SB2572

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

Artificial Intelligence Safety and Regulation

PART I. GEneral Provisions

§ -1 Short title. This chapter shall be known and may be cited as the Hawaii Artificial Intelligence Safety and Regulation Act.

§ -2 Legislative intent. Artificial intelligence technologies are rapidly advancing and have the potential to significantly impact the economy, society, and individual rights. To protect the safety, privacy, and fundamental rights of Hawaii residents, it is essential to ensure that the development, deployment, and use of artificial intelligence technologies and products in the State are undertaken in a responsible and transparent manner.

Several open letters published in 2023 by academics, advocates, and industry leaders on the risks posed by advanced artificial intelligence have warned that the potential existential risks from artificial intelligence should be a global priority alongside other societal-scale risks, including pandemics and nuclear war. Industry experts have also raised concerns regarding nonexistential risks of artificial intelligence, including systematic bias, misinformation, malicious use, cyber-attacks, and weaponization, which are also important and must be addressed urgently.

In addressing the potential risks associated with artificial intelligence technologies, it is crucial that the State adhere to the precautionary principle, which requires the government to take preventive action in the face of uncertainty; shifts the burden of proof to those who want to undertake an innovation to show that it does not cause harm; and holds that regulation is required whenever an activity creates a substantial possible risk to health, safety, or the environment, even if the supporting evidence is speculative. In the context of artificial intelligence and products, it is essential to strike a balance between fostering innovation and safeguarding the well-being of the State's residents by adopting and enforcing proactive and precautionary regulation to prevent potentially severe societal-scale risks and harms, require affirmative proof of safety by artificial intelligence developers, and prioritize public welfare over private gain.

The purpose of this chapter is to establish the office of artificial intelligence safety and regulation within the department of commerce and consumer affairs to regulate the development, deployment, and use of artificial intelligence technologies in the State in accordance with the precautionary principle, while encouraging innovation and advancement of artificial intelligence development.

§ -3 Definitions. As used in this chapter:

"Artificial intelligence" has the same meaning as defined in title 15 United States Code section 9401.

"Department" means the department of commerce and consumer affairs.

"Director" means the director of commerce and consumer affairs.

"Executive director" means the executive director of the office of artificial intelligence safety and regulation.

"Office" means the office of artificial intelligence safety and regulation.

"Precautionary principle" means the principle that:

(1) Requires the government to take preventive action in the face of uncertainty;

(2) Shifts the burden of proof to those who want to undertake an innovation to show that it does not cause harm; and

(3) Holds that regulation is required whenever an activity creates a substantial possible risk to health, safety, or the environment, even if the supporting evidence is speculative.

§ -4 Deployment of artificial intelligence products; prior written approval required. No person shall deploy artificial intelligence products in the State without submitting to the office affirmative proof establishing the product's safety.

PART II. Office of artificial intelligence safety and regulation

§ -11 Office of artificial intelligence safety and regulation; establishment; executive director; personnel. There is established within the department of commerce and consumer affairs for administrative purposes only, the office of artificial intelligence safety and regulation to regulate the development, deployment, and use of artificial intelligence technologies in the State. The office shall be headed by an executive director who shall be appointed by the governor, with the advice and consent of the senate, to serve for a term of four years. The executive director shall be exempt from chapter 76 and may employ staff as may be necessary for the purposes of this chapter without regard to chapter 76.

§ -12 Salary and duties of executive director; benefits. Notwithstanding section -13, the governor may define the executive director's powers and duties and fix the executive director's compensation. The executive director shall be entitled to participate in any employee benefit plan.

§ -13 General functions, powers, and duties. The executive director shall have the following functions, powers, and duties, guided by the precautionary principle:

(1) Identify and assess existing and potential risks and uncertainties associated with the development, deployment, and use of artificial intelligence systems and applications in the State;

(2) Develop, implement and enforce regulations regarding the responsible development, deployment, and use of artificial intelligence technologies to mitigate risks in the State with particular focus on public safety and protecting the privacy and individual rights of users of artificial intelligence products in the State;

(3) Establish standards and guidelines for data privacy, security, and transparency in artificial intelligence systems and ensure that developers, deployers, and users of artificial intelligence systems and applications in the State adhere to the provisions of this chapter and rules adopted pursuant to this chapter;

