators in December that this is a potential problem coming, and I didn't realize that this is accelerating, happening faster than what I thought it was gonna happen. And right now, I mean, it is really all across the state.

Yeah. Honestly, I mean, I saw the first version of the bill and I thought, you know, they just stopped printing pennies. How-- this is probably not something we can deal with in another couple of years. But I just don't understand how it accelerated so quickly.

And that's the reason why, you know, I talked to some of the leadership in both chambers, and the fact that we should work on some fact, getting something passed out. And that's why when it wasn't heard on the House side, we work with the Senate side to at least have it, you know, attached to the bill that came back over here.

And someone--don't know, like--the business can be-- especially if you look at it, the small mom and pops are probably getting hit more. They have more questions because, you know, the corner shave ice store or Crack Seed Store, they-- you know, they might not take credit cards and they're not--they need something to clarify-- to help them do their business.

Okay. Thank you.

All right.

So, Victor?

Question, yes. So you mentioned the calculations for rounding up, rounding down, and then there were a couple testimonies that said that HRS 486 requires to-- for everything to be rounded down. And are you-- would you be okay with that amendment? Just--

So to me, to be fair, I think the U.S. Treasury guidelines was that, you know, two and under, you round down. Three and above, you round up, you know? So to me, to be fair with everybody, you know, you should be able to round down as well as round up, because at the end of the day, you're talking about pennies.

Monetary wise, it's not that significant. However, you know, to be fair, I think we should be able to do the both, and even though the bill said to get to only round up--the bill calls for rounding up--I'm okay for rounding down too, you know, because the bill said, you know, one and two, you automatically go to five. You know? I'm okay with going down as a business person to be fair with everybody.

Thank you, Victor.

Thank you. Thank you.

Okay. Moving on to SB 2765, SD 1, relating to condominiums. Clarifies that condominium associations that have obtained title to a unit through foreclosure may retain rental income received prior to the appointment of a commissioner in a subsequent foreclosure. First up is Hawaii Bankers Association in opposition. Thank you. Paul Ireland Koftinow, individual with offering comments on Zoom.

Thank you, Vice Chair Grandinetti and Chair Matayoshi. I just wanna emphasize that in my... My name is Paul Ireland Koftinow, and I'm providing comments to this measure. And I wanna emphasize that we and others are asking for the removal of the words or the unit owner to avoid confusion.

The result if that those words are not removed is that a uniform or unit owner who owes the association money could be getting a windfall of rental proceeds, and I'm sure that that could not be the legislature's intent here. But if you have any other questions about this measure, please feel free to contact me. Thank you.

Thank you. Shawn Andrews, individual in opposition. Not present. Anyone else in person or on Zoom would like to testify on this measure? Just noting we also had seven individuals submit written testimony in support, seven in opposition, and one offering comments. Members, any questions?

Too bad the bankers weren't here. I was gonna grill them, but I guess I don't have that opportunity. No. No questions. Anyone else? Yeah. Let's move on.

Okay. Moving on to the final measure, SB 2852, SD 1, relating to civil rights. Establishes it as an unlawful discriminatory practice for a place of public accommodation to deny a person with a disability full and equal enjoyment of information related to their services. Requires each place of public accommodation with 16 or more employees to ensure that all information and communication technology used is accessible to persons with disabilities and requires all places of public accommodations to each ensure that all information and communication technology used is accessible to persons with disabilities. Hawaii State Council on Developmental Disabilities in support.

Aloha, Chairs and Committee Members. My name is Che Silvert. I'm with the Hawaii State Council on Developmental Disabilities. We'll stand on written testimony in support. We just wanted to highlight that this just really clarifies that you cannot discriminate because of technology or the inaccessibility of technology. Oftentimes, our world is moving more and more towards technology being the thing that we interact with in public spaces, so we don't want those to be the gatekeepers. Appreciate it. Thank you.

Thank you. Hawaii Civil Rights Commission in support on Zoom.

Afternoon, Chair, Vice Chairs, Member of the Committee. Constance Yonashiro with the Hawaii Civil Rights Commission. We stand on our testimony in support. With technology and digital communications becoming an integral part of how individuals and members of the public and private businesses, the HCRC recognizes we need for clarity and guidance in the law, not only for the public who wants access in public accommodations, but also but also for businesses.

So we're having a really hard time hearing you. Maybe it's just me. But could you speak a little bit louder?

Okay. Alright. So we appreciate the hearing on this bill because we stand in strong support, and I will be available for any questions. I will be trying to fix my mic so you guys can hear me better. I apologize.

Thank you. Accessibility. Alright.

National Federation of the Blind of Hawaii in support.

Thank you, Chair Matayoshi, Vice Chair Grandinetti, and Members. James Gashel here speaking for the National Federation of the Blind of Hawaii. And let me just say, you know, I this is an issue that I live with every day, inaccessible technology, but I, even I found the written testimony to be particularly compelling on this subject in explaining to you the need. You know, this is a much vetted bill as well. It was SB 1496 last year.

It passed the House, passed the Senate. House conferees were appointed. Senate conferees didn't get appointed before the time ran out. So I hope for a better result this year. 11 other states have explicit digital access requirements like this bill, California, Colorado, Massachusetts, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Vermont, Washington State, and Washington DC. I hope you'll add Hawaii to the list. Mahalo.

Thank you. Peter Fritz, individual with comments on Zoom.

Thank you. My name is Peter Fritz. I'm an attorney and an individual with disabilities. I support the purpose of the bill. The purpose is sound, but I submit this a drafting problem. Solution's available for the committee's consideration. This bill embeds regulatory content into statutory text. One example illustrates the problem. The bill will require compliance or says that its website will be deemed accessible as it complies with the most current version of the WCAG, Webex Content Accessibility Guidelines. WCAG 3.0 is currently under development.

When adopted, every Hawaii business covered by this bill must comply immediately with no phase in, no public comment, no regulatory review. The legislature will not have voted on it, and businesses will have no time to adjust. A plaintiff's godsend. The ADA has prohibited discrimination in public accommodation for more than thirty years. The technical standards have always been in the regulations, not the statute.

That separation is deliberate. It's how disability laws have worked since 1990, and it's the correct model for this bill. When a benchmark is fixed in rules rather than a statute, they can be updated through rulemaking. The public can comment, businesses receive notice, and there is a phase in period. It's not required to convene a new bill in the next legislative session to amend it.

That's how benchmark should work. I've attached a couple. I've attached an SD 1 and proposed regulations that I've drafted. And I've done this, drafted regulations in the past. So the Department of Justice completed title two accessibility rulemaking in eight months. I prepared the proposed rules and the SD 2 that incorporate disability discrimination into the bill itself. The commission doesn't start from a blank page, so we're actually starting ahead.

So what I request is that we look at how the government has done it for thirty years, how other states have done it for that same period of time when they've been addressed this type of thing. And they've done this to so adopt an amended bill that's similar to the SD 2 that I've attached, direct the Hawaii Civil Rights Commission to initiate rulemaking using my draft rules, so the government's draft rules, which is where I started with, and direct a commission to complete rulemaking on an expedited basis. My written testimony contains a full...

Peter, it's been two minutes. If you could start to conclude your testimony, please.

I just did. My written testimony contains a full analysis and both attachments. Thank you. And I'll be around if anybody has any questions.

Okay. Thank you.

Thank you. Virgil Stinnett, individual in support on Zoom. Not present. Katie Keim, individual in support on Zoom. Donald Sakamoto, individual in support on Zoom.

Good morning, Chair, Vice Chair. Donald Sakamoto in strong support of this bill. As a blind individual, it's very difficult to use technology in the world like retail stores. You know, to simply use a checkout and somebody has to assist me is very difficult. I would like to do it independently. But I recommend that you pass it and pass it down later. So I appreciate I stand by my testimony. Thank you.

Thank you. Ann Lemke, individual in support on Zoom.

Hello. I'm Ann Lemke. I support this bill. I think that the intent of title two and, of course, also title three, but the intent when the physical access was mandated, things have changed dramatically from 1990 to now. And although much is being done in an appropriate manner, it isn't in the, it isn't in our legislation as it needs to be.

