House Standing Committee on Consumer Protection & Commerce

Okay. Good morning every-- or good afternoon, everybody. We are convening the hearing at the Committee on Consumer Protection and Commerce. It is Tuesday, March 31st, 2:00 p.m. in Conference Room 329, and today, we are hearing resolutions.

It's a very short agenda, but another quick reminder that we have a two-minute time limit on testimony and when the timer goes off, I will kindly ask you to wrap up your remarks. First on the agenda is HCR 160 and HR 150. We're taking them in tandem.

This reso requests the Public Utility Commission to develop a temporary working group to study the current capacity of utility services, the expected lifespan of existing coastline infrastructure, and the financial implications of necessary expansions. First up is DCCA, Division of Consumer Advocacy, with comments. Okay. Not present. Public Utilities Commission, with comments.

I'm sorry. Aloha. Good afternoon, Vice Chair Grandinetti, Chair Matayoshi, and members of the House Committee on Consumer Protection Commerce. My name is Andrew Kabe. I'm a engineer at the Public Utilities Commission. I'm here on behalf of Chair Itomura and the commission. I stand on the commission's written testimony, offering comments on HCR 168, HR 158. I'm available for any questions committee may have. Thank you.

Thank you. Anyone else in person or on Zoom would like to testify on this measure? Okay. Seeing none, moving on to HCR 145-- oh, sorry. Sorry. Seeing none. Members, any questions?

I have one for Public Utilities Commission. Are you guys the right guys or what, for this?

I mean, as you see in our testimony, you know, not everyone you're considering under this reso, or resolution, you know, we have direct authority over. So we can't really, you know, tell them, hey, we're gonna meet on this day, and you have to get us things by this day. I-- otherwise, I don't know really how to answer, you know, your request about if someone else would be the right one. So I would say that we kind of aren't. So I know that's not satisfying for you here, so I apologize.

No, I mean, we were kinda thinking, like, DLNR, or some-- it's such a broad, you know, topic. Infrastructure is so broad. You could touch so many areas. I'm wondering if there's some kind of overarching department that could do it, or maybe if the House should be convening this working group instead, or what do you guys think?

I mean, maybe a more neutral party like yourself would be a great idea, but, again, I don't wanna-- you know, you guys are doing a lot. I don't wanna tell you guys you have to do more work than you already are.

Yeah, invent your own. I'll do this. We got a request from the introducer to restrict this geographically to just the neighbor coast. Do you think that would make sense to do that, or should this be done more kind of holistically on the island of Oahu, maybe?

Sorry. Could you repeat the coast part? I didn't hear between coast and restrict.

So this is to study utility services along the coastline or existing coastline infrastructure. I had originally thought this meant, you know, all the coast on the island, but I think the bill introducer wants to restrict it to the Waianae Coast. I'm just not sure if that makes sense or if infrastructure should be considered more holistically, or does it make sense to stop it, like, you know, Kauai power point to--

Yeah. So I guess to try to address that, you know, infrastructure goes far and wide from, you know, the Waianae Coast area all the way through maybe even to Central, and we're talking about sub-transmission lines to transmission lines, wastewater feeders for the rate-- regulated waste water companies to regulate, waterlines too.

So it may not cover everything, and I do admit that, like, if we put a set feet amount or set mile amount, it may not still cover everything we need to cover, if that's the intent of this reso. And, you know, the devastation caused by the second Kona storm, it's miles in, not just a few feet, not just hundreds of feet. Miles, right?

So if that's the intent to cover potential storm surge, it might be better to cover the entire island. I'm not trying to make this more work than it is, but I'm trying to be comprehensive, right? When we're talking about flooding, we're not talking about just coastal flooding, we're also talking about flooding, you know, at the power plants or the main station, the pump station or the filtration station or a well.

You know, those things are critical infrastructure that could be knocked out by any weather event, right? So maybe that would-- it would be better to keep it on the island level. And, again, a lot of work, a lot of people involved. Again, not all of them are regulated by us.

Okay. Thank you. Anyone else? Okay. We can move on.

Okay. Okay. Moving on to HCR 145 and HR 137, urging the Insurance Division of the Department of Commerce and Consumer Affairs and Department of the Attorney General to convene a working group to identify feasible options and mechanisms to protect the state and its residents against the effects of climate change on the availability and affordability of insurance. First up is DCCA's Insurance Division with comments.

Thank you, Chair. The Insurance Division will stand on its written comments.

Thank you. DLNR Climate Change Mitigation and Adaptation Commission, in support.

Aloha Chair, Vice Chair, members of the committee. Leah Laramee with the Climate Change and Mitigation Adaptation Commission. We had-- just had a chance to review Attorney General's testimony and just wanna defer to them. So while we support the intent of the bill, we definitely don't wanna undermine any <inaudible>.

Thank you. Department of the Attorney General in opposition.

Good afternoon. Deputy Attorney General Christopher Han, in opposition to the measure. We understand there are good intentions behind this resolution, but as previously shared with this committee, last year, we did share-- file a major climate change lawsuit against several fossil fuel manufacturers.

We are concerned that if we convene this working group out, it's gonna be to creating more discoverable materials that may undermine our-- undermine our efforts. We also wanted to note that the department's roles is to interpret and enforce laws.

We don't view ourselves as policymakers. We defer to you guys on that front. And lastly, just on a technical note, the term, quote, the administrator of the Hawaii Hurricane Relief Fund, end quote, is ambiguous since, statutorily, they don't have a defined administrator. So that may cause some confusion. Thank you.

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

I have a question. For the Attorney General's Office, please? Just for those of us in the room that are not lawyers, can you explain the uncovering more discoverable information?

Sure. So the general progression of a lawsuit is a plaintiff will file a complaint, the defendant will file and ask for some motions to try to get rid of it, but assuming that it still progresses, then there's discovery where parties get to exchange documents at events. They get to discover, request, and demand things from the other party that they think are relevant to the case.

And so since we are discussing-- this is a climate change lawsuit, and this is a working group that's seeking to address climate change, including seeking means of recovery from third parties that would-- that could potentially become relevant, in which case, we would pretty much essentially have to hand over document-- any documents from this working group as soon as it's generated to the defendants, the fossil fuel companies.

And you think that would just cause delays?

It's more burden on our end, which, yeah, we are concerned about.

Thank you. Thank you, Chair.

I have a question. Does your testimony that-- relating to the administrator of the HHRF apply to the HPIA as well, or is that more clearly defined in statute?

I'm not sure. I may have to check that.

Thank you. Members, any other questions?

Has the other side asked for a-- did they do an RPD yet? Did they do a request for--

No, not yet. There's-- last I checked, I believe there's a motion for state because the DOJ sued us.

Okay. I was just wondering how broad it was. That's fine. Thanks.

Thank you.

Any other questions? Seeing none, recess? Okay. Reconvening the Committee on Consumer Protection, Commerce for decision-making. First, we're taking HCR 168 and HR 150 in tandem. Recommendation on this one is to make several amendments. We will be replacing all references to the Public Utility Commission with the Public Utilities Commission. We will also specify that the study conducted by the working group should be specific to the City and County of Honolulu.

And we're going to make amendments to the membership of the working group, designating the chairperson of the PUC as the chair of the working group, adding House and Senate designees, adding the directors of the DLNR, DOT, Hainima, and DCCA's Division of Consumer Advocacy or their designees, and deleting the council member from District 1 since it's now focusing on all of Oahu. Members, any discussion?

I have a question. You said replace the Public Utility Commission with Public Utility Commission?

Oh, it's-- the bill references the Public Utility Commission instead of the Public Utilities Commission. So we're just correcting. Yeah. Any other discussion? Okay. Seeing none, Chair for the vote.

Okay. Vice Chair's recommendation is to pass HR 158 and HCR 168 with amendments. Chair and Vice Chair vote aye. [Roll call]. Okay. Vice Chair, your recommendation is adopted.

Thank you. K. Moving on to HCR145 HR137. The recommendation is to move this out with amendments as well, and we appreciate the concerns from the AG, but are gonna continue the conversation and keep the bill moving forward. We will be replacing references to the administrator of the Hawaii hurricane relief fund with the chair of the Hawaii hurricane relief fund board of directors.

We'll also remove the attorney general as a convener, but keep them on as a member of the working group. And instead of a report, we'll be requesting that the working group share its findings and recommendations with the house CPC committee and the Senate CPM Committee. Members, any discussion? Seeing none, Chair for the vote.

Alright. Voting now in HCR 145 and HR 137. Vice Chair's recommendation is to pass with amendments. Can anyone else? Nope.

Noting the previous excused members being excused. Any members voting with reservations?

Over here. K.

Reservations for Rep Marten. Any other members voting with reservations? Any members voting no? K. I show your recommendation is adopted.

Okay. And we're just the three.

Good afternoon. We are convening the committee on consumer protection and commerce for the 02:05pm agenda on Tuesday, 03/31/2026 in Conference Room 329. For those of you who weren't here for the earlier agenda, you have two minutes. This timer will flash a rainbow pattern to celebrate the conclusion of your testimony when it's that time. If you do not conclude, we will help you conclude.

So try to wrap it up when you see the the timer go off. But if not, it's okay. Alright.

Okay. Oh, sorry. Thank you. Okay. Nope.

This is the problem. Thank you. Okay. First up is SB2607SC1 relating to landscape architects. Authorizes the board of professional engineers, architects, surveyors, and landscape architects to determine the appropriate educational and examination requirements for landscape architecture, landscape architect licensure.

Clarifies experience requirements for landscape architect licensure. First up is DCCA, board of professional engineers, architects, surveyors, and landscape architects in support.

Hi. Thank you. This is, chair, vice chair, I'm the executive officer on the board of professional engineers, architects, surveyors, landscape architects, and we stand in support or stand on our testimony in support

if you have any questions.

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

I have a question. Thank you. So what is the difference? What does a landscape architect do that it needs to be certified versus, I guess, a groundskeeper or I'm just I'm sorry.

Not a problem. It's it's more about the the design part, actually draft, drafting plans and all that. Just like an architect would for a building, but for the landscape itself. I'm not a landscape architect myself, but that's that's my general understanding just as an administrator

So mainly, is it to make sure, for instance, that when it rains, the ground slopes water away from the structure as opposed like, things like that?

for me.

With my rudimentary knowledge, yes. I I think that technically, the the more technical aspects of drainage and such falls to civil engineers. But when it comes to landscape design and where to hook up plants and whatnot, Yes. That that is landscape architects.

I guess my concern is that it's not been a licensed position up to now. Is that correct?

It has been. Oh. for long. This is just modernizing the licensure requirements to get caught ,caught up with the national standards.

Oh, okay. Thanks.

Thank you. Thank you. Members, any other questions? Okay. Seeing none, moving on to SB 2031 SD2 relating to consumer protection.

Makes it an unfair or deceptive practice oh, sorry. Unfair or deceptive act or practice for businesses to offer display or advertise the price of live ticket events or short term lodging without clearly and conspicuously disclosing the total price and misrepresent any fees or charges in any offer display or advertisement for the sale of live ticket events or short term lodging. First up is BCCA's Office of Consumer Protection and Support.

Mana Moriarty, executive director at the Office of Consumer Protection. Thank you for hearing this measure, which is unopposed on the record, say, for one testimony. It's I'm gonna suggest it's unopposed because the substance of this measure is already the law of the land. In 2025, the Federal Trade Commission adopted, the rule, which has nationwide effect, requiring covered businesses to go all in with their pricing.

That means that all of the the the price of the item and any fees associated with it have to be advertised first time you see it.

No more surprise pricing at the end of the at the end of the checkout experience online. This this bill itself is important because we are mapping a federal move onto state law. Why is that important? Because it unlocks for us an enforcement possibility. The state of Hawaii can be vigilant in detecting these violations, particularly those that harm our consumers disproportionately, and we can bring enforcement actions in state court and obtain state remedies, state law remedies to address the violations.

I would love to address the testimony suggesting amendments, from our friends at the Hawaii Financial Services Association and our friends at the Hawaii Hotel Alliance. My time may run short, but I have some thoughts about those. I'll start with the Hawaii Financial Services Association. The proposed amendments appear to request an amendment that would make our protections less than the protections already afforded under federal law.

My suspicion, although I do not know for a fact now, is that such an amendment would be preempted by the text of the federal rule itself.

But setting that aside, I I think it's probably not good policy to set a lower standard for consumer protection in Hawaii and the entire nation. From the hotel alliance, we had some Alliance, we had a request for an amendment exempted. Hotel's in compliance with the federal law. That's an interesting request, and and it's interesting for two reasons.

Number one, it assumes that our federal partners, many many times are vigilant, are always going to be vigilant, and they're always going to bring the enforcement actions that we need for the people of Hawaii.

That is not always the case with all due respect to our federal partners. And the second reason is perhaps more important, and that's because the state law remedies that we unlock if we pass this bill allow for restitution to Hawaii residents affected by a violation. The Federal Trade Commission lost the ability to obtain restitution for Hawaii residents when, when the Supreme Court, passed the case called Security Enforcement Commission versus Leo. I'm happy to answer questions. Thank you very much for hearing the bill.

Thank you. Next up, stub hub with comments on Yeah. We've gathered our written testimony. Thank you. Thank you.

Ticket policy forum in support. Ticket policy forum sounds honored to written testimony in support. Thank you. Hawaii Financial Services Association in opposition.

Good afternoon, Chair, Vice Chair, and Members of the Committee. Marvin Dang for the Hawaii Financial Services Association. As was mentioned by the consumer protect here, we do have opposition to this bill as drafted. So the scenario that we outlined is this one here. Financial institutions sometimes issue credit cards.

There's reward programs. With the reward programs, the customer of the consumer with the credit card has the opportunity to use certain rewards, let's say, for hotel. In the process of that, the financial institution or its affiliate will get from, let's say, a hotel information about fees that would be charged. So the financial institution or the credit card issuer will rely on that information in disclosing that to the customer.

So all that we're requesting is that there be a limited exemption from liability if a credit card issuer relies on a third party supplier, such as the hotel, for information, and there's reasonable efforts to obtain accurate information, and the information that is received is disclosed.

So that is all that we're asking. So the amendments would, among other things, provide that limited exemption from liability because under this chapter, there's for unfair deceptive acts or practices, there's triple damages, there's fines, And there is in the amendment a definition of the spire and all of the things I discussed. I'll be happy to answer any questions.

Thank you.

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

Hello, Chairman. My name is Ivan. My name is Ivan Lui Kwan. I represent a number of hotel rooms as well as the Hawaii Hotel Alliance. And I note that the Hawaii Hotel Alliance, AHLA has written written tests will be that strongly supports this bill.

As Miss Moragardi indicated, there is a federal regulation. And what we're asking is that there'd be alignment just with the federal regulation and the state it's a state statute. We believe this will, advance consistency and harmony and avoid any disparity between the tools and just make it just enable the the people who need to comply some efficiency and compliance. We don't see that there's a real genuine difference, you know, in in in in in the remedies.

It's just a matter of of making the alignment between the federal rule and the state rule.

So we specifically request in in the written testimony of AHLA and HHLA is that there'd be a new section f, which would read any offer display or advertisement of short term lodging that complies with the provisions of the federal law. 16 CFR part 464 shall we deem compliant with this section, and that that references the the federal trade commission rule. And so we respectfully request that that be added into into into the section two of the 2031. Thank you very much.

Anyone else who'd like to testify in this measure? Seeing none, members, any questions?

Yes. For mister Dang. Thank you. You were asking about an exemption for when there's, like, added fees that maybe somebody gets membership rewards and this is a hotel, and the hotel has all these extra fees. Maybe your but we didn't you know, everything is computerized.

