House Standing Committee on Economic Development & Technology

Hey. Good morning, everyone. We're in Room 423. This is ECD 09:30am agenda. We have myself, Representative Illegon, the chair, Representative Temple, and Representative Gideon.

Because morning hearings must adjourn prior to floor session, not all testifiers may have the opportunity to testify. In that event, please know that your written testimony will be considered by the committee. For those on Zoom, please keep yourself muted and your video off while waiting to testify and after your testimony is complete. The Zoom chat function will allow you to chat with the technical staff only. Please use the chat only for technical issues.

If you're disconnected unexpectedly, you may attempt to rejoin the meeting. If disconnected while presenting testimony, you may be allowed to continue if time permits. Please note that the house is not responsible for any bad Internet connections on the testifier's end. In the event of an ever failure, it may be necessary to reschedule the hearing or schedule the meeting for decision making. In that case, an appropriate notice will be posted.

Please avoid using any trademarked or copyrighted images. Please refrain from profanity or uncivil behavior. Such behavior may be grounds for removal from the hearing without the ability to reach a line. And I think I need a binder. This works too.

But the list of testifiers. Thanks. Okay. Alright. We're gonna start first with our first measure which is SB 2,580.

And just as a note, you know, it's sort of our, our habit and tradition to, to stand up and say that you're standing on your written testimony. Let's assume that everyone is doing that. And I'll just say, does anyone like would anyone like to testify, you know, to come to, to the stand, and, and, you know, speaker piece? But, otherwise, don't have to go through that that rigmarole. Okay.

So, we're on SB 2580, SD 2. For this measure, we have 89 in support, none with opposition, four with comments. Would anyone like to testify? Georja, please.

I just wanted to thank this body and the Senate for really working together to pass a measure this year to help our film industry. A lot of good ideas have been presented. That's why we support this measure, and we have some comments to clean up the grant language and the tax credit management. Thank you.

Okay. Thanks. Anyone else? Ali, please.

Aloha, chair, vice chair. We have strong support testimony, but we would like to see the 30% baseline, as well as the 35 with some 80% uplift of local hires. And, with—also with Olelo and the ATL, these two points would be non-stackable. So, it's something that we would like to see. But we perfectly find that...aside from that. Thank you.

Thanks. Anybody else? Please.

Aloha, Chair, members of the committee. Thank you for your support throughout this session. I concur with making sure that the 5% uplift for local hire is included with this particular measure. Wanted to point out that there are two other things. One is there's a third party—sorry, I just ran over here in the rain—third party language should exclude productions under a million dollars because that is a pretty healthy price tag for an independent production to pay for an audit.

And then, there's some old language that we should modernize where it bans advertising that's Internet-only to qualify for it, and that's the way that the world is going. So, thank you very much for the opportunity to comment.

Thank you very much. Any other testifiers? Do you have any questions? Please. Okay. Tom, go ahead.

Tom Yamachika for Tax Foundation. Just wanted to be available for questions if there were any.

Oh, thanks very much.

On Zoom. So...

Good morning, Irish. Go ahead.

Good morning. I'm sorry. Are you calling me?

Yes, please.

Okay. Good morning, chair, vice chair, members of the committee. Irish Barber with the Hawaii Film Alliance. I'm sorry. I just stepped in from the rain like Vallea.

But this bill is going to be a game changer. We haven't had our two anchor TV series in over two years, and this bill will attract more shows to come here and incentivize and put us on par with global competition. So, we are standing strong support of this bill. Thank you.

Okay. Thank you. Awesome. Anyone else on Zoom?

Oh, one more coming up.

Alright.

Aloha, chair, vice chairs, and members of the committee. My name is Nadine. I'm an Oahu resident, author, and established background actor in Hawaii's film and digital media industry. As a proud member of SAG-AFTRA and the Committee for the First Amendment, I know firsthand how vital a secure and vibrant entertainment industry is to the islands. The bill would modernize and extend Hawaii's film production tax credits, and the data makes the case clearly.

In 2018 and '19, Hawaii's most impactful filming seasons generated over $740,000,000 in economic activity, more than 23,000 jobs for background talent, and over 4,000 high=paying jobs for local crew and cast. DBEDT data shows that for every dollar invested in this credit, we see roughly a four to one return in economic activity. In 2020, when the pandemic came, the hires dropped from 27,000 to just 1,280. The industry has been rebounding though, generating over $540,000,000 just last year.

But we need long term certainty to keep that momentum going.

By extending the sunset date to 2038 and including streaming platforms, SB 2580 gives studios the predictability they need to commit to multi-season productions. That means year-round income, health insurance, and stability for thousands of families in Hawaii. Streaming platforms, like Netflix, wanna spend their big money here. Let them. It's a win for residents, a win for the economy, and a win for Hawaii's future.

Hawaii has the talent, locations, and stories. This bill ensures that the competitive edge to keep telling these stories remains right here at home. I respectfully urge this committee to pass SB 2580. Mahalo for your time and attention.

Thank you very much, Nadine. Is there anyone else on Zoom that'd like to testify? Okay. Thank you.

Thank you.

Could we have the Film Office come up, please? I was reviewing your testimony, and you just voiced out that you were working on some language, but I didn't see any sort of language on your testimony.

Yeah. So, hang on one second, please. Georja Skinner, Creative Industries Division, and just to point out that there was a question that we had—any, any, I think the sunset date and the strength of the measure is very strong for this particular measure. We do have comments on 2578 however, but for this measure, I don't think that there's anything major although there are other...

Oh, so you are just referring...

You were just referring more language on SB 2578, not particularly...

Not to this. Yes, correct. I sort of condensed them into one to save time.

Thank you.

No, thank you very much. Here for more questions. Thanks.