(4) Conduct periodic risk assessments of artificial intelligence systems and applications to identify existing or potential hazards, vulnerabilities, or adverse effects, and develop and implement measures to mitigate the hazards, vulnerabilities, or adverse effects, taking into account potential adverse effects that may arise from artificial intelligence technologies and requiring affirmative proof of safety by artificial intelligence developers before products are deployed;

(5) Provide guidance and education to artificial intelligence developers, deployers, and users of artificial intelligence technologies and the public on the best practices, potential risks, and responsible adoption of artificial intelligence technologies and encourage the application of the precautionary principle in the design and deployment of artificial intelligence products to safeguard the well-being of the communities;

(6) Establish and maintain a reporting system for the public to raise concerns, report incidents, and seek information related to artificial intelligence systems and their impact on society. The executive director shall be responsive to the reports, take necessary action to protect public safety, and act in the best interest of the public;

(7) Collaborate with relevant public and private agencies, academic institutions, and industry stakeholders, as appropriate, to promote research, innovation, and advancement of artificial intelligence technologies, while integrating precautionary measures to effectively address potential risks;

(8) Conduct investigations and audits to ensure compliance with this chapter; and

(9) Adopt, amend, or repeal rules in accordance with chapter 91, necessary to carry out the purposes of this chapter.

§ -14 Artificial intelligence regulation; precautionary principle; risk-based approach. (a) In regulating the development, deployment, and use of artificial intelligence technologies in the State, the office shall:

(1) Adhere to the precautionary principle, emphasizing the proactive identification and management of risks associated with artificial intelligence technologies and the need for artificial intelligence developers to provide affirmative proof of safety of their products before deployment; and

(2) Take a risk-based approach considering factors, including the potential for harm, criticality of the application, and level of autonomy.

A developer of an artificial intelligence product deemed by the office to have a higher potential risk shall have a higher burden of proof to demonstrate the safety of the product before deployment.

(b) As part of the risk-based approach, the office shall:

(1) Strategically allocate its resources into its efforts to address high-priority artificial intelligence applications that pose significant risks to human health, safety, or fundamental rights; and

(2) Establish, in accordance with the precautionary principle, a framework for assessing and categorizing artificial intelligence systems based on risk levels, which shall enable the office to prioritize regulatory efforts on high-risk artificial intelligence applications and products to prevent and mitigate potential harm to public safety and individual rights.

(c) In applying the risk-based approach, the office shall be transparent and cooperate with stakeholders from diverse backgrounds, including experts in artificial intelligence technology, ethicists, business groups, indigenous groups, the nonprofit sector, health care professionals, academics, and members of the public, to ensure that decisions regarding risk assessment and regulation are informed, well-balanced, and considerate of the potential implications on society.

(d) The office shall regularly review and update its risk assessment framework to keep pace with evolving artificial intelligence technologies and potential risks and effectively address any emerging challenges through continuous evaluation and improvement.

(e) The office shall maintain a balance between innovation of artificial intelligence technologies and public safety by fostering and promoting the responsible innovation and use of artificial intelligence technologies, and cooperating with counties, other state agencies, federal agencies, international regulators, artificial intelligence developers, industry stakeholders, and others, as appropriate, to encourage the adoption of best practices and precautionary measures in artificial intelligence product regulation and development.

and rules by bringing civil actions or proceedings.

§ -15 Annual report. The executive director shall prepare and submit an annual report describing the activities of the office to the director, governor, and legislature, no later than twenty days prior to the convening of each regular session.

PART III. Enforcement AND PENALTIES

§ -21 Penalties. Any person who violates any provision of this chapter or any rule adopted by the office pursuant to this chapter shall be fined not more than $ for each separate offense. Each day of each violation shall constitute a separate offense. Any action taken to impose or collect the penalty provided for in this section shall be considered a civil action.

§ -22 Enforcement authority. The attorney general or the executive director of the office of consumer protection is authorized to investigate reported or suspected violations of this chapter and any rules adopted pursuant to this chapter, and to enforce the laws and rules by bringing civil actions or proceedings."

SECTION 2. Section 26-9, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) Notwithstanding any provision to the contrary, the employment, appointment, promotion, transfer, demotion, discharge, and job descriptions of all officers and employees under the administrative control of this department shall be determined by the director of commerce and consumer affairs subject only to applicable personnel laws[.]; provided that, to the extent it conflicts with sections -11 and -12, this subsection shall not apply to the officers and employees of the office of artificial intelligence safety and regulation established under section -11."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2024-2025 for the establishment of the office of artificial intelligence safety and regulation.

The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2024.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2572
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII