HB 639: RELATING TO ARTIFICIAL INTELLIGENCE.

A BILL FOR AN ACT

RELATING TO ARTIFICIAL INTELLIGENCE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that modern chatbots are now advanced enough to engage with users in highly human-like conversations, making it difficult for users to determine if they are speaking with a chatbot or a real person.  Many chatbots are also designed to mimic human behaviors and conversations, and can be used to effectively influence people in a variety of ways, from advertising to spreading misinformation, and can even manipulate users into revealing personal information such as their social security or bank account numbers.  Additionally, chatbots are intended to learn and adapt through their interactions with users.  As chatbots gather information from users, they become better able to help their developers achieve specific objectives, such as keeping users engaged or encouraging them to make a purchase.

     The legislature further finds that there are few regulations requiring that companies or individuals make users aware that they are interacting with a chatbot.  This lack of transparency means that individuals may mistakenly believe they are conversing with a licensed professional, such as a doctor, financial advisor, or therapist, when they are actually speaking with a chatbot.  The legislature believes that consumers have a right to know when they are engaging with a chatbot or other technology that mimics human interaction.

     Accordingly, the purpose of this Act is to require:

     (1)  Corporations, organizations, or individuals engaging in commercial transactions to inform consumers when the consumers are communicating or otherwise interacting with a chatbot or other technology that mimics human interaction; and

     (2)  Developers of chatbots that sell, offer for sale, advertise, or make available chatbots to disclose that their chatbots use artificial intelligence and are capable of mimicking human behavior and engaging in a textual or spoken conversation.

     SECTION 2.  Chapter 481B, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part    .  artificial intelligence chatbots

     §481B-     Definitions.  As used in this part:

     "Artificial intelligence chatbot" or "chatbot" means a software application, web interface, or computer program designed to have textual or spoken conversations that uses a generative artificial intelligence system capable of maintaining a conversation with a user in a manner that uses natural language and simulates the way a natural person would behave as a conversational partner.

     "Class action" includes the definition as provided in rule 23 of the Hawaii rules of civil procedure.

     "Consumer" means a natural person who, primarily for personal, family, or household purposes, purchase, attempts to purchase, or is solicited to purchase goods or services or who commits money, property, or services as a personal investment.

     "De facto class action" has the same meaning as in section 480-1.

     §481B-     Disclosure required.  (a)  No corporation, organization, or individual engaging in a commercial transaction or trade practice of any kind shall use an artificial intelligence chatbot or other technology that is capable of mimicking human behavior and that engages in a textual or spoken conversation with a consumer in a manner that may mislead or deceive a reasonable person to believe they are engaging with a natural person without first disclosing to the consumer in a clear and conspicuous fashion that the consumer is interacting with a chatbot or other form of technology capable of mimicking human behavior; provided that small businesses that unknowingly utilize artificial intelligence chatbots in their operations shall not be in violation of this chapter unless the small business has been provided clear and adequate notice of the requirements under this part and fails to comply after being afforded a reasonable opportunity to do so.

     (b)  No developer of an artificial intelligence chatbot shall sell, offer for sale, advertise, or make available any artificial intelligence chatbot without disclosing in a clear and conspicuous fashion that the chatbot uses artificial intelligence and is capable of mimicking human behavior and engaging in a textual or spoken conversation with a person in a manner that may mislead or deceive a reasonable person to believe they are engaging with a natural person.

     (c)  Any violation of this section shall be considered an unfair or deceptive act or practice under this chapter.

     §481B-     Suits by persons injured; amount of recovery; injunctions.  (a)  Except as provided by subsection (b), any person who is injured by a violation of this part may:

     (1)  Sue for damages sustained by the person, and, if the judgment is for the plaintiff, the plaintiff shall be awarded a sum no less than $1,000 or threefold damages sustained by the plaintiff, whichever sum is greater, and reasonable attorneys' fees together with the costs of the suit; and

     (2)  Bring proceedings to enjoin the unlawful practices, and, if the decree is for the plaintiff, the plaintiff shall be awarded reasonable attorneys' fees together with the costs of the suit.

     (b)  The remedies provided in subsection (a) shall be applied in class action and de facto class action lawsuits or proceedings; provided that:

     (1)  The minimum $1,000 recovery provided in subsection (a) shall not apply in a class action or de facto class action lawsuit;

     (2)  That portion of threefold damages in excess of compensatory damages shall be apportioned and allocated by the court in its exercise of discretion so as to promote effective enforcement of this part and deterrence from violation of its provisions; and

     (3)  Damages awarded shall not exceed $10,000,000.

     (c)  The remedies provided in this section are cumulative and may be brought in one action.

     (d)  In addition to any other remedy provided by law, the attorney general and director of the office of consumer protection may file a petition for injunctive relief against any corporation, organization, developer, or individual who violates this part.

     §481B-     Penalties.  Any corporation, organization, developer, or individual found to be in violation of this part shall be subject to a civil penalty of no more than $5,000,000."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  This Act shall take effect on July 1, 3000.

Report Title:

Artificial Intelligence; Chatbots; Unfair or Deceptive Practices; Developer; Penalties; Exemptions

Description:

Requires corporations, organizations, or individuals engaging to commercial transactions or trade practices to clearly and conspicuously notify consumers when the consumer is interacting with an artificial intelligence chatbot or other technology capable of mimicking human behaviors, with certain exemptions.  Requires developers that sell, offer for sale, advertise, or make available artificial intelligence chatbots to disclose that their chatbots use artificial intelligence.  Authorizes private rights of action.  Establishes statutory penalties.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to artificial intelligence.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that modern chatbots are now advanced enough to engage with users in highly human-like conversations, making it difficult for users to determine if they are speaking with a chatbot or a real person.  Many chatbots are also designed to mimic human behaviors and conversations, and can be used to effectively influence people in a variety of ways, from advertising to spreading misinformation, and can even manipulate users into revealing personal information such as their social security or bank account numbers.  Additionally, chatbots are intended to learn and adapt through their interactions with users.  As chatbots gather information from users, they become better able to help their developers achieve specific objectives, such as keeping users engaged or encouraging them to make a purchase.