Thank you, Georja. Any other questions? Okay. We'll move then to our next measure, which is SB 2578. And, you know, should we just start with you, Georja?

Okay. I stand on my testimony. I'll come up. What the heck.

It's up to you

Thank you Well I think it's important because both measures are very important to the industry, and I'm sure you'll hear that from other testifiers. The only areas we would like to point out are certain things. The development of a commission does help formalize and strengthen to have an advisory committee as well as the functioning knowledge from, institutional knowledge from the existing staff that would move with it. Of course, that reduces the number of staff in creative industries.

However, we think that the idea and the way that it has been presented is good. There may be some additional either members or ways to structure the advisory board. The main thing here is to highlight a couple of things. The challenges between one entity managing a grant program and the film tax credit can be problematic, and the reason being that the tax credit itself it really is managed already by the tax credit unit within Creative Industries.

And so what that means is that that structure then would have to move, but that's going contrary to the department's request in HB 1800, HD 1, and whatever happens in the Senate, where we are establishing a tax credit unit in the director's office to have a higher level to be able to then work with the subject matter experts everywhere.

Also, as mentioned yesterday, the timing of a grant program may have to be before the tax credit or they have to track at the same time. So determination, and I have some clarifying language that I'd like to present to the introducers as well as the House that would explain that. Grant program as written and as has been discussed in the legislature before is something that would be incentivizing on top of the existing.

So it's a layering of credits, but you don't want to have the same person managing both. So the idea is that within the commission identify perhaps another position or designate that for the advisory group, and then what are the parameters of the responsibilities and the actions of that advisory group.

They would work together. There's no question, whether the tax credit unit is in DBEDT or not. But we prefer it there. That is our intent because operationally we feel that that's very important. Both programs are needed, and here's the reason why. Is that you have the tax credit that has its already structure, it is going to be enhanced thankfully and pass this session with these amendments that we're hearing today and throughout the session.

However, we do want to make sure that if there is a grant program and this tax credit cap authority, you can't keep crossing these things. So I believe that, you know, working with the introducer as well as the House to find a way to enhance language, and we would like to provide that. Second is the we are fine with the separating of the creative industries film and creative industries development fund. That's HRS 201-113. That's fine.

However, media we feel should remain with the creative industries fund. And the reason being is the intent of the legislation initially was about incentivizing local talent. Local talent that is creative content, writing, directing, producing, and also all other areas of emerging media and the emerging creative industries.

So we see the grant program for the commission as a grant program for the larger productions, maybe mid tier, some of those that are produced by local companies here, and those would be the grant program, and then the existing program would just be for local media content. Those are the only areas that I see really of needing further discussion so we can pass the measure.

Thank you very much. Okay. Would anyone else like to testify on this? Walea.

Thank you, Chair. Just a small technical note. In the bill, it restricts county film commissioners to one 4 year term, but it also mandates that there be a county commissioner on the commission. So in my testimony, I have reference to the specific line item either to make the county commissioner, since they're government people, ex officio, as some of the other government people are, or to have the 4 year term limit start with item number four instead of item number three. Thank you.

Thank you. Hale? Great.

Aloha, Chair, Vice Chair, Members of the Committee. Hale Gualdarama, Teamsters Local 996. Really like this bill. It'll offer transparency and accountability. However, the only thing we see with amendments would be not just two union labor workforce, but all four of it represents the industry as a whole.

Teamsters, IATSE, SAG-AFTRA, and musician, these are the workforces. Right? These are the horses that pull the carriage. Without these guys, without our people, there is no film industry. You know, professionals in their craft. Mind you, not all of us can... Everybody in this room can drive one truck. Not everyone in this room can do film. Not everyone can play music, and I know for sure not everyone can act because I cannot act. Right? So at the end of the day, these are the professions.

Right? This is a union state. It's not a right to work state. So we're not asking as a union to be the voting party, but as Georja brought up, you can sit on a part where we are advisors to these people. We can give our advice as far as the workforce goes. At least have one seat, one seat at the table and be able to voice where our labor workforces go through and what they go through.

Because at the end of the day, we wanna see, like, these low budget films. Again, you cannot pay union rate, but we, like, use this as a pipeline for workforce development. There are people trained up as permits and get their time counted. So that's what we're looking at, the big picture overall. Right? The industry will grow. I mean, the way leg is going, both House and Senate, we see such a positive direction when the floodgates will open, and that's what we're hoping for. Right? Now we gotta keep our people working and stay warm. Thank you.

Thank you. Please.

Good morning, Chair, Vice Chair, Members of the Committee. Thank you for your time. I'm going to stand on my testimony in support of this bill, and I just want to echo what Hale and Georja both said. I don't need to restate that for you. Mahalo.

Thank you. Anybody else? Okay. Zoom? Irish, go ahead.

Aloha, Chair, Vice Chair, Members of the Committee. We are very much in support of this bill, and thank you for hearing it. I cannot emphasize the need. There are seven entertainment unions with members in Hawaii. I would love to have as many seats at the table because we are the ones that are actually making the films.

It is a highly technical, highly artistic, and very difficult job to... And right now it's storming, and we are filming in the rain. We run circles around outside mainland hires, and this is really important that we be able to represent the workers that are actually turning these projects out. So thank you for scheduling it, and we stand in strong support on our written testimony. Mahalo.

Thank you. Any other Zoom testifiers? Okay. Okay. Alright. In that case, are there any questions and comments? Chair.

Could we have the State Film Office come up? I was reading through your testimony, and you're in support with many recommendations to consider. And I find that interesting to support a measure but it requires a lot of work. I'm just going to ask you some of the questions that, this measure has 35 support and then one opposition.