That's that's all we're we're asking for because things are changing so rapidly. And I use assistive technology every day of my life. Every day. It's not a theoretical issue to me. It's a can I have access to what I need or not issue to me. And I guess we need to pass we we need to encourage you strongly to pass this legislation. Thank you.

Thank you. Kaili Swan in support.

Good morning, Chair, Vice Chair, and Committee Members. Aloha. My name is Kaili Swan. I'm a self advocate with developmental disabilities showing support SB 2582. Technology should open doors, not close them. This bill helps make sure people with disability like me are not left up when service moved online. Please pass SB 2852. Mahalo, and let me know any other question you have. Thank you for allowing me to testify.

Thank you, Kaili. Linda... Oh, sorry. Linda Elento, individual in support on Zoom. Not present. Okay. Anyone else in person or on Zoom who would like to testify on this measure? Seeing none. Members, any questions?

Yep. It's Hawaii Civil Rights Commission. You guys still on Zoom?

Hi. Is my audio better?

Yep. That's fine.

I apologize. The Maui District Office is actually closed right now, so I'm testifying remotely because of this. So apologies about that.

That's alright. I hope you guys are surviving. So Peter Fritz's testimony, I I found fairly compelling that a lot of this should be in rules, not through the statute itself. But I want to hear your office's thoughts on that.

You know, there are benefits for codifying this language. You know, there is, at the federal level, case law regarding ADA access. We we appreciate that this bill would clarify what is, you know, a denial of access or denial to the full and equal enjoyment of public accommodation. So I think that clarity is good not only for publics who are trying to communicate with these businesses, but also for puts on notice businesses that if they use this digital communication, it has to be accessible to, you know, everybody, including people with disabilities. There is the HRC can engage in rulemaking under our statutes, and it doesn't have to be directed by the legislature.

So that is something that, you know, interested individuals can't petition our commission. So I don't know if that addresses the question, but we appreciate how the language of this current bill because it does provide clarity on what is prohibited, especially in today's world where more businesses are beginning to use digital technology and digital communications for just everyday use. Okay.

I really like this bill. I think we passed it last year. My intent is to pass it this year. I would like to have your office take a look at Peter Fritz's testimony and and also just consider it yourself, which pieces of this bill should go into statute and which ones you would like more flexibility on in the rulemaking process. Stick around for decision making, and it'll be a little more clear, but I'd like to pull you and Peter into a room and talk about this and and discuss the aspects of this bill.

We have a little bit of time to hear to to pass this since this is a double referral, but I just wanna put that on your radar for now, and we'll be in touch. Thank you. Alright.

Thank you so much.

Any other questions? Okay. I'll take a short recess. Recess. Alright. We've been waiting for decision making. First up on the Agenda is SB 2940 I'm sorry. You're ready? Yes. First up on the Agenda is SB 2498 I'm sorry.

Im sorry, 2948 SD2 relating to insurance fraud. We're gonna make a number of changes to this bill. Chair's recommendation is to adopt the NAMIC proposed amendments to remove the unfair and deceptive remedy. I just didn't feel like it was the track with this bill. On page four, there is no definition of claims harvesting even with terms used.

So we're gonna be amending the language to delete this wording and simply forget that there are numerated items. We'll be we'll be doing the same thing with the post loss assignment abuse section on page eight as well. That's another term that wasn't defined properly or not quite at all. So we're just gonna change the wording route to prohibit the enumerated things under that. Page nine, line 15, we'll be adding if applicable to the height of enforcement standards, as the governor may not set different enforcement standards during every emergency situation.

We're gonna be amending HRS 431:2-408 to broaden the private right of action to include the other forms of insurance fraud under this bill as well. For the insurance commissioner's testimony, we will we will be deleting the insurance fraud database language as it is duplicative of the powers the insurance commissioner already has. This starts on page six, line 10 and goes to page eight, line 10. Deleting section 13 regarding county emergency contractor licenses as as it is beyond the scope of the bill's title. We'll be adding a savings clause, redefecting the date.

And in the committee report, I do want to add language expressing my concern about the unverified claims language brought up by representative Iwamoto. Sounds like a JHA problem, Bill, but we will be working with JHA on that to try to clarify that language. Members, any comments?