Everything everyone has shared database. Why wouldn't that information just be readily available when somebody does book a rewards or does use its rewards program to secure a room?

What happens or what will happen is that the credit card issuer will disclose fees in compliance with the provisions of this bill if it comes off. The issue is that the credit card issuer is not the hotel. If you'd be disclosing, please. We would be getting the information from a third party supplier, which is the hotel.

So we're not so we're sort of in the intermediary situation As long as we've made reasonable attempts to get accurate information from the hotel, the information that we get would be disclosed, will be disclosed on the travel portal that the credit card issuer has.

So it's not an exemption from disclosure that we're seeking. What we're seeking is exemption from liability as an unfair deceptive practice if we made a reasonable effort to get that information, and

it was not accurate. And correct me if I'm wrong, but couldn't you if you were the credit card company, for instance, would you negotiate to you know, with the hotel chain that there will be no additional fees? I couldn't that all be avoided, any surprise? And wouldn't you do that to protect your cons your customer, your client in that way?

So there's many fees that a hotel could charge. You know, there's, you know, resort fees, you know, all of the other fees. I'm not familiar with the mechanics of the negotiation or anything like that there. But when the credit card issuer is dealing with multiple third party suppliers, There's always room for error, not withstanding the situation that might have been negotiated.

So we don't want to be liable for the fines or third triple damages if we did make reasonable efforts to obtain accurate information and whatever information we did obtain was disclosed fully.

Okay. Okay. Okay.

No. No problem. So I looked at your proposed amendment. I do have concerns that it's a little too broad, but I think before we get to that even, this is supposed to be mimicking federal guidelines. I mean, that's all funded still.

Do you agree that there would be federal preemption of any exemption we put in here?

I don't know the answer to that question with regard to whether or not there would be federal preemption.

Is there a federal exemption that you're asking for at the federal level?

I believe they are looking at something at the federal level. Yes.

Okay. So if we added the hotelers the hotel language to sync with the federal guidelines that they pass something on the federal side, then I could see the exemption being there. But if we added an exemption in at this level, but the federal guidelines were more stringent, do you they I mean, is it of your opinion that the federal would trump it? Would perhaps? Could could we even I mean, could we?

You can put in your exemption is what I'm saying.

You know, if we have to be in compliance with the federal law and or and if the federal law does not have a limited exemption, but the state law does have a limited exemption. There is an argument that

the federal

situation could trump that, but what we're trying to do is to at least provide this limited exemption from liability because if the federal does trumpet, well, you know, so be it with regard to that particular argument. But if it doesn't, at least it is there to deal with this limited situation for third party suppliers.

But it's preempted. Right? I mean, if if we were making it stricter, I could see that. But then it wouldn't be preempted. But what you're trying to do is make a lower standard in a very specific situation, which I was gonna narrow down anyway if if I was gonna add it.

But you're you're trying to make the standard lower than the federal guidelines required. That that I think I mean

I I don't think we're making it lower. What we're dealing with is the the penalty probation. Yeah.

I mean, we're we're adding we're adding a exemption where there is none at the federal level. Right? Yes. So do do you think we can do that and not violate federal law?

As an attorney, I must say I don't know the answer to that. Okay.

Okay. No. Thank you. I have another question for the CP. So talking about federal preemption, are are you guys okay with the hotel's language to sync to the federal guidelines?

No. Okay. And why not? Because we they're gonna if if they were gonna take precedence anyway, why wouldn't we want our guidelines to mirror theirs? And I'm worried about the situation where in a somewhat erratic federal administration, they may change the federal guidelines and then ours would then not be compliant or might be requiring a lower level and put us in violation.

But why not just sync it to the federal guidelines?

The the the purpose of this is to get at the covered businesses that are engaging in these practices. And what they request for the amendment does is say that, well, we're half of the covered universe here. We are we are the hotels that are covered. The other half is the livelihood businesses that are covered. For so long so so long as we abide by the federal guidelines, we're fine.

That just invites a defense every single time that we are thinking of engaging in an enforcement action. It means we'll have to defend another, line of attack. It also means that we've effectively rewritten half of the law so that now hotels are no longer under the purview of the state enforcement regime, and they are solely and exclusively under the purview of the federal enforcement regime.

That's a problem because as I mentioned earlier, the federal enforcement regime, number one, their willingness and their their ability to enforce laws, violations that affect our population may not be aligned with ours. But number two, and perhaps more importantly, restitution is not available to the Federal Trade Commission, which means people who are actually harmed in Hawaii by practices in violation of the law would not be made whole by the Federal Trade Commission under the federal regimes.

And that's very important because we can make them whole if we pass this law here. So that's a key distinction. The the other way I would illustrate it would be to say, well, if the hotels get this amendment, what's to stop the providers of tickets from going in and saying, well, we would like an amendment too that says I do apologize. If we're compliant with the federal law, then we should not be subject to the state law. So I I think if we're gonna

If they're compliant with the federal law though, and this is supposed to mimic the federal law, why wouldn't they be compliant with our law too?

What it does in reality is it it just invites litigation over compliance with the federal law and and over these determinations of whether this actually maps. And I think it is clear that the bill itself actually maps. But we what we wanna do is we wanna do we wanna provide greater protections for Hawaii consumers, and that is not preempted by the federal rule.

In fact, that's why this bill is before you because it's already the nationwide law that these folks have to comply, with the rule, but we wanna go a step further and provide them not only a guarantee that compliance will happen under federal law, but a guarantee that the state of Hawaii will backstop you if your if your rights are violated within these laws.

But the federal laws change. I mean, well, are we gonna lose our ability to enforce if our laws kinda get out of sync with federal law and they preempt us? I'm wondering if syncing it is not a good idea in order to prevent any kind of gaps for us to have to come back to the next legislative session, you know, a year from then to to fix it and make it.

That's that's a very healthy concern, and excuse me for jumping in, but that's a very healthy concern, I think, given, you know, what's going on. The trend line here is to expand the protections under federal law. Currently, we've become aware of an advanced public notice of rulemaking issued by the Federal Trade Commission to expand this rule to include additional protections for price transparency in rental housing. So far from actually contracting the rule to provide fewer rights, this federal administration is actually thinking of expanding the rule.

That's not in our testimony.

The Federal Trade Commission did issue an advance notice of public rule making, I'm seeking comments on expanding the scope of the rule to address all in pricing, and indications are from public statements from the Federal Trade Commission and other administration officials in Washington that Washington is actually looking at making more protections for consumers in this area.

Okay. Thank you. I have a question.

In regards to the Financial Services Association proposed amendment, the Federal Trade Commission rule applies to online travel agencies and metasearch sites as well. Is that correct?

I'm sorry to say I don't know the answer to that. I could I could try to

I'm asking because well, it says so in the Hawaii Hotel Alliance testimony, but I'm, like, trying to identify parallels where, like, you these let's say that online travel agency or metasearch sites like Kayak would contract with a third party the hotel itself and then not have direct control over the fees, but would still be obligated under federal law to the this role. Yeah. I understand the connection. Yeah.

I I'm sorry. I can't answer the question, but I do see the connecting the dots because the you have a an entity relying on pricing when fee fee disclosure is provided by another entity that is conceivably under still on the hook for a violation. So I see the parallel.

Okay. Okay. Thank you. Any other questions, members? Okay.

Seeing none moving on to SB 2,043 SD one relating to insurance. Allows captive insurance companies that are not risk retention captive insurance companies to apply to the insurance commissioner for certificates of exemption from examination after meeting certain requirements. First up is DCCA's insurance division with Commerce.

Good afternoon. My name is Andrew Curata. I'm the deputy commissioner at Captive Insurance Administrator for the insurance division. On behalf of the department, we submitted amendments and we stand on our testimony. Thank you.

Thank you. Hawaii Captive Insurance Council in support.

