SB 757: RELATING TO LIBRARIES.

A BILL FOR AN ACT

RELATING TO LIBRARIES.

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

     SECTION 1.  The legislature finds that public libraries serve as crucial community institutions that provide equitable access to knowledge, culture, and information.  Digital resources such as electronic books (eBooks) and digital audiobooks have become essential components of library collections.  However, current licensing agreements and practices often impose restrictive terms and exorbitant costs that hinder libraries' ability to fulfill their mission.

     These challenges disproportionately impact Hawaii's public libraries, including those within the state library system and the department of education, as they strive to serve diverse communities across urban and rural areas.  Many publishers charge public libraries significantly higher prices for digital literary materials compared to prices available to individual consumers and impose limitations on usage and duration of access.  Such practices undermine the public's access to critical digital resources.

     The legislature further acknowledges the advocacy of over 1,000 authors and their call for fair treatment of libraries, as highlighted in the "Authors for Libraries" initiative.  Libraries are champions of emerging, midlist, and marginalized authors, providing avenues for discovery and ensuring the preservation of diverse voices for future generations.

     In light of the legal precedent set in Maryland, where attempts to legislate fair digital licensing terms were challenged on the grounds of federal preemption by the Copyright Act, this Act seeks to support Hawaii's public libraries while respecting federal copyright law.  Accordingly, this Act establishes reasonable terms for licensing agreements between publishers and public libraries that safeguard the libraries' rights to access and lend digital materials without contravening federal law.

     The purpose of this Act is to ensure that Hawaii's public libraries can acquire and lend digital literary materials on reasonable terms and preserve their ability to serve as vital public resources for education and equity.

     SECTION 2.  Chapter 312, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART     .  DIGITAL MATERIALS

     §312-A  Definitions.  As used in this part:

     "Digital literary material" means any digital format of a published work, including electronic books and digital audiobooks.

     "Library" means public libraries under the jurisdiction of the Hawaii state public library system and the department of education.

     "Publisher" means an entity engaged in the production, distribution, or licensing of digital literary material.

     "Reasonable terms" means licensing terms that do not impose undue financial or operational burdens on libraries, including:

     (1)  Prices comparable to those offered to individual consumers;

     (2)  No arbitrary restrictions on the number of loans or license duration; and

     (3)  Permissions for interlibrary loans.

     §312-B  Contracts between publishers and libraries.  (a) No contract or license agreement between a publisher and a library shall:

     (1)  Preclude, limit, or restrict the library from performing customary operational functions, including:

          (A)  Licensing digital literary materials;

          (B)  Employing technological protection measures necessary to lend digital literary materials;

          (C)  Making non-public preservation copies of digital literary materials in accordance with federal law; and

          (D)  Lending digital literary materials through the interlibrary loan systems.

     (2)  Preclude, limit, or restrict the library from performing customary lending functions, including:

          (A)  Lending digital literary materials to borrowers; and

          (B)  Determining loan periods for digital literary materials.

     (3)  Require the library to acquire a license for any digital literary material at a price greater than the price charged to the public;

     (4)  Restrict the number of licenses for digital literary material that the library may acquire after the same digital literary material is made available to the public;

     (5)  Require the library to pay a cost per circulation fee to lend digital literary material, unless the total fee is less than the cost of purchasing the digital literary material;

     (6)  Restrict the number of loans of any digital literary material during the term of the license agreement.  The publisher may offer a license agreement to the library for perpetual public use of digital literary materials without lending and duration restrictions at a price that is reasonable and equitable to both parties;

     (7)  Restrict or limit the library's ability to virtually recite text and display artwork of any material to library patrons in a manner that compromises the educational utility of the material compared to the same material when recited or displayed at a library;

     (8)  Restrict the library from disclosing any terms of the license agreement to other libraries; or

     (9)  Require, coerce, or enable the library to violate any law or rule protecting the confidentiality of a borrower's library records.

     §312-C  Offers to license digital literary materials.  (a)  Publishers offering digital literary materials to the public in Hawaii shall extend offers to license the same materials to libraries on reasonable terms.  Licensing agreements shall not:

     (1)  Prohibit or restrict libraries from lending digital literary materials to borrowers;

     (2)  Impose pricing models significantly exceeding those available to the public for equivalent access;

     (3)  Restrict the duration of licenses to a period shorter than the industry standard unless agreed upon by both parties; or

     (4)  Limit libraries' ability to archive or preserve materials for educational and historical purposes.

     (b)  Libraries shall retain the right to determine loan periods and borrowing limits for digital literary materials, subject to fair use rules and appropriate technological safeguards.