This one opposition is from a testifier, and they believe that this measure is a rebrand and that it lacks some basic safeguards. And the tax credit waiver is unchecked power grab. And I wanted to expand on that particular measure because it lets the commission waive the 17 million per production tax credit cap, and I just wanted to ask your thoughts since you support this bill and want to see it move forward.

Yeah, so I appreciate the constituent's comments. I did read it briefly. I think that the transparency and the management of the current 235-17, the Hawaii film motion, sorry. Motion picture, digital media, and film tax credit is managed very well and transparently. The goal of I think what I mentioned earlier was that perhaps waiving the cap by an advisory group is not the best idea. Perhaps there are other ways to do this.

And I think in current measures that have been introduced there is other language that might be included, and I referenced the separating of the grant program from the tax credit. Most of the, one of the specified reasons is because I don't know how a body who isn't held accountable necessarily. But I don't know the intricacies of what the advisory committee does in terms of AG's office, so I don't want to cross any lines there and assume. But I would think it would be highly challenging and perhaps not the best direction.

It sounds like you agree with the sentiment of this testifier.

Well, in essence, yes. However, we are transparent and we do all our reporting for the state, so I do understand I think the concern from the constituent is coming from a place of reading the bill and perhaps without some additional knowledge of the three people that manage these credits and also the very strong oversight of our department and DOTAX. Because ultimately, DOTAX decides with each filer that files. DBEDT does not. DBEDT does not write any checks, and DBEDT currently doesn't waive anything.

I'm gonna move on from this testifier. I also wanted to ask, regarding this bill, is this a measure that came from your department, or is this an idea of the commission, from the industry, from the community?

Yes. Thank you I think the majority of these, the genesis of this and bills that were introduced in prior session were also from an aggregate voice of the community strengthening. And it's not rebranding. It is strengthening and making us competitive by having all the industry representatives at the table, as opposed to how it is now with ad hoc. Okay, I'm not dissing the structure of the Hawaii Film Office, which is within creative industries, nor am I saying that the county film offices are ad hoc and no direction No, that's not the case They work collaboratively.

But when you have a structure like this that is very specific to a new structure that is looking at the entire ecosystem of not only workforce development, as you heard earlier, also the management of a grant program, a new fund that they can then provide funding to the advice of right but with a staff person that's responsible and accountable.

And also the idea that they have the possibility to move into an infrastructure development phase. That's done all across the country, and I think our director has cited much of that in his testimony regarding this measure. So this is a very necessary I would say structural change, not just in name only. It's not just shifting from one to another.

We are talking about building something that will last, building something of the legislature can embrace and hold other people accountable in addition to our department. And we hope to really emphasize that, again, the grant program and the current film fund that is in place now, we have no opposition to it being split apart.

And we have some concerns about the media language, but at the moment, there's nothing else that would prevent us. If we want to be competitive in a global and a US market, raising the incentive, having the commission structure, which is a defective date till much later. It's not July 1. It's, you know, 2027. Gives us the time to formulate it well.

So changing the structure will help carry on the mission. And could you just emphasize exactly on what that mission would be?

On the entire commission? Well, I didn't author the measure, but I would say that probably this is to have a structure in which you have more voices at the table, more accountability between the industry and those who are handling film permitting, for example, which does migrate over in the language...

So you're looking at multiple aspect of the film industry?

Yeah. Coming together in a...

Can I propose a consideration, if this film commission moves forward and is established? I think we have a unique opportunity to create a Hawaii film museum. We have many productions that come to this state and take advantage of the film tax credit that we have to offer. And it would be amazing to have some sort of MOU, MOA.

Or some sort of agreement where those productions are able to donate or give or even sell iconic props, their sets, costumes, things that would be very helpful for the museum. Kind of like what we see with Jurassic Park and Koloa, I believe. And to have that as a consideration for the film commission to look into creating a Hawaii film museum or Hawaii motion picture museum, whatever it may be called. Is that something the film commission would look into?

I think the idea is very valid. And, definitely, Chair, it has been discussed not only in the HTA film committee but also with us with the state archives at one point in time. I can say that because the State Film Office has been around since 1978, there is a lot of already hard props, hard props and other elements of the industry.

I think what you're talking about is very logical. I think that there's a partnership and an MOA between multiple agencies that would be helpful, including DAGS. Thank you. And it's an important step in the right direction. First thing foremost is making the credit competitive, being able to have a body that is larger and have more responsibilities, and in that museum would be a great consideration it would fall under probably the marketing committee. You're welcome.

Oh, one last thing. Productions historically do donate excessively to the community or in terms of their workforce development requirement as part of the tax credit, whether it's cash or internships. They already do that. But to your point of selling these items, the example is Lost. Because Lost, when they shuttered, they later on I think. I don't remember the exact time frame, but they did hold an online auction of a lot of the elements. They also gifted a lot of those elements to the State Film Office, so we have the assets. We'd be happy to work with anyone. Thank you.

Is DBEDT, is the deputy or director here by chance?

They're not, but you can ask me.

Could you just pass it on that, this Hawaii film museum is one type of museum? Maybe there could be a cluster museum and that could be part of the greater vision for tourism in Hawaii. If you could pass that message on.

I will, happily. And one of the things that we have discussed in the past I believe when our director was that Department of Transportation. Before he became our director, Director Tokioka and some of our community members also talked about music and film as displays in the airport, which many many states have and, of course, Nashville has. So we'd like to do that same kind of of thing. Thank you.

Okay. Anybody else? Alright. Thank you very much. That was 2578, SD 1. We're gonna move to the next bill, 2259.

So this measure actually, I should

I'm sorry.

I should also mention for the record that we have 2578. There were 42 testimonies in support, one in opposition, five with comments. K. For 2259 we have five in support, one in opposition, three with comments. Would anyone like to testify in, you know, in person?

Good afternoon, chair, vice chair, and members of the committee. My name is Hayden Cobb, and I'm in strong support of this bill, not just because I helped create it, but because of my own story as I've stated in my previous testimonies. I lost my dad to Alzheimer's disease. And a few months after that, I lost my mom to liver cancer because she was a caregiver that went through a lot of adversity and circumstances, especially in her workplace.

And I strongly believe if my parents' workplace had access to these free dementia training programs, they might still be alive right now.

And I know my my story is one of many, especially in Hawaii. There's a lot of people hurting in Hawaii, especially because of dementia. And that's why the training programs offered are free. They're free access, and it's because you can't put a price tag when it comes to caring for someone, especially a loved one, and making them feel safe. And I I I really do believe that.

And I ask you guys to continue to support this bill and and be the reason someone feels valued today. Be the reason someone feels safe and let that be your legacy. Thank you. Thank you for allowing me.

Appreciate it. Thanks. Do you wanna speak? Sure. Please.

Hi. My name is Jean Simon. I was here for the film bills, but I took care of my mom and my husband together with Alzheimer's and worked midnight shift at State Civil Defense at the same time. I had to retire because they could no longer be left at home safely. Fortunately, I had a state job and I had enough years and I could retire, but, man, I'm telling you, it's really hard.

So anything that can be done for the dementia community, a lot of caregivers die before the person they're caring for. That's how hard it is.

Thank you very much Please

Hello, Chair, Ligon, Vice Chair, Hussey, I'm Kobi Chok with the Alzheimer's Association in support of this bill This is so important as you heard from Heedan and some other testifiers as well. We just have a couple notes in our testimony for suggested amendments to kind of show the relationship and support between what EOA can provide to DBEDT in rolling this program out. And then there's also an amendment. You know, we know that workers turnover quite frequently.

So we have an amendment that allows DBEDT to potentially do a like, every two year retraining.

And that allows for people to be trained throughout the entirety of the business rather than just this 1.0 in time. Because if in two years nobody who is trained is still there, then the recognition doesn't really mean too much anymore. So the idea is just to give DBEDS some opportunity to retrain people to continue the program. Thank you, Chair.

Thank you. Anyone else? Anyone on Zoom?

Yes. This is Dennis Ling from DBEDT. Aloha, Chair, Vice Chair, Committee members. This is an extremely worthy measure. However, it is not an economic development initiative, and this program should align with existing programs and initiatives regarding statewide dementia.

DBEDT does not have the relationships with these kinds of service providers, but we can certainly reach out to businesses. Furthermore, there is a request for funding for this measure because businesses, business owners, let alone employees, will not avail themselves of these dementia training services unless it is made easy for them, such as online. And the retraining, if it's online, they can also avail themselves of that. However, I don't know if the training services right now are providing that online and if it's made easy for businesses.

Because they have a lot of other things to do, and it'll be tough for them to attend in person training unless it's made relatively feasible for them to do so.

Thank you.

Thank you, Dennis. Any further Zoom testifiers?

Thank you, Dennis. Any further Zoom testifiers?

Okay. Any questions?

I do have a question.

Dennis, can you

hear me? Yes. I can.

I think we went through this with the HP version of Yes. And we made those amendments. Are those amendments something that you're willing to work with? Or because the last time we spoke, you were okay with them.

Yeah. We are okay with the amendments. However, I think the, you know, the lead should be someone in the health or aging industry. And, you know, because they need to provide the right kind of, I believe, online training or something that would make it feasible and easy for the businesses to avail themselves of. In person, I don't think it's there will be much takers.

And so we need to find a way that we can reach a lot of people. And we'd be more than happy to support, provide the outreach, let them know about it. But, you know, to sort of sort of administer this might be a little tough for us.

Okay. Thank you, Dennis. Can we bring up the gentleman who draft helped draft this bill? So you got to read the Senate version. Yeah.

And you were here last time on the house version. Comparing the two, are you okay with this language?

I am okay with that language. And I'd also like to point out, there the dementia training programs can they're can be offered online and actually through the Alzheimer's Association as well where I've actually taken a variety of the dementia training programs. They're fairly simple, about an hour long, just a couple modules too, and it's very important information and it's not in person. It doesn't have to be in person.

I understand that businesses with their schedules and their workers, they're not always gonna be able to do in person.

So it is offered virtually. And there all the, dementia training programs that I've taken are free. And I've taken them through the Alzheimer's Association and it's fairly easy it's a fairly easy process to do. You just go online and it's, yeah relatively not hard.

Oh, we appreciate your work on this. Thank you.

Thanks. Any other questions? Alright. Let's move to the next measure. SB 3084, SD 1.

For this measure, we have 12 in support, none in opposition, none with comments. Would anyone like to testify in person?

Hello, Chair, Vice Chair, members of the committee. Ray Gomez for HTDC. With the unknown climate on the federal level, HTDC wishes to expand our R and D matching program to other R and D federal grants other than the SBIR program. This bill would allow us to do so.

Thank you. Okay. Anybody else? On Zoom? Okay. Any questions? Comments?

Just one question for HCDC. I believe we had a concern from any concern from one of our members on the floor regarding the same subject matter. And the concern was a a claim assumption that the state funds would be used for any sort of war related activities. And I just wanted to ask you, does that, because of your field in Hawaii Technology, Corporate Development Corporation, it kinda ties into a lot of tech things and also with the military.

So I just wanted to ask you, is that claim or is that assumption accurate? Or.

Currently, we have a committee who, I guess, decides on the projects, not just, not just if you already got a federal award, we can just match. So there's a process that the committee we score based on the project. Because SBIR awards are based on a project level. So, a committee does evaluate projects whether the committee scores, you know, tech that would go tech that could be used for more defense.

How they value it, I guess, is would be up to the committee.

So you're saying that it could possibly be if the committee approves it?

I believe so if there's nothing in our administrative rules to say that it cannot be.

So if we put into this measure that these funds shall not be used for any war related projects, then that would limit the scope of the ability to fund those kind of projects?

I believe so. I mean, depending the the more specific language on the definition of what, the tech would be, then the easier it would be for us to, control that.

Why don't you, figure it out as quickly as possible before we go to DM on what we could narrow the scope so it does not go into any sort of war related activities because, as you know, the public is hearing a lot of things, and the last thing we want to use is State funding for any sort of war activities. Yes.

I agree.

Thank you.

Thank you. Any other questions? Okay. Let's move to the next measure.

To the next measure, 2816 SD 1. For this measure, we have eight in support, none in opposition, three with comments. Would anyone like to testify in person or on Zoom? No takers. We'll move to questions.

Any questions from our committee?

Actually, let's bring in Enterprise Zone.

Good morning, Chair, Vice Chair. Jason Ushijima from the business development and support division.

Good morning. Could you expand a little bit on the comprehensive review? Because I find that measure quite interesting. And I assume that you already, I mean, not assume. I've seen your annual reports.

So I wanna know what's the difference between your annual report and this comprehensive review that is in this measure.

The items outlined, I need to double check, in the comprehensive review are closely aligned with what's already in our annual report. I believe there's an additional request, requested in the comprehensive review. Overall, there has not been a external agency or audit of the program itself.

Everything has been done by your department and the information collect.

So they're very similar then. So what would be the difference other than giving the annual report as the comprehensive review?

I need to find that one line. But there there is one additional item that it is asking for that the annual report currently does not have. Okay. I can get you that information.

Well, why don't you add that into the annual report?

That can be done. Yep.

Okay. Any other questions? Alright. That was 2816. Let's move to 2928 SD 1.

For this measure, we have 16 in support, none in opposition, none with comments. Are there any testifiers who'd like to speak in person or on Zoom, please?

Aloha Chair, Vice Chair, members of the committee. Keari Shibuya, small business procurement coordinator with the State Procurement Office. SPO stands in strong support of this bill. And I just wanna reiterate for those who may not be familiar, the small business procurement program serves as the bridge between small businesses and state contract opportunities. And it's a key component of the resource pool that our state provides to small businesses.

So we do work alongside agencies like DBEDT, like DOT, like the Chamber, to provide small business support. And so, therefore, I just wanna thank Chair and the Committee for working with us to pass SB 2928 SD 1 as is, to transition the five-year initiative into a permanent program, to ensure the success of the initiative as well as continuing our support as a resource for the local small business community. Thank you.

Thank you. Any further testifiers? Anyone on Zoom? Okay. Any questions?

Are there any safeguards in place to make sure that, say small business with a contract and just doesn't sub it out to like a large mainland company.

Joe?

Yeah. So part of the initiative is to pass administrative rules, and those include rules for set asides and for subcontracting policies. Those need to be passed by the procurement policy board. So it'll be up to the board to make sure that those safeguards are in place. So, yeah, I'll make sure of that.

Okay. Any other questions? Let's move then to next measure. SB 2075 SD 1.

We have 14 in support, none with opposition, one with comments. Any testifiers in person who'd like to speak? Or by Zoom? Okay. Any questions?

I do have one. Or, this is SB 2075. 75. I do want to bring up Procurement real quick.

Good morning, Chairs, Vice Chairs, members of the committee. Bonnie Kahakui, administrator State Procurement Office.

Thank you for being here. I do want to implement some of the changes for a 5% flat rate offset. My main thing is, could you figure out a way for these local preference?

I'm not gonna add it into the amendment, but I was hoping that you could do it in policy, to make sure that these are local businesses that are headquartered here in Hawaii and not just headquartered elsewhere and claiming themselves as local, and as well as that 51% of their workforce is hired here in Hawaii as well.

Yes. Of course. So with the Procurement Policy Board, when they draft rules, or when they draft rules, we could have, certainly have those parameters in place clarifying exactly what a local business is, including the local presence, local workforce. Thank you.

I wanna give you some flexibility, so that's why if you could put into your policy Okay. Instead of it being in the HRS.

Okay. Thank you.

Okay. Any other questions? Alright. That was SB2075 SD 1. Let's move to the next measure.

SB 3322 SD 2. We have seventy in support, three in opposition, one with comments. Would anyone like to testify in person?

Hi. Aloha. My name is Leilani Stacy, and I'm the immigrants rights attorney at the American Civil Liberties Union of Hawaii. We are in strong support of this bill and its companion, HB 2540 which is passed in the House. SD 2 just adds sort of robust accountability measures.

Thank you. Any other testifiers? Anyone on Zoom?

And as a reminder, this bill just generally ensures that local and federal law enforcement are held accountable by having, by limiting facial coverings, ensuring identification, and also just ensuring that local law enforcement is for focusing on keeping our communities safe, and federal law enforcement is focusing on any immigration enforcement that I'd like to do. So thank you.

Aloha, Chair, Vice Chair. This is Liza Ryan Gill with the Hawaii Coalition for Immigrant Rights. We are standing on our testimony in strong support of this bill. We just had a great lobby day yesterday in the capital with more than a 100 folks showing up and showing their support for, all of these packages of bills, and we're thankful to the committee, and we hope we can get this passed out. Any other additional items I think we can work on with the Judiciary Chair. Mahalo.

Thank you. Anyone else on Zoom? K. Any questions? Okay.

Let's move then to, the next measure. Actually, I do have a question. Maybe for Leilani. I've been reading reports out of Minneapolis that ICE is actually adjusting their tactics.

And I'm curious about you know, I think this is very important bill. Obviously I want it to move forward, but I'm wondering if there's ways to adjust this language to account for any changes in the, in the behavior that we're trying to, you know, guard against or prevent against.

That they've, you know instead of using a a full face covering, they've started to use, you know, ball caps and sunglasses and

Sure. Are you talking about, like, sort of, like, what sort of changes in Minneapolis might you be referring to?

Sure. That's a great question. I think, yeah, the situation on the ground is changing, and we might be able to address that in bill language, either in this one or the House version. I think in general, we're just hoping that, you know, in the same way that our local police officers have identification when they're going around or are able to respond to questions, if folks are stopped in the street, we might be able to require the same thing.

There's, you know, difficulties just legally making sure that it's equal across both state and federal law enforcement. But, yeah, that's definitely something that we could take into consideration.

Thanks. I Appreciate it. Okay. Are there any other questions? Okay.

Thank you. Let's move to the next item. Next bill is SB 2377 SD 2. Nine in support. None with opposition.

None with comments. Are there any testifiers who'd like to speak? Anyone on Zoom? Any questions or comments? That's a new record, guys.

That was very impressive. Okay. Let's move to the next one. 2436 SD 2. For this measure, we have six in support, none with opposition, none with comments.

Anyone in person would like to testify? Anyone on Zoom? You gonna testify? Okay. Great. Please, join us.

Hello. My name is Katy Chen. I'm the president and CEO of Goodwill Hawaii, and we stand in strong support for SB 2436 SD 2. And thank you for allowing me to come before you today, chair and vice chair. This bill is extremely important to restore the trust of our donors.

Right now, there's all these donation receptacles out in the community, and they are not being properly monitored by the attorney general's office under the charitable act. They're soliciting goods, and it's often frustrating to understand whether these goods are, in fact, benefiting the charities that they claim to be. They are being solely operated by for-profit entities, and we think that it's really important at since they are for profit solicit charitable solicitors that they be held accountable with this charity act.

And we, Goodwill Hawaii, has been a local nonprofit since 1959, and we rely on these donations. And when people donate and realize later that maybe their entire donation does not benefit an actual charity, it leads to a troubling trend of loss of trust in the charitable process, and that affects organizations like ourselves.

The we do know that the attorney general has requested additional funds to they they're fine with this bill, but they're requesting additional funds to enforce it. However, we, as Goodwill Hawaii, are one of over 10,000 charities each and every year that pay into a fund that supports that office to enforce the charitable laws. So that, fund is already sitting at over 5 million dollars and so, as of the 2024.

So the attorney general's office does have the resources in which to support or enforce this bill should it pass.

Thank you.

So, thank you. Are there any questions?

Okay.

I don't have any questions.

Any other testifiers? Okay. Anyone on Zoom? Any questions? Okay.

That was 2436. Let's move to the next item. SB 2835 SD 1. We have 12 in support, none in opposition, one with comments. Would anyone like to testify in person or on Zoom?

Okay. Are there any questions?

Okay.

I have a question.

Aloha, Chair Ilagan, Vice Chair Hussey, and members of the committee. My name is Jeff Hong. I'm the chair of the Honolulu Laker Commission. Anna Harai was supposed to be here, she's not here. She's our assistant administrator representing the agency.

Our administrative position is currently vacant. The commission has comments on the substance of the current bill and requests two changes that are in the spirit of this bill. The commission views its role as facilitating and supporting the responsible service of alcohol while enforcing regulations to protect public health and safety. Streamlining nonprofit licensing aligns with this vision. We asked for two additional changes.

The first, while small, is critically important and requires a little bit of history. Honolulu is the only county that issues class 10 licenses.

We have been issuing them for over forty years. In 2008, a massive cleanup of the liquor statutes provided for the free nonprofit licenses. It is unclear whether after this amendment the for-profit class and licenses can be issued. We issue 100 of these licenses yearly to support our bars, hotels, and events like the semi-open. We have recently been questioned on our authority to issue these license and ask for this technical cleanup to continue the status quo. We also want to expand the class 10 license to include off-premise consumption. This is so that our small craft brewers and manufacturers can sell their products at farmers markets and pop-up. We realize this expansion is not without controversy, so we can come back in another session for a folk debate on the merits.

Thank you for this opportunity to testify.

Okay. I think we have a question for you.

Okay.

Since you said in your testimony, we'll, we'll adopt your first recommendation, and the controversial one will not.

Yep. We're fine with that.

Sounds good.

Thank you very much. Alright. Well, that was easy. Okay. Any other testifiers? On Zoom, perhaps?

Okay. Any other questions? Alright. Let's move to the next item. 23, I'm sorry.

3248 SD 2. SB 3248 SD 2. For this measure, we have nine in support, four in opposition, one with comments. Any testifiers would like to speak? Please.

Aloha, Chair, Vice Chair, members of the committee. My name is Naehalani Breeland. I'm the president and cofounder of Ola Brew. It's nice to see you guys again.

I stand on my written testimony, and I wanted to just share a few more thoughts. As we know, the life of began here in Hawaii, rooted in our and in our people. When proudly received awards in 1889 at the Paris World Exhibition, I want to note that Napa wine also received international recognition. Just days before the overthrow of 1893, our queen published regulations to license production. Like many things that were tied to that era, was nearly lost.

Today, Napa Valley generates over 11 billion dollars annually from about 42,000 acres of Vineyards. In comparison, here in Hawaii, the Hamakua Coast alone once produced over 40,000 acres of sugarcane. That land is now thriving, currently in the hands of local farmers and stewards like Kamehameha Schools. Now the question is, how can we continue to malama this and allow the land to prosper, both culturally and economically? At Ola Brew, we are not just trying to build our brand, but we're trying to build the industry.

We are building the okolehao industry. We've invested tens of millions into cultivation, distillery infrastructure, and into refining multiple award-winning products. More importantly, Hola is actively creating a foundation for our farming community. With our distilling capacities, we can support our neighboring farmers up and down the Hamakua Coast with co-packing that will fuel the revival of the okolehao industry.

I also wanna clarify that the 51% key requirement in this bill, measured by sugar content as defined by the TTB, translates to about 85% key by, by weight.

This ensures that the integrity of a historic product while anchoring a huge agricultural demand in Hawaii. This bill is a structure to help us ensure this industry develops here, that it's grown here, made here, and most importantly, benefits our. This is our opportunity to build Hawaii's next place-based value-added industry. Belongs here in Hawaii, so let's build it in the right way. Mahalo for hearing my testimony, and I'm open for questions.

Thank you very much. Any further testifiers? On Zoom? Okay. Any questions?

I do have one. Can you come up? I'm not a brewer myself, so I have some questions.

Yeah. Absolutely.

For the key being 51% I think I think there were some requests to make it a 100%. Right. And could you just give me an understanding of the difference between 51% and a 100%?

Yep. So, basically, we have we have produced okolehaos that have been anywhere from 65% key to 100% key. We know that the sweet spot for us is about, you know, 95%. Right? That has to do, actually, and I'm glad that you brought up the brewing, that has to do with how the sugar how the enzymes are relating with the sugars and actually finishing out the product to, to create a beneficial and delicious product.

Right? So we really wanna make sure that when we are, when we are setting these regulations, similar to like, the TTB has regulations with Kentucky bourbon. It has regulations with that we've adopted from tequila from Mexico. And all of those state that it should be 51% blue agave or 51% corn. You know?

And so we were just kind of going with those with those, adopting those regulations just to maintain, you know, that we could potentially create a great industry here. Sometimes when I believe that we would, we would love to do 100% and we, and we will continue to, to do our 100%.

But we also want to make it available and make a lower barrier to entry to everybody because we've, we've definitely, like I mentioned, we've spent a lot of money doing, like, R and D and really creating the cultivation. And that's something that we're really willing to work with other farmers and willing, willing to help. But the more percentage of key that you get, the higher the value of the product.

Right? Which is great because we want to, we want a growing industry, and we also want to be able to allow our farmers to, you know, create products that aren't too expensive for them to, to make themselves. You know?

Yes.

That we want to ensure the integrity of using this labeling marketability. And if we go too high on the percentage and it just bears the entry, it bars that entry for other businesses like yourself. So maybe in the future, we could raise that percentage up once the market matures.

It sounds like it sounds like, one, this is a emerging industry.

Yeah.

Where all everyone can participate.

And then we can figure out what it looks like as the market matures.

And we could figure out what that looks like. But for now, it sounds like 51% is probably the right starting point.

I think so, yeah.

Yes. Exactly.

Exactly. Yeah.

Perfect. Thank you.

Absolutely. Thank you.

Any further questions? Okay. With that, I think we're going to recess.

Welcome, everybody. We are back from recess, and now it's decision making. We are gonna go to the top of the agenda on SB 2580. This bill provides Tax Incentives for the Film Industry. Chair recommends to re-defect the date to 07/01/3000.

And just for the public's understanding, defecting the date allows us to ensure that we have a HD1 on this measure, and then it can move over to conference because there are difference between this measure with the SD1 and the HD1

And then we can figure out what to do with those differences. So just for the public's understanding of what that means, and also technical amendments for the purpose of clarity, consistency, and style. Members, any questions or comments?

No questions or comments. Vice chair, could you please take the vote?

Okay. SB 2580 SD2, recommendations to pass with amendments. Chair and Vice chair vote aye.

[Roll call]

Thank you very much. Chair, the recommendation is adopted.

Thank you. Moving on to SB 2578. The Chair recommends to re-defect the date to 07/01/3000, technical amendments for purpose of clarity, consistency, and style. I also wanna just make a brief comment. If this commission does start up, I do want to ask them to look into a film, a Hawaii Film Museum.

And if DBEDT can also look into locations where a cluster of museum could be within the area. So that way, for tourism, it would really help our state and reasons for coming to our state. And also, the Film Museum would encourage more film production in our state. Members, go ahead.

Comment.

I'd like to add on to that. I really like the idea of a film museum and a cluster museum. I would I would urge, to take a look at maybe Balboa Park in San Diego where they've got a cluster of 18 different museums. It's a very highly visited spot, in that area and could help drive a lot of revenue in the tourism industry.

Thank you. Any other members?

With no further questions and comments. Vice chair, please take the vote.

Okay. SB2578 SD1. Recommendation is to pass with amendments. Any opposition?

Any reservations?

Chair, the recommendation is adopted.

Thank you. Moving on to SB 2259. This bill helps families in Kupuna by encouraging more businesses to become dementia friendly so people living with dementia can live more safely and with dignity.

Chair recommends to re-defect the date to 07/01/3000 with technical amendments for the purpose of clarity, consistency, and style. Members, any questions?

No questions. Vice chair, please take the vote.

SB2259 SD1. Recommendation is to pass with amendments. Any opposition?

Any reservations?

Chair, the recommendation is adopted.

Thank you. Moving on to SB 3084. This bill allows grant funds for research and development in Hawaii Technology Development Corporation. Chair recommends that matching funds shall not be awarded to projects whose primary purpose is the development, testing, or development of weapons or munitions.

We wanna make sure that this measure and this funding sticks to economic development and focus on technology for that industry in our state. And so we wanna limit the funding scope and make sure that deployment of weapons and munitions are not being funded through this funding.

Members, I also wanna put in some technical amendments for the purpose of clarity, consistency, and style. Members, do you have any questions or comments?

With no questions or comments. Vice chair, please take the vote.

Recommendation on SB3084 SD1 is to pass with amendments. Any opposition?

Any reservations?

The recommendation is adopted.

Thank you. Moving on to SB 2816. This is to amend the enterprise zone and provide businesses tax incentives. Chair recommends to re-defect the date to July 1, 3000 with technical amendments for purpose of clarity, consistency, and style. Members, any questions or comments? No questions or comments. Vice Chair, please take the vote.

SB 2816, SD 1. Recommendation is to pass with amendments. Any opposition? Any reservations? The recommendation is adopted.

Thank you. Moving on to SB 2928. This bill establishes the small business procurement program and small business procurement coordinator position permanently in the State Procurement Office. Chair recommends to re-defect the date to July 1, 3000 with technical amendments for the purpose of clarity, consistency, and style. Members, any questions or comments? With no questions or comments, Vice Chair, please take the vote.

SB 2928, SD 1, recommendation is pass with amendments. Any opposition? Any reservations? The recommendation is adopted.

Thank you. Moving on to SB 2075. This bill allows local preference for Hawaii bidders. Chair recommends to remove the tiered language for local preference and implement a 5% flat rate offset instead of the tiered. Chair recommends to amend the language that the local preference apply only to Sections 103D-302, which is a competitive sealed bidding, and 103D-303, which is a competitive sealed proposals, and not apply to Section 103D-305, which are small purchases.

A lot of the, a lot of the local businesses that we wanna provide opportunities are actually the sealed and competitive bidding that are a higher lump sum. A lot of the mainland bidders who are out of state are not bidding for the small purchases because they're too small. However, where it becomes very competitive are the higher bids, those amounts.

And so providing this 5% offset will give a leg up to the local businesses here in Hawaii, and that this is what this local preference does. And I hope that we can spur more local businesses here in our state. There's also technical amendments for the purpose of clarity, consistency, and style. Members, any questions or comments? With no questions or comments, Vice Chair, please take the vote.

Okay. We're on SB 2075, SD 1. Recommendation is to pass with amendments. Any opposition? Any reservations? The recommendation is adopted.

Thank you. Moving on to SB3322. This bill establishes policies for facial covering for law enforcement. Chair recommends to redefect the date to 07/01/3000 with technical amendments for purpose of clarity, consistency, and style. This committee has moved many immigration bills, and we have worked very hard on the House Version.

And we fixed it up quite nicely. And this bill, we wanna move it forward for discussion purposes and ensure if the House Bill does not move forward, we still have a vehicle and this could be that vehicle in the future.

So there are a lot of fixes that needs to happen on this bill, but we wanna move it and make sure that this vehicle is still here. Members, any questions or comments?

Just wanna flag for the advocates working on this measure to, please engage with us on thinking through any potential language changes so that, we could be most responsive to current needs.

Thank you.

Alright. With no questions or comments. Vice chair, please take the vote.

Okay. SB3322 SD2, recommendations to pass the measure with amendments. Any opposition?

Any reservations?

Reservations.

Noting the reservation of Representative Gedeon. Any further reservations?

Chair, the recommendation is adopted.

Thank you. Moving on to SB 2377. This bill adds broadband as critical infrastructure, increasing it to a Felony for those who messes up those critical infrastructure. Chair recommends to add wireless between broadband and cable television networks, technical amendments for the purpose of clarity, consistency, and style.

We just wanna make sure wireless infrastructure is also added in, and this measure increases the penalty for those who are damaging these critical infrastructure. Members, any questions or comments?

No questions or comments. Please, Vice chair take the vote.

Okay. SB2377. SD2 recommendations to pass with amendments.

Okay. Any opposition?

Any reservations?

Chair, the recommendation is adopted.

Thank you. Moving to SB2436. This bill establishes a time frame and financial reports for professional solicitors who resell items. Chair recommends to redefEct the date to 07/01/3000 with technical amendments for the purpose of clarity, consistency, and style. Any questions, members, or comments?

With no further questions or comments. Vice chair, please take the vote.

Okay. SB2436 SD2. Recommendations to pass with amendments. Any opposition?

Any reservations?

The recommendation is adopted.

Thank you. Moving on to SB2835. This bill allows more use for the three day temporary liquor licenses for certain counties. Chair recommends to adopt the first recommendation from the Liquor Commission's testimony and not the second recommendation, with technical amendments for the purpose of clarity, consistency, and style.

This definitely should be able to help the nonprofits who utilize these temporary liquor licenses and hopefully be able to raise the funds that they need to raise to help out vulnerable populations in our communities.

Members, any questions or comments?

With no further questions or comments. Vice chair, please take the vote.

SB 2835 SD1, recommendations to pass on amendments. Any opposition?

Any reservations?

The recommendation is adopted.

Thank you. We have SB 3248. This bill establishes the labeling requirements of Ōkolehao. The chair recommends to redefect the date to 07/01/3000, technical amendments for the purpose of clarity, consistency, and style. And we should also add in, an amendment that once this bill becomes effective, that these organizations shall establish a tasting for the legislature.

Strike that from the records. Members, do you have any questions or comments?

Alright. With no further questions or comments

Just wanna make sure we're passing unamended.

We are doing a HD1.

HD1?

We are redefecting the date. Date. So 07/01/3000. Okay. And we're also having technical amendments for the purpose of clarity, consistency, and style.

Thank you. Disregard my

Got it.

Okay. We are on SB3248 SD2, recommendation to pass with amendments. Any opposition?

Any reservations?

Okay. The recommendation is adopted.

Thank you members and thank you everybody who testified. This hearing is now adjourned.