     The legislature finds that there are few regulations requiring that companies or individuals make users aware that they are interacting with a chatbot.  This lack of transparency means that individuals may mistakenly believe they are conversing with a licensed professional, such as a doctor, financial advisor, or therapist, when they are actually speaking with a chatbot.  The legislature believes that consumers have a right to know when they are engaging with a chatbot or other technology that mimics human interaction.

     Accordingly, the purpose of this Act is to require corporations, organizations, or individuals engaging in commercial transactions to inform consumers when the consumers are communicating or otherwise interacting with a chatbot or other technology that mimics human interaction.

     SECTION 2.  Chapter 481B, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part    .

artificial intelligence chatbots

     §481B-     Definitions.  As used in this part:

     "Artificial intelligence chatbot" or "chatbot" means a software application, web interface, or computer program designed to have textual or spoken conversations that uses a generative artificial intelligence system capable of maintaining a conversation with a user in a manner that uses natural language and simulates the way a natural person would behave as a conversational partner.

     "Class action" includes the definition as provided in rule 23 of the Hawaii rules of civil procedure.

     "Consumer" means a natural person who, primarily for personal, family, or household purposes, purchase, attempts to purchase, or is solicited to purchase goods or services or who commits money, property, or services as a personal investment.

     "De facto class action" has the same meaning as in section 480-1.

     §481B-     Disclosure required.  (a)  No corporation, organization, or individual engaging in a commercial transaction or trade practice of any kind shall use an artificial intelligence chatbot or other technology that is capable of mimicking human behavior and that engages in a textual or spoken conversation with a consumer in a manner that may mislead or deceive a reasonable person to believe they are engaging with a natural person without first disclosing to the consumer in a clear and conspicuous fashion that the consumer is interacting with a chatbot or other form of technology capable of mimicking human behavior.

     (b)  Any violation of this section shall be considered an unfair or deceptive act or practice under this chapter.

     §481B-     Suits by persons injured; amount of recovery; injunctions.  (a)  Except as provided by subsection (b), any person who is injured by a violation of this part may:

     (1)  Sue for damages sustained by the person, and, if the judgment is for the plaintiff, the plaintiff shall be awarded a sum no less than $1,000 or threefold damages sustained by the plaintiff, whichever sum is greater, and reasonable attorneys' fees together with the costs of the suit; and

     (2)  Bring proceedings to enjoin the unlawful practices, and, if the decree is for the plaintiff, the plaintiff shall be awarded reasonable attorneys' fees together with the costs of the suit.

     (b)  The remedies provided in subsection (a) shall be applied in class action and de facto class action lawsuits or proceedings; provided that:

     (1)  The minimum $1,000 recovery provided in subsection (a) shall not apply in a class action or de facto class action lawsuit;

     (2)  That portion of threefold damages in excess of compensatory damages shall be apportioned and allocated by the court in its exercise of discretion so as to promote effective enforcement of this part and deterrence from violation of its provisions; and

     (3)  Damages awarded shall not exceed $10,000,000.

     (c)  The remedies provided in this section are cumulative and may be brought in one action.

     (d)  In addition to any other remedy provided by law, the attorney general may file a petition for injunctive relief against any corporation, organization, or individual who violates this part.

     §481B-     Penalties.  Any corporation, organization, or individual found to be in violation of this part shall be subject to a civil penalty of no more than $5,000,000."

     SECTION 3.  This Act shall take effect upon its approval.

Report Title:

Artificial Intelligence; Chatbots; Unfair or Deceptive Practices; Penalties

Description:

Requires corporations, organizations, or individuals engaging to commercial transactions or trade practices to clearly and conspicuously notify consumers when the consumer is interacting with an artificial intelligence chatbot or other technology capable of mimicking human behaviors.  Authorizes private rights of action.  Establishes statutory penalties.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  167

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 639

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Economic Development & Technology, to which was referred H.B. No. 639 entitled:

"A BILL FOR AN ACT RELATING TO ARTIFICIAL INTELLIGENCE,"

begs leave to report as follows:

     The purpose of this measure is to require corporations, organizations, or individuals engaging in commercial transactions to inform consumers when the consumers are communicating or otherwise interacting with a chatbot or other technology that mimics human interaction.

     Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs; Public Citizen; and one individual.  Your Committee received testimony in opposition to this measure from TechNet and the Chamber of Commerce Hawaii.

     Your Committee finds that chatbots have increased in their sophistication and can engage in human-like conversations and potentially mislead users into believing they are interacting with real people.  This measure will ensure that consumers are informed when they are interacting with a chatbot or similar technology during commercial transactions.

     Your Committee has amended this measure by:

     (1)  Adding an exemption for small businesses that unknowingly utilize artificial intelligence chatbots;

     (2)  Adding a requirement for developers of chatbots to make certain disclosures regarding their chatbots' use of artificial intelligence;

     (3)  Clarifying that the Director of the Office of Consumer Protection may file a petition for injunctive relief against violators;

     (4)  Changing the effective date to July 1, 3000, to encourage further discussion; and

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

     As affirmed by the record of votes of the members of your Committee on Economic Development & Technology that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 639, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 639, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Economic Development & Technology,