STAND. COM. REP. NO. 3356

Honolulu, Hawaii

RE: H.B. No. 1782

H.D. 3

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 Labor and Technology and Health and Human Services, to which was referred H.B. No. 1782, H.D. 3, entitled:

"A BILL FOR AN ACT RELATING TO ARTIFICIAL INTELLIGENCE FOR THE PROTECTION OF MINORS,"

beg leave to report as follows:

The purpose and intent of this measure is to establish safeguards, protections, oversight, and penalties for interactions between minors and artificial intelligence (AI) companion systems or conversational AI

services.

Your Committees received testimony in support of this measure from the Department of Education, Office of Wellness and Resilience, Aloha Independent Living Hawaii, Catholic Charities Hawaiʻi, Imua Alliance, Transparency Coalition, Hawaiʻi Children's Action Network Speaks!, Prince Kūhiō Hawaiian Civic Club, Public Citizen, Young People's Alliance, Common Sense Media, Hawaiʻi State Teachers Association, Age Verification Providers Association, Hawaiʻi Psychological Association, and nine individuals.

Your Committees received testimony in opposition to this measure from CTIA and Computer & Communications Industry Association.

Your Committees received comments on this measure from the Office of Consumer Protection of the Department of Commerce and Consumer Affairs, Department of the Attorney General, Retail Merchants of Hawaii, Charter Communications, and TechNet.

Your Committees find that AI technologies — used in social media, tutoring platforms, gaming, and everyday digital tools — are shaping the emotional and cognitive development of young people in ways that are not yet fully understood. While these tools can create opportunities for learning and connection, they also introduce significant risks when appropriate safeguards are not in place. Your Committees further find that without proper protocols, youth can be exposed to unsafe AI practices that contribute to emotional and mental health concerns, including algorithmic amplification of harmful content, AI-generated harassment, and deep fakes and identity harm. These risks underscore the need for clear, enforceable protocols that ensure AI systems used by or accessible to youth are designed with safety guardrails, transparent data practices, age-appropriate content filters, and human oversight. This measure establishes protocols to help ensure that rapidly evolving AI technology supports healthy development for minors and protects them from potential harm.

Your Committees have amended this measure by:

(1) Inserting language to exclude from the definition of "conversational AI service" AI systems used by a business entity solely for customer service or technical assistance or to strictly provide users with information about available commercial services or products provided by the entity, customer service account information, or other information strictly related to its customer service;

(2) Deleting the definition of "material risk of harm" and related provisions throughout the measure;

(3) Deleting language that would have:

(A) Required providers to limit the collection, use, and retention of a minor's personal data;

(B) Prohibited a provider from using a minor's personal data for targeted advertising or profiling minors for engagement optimization or behavioral manipulation; and

(C) Prohibited the collection and processing of sensitive data of a minor unless necessary for system safety or accessibility, subject to heightened data minimization and security safeguards;

(4) Inserting language to specify that a provider of a conversational AI service or AI companion system shall offer reasonable tools that allow parents or guardians to view, change, and manage a minor's privacy and account settings;

(5) Clarifying that the objective of a provider's implementation of reasonable and proportionate age assurance measures shall be to determine whether a user is a minor, rather than to prevent access by minors, where appropriate;

(6) Inserting a severability clause;

(7) Inserting an effective date of January 1, 2077, to encourage further discussion; and

(8) 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 Labor and Technology and Health and Human Services that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1782, H.D. 3, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1782, H.D. 3, 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 Committees on Labor and Technology and Health and Human Services,

________________________________ JOY A. SAN BUENAVENTURA, Chair

________________________________ BRANDON J.C. ELEFANTE, Chair