Good afternoon, chair, vice chair, members of the committee. Paul Shimono on behalf of the Hawaii Captive Insurance Council. We did have an opportunity to see the, amendments submitted by the insurance division. We also had an opportunity to speak with them, about the exact language that's before you, and we are in support of the amendments that they've offered. Happy to answer any questions.

Thank you. Brown and Brown, Hawaii Captive Insurance Council in support.

Hello, chair, vice chair, members of the committee. Matt Takamini, leader of Brown and Brown's National Captive Practice, head of our office here in Hawaii. He also serve on the board of directors of the Hawaii Captive Insurance Council. Sentiments have been in support of the changes proposed by insurance. Thank you.

Thank you. Anyone else in person around Zoom who would like to testify on this measure? Seeing none, members have any questions?

Board of Council. Yep. What is so I thank you for using the term self regulation. What is the difference between self regulation and deregulation?

That's an interesting question. So I think the term as we've used self regulation is really more sort of internal governance than anything else. The captive insurance companies that are here in Hawaii always will remain subject to the the same regulatory standards that they always have been. So there's not suddenly, we're gonna not be regulated anymore.

It's more that term was more in terms of internal governance to address a situation where captives that have the ability to govern themselves sort of as a as an as an as a gold standard licensee would have the opportunity to extend essentially be exempt from examination. That's how this bill started. And so those types of companies that the insurance division, while they still regulate those companies, could look at those companies and say, you know what?

We think they're doing a really good job of taking care of what they need to take care of. They filed the reports on time.

We have no issues with solvency, so you get the pass. That's kinda how this whole thing started. So that's that's the reference to self regulation.

Okay. And I think it was your testimony that cited how well Hawaii was doing in terms of up until recently, I guess. What changed to make this feel like we're dropping in the rankings?

It's competition in large part. So this year actually is Hawaii's fortieth fortieth anniversary as a capital trans domicile. And, I would say within the last ten years, you've seen essentially the number of states that have offered captive legislation like Hawaii essentially double. So now you have close to 40 states that offer captive insurance legislation. So captive owners across the country have many more options today as to where they wanna put their captive insurance company than they did ten years ago, twenty years ago, thirty years ago.

Got it. So by you by Hawaii being the the ideal place to be, are we what are we losing out on for you to go to another for other companies to go to another state? Are we losing on tax revenue? I mean, who's that?

Yes. So I think in our I can't remember if it was in our testimony or not.

But right now, the captive insurance industry contributes about a a $140,000,000 a year to the state economy through tax revenues, fees, ancillary spending, GET, and the like. And so, yes, the fewer companies that come here, right, the the impact there is to the to the general state economy to what our industry contributes. And you think that this self right? Moving to self regulation would actually increase

captive insurance companies to I

think yes. I think this is in part a competitive measure for sure for Hawaii. It's also an opportunity, I think, and and certainly the insurance division can speak to this themselves. But we've always felt industry has always felt that this type of exemption from examination would also help with the division's workload in terms of examining 270 some odd 300 captives that are here on the schedule that's currently within the statute, which is every five years automatic. No, you know, no if, ands, or buts about that.

And so it becomes an issue of being able to direct the resources and the assets within the division in a in a more thoughtful way that can be more responsive to the industry, that can focus on areas where it's much more needed. Because a lot of these companies, about 85% of the companies here, really don't have any real issues, year over year or certainly each five year cycle. Really don't have any issues that that cause an examination to be, so significant.

Sure. I have a question for the insurance commissioner.

Yeah. Let me ask a guy. You guys are okay with the insurance commissioners? I'm kinda surprised, actually. I thought you To

to be honest, we actually see it as better than what we originally proposed. It although, you know, it's it's essentially a five year pilot project, right, is the way the the amendments read. It's it's now making examinations, except for your first exam, which happens five years after licensure, which we think is a good idea for an initial check-in as to how the company is doing five years into its its life cycle. And then after that, the exemption is by exception, not by exemption.

So meaning that you go through your first, and if you come out of that fine, you're not gonna get examined again unless the division feels later on something comes up that requires the division to look into into your company.

That's much different than what we had before when you had this sort of it's all it's still gonna be the five year exam every all all the time, but you have to apply every five years to get out of it. So it's you sort of end up a little bit in the same place. The process is different.

But it's it's it's the you get off the exam schedule after your first one, and you don't you don't get called unless the commissioner decides you need to have one. So we like that better, actually.

Are you aware of?

For the insurance commission? Sure.

Right? Yeah. Insurance commission. Sure.

Okay. Yeah. So I'm sorry. My question is, so this move towards self regulation, so I see them that the insurance commission is housed within the greater department of consumer protection, consumer affairs. So your kind of your job is to look out for consumers.

How how do consumers benefit from this move towards self regulation?

Okay. So this is gonna be a a complex question, but or answer it's a complex question in a sense. But consumers are not really the right term when we talk about captive insurance. Because captive insurance in essence is for formalized self insurance. So companies that so a company forms a captive insurance company with the sole purpose of providing insurance to its parent and its affiliated companies.

So the term consumer in in in your normal commercial insurance division kind of terms is different because they're the consumers is actually like the owners in a sense. Right? It's it's regulated self insurance. So the regulatory framework of captive insurance is actually separate from the regular regulatory frame. So I shouldn't wanna say separate.

I'll just say different than the regulatory framework of what your your commercial your their typical insurance companies that we think of fall under. They update they the the regulatory framework that they have is a little bit different from the captives, which is different because of that concept. Right? Is that it's formalized self insurance. So it's not the purpose of captive insurance isn't so that they can, say, offer to the public or just, you know, your third party consumers that are

looking for insurance that's not going Right?

Necessarily works. So sounds

like what you're saying is the only entity that could be harmed would be the entity that's actually funding.

Directly, it would be the yeah. The insurance would be the the parent and the the the

the That helps. I understand. Thank you so much.

Okay. Thank you. Moving on to SB 2,623, SD two relating to licensing. Authorizes the Board of Pharmacy to renew certificates of registration for registered pharmacy technicians, clarifies renewal requirements and restoration provisions for certificates of registration. First up is DCCA Board of Pharmacy in support.

Good afternoon, chair, vice chair, members of the committee. My name is Christopher Fernandez, executive officer to the board of pharmacy, here to stand on the board's testimony, supporting the bill. I just wanted to go over some things. Like, firstly, thank you for hearing the bill. This is a administrative, focused bill that would help, not only our offices, but the industry.

It was a it was a hill to climb, maybe a mountain, to get the registration done by December 31 to be ready for January 1. However, looking projecting out to two years from now when reregistration will begin, it seems that the better process would be renewal. So we are asking for a renewal. You will notice that there is a second amend amendment request in there.

So one of the unforeseen issues with act 93 from last year was that in registering the pharmacy technicians under four thirty six b, we go by the required the minimum required age, which is age of majority defined in another chapter as 18.

So the board was asking here in the industry, the board was asking for an amendment to reduce the age to 16. This would basically realign the the industry back to what it was prior to act 93, as there were at least 16 year olds working as pharmacy technicians in pharmacies in Hawaii. So I just would hope that the, committee would hear that amendment, and I'm here for any questions, and so is my colleague.

Okay. Next up, Walgreens oh, Walgreens Company in support. Sure. We send that a written testimony. Thank you. The Hawaii Pharmacists Association in support.

Hi, chair, vice chair, members of the committee. We'll stand on our Corey Sanders, executive director of the Hawaii Pharmacist Association. We'll stand on our written testimony in support. We're in agreement with the additional age lowering restriction that the DCCA proposed. Just two important points to that. That's a really great pipeline that we have for our independent community pharmacies. It is a high school program to get some younger involvement to be involved in the workforce. So the 16 difference does make a significant difference to the profession. And a lot of companies also do background checks, so even though that's, something that the DCCA is already doing just as another layer of protection when lowering the age, the background checks are normally kept in by the company. So I will stand by for any questions relating to the bill. Thank you for hearing this.

