STAND. COM. REP. NO. 3198

Honolulu, Hawaii

RE: H.B. No. 1721

H.D. 2

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committees on Energy and Intergovernmental Affairs and Housing, to which was referred H.B. No. 1721, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

beg leave to report as follows:

The purpose and intent of this measure is to clarify insurance, indemnification, and certain certificate of occupancy requirements for purposes of expedited permits.

Your Committees received testimony in support of this measure from Housing Hawaiʻi's Future, Grassroot Institute of Hawaii, American Council of Engineering Companies of Hawaii, American Institute of Architects Hawaiʻi State Council, Maui Chamber of Commerce, and one individual.

Your Committees received testimony in opposition to this measure from Plumbers and Fitters UA Local 675.

Your Committees find that the State is experiencing chronic permitting delays that increase costs and exacerbate housing shortages. While Act 295, Session Laws of Hawaii 2025, was enacted to streamline permitting processes for single- and multi‑family housing projects, the underlying liability, insurance, indemnification, and certification of occupancy requirements must be clarified for the innovative framework to succeed. This measure provides necessary clarity to developers and contractors and reduces administrative burdens to effectuate the expedited permitting process.

Your Committees note the concerns expressed by Plumbers and Fitters UA Local 675 that this measure, as written, eliminates required inspections that ensure as-built construction is consistent with approved designs, which often times is not the case in the construction industry. Your Committees further note that these exclusions, coupled with the broadly-applied indemnifications established in this measure, may unduly burden homeowners, occupants, or contractors with unknown future liability and life safety concerns that could have otherwise been prevented. Amendments to this measure are therefore necessary to address this concern.

Accordingly, your Committees have amended this measure by:

(1) Clarifying that the State and county shall be named as additional insured, under a general liability policy;

(2) Inserting language that requires state or county inspectors to inspect all projects with expedited permits;

(3) Amending section 1 to reflect its amended purpose; and

(4) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Energy and Intergovernmental Affairs and Housing that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1721, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1721, H.D. 2, S.D. 1, and be referred to your Committee on Commerce and Consumer Protection.

Respectfully submitted on behalf of the members of the Committees on Energy and Intergovernmental Affairs and Housing,

________________________________ STANLEY CHANG, Chair

________________________________ GLENN WAKAI, Chair