     §312-D  Unfair or deceptive act; remedies.  (a)  An offer to license digital literary materials to a library that includes a prohibited provision listed in section 312-B or 312-C shall constitute an unfair or deceptive act or practice within the meaning of section 480-2 and shall be void and unenforceable under section 480-12.  Any remedy under section 480-13 shall be available for the enforcement of this part.  Actions for relief pursuant to this section may be brought by libraries, library officers, or borrowers.  Parties shall be enjoined from enforcing license agreements that include a provision prohibited under sections 312-B or 312-C.

     (b)  A contract to license digital literary materials to a library that includes provisions prohibited under sections 312-B or 312-C shall be unconscionable under section 490:2-302 and shall be void and unenforceable.  Any attempt to waive any provision of this part shall be contrary to public policy, void, and unenforceable."

     SECTION 3.  If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

     SECTION 4.  This Act shall not be applied so as to impair any contract existing as of the effective date of this Act in a manner violative of either the Constitution of the State of Hawaii or article I, section 10, of the United States Constitution.

     SECTION 5.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 6.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

     SECTION 7.  This Act shall take effect on July 1, 2050; provided that this Act shall apply to contracts and licensing agreements entered into or renewed after the effective date of this Act.

Report Title:

Public Libraries; Department of Education; Digital Literary Materials; Publisher License Agreements; Prohibited Terms

Description:

Requires reasonable terms in license agreements for digital literary materials between libraries and publishers.  Defines prohibited terms for license agreements between libraries and publishers.  Declares offer of a license agreement with a prohibited term an unfair or deceptive act.  Makes a license agreement with a prohibited term void and unconscionable.  Creates a right of action by libraries, library officers and borrowers.  Effective 7/1/2050.  (SD1)

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 libraries.

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

     SECTION 1.  The legislature finds that public libraries serve as crucial community institutions that provide equitable access to knowledge, culture, and information.  Digital resources such as electronic books (eBooks) and digital audiobooks have become essential components of library collections.  However, current licensing agreements and practices often impose restrictive terms and exorbitant costs that hinder libraries' ability to fulfill their mission.

     These challenges disproportionately impact Hawaii's public libraries, including those within the state library system and the department of education, as they strive to serve diverse communities across urban and rural areas.  Many publishers charge public libraries significantly higher prices for digital literary materials compared to prices available to individual consumers and impose limitations on usage and duration of access.  Such practices undermine the public's access to critical digital resources.

     The legislature further acknowledges the advocacy of over 1,000 authors and their call for fair treatment of libraries, as highlighted in the "Authors for Libraries" initiative.  Libraries are champions of emerging, midlist, and marginalized authors, providing avenues for discovery and ensuring the preservation of diverse voices for future generations.

     In light of the legal precedent set in Maryland, where attempts to legislate fair digital licensing terms were challenged on the grounds of federal preemption by the Copyright Act, this Act seeks to support Hawaii's public libraries while respecting federal copyright law.  Accordingly, this Act establishes reasonable terms for licensing agreements between publishers and public libraries that safeguard the libraries' rights to access and lend digital materials without contravening federal law.

     The purpose of this Act is to ensure that Hawaii's public libraries can acquire and lend digital literary materials on reasonable terms and preserve their ability to serve as vital public resources for education and equity.

     SECTION 2.  Chapter 312, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART   .  DIGITAL MATERIALS

     §312-A  Definitions.  As used in this part, unless the context otherwise requires:

     "Digital literary material" means any digital format of a published work, including electronic books and digital audiobooks.

     "Library" means public libraries under the jurisdiction of the Hawaii state public library system and the department of education.

     "Publisher" means an entity engaged in the production, distribution, or licensing of digital literary material.

     "Reasonable terms" means licensing terms that do not impose undue financial or operational burdens on libraries, including:

     (1)  Prices comparable to those offered to individual consumers;

     (2)  No arbitrary restrictions on the number of loans or license duration; and

     (3)  Permissions for interlibrary loans.

     §312-B  Contracts between publishers and libraries.  (a) No contract or license agreement between a publisher and a library shall:

     (1)  Preclude, limit, or restrict the library from performing customary operational functions, including:

          (A)  Licensing digital literary materials;

          (B)  Employing technological protection measures necessary to lend digital literary materials;

          (C)  Making non-public preservation copies of digital literary materials; and

          (D)  Lending digital literary materials through the interlibrary loan systems.

     (2)  Preclude, limit, or restrict the library from performing customary lending functions, including:

          (A)  Lending digital literary materials to borrowers; and

          (B)  Determining loan periods for digital literary materials.

     (3)  Require the library to acquire a license for any digital literary material at a price greater than the price charged to the public;

     (4)  Restrict the number of licenses for digital literary material that the library may acquire after the same digital literary material is made available to the public;

     (5)  Require the library to pay a cost per circulation fee to lend digital literary material, unless the total fee is less than the cost of purchasing the digital literary material;

     (6)  Restrict the number of loans of any digital literary material during the term of the license agreement, or restrict the duration of any license agreement.  The publisher may offer a license agreement to the library for perpetual public use of digital literary materials without lending and duration restrictions at a price that is reasonable and equitable to both parties;

     (7)  Restrict or limit the library's ability to virtually recite text and display artwork of any material to library patrons in a manner that compromises the educational utility of the material compared to the same material when recited or displayed at a library;

     (8)  Restrict the library from disclosing any terms of the license agreement to other libraries; or

     (9)  Require, coerce, or enable the library to violate any law or rule protecting the confidentiality of a borrower's library records.

     §312-C  Offers to license digital literary materials.  (a)  Publishers offering digital literary materials to the public in Hawaii shall extend offers to license the same materials to libraries on reasonable terms.  Licensing agreements shall not:

     (1)  Prohibit or restrict libraries from lending digital literary materials to borrowers;

     (2)  Impose pricing models significantly exceeding those available to the public for equivalent access;

     (3)  Restrict the duration of licenses to a period shorter than the industry standard unless agreed upon by both parties; or

     (4)  Limit libraries' ability to archive or preserve materials for educational and historical purposes.

     (b)  Libraries shall retain the right to determine loan periods and borrowing limits for digital literary materials, subject to fair use rules and appropriate technological safeguards.

     §312-D  Unfair or deceptive act; remedies.  (a)  An offer to license digital literary materials to a library that includes a prohibited provision listed in section 312-B or 312-C shall constitute an unfair or deceptive act or practice within the meaning of section 480-2 and shall be void and unenforceable under section 480-12.  Any remedy under section 480-13 shall be available for the enforcement of this part.  Actions for relief pursuant to this section may be brought by libraries, library officers, or borrowers.  Parties shall be enjoined from enforcing license agreements that include a provision prohibited under sections 312-B or 312-C.

     (b)  A contract to license digital literary materials to a library that includes provisions prohibited under sections 312-B or 312-C shall be unconscionable under section 490:2-302 and shall be void and unenforceable.  Any attempt to waive any provision of this part shall be contrary to public policy, void, and unenforceable."

     SECTION 3.  If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

     SECTION 6.  This Act shall take effect upon its approval; provided that this Act shall apply to contracts and licensing agreements entered into or renewed after the effective date of this Act.

Report Title:

Public Libraries; Department of Education; Digital Literary Materials; Publisher License Agreements; Prohibited Terms.

Description:

Requires reasonable terms in license agreements for digital literary materials between libraries and publishers.  Defines prohibited terms for license agreements between libraries and publishers.  Declares offer of a license agreement with a prohibited term an unfair or deceptive act.  Makes a license agreement with a prohibited term void and unconscionable.  Creates right of action by libraries, library officers and borrowers.

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. 433

Honolulu, Hawaii

RE:    S.B. No. 757

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Education, to which was referred S.B. No. 757 entitled:

"A BILL FOR AN ACT RELATING TO LIBRARIES,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Require reasonable terms in license agreements for digital literary materials between libraries and publishers;

     (2)  Define prohibited terms for license agreements between libraries and publishers;

     (3)  Declare offer of a license agreement with a prohibited term an unfair or deceptive act;

     (4)  Make a license agreement with a prohibited term void and unconscionable; and

     (5)  Create a right of action by libraries, library officers, and borrowers.

     Your Committee received testimony in support of this measure from the Hawaiʻi State Public Library System and three individuals.

     Your Committee received testimony in opposition to this measure from the Association of American Publishers, Copyright Alliance, and Independent Publishers Association.

     Your Committee received comments on this measure from the Department of the Attorney General and Department of Education.

     Your Committee finds that public libraries provide a variety of materials, including books, periodicals, and learning materials, to the public that are accessible and free of charge.  However, certain digital literary materials are charged on a subscription basis, charging libraries per licensing period or through the number of uses.  Therefore, establishing fair licensing agreements will ensure fair licensing of digital literary materials to continue free access for patrons at public libraries.

     Your Committee has amended this measure by:

     (1)  Clarifying that a license agreement between a publisher and a library shall preclude, limit, or restrict the library from making non-public preservation copies of digital literary materials in accordance with federal law;

     (2)  Deleting language that would have restricted the duration of any license agreement to clarify that this measure shall not restrict a publisher's right to choose whether to distribute;

     (3)  Inserting a non-impairment savings clause;

     (4)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

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

     As affirmed by the record of votes of the members of your Committee on Education that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 757, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 757, S.D. 1, and be referred to your Committees on Commerce and Consumer Protection and Judiciary.

Respectfully submitted on behalf of the members of the Committee on Education,