Chair, I'm gonna be voting with reservations only because the, you know, as I asked about is this a problem we're seeing here now in Hawaii? And I the answer, I think, that we heard was not at this moment. And I was also concerned that we didn't hear more from attorneys who might represent claimants, who may have legitimate claims, but might be swept by an overly broad kind of definition of what may constitute fraud. So for those reasons, I'm with reservations.

Okay. And I I encourage you to to reach out to those attorneys and find out and and let the next committee know as well. K. Seeing no other go. You have COVID? Okay. Vice chair for the vote.

Okay, voting on SB 2948 SD 2. Chair's recommendation is to pass with amendments. Chair and vice chair vote aye.

[Roll Call]

Chair, your recommendation is adopted.

Thank you, members. Moving on to SB 2757 SD2 relating to digital asset charters. We're gonna be deferring this measure at this time. It sounds like federal guidelines are gonna be coming out 01/01/2027, which is pretty soon. So maybe we'll be back next year to readjust, but I do want to I do think we should see what the feds do in this area first before acting.

Moving on to SB 3016 SD 1 relating to privacy. Chair's recommendation is to adopt HPA's proposed amendment regarding personal information available to the general public. We'll be redefining the date. And I want in the committee report, I do wanna add the Social Security number concerns and note that many other statutes will be maybe needing to be changed as well in order to conform. But I'll let the next committee weigh in on that. Members, any comments? Okay, vice chair for the vote.

Thank you. Voting on SB 3016 SD 1, chair's recommendation is to pass with amendments noting the excused absence of Representative Lowen. Are there, for this measure and the remainder of the measures on the agenda unless otherwise stated, are there any reservations? Any noes? Chair, your recommendation is adopted.

Thank you. Moving on to SB 3255 SB 1 related to currency. Chair's recommendation is to delete page two, line 19 through page three, line four just to and to kind of focus this bill on the penny rounding sections. We'll be adding fees and surcharges language to subsections 12 and three as well and redefining the date. Members, any comments?

Just a clarifying one.

So it won't be about requiring cash payments?

No. It'll just be about the rounding. Okay. Did you have the comments?

Chair, I'll be with reservations. I have to I was excited about this bill, and it was requiring acceptance of cash payments because there are segments of our population in our community who are don't actually have maybe bank accounts or debit cards or credit cards, and then it'd be more challenging than for them to sustain themselves. So and also well, for that reason, I'm gonna vote with reservations.

Yep. And and your point is well taken. My concern is that forcing businesses to take cash in all situations might be harmful to those businesses too. And the business I wanna give the businesses the flexibility to either decide to take cash where appropriate or in situations where cash might be very difficult to have the option not to take cash in those situations as well. And I felt like this bill would push them, push all businesses to have cash only, including those that might be, you know, hot dog stand in Waikiki or something or in some difficult position where cash might be very awkward or maybe even dangerous to have one hand or change.

Members, any other comments? Okay. Vice chair for the vote.

Voting on SB 3255 SD 1. Chair's recommendation is to pass with amendments, editing, reservations, Rep Iwamoto. Any notes? Chair, your recommendation is adopted.

Okay. Moving on to SB 2765 SB 1 relating to condominiums. On page four line 10, we will be deleting or the unit owner, per a lot of testimony against that one. Redefecting the date. Members, any comments? The vice chair for the vote.

Voting on SB 2765 SB 1. Chair's recommendation is to pass with amendments. Any reservations? Any no's? Any recommendations?

Okay. Moving on to SB 2852 SB 1 relating to civil rights. I really like this bill. I do want this to pass. I think this bill needs more some work.

We don't need to vote on it at this current deadline. So I'm gonna be calling the parties together to work on this bill. We'll be deferring decision making at this time in order to allow us to get more information to decide whether we should pass this bill more or less as is or whether we should be putting certain aspects into the statute and allowing Hawaii Civil Rights Commission and others to do rulemaking, which I think provides a little more transparency and more opportunity for the public to comment on specific rules as they're being made. So I do wanna assure the advocates that we will be trying to move this bill before the deadline. I'm pretty sure we are we are gonna move this bill, but defer until a later date at this time to allow us to do a little more work on it.

So defer for now. Alright. Thank you, members. We are adjourned.