HB2577

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

"Chapter

Contract and License Agreements for electronic books

§ -1 Definitions. For purposes of this chapter:

"Aggregator" means any person in the business of licensing access to electronic literary material collections that include electronic literary material from multiple publishers.

"Borrower" means any person or organization, including another library, to whom a library loans a copy of electronic literary material.

"Digital audiobook" means a sound recording of a reading of any literary production, that has been converted into or published in a digital audio file that may be listened to on a computer or portable electronic device.

"Electronic book" means a text document that has been converted into or published in a digital format that may be read on a computer or portable electronic device.

"Electronic literary material" means any digital audiobook or electronic book.

"Library" includes public libraries and public elementary school or secondary school libraries.

"Literary monograph" means a literary work that is published in one volume or a finite number of volumes.

"Loan" means the creation and transmission by a library to a borrower of a copy of any electronic literary material and the deletion of that copy upon the expiration of the loan period.

"Loan period" means the period of time commencing with the creation and transmission by a library to a borrower of a copy of any electronic literary material and concluding with the deletion of that copy.

"Portable electronic device" means any self-contained electronic device for personal use for communicating, reading, viewing, listening, playing video games or computing, including but not limited to a mobile telephone, tablet computer, electronic book reader, or other similar device.

"Publisher" means any person in the business of the manufacturing, promulgation, license, or sale of books, audiobooks, journals, magazines, newspapers, or other literary productions, including those in the form of electronic literary materials. "Publisher" includes any aggregator who enters into a contract with any library for the purpose of providing materials for purchase or license from any publisher.

"Technological protection measure" means any technology that enhances the security of loaning or circulating electronic literary materials by a library.

"Virtually" means transmitted to receiving parties via the Internet in such a way that the transmission appears in front of the receiving parties on a computer, tablet, smartphone, or electronic device.

§ -2 Contracts between publishers and libraries. (a) Any contract between a publisher and a library to license electronic literary materials to the public in the State is governed by state law.

(b) No contract or license agreement entered into between any publisher and any library shall:

(1) Preclude, limit, or restrict the library from performing customary operational functions by including any provision that precludes, limits, or restricts:

(A) The library from licensing electronic literary materials from publishers;

(B) The library's ability to employ any technological protection measures necessary to loan electronic literary materials;

(D) The library's right to loan electronic literary materials via interlibrary loan systems;

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

(A) Precludes, limits, or restricts the library from loaning electronic literary materials to borrowers;

(B) Restricts the library's right to determine loan periods for licensed electronic literary materials;

(C) Requires the library to acquire a license for any electronic literary material at a price greater than that charged to the public for the same item;

(D) Restricts the number of licenses for electronic literary materials that the library may acquire after the same item is made available to the public;

(E) Requires the library to pay a cost-per-circulation fee to loan electronic literary materials, unless substantially lower in aggregate than the cost of purchasing the item outright;

(F) Restricts the number of times the library may loan any electronic library material over the course of the contract or license agreement if the contract or agreement also imposes a time-based limitation on the duration of the library's license to such materials; or

(G) Restricts or limits the library's ability to virtually recite text and display artwork of any materials to library patrons such that the materials would not have the same educational utility as when recited or displayed at a library facility;

(3) Restrict the library from disclosing the terms of the contract or license agreement to any other library in the State; or

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

§ -3 Remedies. (a) An offer to license electronic literary materials to a library that includes a provision prohibited under section -2(b) constitutes an unfair and deceptive practice within the meaning of section 480-2 and shall be deemed void and unenforceable pursuant to section 480-12. Any remedy provided pursuant to sections 480-3.1 and 480-15.1 shall be available for the enforcement of this chapter. Actions for relief pursuant to this chapter may be brought by libraries, library officers, or borrowers. Parties shall be enjoined from enforcing license agreements that include a provision prohibited under section -2(b).

(b) A contract to license electronic library materials to a library that includes provisions prohibited under section ‑2 are unconscionable within the meaning of section 490:2-302 and shall be deemed void and unenforceable. Any waiver of the provisions of this chapter is contrary to public policy and shall be deemed void and unenforceable."

SECTION 2. 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 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 upon its approval; provided that enforcement of its provisions shall not commence until at least one other state enacts a law similar in purpose to this Act regulating contracts for the licensing of electronic literary materials to libraries.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2577
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII