Senate Standing Committee on Government Operations

This is our Joint Committee of Labor and Technology and Government Operations. I'd like to welcome Chair McKelvey and Senator Moriwaki for joining us. Thank you for coordinating with us to have our joint hearing. Today is Wednesday, 03/25/2026. It's 3PM.

We're in Conference Room 225. Just a few housekeeping announcements. In the unlikely case of technical failures, this meeting will reconvene here in Conference Room 225 on 03/27/2026 at 3PM. For all testifiers, including those on Zoom, we ask that you stand on your written testimony. If your oral testimony is different from your written testimony, the time limit for each testifier will be one minute.

The content, including the hearing notice, copies of the measures, and testimony can be found on the legislature's website. If time permits, decision making will occur after we hear from all those offering testimonies.

We have three items on our agenda. We'll begin first with our first item, which is House Bill 1663 House Draft Two. This is relating to reimbursement of public officers and employees. First up on our list is Bonnie Kahakui.

Good afternoon, Chairs, Vice Chairs, and Members of the Committee. My name is Carey Ann Sasaki, and I'm testifying in on behalf of Bonnie Kahakui, state procurement office administrator, state procurement office, and providing comments.

Okay. Thank you, Miss Sasaki. Standing under testimony, providing comments. Kamakana Kaimuloa, UPW.

Chairs, UPW stands on written testimony in support.

In support, thank you. And Nui Sebas. HGEA.

Chairs, Member, Nui Sabas for HGEA. We submitted testimony, strong support. I do just wanna, request an amendment just to delete the term no fault, through no fault of their own on page four line five to six. Just the term fault might be might create a kind of a problematic situation if, if employees have to cancel their travel due to a sudden medical or family reason, and the employer may subjectively determine that they may not be eligible for reimbursement.

I also had a chance to take a look at SPOs amendments, and we are amendable if the committee decides to, to, accept those amendments.

If, however, for one of the amendments that they did put as determined by the comptroller is one of the amendments I do request is more of a nexus to what they're referencing in their testimony for interest rates for late vendor payments. Happy to answer any questions. Thank you.

Thank you, Mister Sabas. That completes our list of registered testifiers. Anyone else in the audience that wishes to testify on this measure? If not, Members, questions?

Question.

Yep. Chair McKelvey.

SPO. Just to real quickly, have you, they had a question about your.

Yes. If you could, if you're able to, please come forward, Miss Sasaki.

Yes, Chair.

Thank you.

About reference to the comptroller. Right?

Yes.

No. I'm, I'm not. You had a question about one of their proposed amendments insofar as the comptroller goes. Right?

Yes.

So.

Yes. We've.

Might as well come up since we're.

Yeah. So I, I saw our our, request for, for that amendment would be, so in their testimony, they reference the interest rates that would be determined by the comptroller is in Section 103-10 for late vendor payments. So, we just request that there could just be more of a nexus between kind of what they're referencing in their testimony with the amendment they're requesting. If that makes sense.

I guess the the logic behind it is there is a process in place and and for consistency. There's a formula calculation, you know, for late vendor payments. So, therefore, we'll just have it, you know, across the board. It is adjusted quarterly. So that way rates may be, you know, not just a static rate.

Of course. Yeah. And we're not objecting to, to the calculation of that. We just in the measure, we just wanted to just have that more of a nexus and stuff.

Oh, I see.

I'm just, I'm not accusing this comptroller, but who does it say future comptroller? They say zero and stuff. Just so.

Got it.

And stuff. So that's kind of just our our concern. But, yeah, we have no objections to the actual interest rate determined in that section.

Okay.

Does your explanation, like, I guess, have been satisfied you guys in so far as the whys?

Yeah. We're good on the whys. I think it's just the language of it if there can just be that.

Well, that's that's so late in the process. That's why I'm trying to basically drill down now. Like, okay. There may not be time to come up with said magic language. So if knowing that this is why they put it in, if they were to move it with the their amendments, would you guys have heartburn over that, or is that something you continue to talk over?

We're happy to continue, continue to talk about it.

Thanks, Chair.

Chair.

Yeah. Senator Moriwaki?

So, so a question for SPO then in, in, in response is that if we said it's determined by the comptroller pursuant to 103 D or 103-10 or HRS or your, HAR, you have rules that have the quarterly or is that something where there's a statutory authority? Is that what you're talking about?

Yes. Yeah. There is the, HRS 103-10

Yeah. So.

Goods and services, and the comptroller's memo is based on that.

So you said, determined by the comptroller pursuant to 103-10. That does that, does that satisfy?

Yep. Yeah. Okay.

Okay. Cool. Perfect.

I have, I have another question for the both of you. No. Stay there. Stay there. Stay there.

It it has to do with Nui's question about, taking out the no fault of their own. Is there any other language, like, good cause exception or some other language that would be a little bit more specific than no cause I mean, good like, good cause exception? Is that a language that would be agreeable to SPO? Maybe it's versus no. I, I mean, no fault of their own seems to cover it, but I guess you're feeling uncomfortable with that.

No legitimate reason or?

No legitimate reason.

We're good with for a legitimate reason or for good cause. Good cause.

Good cause. No. Good cause. For good cause.

For good cause. Yeah.

That's a standard term that there's a universal definition behind. There's not gonna be any kind of interpretation.

Okay. Thank you.

Thank you. Members, any further questions? Okay. If not, we'll move on to our next item, which is House Bill 2335 House Draft one. This is related to workforce development on Zoom or in person, DOT.

Hello, deputy director Lee.

Hello. Hello, Chairs, Members. The DOT is in strong support as our written testimony says, but I do have a correction, and it starts with the statutory change in the ramsear. I would like to request for a strikeout under that first ramsear where it starts state departments, divisions, and agencies shall have the following flexibilities regarding minimum qualifications to strike out for positions having a salary range at or below SR 10.

When we're doing the research, we were reviewing act two ninety one of, 2025 and the Department of Health's pilot program.

So we made a mistake on that.

Okay. Thank you.

Thank you. We might have some follow-up questions. Okay. Thank you. Okay.

That completes our list of registered testifiers. Anyone else on House Bill 2335? If not, members questions? Okay. Question for deputy director Lee.

Okay. So we did receive your testimony. So your further request is to strike out the language from state departments all the way to SR 10, that first line.

I'm so sorry. So it should read, flexibilities regarding minimum qualifications should be a period. And the strikeout is for positions having a salary range at or below SR.

So period after qualifications.

Yeah. That was a mistake.

Okay. Okay. Thank you. Any further questions for deputy director Lee? Okay.

If not, we'll move on to our last item on our agenda, which is House Bill 2597 House Draft one. This is relating to artificial intelligence. First up on our list is Jennifer Chun, acting administrator for DBEDT.

Aloha Chair, as Vice Chairs, and Members of the Committee. DBEDT stands at our testimony in support.

Okay. Thank you. Christine Sakuda, ETS director.

Aloha, Chairs, Vice Chair, Members of the Committee. Christine Sakuda, the state CIO, and with the Office of Enterprise Technology Services. We are in support of this Bill, which requires the Chief Data Officer, also within the Office of Enterprise Technology Services, with the ability to enhance the state's open data portal. We believe strongly that a portal provide a single portal, otherwise known as a statewide chatbot for open data, would really help ease our constituents' ability to access state data, publicly available data in a central place.

And we are a big advocate of that.

In addition to that, the Bill also asks the CDO to develop a system to evaluate and select AI governance tools for use by state departments and agencies. And we support that Bill as well. We ask for some funding to support those activities. And, thank you for the opportunity to testify and stand by for any questions. Thank you.

Thank you so much. That completes our list of registered testifiers. Is there anyone else that wishes to testify on House Bill 2597? I'll note members for this measure. We had three in support, 15 in opposition, one comments.

Any questions?

That's a good question.

Yeah. Chair McKelvey? Super fast.

Because I know we're running out out of time here. You know, I mean, while it's, of course, it's advantageous for a CHAP offer central government, there's a lot of concerns about it. I think you saw that in the opposing testimony.

While not trying to get prescriptive by putting in the Bill, would you support language in the committee report to put in the legislative intent that any such system should be safeguarded against for PII, for hallucinations, and and any such vendor shall be solely indemnify the state for any such ramifications of that?

Yes. We would support that. Thank you very much.

Thank you, Chair. Appreciate it. Okay.

You're welcome. Yep. Senator Moriwaki.

Thank you. Hi. Thank you, director. The question I have is is that, I think OIP had had, test testified that, you know, they they should be exempted from it and how you carve out those who don't have, have, a data system that that links to whatever, and that they wanna carve out their their program.

So there may be others, and so I'm just wondering how you might coordinate this because I think we're putting you in the lead, but but a lot of this has to do with social services and people who are Medicaid, Medicare, and how you might coordinate with those kinds of departments where open access is really for people to have information from the community Into our programs?

Yeah.

Thank you for that question, Senator. And we value the the the discussion and with all the departments, including with OIP. We talk to them all the time. And, you know, the the virtual agent or the chatbot acts kind of like a a a elaborate Google search. And so it does provide a summary based off of the data that it connects to.

And the data that it connects to is all publicly available data on the state's different websites. So it doesn't really generate new data aside from the summary. And it also cites the source, like a Google search. It cites the source of the source data. So if anyone wanted to know where the data came from, it would be sourced to that.

And so we only, the idea with the virtual agent is only to connect to publicly available data. So if there is sensitive data, we wouldn't connect to that. And we do wanna hold, of course, any of our partner vendors accountable for making sure that the data is always protected.

I think that so some of the opposition comes from people thinking that you're taking the personal data, but that's not gonna be available in in this kind of, system.

Right. The the chatbot links to publicly available data. So the data that the departments deem as publicly available public data, that's what we're linking to. We don't link to any other data that's not publicly available.

So the the one, one access that we've talked up in the in the past, especially in social service data, is that I have services from labor department, from DHS, from DOH, and I don't wanna keep on putting my same data in, my my personal data in, and I want that to be going to all of the agencies.

Is that something that this kind of system does, or is that another system that has to be developed where I just put my name in once and it's there for all the agencies that I need to get services from?

Thank you. Thank you for that question, Senator. So this this chatbot is really envisioned to be a virtual assistant, like a chatbot where you kind of ask it questions about, I'm trying to find this. You know, where can I find that? It's not, and so as a chatbot, it has limited capability.

It's not like it is, a benefit hub that we've talked about in in other discussions where a citizen would put information into that hub and it's stored there. It's really envisioned to really be a chatbot to to get information quickly to the constituents across the departments.

Okay. So it's just the kinds of services and what you need, the benefits and so forth, but nothing personal in this system?

As long as it's not publicly available data.

That's the relevant.

Yeah. That's right. So the the idea of the of the virtual assistant in the chatbot, like a Google search, is that it only it only searches what is publicly available. And so we we work very closely with all of the departments because they post information on their websites that's publicly available. And that's really where the link is between the virtual agent and the departments.

It's what's on their website already. And so we're not the the idea of the virtual, the virtual assistant is not to query any other data that's not publicly available. It's only for data that is publicly available. And it makes it easy for constituents to find the answers. So we will work closely with the departments to make sure that the data that they provide on their websites is publicly available data.

I know we've worked in the past for consolidation, and you have shared resources now. But I think that's part of the beauty of this, is that all departments should be working together. Yes. And we should have one system. So, but this is a system of services each department provides.

Is that correct?

Yep. The the department some departments have their own chatbots, and they develop it faster than ETS. And so it that's fine that they have their own chatbots, you know, and that just happens naturally. But on the the state's central data portal, the the Bill asks for a centralized statewide virtual assistant that connects to all of the other ones. So it's a kind of a one stop shop.

Yes.

Yeah. But That's why the Bill's important. I mean, all these agencies are running in different directions. No standards. And sorry.

But the the PII, there is no standard, and our standard is sorely lacking. So you and then AI synthesizes the data. It doesn't just retrieve it. So that's where the I guess my concern is you're now synthesizing and making representation. What if I need help from this, but I get sent to that department and now I get nailed by, say, the tax mark said and file something on time.

Well, the AI agent didn't send me there. It sent me someplace else. I guess that's why I keep coming back to the liability and these things or these types of things where somebody has a medical emergency, they go to the chatbot and something happens, we get sued. Right?

Yeah. Those are those are good questions.

But that's why I think in the committee report, why we we could put that in there. It would be great to put the legislative intent, but I concur with you what you're saying. Yeah.

There any further follow-up questions? If not, the the Chair does have a few. So Yes. Currently now, some departments just developed their AI chat box. What is there an internal memo on usage or how protocols or is that based on the department, or does that come from you as the CIO?

Yes. Thank you for that question. So the chief data officer in collaboration with the data task force, which is legislated, thank you for your support on that, has developed a set of guidelines, AI use guidelines, data use guidelines that's posted on the website. In addition to that, we are working with DHERD to, revisit their acceptable use poll acceptable use policy for IT, for technology.

And probably that needs a face lift too so that all state employees are aware of, the opportunities as well as the the dangers of, abuse of AI and technology.

And so we work on that. And so I would like to strengthen that in the future, from guidelines. But, again, it's a conversation that we're having with our partners.

And I would also highly recommend bringing the unions in because there's been a lot of concerns and and this is a conversation starting up in other jurisdictions.

Yes. Absolutely. Any further questions for miss Sakuda? Okay. If not, we're gonna recess.

I think I called all the testifiers on that.

We're gonna recess.

Thank you. Hey. Thank you everyone for your patience. Reconvening our joint hearing from Labor and Technology and Government Operations. Chairs having conferred, we are ready for decision making.

Thank you very much.

We'll first begin with House Bill 1663 House draft two. This is relating to reimbursement of public officers and employees. Chair Rook is gonna recommend here that we pass with amendments. We're gonna accept and adopt the state procurement office proposal amendments in their testimony pursuant to HRS 103 dash 10. And we're also gonna accept and adopt HGEA's proposed amendments in their testimony, accept and adopt University of Hawaii professional assemblies, proposed amendments in their testimony, tech amendments, and change the effective date to 01/01/2077.

Any further discussion? If not, Vice Chair Lamosao for the vote, Chair votes aye.

Members are voting on HB 1663 HD two. Recommendation of the chair is passed with amendments. Chair votes aye. Vice Chair also votes aye. Senator Ihara is excused.

Senator Moriwaki. Aye. Senator Fevella. Aye. Chair recommendation is adopted.

Okay. Thank you very much. Our government operations, same recommendation. Senate draft one, I vote yes.

Member HB 1663 HD two Chair's recommendation is to pass with amendment. Chair votes aye. Vice Chair is excused. Senator, I vote aye. Senator Moriwaki.

Aye. Senator Awa. Aye. Chair recommendation is adopted.

Okay. Thanks, guys. Okay.

Thank you. Our next item on agenda is House Bill 2335 House Draft one. This is relating to workforce development. Trish is gonna recommend that we pass with amendments. We're gonna accept and adopt each DOT's proposed amendments.

However, we're also gonna further amend it based on the testimony that was provided by deputy director Lee, wherein their proposed language, where it begins in HRS 76 dash 22.6 under recruitment and minimal minimal qualification review. We're gonna put a period after the qualifications that's outlined in their testimony and then strike out the word starting from four all the way to SR 10. And then in addition to that, we're gonna change the effective date to 01/01/2077.

And in the committee report, we're gonna highlight DOE's testimony regarding consideration for a framework in a skills based hiring approach. With that, any further discussion?

If not, Vice Chair Lamosao for the vote. Chair votes aye.

Okay. Members, we're voting on HB 2335 HD one recommendation of the Chair is to pass with amendments. Anyone present wanting to vote with reservations or no? Hearing none, Chair your recommendation is adopted.

Okay. Okay. Thank you very much. Our government operations, same recommendation. Senate draft one, I vote yes.

Member is HB 2335 chose from the hospital. Noting receivable by Vice Chair Gabbard for this measure and all others. Any members waiting for reservations? Any members voting no. Without others voting, I recommendations adopted.

Thank you. Our next item and our last item is House Bill 2597, House Draft one. This is relating to artificial intelligence. We had a really good discussion with that. Recommendation here is to pass with amendments.

We're gonna accept and adopt OIP's proposed amendments in their testimony, tech amendments, and we're gonna change the effective date to 01/01/2077. In the committee report, we're gonna highlight ETS's testimony in which it would be 2,000,000 to develop the two and hire one AI engineer and one AI scientist. And then, chair McKelvey, you had some.

For our discussion, rather than be prescriptive and put it in the Bill, we're gonna put it in the committee report that any procured AI system has to indemnify the state for liability protection for some of the things we've concerned. And anonymize and aggregated data on breaches, hallucinations, and other types of misuse of AI so we can ensure that the vendor in the system is working without any needs for it.

And then finally, to have the group encourage and work with the agencies on all agencies to adopt and modernize their definition of PII so the information obtained within will not be misused or put out there, especially as far as generative AI goes.

Could you could could you repeat that again?

I could just say it again, or I can just go ahead and have this, do a print statement. Yes.

Thank thank you, Chair. So with with all that, recommendation is, to do all that, with amendments. So yeah.

So Vice Chair Lamosao for the vote. Chair votes aye.

Okay. Members, we're voting on HB 2597 HD one. Recommendation of the chair is to pass with amendments. Anyone present wanting to vote with reservations or no? Hearing none, Chair recommendation is adopted.

Okay. Give committee and government operations, same recommendations. Senate Draft one, I vote yes.

Members HB 2597. Chair's recommendation passed. Chair votes aye. Any members voting with reservations? Any members voting no.

Without others voting, I recommendation is adopted

Thank you. This concludes our joint hearing. We are adjourned.