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

Moving on to SB 2,876 relating to natural hair braiding. Exempts natural hair braiders from licensing requirements under certain conditions. DCCA board of Harabedian cosmetology with comments.

Good afternoon, chair, vice chair, members of the committee. My name is Allen Yim, executive officer for the board of Barbering Cosmetology. Our board stands on the comments provided, and I will be here if you have any questions as well.

Thank you. Grassroot Institute of Hawaii in support.

Aloha, chair, vice chair, committee member. Ted Kepelos with Grassroot Institute of Hawaii in support of twenty eight's s b twenty eight seventy six. As we talked about in the first go around of this hearing, the board of partnering cosmetology has already pretty much determined that braiders require a better regulatory solution, but one has never really materialized. So as a result, we've put these hair braiders in regulatory limbo, where you're technically required to have a full cosmetology license, but that requirement isn't enforced.

So we think that that these current, I guess, licenses, whether it's the cosmetology license or a hairdressing license, they're just core fits for braiders or you require thousands of dollars and for training, and and very little of that training actually results in hair braiding.

So we do think it's reasonable to ask these hair braiders to pass a basic sanitation course, but we do urge the committee to not add an open ended continuing education requirement because it could force hair braiders to pay for an expensive class, with little connection to hair braiding. So mahalo for your time and consideration to that.

Thank you. Anyone else in person around Zoom who would like to testify on this measure? Okay. Seeing none, members, any questions? Moving on to SB 2,396 SD one relating to property.

Requires the Department of Commerce and Consumer Affairs to establish and maintain a registry of agents designated to manage a property on behalf of an absentee owner or landlord, which shall be available for public access on the Office of Consumer Protection's website. Requires an absentee owner or landlord to register any agents managing a property on their behalf with the DCCA.

Prohibits an agent an absentee owner or landlord from tenant as an agent that establishes penalties for an absentee owner or landlord that fails to register an agent with the DCCA or fails to designate an agent. First up, DCCA Office of Consumer Protection in opposition.

Thank you again, Chair, Vice Chair, and Members. Mana Moriarty, Department of Commerce and Consumer Affairs. We oppose the provisions requiring the department to establish a registry for agents on island. We also oppose the provisions requiring enforcement, the agent on island requirement by the Department of Commerce and Consumer Affairs. We've noted here and elsewhere on other bills the judicial conflict of interest that has arisen for the DCCA in context of enforcement of rights and and duties of landlords and tenants.

We are not taking a position on the narrower question of whether section the existing law should be amended to allow, to require landlords to to continuously maintain an agent, on island. Thank you, and I'm available for any questions.

Thank you. Hawaii Association of Realtors in support. Hello, chair, vice chair, members of the committee. My name is Lindsey Garcia from the Hawaii Association of Realtors. So we stand on our testimony supporting the intent.

We believe that there does need to be a greater regulatory framework in place for absentee landlords, but if the committee is inclined not the not to pass this measure today, then we suggest that the discussions continue in the landlord tenant working group. Thank you. Thank you. Mishka Silva, individual in support on Zoom. Not in presence.

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

So I I understand your testimony and why you are opposed to not regulating. But I I don't fully understand it. I don't know why you guys still do it. But for the registry itself, well, why are you opposed to keeping a registry? That that seems to jive with your your mission.

I mean, if you're not if we took out the enforcement permission, what's wrong with keeping a registry that still seems pretty neutral to me?

Speaking for the Office of Consumer Protection, certainly, we're not set up with the resources to establish or maintain a registry. Our office's primary responsibilities include maintaining communication with other agencies, bringing enforcement actions, investigating, and maintaining data for consumer consumer protection actions. We do not have personnel in our office set up to perform these types of administrative tasks, which might include things like collecting the information from tenants, maintaining a database, contracting with a somebody to maintain the information systems needed for the database, and issuing notices.

One thing that we highlighted well, we didn't highlight, but it's in our testimony is that the way that we bring enforcement actions is through civil actions. We do not actually have legal authority to bring enforcement actions via the administrative route, which makes us different from other divisions in the DCCA.

I'll I'll You did just say you maintain databases for consumer protection actions, though. That's correct. Yeah. Isn't isn't this a database maintained for consumer protection action itself by creating and keeping this data so people can enforce? Seems consistent.

But

You know what?

I don't we're we're kind of gonna maybe split hairs a little bit here and have to distinguish between consumer protection actions and the landlord tenant code. The Hawaii judiciary has made the same distinction between landlord tenant matters and consumer protection matters.

I can see. But if you are talking about this is pretty much a tenant right of action. Right? Landlords won't under this it's not like landlords are gonna be enforcing anything. They're the ones being regulated.

So tenants as consumers, I would think that would fall squarely under under your jurisdiction or your the area that you're already occupying. So if you're maintaining a database for consumers and tenants are, I assume, consumers, it seems like it would be consistent with OCP for the for the database maintenance as well. The the

we've tried to get the judiciary to kind of take a little bit of a broader view of what consumers might be, but they have not necessarily agreed with us. They found that consumers do not include tenants. Not that we have to agree with what the judiciary says about that.

But in this particular case, what we found through our experience is that in the landlord tenant area, particularly given our power to investigate already, we find that tenants and in some instances landlords tend to try and use our office as a proxy for their own litigation or investigation. And that is a situation we also do not want to encourage because we do not serve the purpose of being a proxy for tenants, to litigate their matters against landlords.

We take the same position with landlords. We are not their proxy. And if this if this were to pass in the form it's in, one of the things we'd anticipate is that we get requests from tenants, understandably, to produce the and to produce well, first, we have a notice obligation, but then we have to I think we have to produce to them, potentially, the files that we are keeping as far as the the the registry.

And that actually imposes a much greater burden than we're used to dealing with in terms of responding to the responding to responding with documents to people requesting documents from our office, which frequently are protected by, the ongoing investigative privilege.

That's the whole point of the registry. Right? The registry is supposed to be public information. I think so I think it's I think it's getting a little you're you're talking about the enforcement portion of it, which I'm trying to kinda keep separate because I do wanna talk about that a bit. But enforcement aside, maintaining a database for landlords seems like something that you could do and that you you do similar things to it anyway.

And, you know, whether a tenant is consumer or not, it's kinda besides the point. The the point is that OCP appears to make keep and maintain databases of information for consumer protection purposes. That aspect of keeping and maintaining the database seems to be something that you're already capable of doing and have done successfully. So adding this would seem to be within your wheelhouse judiciary aside because we just kinda give it to you. But it seems like something that you guys are already pretty good at.

Would you agree?

I agree that we're good at things, but I I don't necessarily agree that this is the the thing that we're good at because this imposes a lot more than we're used to seeing. This actually requires us to intake documents. It requires us to maintain a registry and issue notices that are part of this administrative upkeep. That's not something that we're used to doing. What would you suggest?

Well, the department's position is that we oppose the registry requirement, but I could certainly talk to our our head, our director, Ando, and see if she has any suggestions about who might be a more appropriate location for the registry.

So you think someone in within DCCA might be appropriate. So

I I would have to take that to director, But and I have no position on that.

K. It's gonna be you guys, though. I'm working if you if you don't give us someone else that's more appropriate. Just we can do for DM. Okay.

Go ahead, Vice Chair.

Thank you. You know, we had conversations at length about enforcement, so I'm gonna skip that part of the discussion. But on the registry, I'm wondering if you have data from the landlord tenant hotline about how many tenants are calling specifically with issues with absentee landlords.

That's a good question. I I would imagine that we do. I can't sit here and say that we do with certainty, but I would imagine that we do since frequently we do notate the section of the code that the callers are calling about. I said frequently, I think that's that's standard protocol for our office that we would have a reference to the section of the code at issue on virtually every interaction with a a tenant caller. So it is data that we could probably pull.

I'm asking because I I mean, I am I like the idea behind this bill. I also feel like acknowledging that it is a heavy lift whether you do it or someone else in DCCA does it. Other places have created rental registries that cover all landlords rather than this one being quite specific to absentee landlords, so I'm just curious about, you know, whether it's something worth pursuing more broadly.

The point about whether we can we as an office can track whether a tenant is calling about an absentee landlord. I'll also point out that that's an issue issue we are exploring with the judiciary in our working group. We are attempting to gather data about civil actions that tenants have brought to enforce their rights under the code.

We're not quite there yet, but I I think we've had some promising conversations about getting a better picture of how tenants how often tenants actually bring in actions to enforce their own rights under the code, and that's a really important piece of the picture the the whole picture to understand when we're talking about landlord tenant code and if there is some imbalance in the the rights, and how people go about exercising their rights through the court system.

K. Thank you.

Thank you, Chair. Further question or follow-up question. So it seems like with DCC, DCC, DCCA maintains the the branch registering of businesses. It's I feel like it's so close to exactly what this is. It's it's a a an asterisk in that.

I mean, if if anyone collects rent, any kind of rental income in Hawaii, perhaps it should be treated as you should be registered. You should be registered in the same way that you need to pay GED on all the rent you collect. All of these issues that come up, are it could be very streamlined if everyone who collects rental income in Hawaii must be registered on Brex, and then they have a lot of denotation that they're collecting rental income.

That would be you're just so close to it already. It would seem like and I don't mean you, the Office of Consumer Protection, but you, DCCA, and then it just breaks.

I I hear the the the points expressed by by you and by the chair, and and I can talk about those internally with our office. Our experience at the Office of Consumer Protection is our own experience. It's not the same as the other divisions of DCCA. Those those other experiences, I I cannot speak to personally.

We're probably not gonna put it in direct. That that would be a little that that'd be kind of far. So, you know, I'm rereading the bill based on things that you're telling me that it doesn't seem like that have to be a lift. The landlords are the ones required to notify you or well, right now you put with the registration information. It doesn't say anything about you having to go out and actively seek them out or find them or notify anything.

If we took out the enforcement provision, we give it back to the tenants to enforce, then all you would do is keep an intent database, make it available to them. So if I'm a tenant and my landlords, you know, basically an absentee landlord, I can go look in your database and say, okay. There's nothing there. Now we can go after him for that too. Just kind of another right of action.

You you had kind of previously said that it would be too much for a burden because you'd have to go take an affirmative septic with seek them, find them, and give them notice and things like that. But none of that appears to be in the bill. So what what is the what's the limit for you guys aside from some data processing?

Oh, that that that was a lot. Let me let me see if I can address it, and and please let me know if you if you need more. What I'm thinking of in terms of administrative burden, what what we observed in the bill in particular not this in the bill in particular was the requirement that the department give proper notification of the violation to an absentee owner or landlord.

And to meet that notice requirement Which page did did you have the Looking at page four, lines four through 10. So this notice requirement certainly sets up a framework where that starts to sound a lot like administrative action under the Hawaii Administrative Procedures Act.

For example, notice and a right to contest case hearing. If that could be inferred from this bill, we would certainly think that that is a concern as a significant Sorry.

I'm reading that. That that's the enforcement portion of it. Right? I mean, you need to notify them just like but if we take it out of your hands and we put it into a private run of action, then they would have to it would just be the the service of the of the complaint, I would think, rather than having

You you're correct. I think that that does occur in the enforcement section. Sorry. I just I didn't realize that. Oh.

My testimony. No.

Totally fine. So if we just stop the database to you guys, you just be absorbing all the data and putting it in a kind of a spreadsheet for everyone. Is that I mean, now that we if we take that out, the the notification part, does that seem like a manageable look for you guys?

You know, I I think there would be concerns about that part of the the bill as well because taking on that responsibility and having to keep the registry up to date, making disclosures in response to information requests, all of those functions do expose the department to potential liability. And our our friends in other divisions are well aware that the maintenance of a registry does come with additional exposure to liability for the state and for the department.

So that that is certainly one of the concerns that I that that I would have regardless of which division that this is placed in.

That that's fair. But if we stick it with some other division, it's gonna be liability for them too. Right? I mean, the state is gonna have if we create the database, the state's gonna have liability, be it with you folks or someone else. You guys are already.

You just you just said it. So seems I guess I'm not as convinced. Anyway, anyone else have any questions on this? Okay. Thank you, Mara.

Thank you.

Okay. Moving on to sb 2964 s d one relating to property insurance. Requires homeowners insurers to provide policyholders with annual disclosures of replacement value cost and the sufficiency of policy holders coverage, requires homeowners insurers to offer annually to policy holders increased coverage if the property is under insured, and requires insurers to maintain records of disclosures and offers for five years. First up is DCCA Insurance Division with comments.

Afternoon, chair, vice chair, members of the committee. Matt Sugimura on behalf of the insurance division. You have our written comments. The division would just wanna note that this is a very complex multifaceted issue, and, you know, we do think that this is an issue, especially in light of Lahaina wildfires and flooding events that we do think warrants a lot of a lot more attention, and we do wanna look into this.

However, we do have concerns that the proposals within the bill as drafted will have some unintended consequences just with regards to cost as well as the availability of insurance vis a vis the authorized insurers that are currently in the market.

For those reasons, we have included language in our testimony to convert the bill into a working group or a task force to look into the issue to be able to just determine what approach would be best for the state of Hawaii, whether that is a model based on other states or whether that's a unique model that we come up with for Hawaii specifically.

We do just think that this issue warrants additional study and additional time, and we'd be hopeful that a task force would be able to accomplish that and propose relevant legislation for next session, but happy to answer any questions.

Thank you. Hawaii Insurers Council with comments.

Chair Matayoshi, vice chair RHNAnetti, members, Martin and Yamamoto. I'm Michael O'Brientti, the current board chair of Hawaii Insurers Council. I'll summarize our comments in general. We're general concurrence with the insurance division. There's a couple of key reasons for that.

This bill really emanated from issues in behind. And the biggest challenge there is that even if the replacement cost was exactly right on the policy was issued prior to the fire, by the time the rebuild occurs, it's going to be willfully inadequate. Because at this point, it's gonna be a minimum of three years if we're fortunate, but probably more like five years before you're able to rebuild in the core part of the burn area.

In those years, inflation for building prices or building materials will have gone up. Contractor costs will go up. And then if you are trying to rebuild hundreds or thousands of homes at the same time, you'll have demand surge because you won't have enough contractors. You won't have enough building materials. So we think a task force is a better approach to get all of the players on the table, including insurance agents as well as insurers and consumers. They all have responsibilities as part of this. And I'm available for any questions you may have. Thank you.

Thank you. State Farm with comments.

Good afternoon, chair, vice chair, members of committee. I'm gonna share on behalf of State Farm. We'll stand on our written testimony offering some comments and concerns. We did offer an alternative push maybe taking a look at Oregon, but we're also open to these suggestions by the insurance commissioner and the council to do a task force. Thank you.

United policyholders in support on Zoom. I'm here. I okay.

Okay. Can you hear me?

Yes. Yes.

Okay. Great. Aloha, chair and members of the committee. My name is Sherry Peterson, and I'm here in strong support of s B2964. I'm working with Maui wildfire survivors as an equal justice fellow with United policyholders.

And what I saw immediately and see repeatedly is this, under insurance is widespread. Not because homeowners are making unin are making informed decisions to under insure, but because they are not given clear, current information about what it will actually cost to rebuild when they do buy insurance. There are policyholders in Lahaina who bought their policy years ago, trusted they were protected, and only after losing everything learned they were hundreds of thousands of dollars short. This is the problem this bill addresses.

You heard concerns about cost and complexity.

The cost of underinsurance already exists. It's simply been shifted. When homeowners are underinsured, the gap is picked up by federal aid, state and county resources, and nonprofits. And the real question is not whether there is a cost. The question is who pays it.

And this bill does not force anyone to buy more insurance. It simply requires insurers to provide homeowners with better information and the opportunity to make informed decisions. That's not overregulation. That's transparency. And respectfully, we do not need more study to know this is a very real problem we've seen in California, Oregon, Colorado, and now Hawaii, and we're living it.

Delaying it to further study means repeating the same outcome in the next disaster. And the recent cone Kona storm reminds us there will be another disaster. Last, there's concern about creating a false sense of security, and the real false sense of security is silence. A policyholder paying premiums for years, believe me believing they are fully covered when they are not. This bill is a balanced practical solution helping homeowners make informed choices, requiring insurers to better ensure to value and reducing long term reliance on public funds.

So I respectfully urge this committee to pass SB 2,964 and mahalo for the opportunity to testify this afternoon.

Thank you. Is there anyone else in person around Zoom who would like to testify on this measure? Seeing none, members, any questions?

Question for the insurance. So and I noticed when I was renewing my family home insurance, they made me take pictures of everything, every climb on the roof, everything. And then they're like, okay. This is what your premium is. Why wouldn't they given that there's such an active kind of assessment of what's happening with your home, why wouldn't they be in the best position to know how much it costs to replace or how much whether we're under insured or not?

Because it feels like they're active in one sense, but then passive and silent in another sense. And it feels that the incongruence feels a little bit like, you're kinda looking out for me, then you're not looking at I don't know. It just feels

So my guess, and I'm not sure who is insuring your family property, is a number of insurers since the live behind a wildfire are concerned about updates to homes and condition of homes. So So that's more than likely what's occurring in that case. And they may also look at it and say, your insurance to value does not appear to be adequate.

When you purchased your policy, you probably had an agent that you dealt with that gave you guidance, And that guidance would have included giving you guidance as to what the appropriate replacement cost of your home was at that point in time. Each insurance company might have a device or replacement cost estimator or something that helps in getting to that point. In addition, insurers offer an inflation guard endorsement. It's actually mandatory in most policies that are issued in the state of Hawaii, but automatically increases coverage on an annual basis. So those two things are there. So the process you're describing is sort of a reunderwriting. The process described in the bill is way more complex than that. It's talking about getting what it costs to get architectural renderings and drawings and the whole thing paid by the insurer, which is really not true. That cost is gonna be passed directly through to consumers, it's gonna be a lot of money for every single one of the thousands and thousands of homeowners in the state. So these are I think those are slightly okay.

So can I ask a question? So if I have a home that's a million dollars and and can I can I insure it for 1,500,000.0 and pay those premiums? And then when it comes time, if something horrible happens and I have to rebuild, you'll even if it costs 1,200,000.0 to rebuild, will you guys give me the extra 300,000? How does that I mean, you guys.

It's a great question. It's a good question. The policy is supposed to be one of indemnity, meaning it pays for the cost to rebuild or replace. Not it's not a cash value policy where it's just like, hey. You insured it for amillion 5. Here you go.

So statute technically prohibits over insurance. There's some exceptions to it. But let's say insurers were allowed to do that, you would get in that case, it'd be whatever the 1,200,000.0 or whatever it was to cost to rebuild, that's what you would get paid at that point in time. Or that's where your contractors would get paid for rebuilding the home.

Right. So even if I'm preparing, like you said, it might take five years to rebuild, and so I'm like, okay. I'm gonna hedge it a little bit. But then so I lose even though I'm paying for that extra $300,000 premium or the the premium on the extra $300,000, I can't claim it as a well, I paid for it. Just give me the cash. I can use it for other things.

And I think you're highlighting one of the reasons we think that a task force is a better way to deal with this. This is not a very simple issue, and I'm very sympathetic to the comments from United policyholders. Lahaina was a terrible event. And wildfires are particularly difficult because it takes many, many years to rebuild. Hurricanes don't take as long to rebuild because most cases, most homes aren't completely destroyed.

We have a situation where the entire infrastructure of a community was devastating. So we're gonna take multiple years. This this is not an easy fix, and we think it's it needs to be studied in much greater detail. And all the parties need to be on the table. It's not just insurers. Consumers have a role in this as do agents.

So I've got a question for you, Mike. If a customer reaches out to an insurance company and says, hey. I just I just put solar on my house. It cost me $50. Would you take that information? Would the insurer take that information and adjust the rebuild cost accordingly?

Absolutely.

Yes.

Okay. So that information coming from the customer would be useful to you folks.

And would the customer be in the best position? Or, I mean, I guess, if if solar in in my hypothetical house cost $50, would you need to do any due diligence on that, or would you just Kinda take my word for it? Or I I

In most cases, if if you know, I've been in the business a very, very, very long time, longer than I care if we met somebody. In all those years, I've gotten more calls from agents requesting that cost coverage be reduced than increased. And that's because it's Hawaii. It's an expensive place to live. Everybody's got an uncle that can replace their home for $200 a square foot even though our claims people tell us it's probably $3.50 or so at a minimum these days.

But we do get calls from people putting in solar because it's been very popular in Hawaii, and they're telling us based on what's on their invoice in front of them. So, generally, we're gonna be okay with the valuation they're giving us. We have some other questions to representative, you know, Moe's point. Let's say it's a 60 year old home, and we just wanna make sure that the plumbing's been inspected, the electrical system's been inspected.

You know, there might be some other questions that come up, but evaluation of that solar PV system would generally be acceptable from our perspective.

Okay. Alright. I have jumped up. I need to think. I'm thinking about changing this bill to make it so to require insurance companies to affirmatively ask customers for information on home upgrades that might have raised the value of their home every couple of years.

And to have the customers then give that information to the insurer if they want to and then have the insurer then reevaluate the rebuild cost of the house based on that information. Would that be too onerous for you folks? I feel like if the whatever mailer you mailed in any way, you could just Kinda stick that in there. If they want to tell you that, hey. I put solar on or, hey.

I built a new garage or how you know, whatnot. I I reroofed for however much money. They can tell you, and then you can use that information to to act accordingly.

So, you know, in fear of getting yelled at by other members and or Allison, you know, the devil is in the details. You know, intuitively, it sounds reasonable. If it's part of the renewal offer package where you're saying, hey. By the way, be mindful of these sorts of things. Let us know if you, you know, add it on to your home, add an ADH.

Something. Yeah. You know, all

of that stuff. Intuitively, it sounds good, but we'd really like to see the language first to make sure that it, you know, it makes sense for us.

That's fair. Would would that allow you folks to get closer to the home value, though, to have the that kind of information given to you by the customer?

It would on the date of the policy's renewal. It wouldn't necessarily on the date of the rebuild after a significant catastrophic.

K. Allison, do you have any thoughts on that, or is that good?

Thank you, chair. I would say that, you know, it's it's part of the responsibility of the agent as they go through this renewal process to sort of go through with the homeowner as to the changes as to their home. So I think a lot in a lot of these discussions, the questions go back to the carrier, but, really, the the person placing the one with the relationship with the homeowner is the agent. And so when you make changes, there there could be a number of things, right, that go on from year to year. And so the agent is the one that really has a contact with the homeowner, and I think that's probably the place where it should be.

Next slide.

Are you able to make the agent your agents do that or insurance companies? How much control do you have over there?

You can.

I I can or can you? I I just don't know where to to put this thing. If we put the burden on the agents, I'm not sure that that would be if I trust them like I trust you guys, Trill, to actually do it.

It can be statutory. Yeah.

If I could jump in, the challenge we have is the relationship is owned by the agent. So they are they are not the insurer's customer per se. They are the independent agent's customer. So that creates that little bit of a conflict.

So for if we start reaching out to our customers, you know, and not necessarily in a mail or renewal, but if we start calling them and saying, hey, representative Matayoshi, if you put solar on your house for all that, we're sort of jumping over the agents in that regard.

And that creates that little bit of a conflict that's again, another reason we think having a broader discussion may make a lot more sense.

Okay. So getting the information to the agent, if we require the agent to to get new information once every other year or at least ask for it, then that agent could then pass that information on to you folks when they're negotiating with you on what kind of coverage or what kind of policy can be offered. Okay. That makes sense.

Thank you.

Any other questions, members? Moving on to SB twenty eighty nine SD one HD one relating to mental health. Expands the services eligible for Medicaid prospective payment system reimbursement to include certain services furnished by a federally qualified health center or rural health clinic and provided by mental health professionals under the clinical supervision of a licensed mental health professional. Requires the Department of Human Services to adopt rules for this purpose and seek federal approvals as necessary.

Specifies that the implementation is contingent upon and only to the extent approved by the Centers for Medicare and Medicaid Services.

Next step is the Department of Human Services with comments on Zoom.

Good afternoon, chair, vice chair, committee members. My name is Edie Miyashiro representing Department of Human Services, and we stand on our testimony.

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

Good afternoon. Chair Modigliani, vice chair Granite, and members. Jack Lewin, the administrator of SHIPTO. We strongly support this, measure. We were very pleased that Medicaid the the MedQuest program has already been able to accomplish this in some of their programs.

This extends to the FQHCs, the community health centers, and rural health clinics, which we strongly support. We just like to make sure that it happens correctly and and because the terms under clinical supervision and unlicensed mental health professionals are sort of general terms. So it'd be best to sort of define what those are. I know in medicine, we it's very clear between between med students and interns and residents and fellows what the standards are, but we we're all too aware. Sometimes they're not fully conducted properly. But so here, what we'd like to see just a little bit of definition in terms of making sure this works for the trainee, getting enough training, and for the facility in terms of its own liability risks and so forth. I think it's a great program. It should be strongly supported. Thank you.

Thank you. Aloha care and support on Zoom. Not present. Anyone else in person around Zoom would like to testify on this measure? Seeing none.

Members, any questions?

Jack. I'm looking through right now in section in Section six, it says it it kinda gives a trigger for the approved by the Centers for Medicare and Medicaid Services. DHS did indicate in their testimony that they're willing to submit to those agencies. Do you have any idea on the timeline that that might take? I'll I'll ask them to, but I'm just gonna have to get those.

You know, I think the the I think the CMS is gonna be supportive of this in general. So I think they should it it this is something that could probably be expedited. And I don't know exactly how long it would take to do this, but I know that there's precedent for it elsewhere in the country and in the Medicaid program in general.

Do you have a response to that?

I there is limited precedent for it. We're always willing to try to do what we can for to to make help Hawaii. The timeline because of, you know, HR one and all the things that is really priority right now, I I can't give a timeline, but it could take anywhere from six months to a year. It just depends on how things go.

Six months to a year to submit or six months to a year to see the process completed?

See the process through. Yeah. And there's never a guarantee. Like, we'll do our best to get it approved. You know how it goes back and forth. So I I can't make a promise how long it will take. It just it's not gonna be super fast, though. I can tell you that.

Okay. Do we need to put language in here making you guys do it, or you guys just wanna do it?

We will do it if we need to do it. If that's something we're gonna go forward with, we will do it.

Okay. How long do you want to have to submit? What's the reason I

Can I take that back to the team? Because like I said, right now, we are totally immersed in, you know, the committee engagement, our requirements, all those things. And so I would like to take it back to the team, before I give you a good answer on that, but but that would help.

Okay. Thank you.

Sure. Thank you.

Anyone else have questions? Okay. There we go. Recess. Anyone else have questions? Okay. There we go. Recess.

Alright.

Reconvening for decision making. First up, we've got SB2607 SD1 relating to landscape architects. Good bill. Chair's recommendation is to redefine the date and move it along. Members, any comments?

I'll share with the vote.

Voting on SB 2607 SD1, chair's recommendation is to pass with amendments. [Roll call]

Chair, your recommendation is adopted.

Alright. Moving on to sb 2031 s d two relating to consumer protection. The chair's recommendation is to adopt the amendment proposed by AHLA, the American Hotel and Logic Association to sync this up with federal I'm sorry. Not to sync it up, but to create a compliance provision that if they're complying with the federal guidelines, they're deep compliant with the section. Most of the read affecting the date.

Members, any comments? And vice chair for the vote.

Voting on SB 2031 SD two, chair's recommendation is to pass with amendments, noting the excused absences of representative Ichiama and representative Loewen for the remainder of the measures on this agenda. Are there any reservations? Any no's? Chair recommendation is adopted.

Thank you, members. Moving on to SP 2043 SD one related to insurance. Transfer conditions to adopt the insurance commission on settlements. Except for the effective date, we'll be re defecting the date. Members, any comments?

Okay. Vice chair for the vote.

Voting on sp 2043 s d one. Chair's recommendation is to cast with amendments. Any reservations? Any no's? Chair recommendation is adopted.

Moving on to SB 2623 SD two relating to licensing. Chair's recommendation is to adopt a board of pharmacies proposed amendments to move the age down to 16, except for administering vaccines. On page four, line 10, adding forfeiture language for certificate of registration to make it consistent with the license and permanent language in that section and read effective date. Members, any comments? K.

Vice chair for the vote.

Voting on SB 2623 SD two. Chair's recommendation is to pass with amendments. Any reservations? Any no's? Chair's recommendation is adopted.

Moving on to SB 2876 relating to natural hair braiding. We'll be replacing the language in this bill with the language from HB 1697 HD one, the house position on this. But we will be amending that as well on gosh. I hope this thing's up. But wherever the this bill is on page two, line 70 line seven through 10 as well as on page three.

This is meant to be 19. On page two, line 17 through 19, and then page three, line's also 17 through 19, to cover initial classes as well as those for renewal. We will be amending well, I maybe scratch those line numbers. Wherever it says to cover the initial classes as well as those for renewal, we will be amending to specify that the course requirements must cover sanitation, health, and safety practices required for natural hair braiding as established by the board by rule. And defecting date.

Members, any I guess the defective date is still in the HD. Anyway, members, any comments? Yep. Vice chair for the vote.

Voting on SB 2876. Joe's recommendation is to pass with amendments. Any reservations? Any notes? Recommendation adopted.

And when we got to SB 2396 SD 12 relating to property, be filling in both blanks with the it's a very loud loud card. We'll be filling in the blanks for both days with thirty days, redefining the date. We will be removing OCP as the enforcer and giving the enforcement back to the tenants. But we will be keeping the database for more CP. Members, any comments?

Moving on sb 2396 s d one, chair's recommendation is to pass with amendments. Any reservations? Any no's? Charter recommendation is adopted.

And moving on to s b two nine six four s d one relating to property insurance, we're gonna be terms of recommendation is to change this pretty significantly. We will be abetting this bill to instead have it require insurance agents to send the request for information to the homeowners insurance to their homeowners insurance customers at least once every two years asking the customer about improvements the customer made to the insured property and the cost and value of said improvements.

The insurance agents will then give the information, if submitted, to the insurer to reevaluate the replacement cost estimate for the insured property. I also want to insert administrative fine of $250 per failure for the insurance agent to act. But, again, the homeowner does not need to reply.

It is but if they do reply, I want that information to be passed on to the insurance company. Also, redefacting the date. Members, any comments? Okay. Vice chair for the vote.

Voting on SB 2964 SD one. Chair's recommendation is to pass with amendments. Any reservations? Yes. Reservation.

Okay. Reservation is for rep Yamamoto. Any no's? Chair, your recommendation is adopted.

Alright. Last bill on the agenda. Sd 2089 s d one h d one related to mental health. I do wanna wait to hear back from Department of Human Services on the timeline for submittal and also take a look at amendments proposed by Chipta to clarify certain things. So we'll be deferring decision making on this, but I do intend to pick this up at a later committee here.

Alright. We are adjourned.