STAND. COM. REP. NO. 3740

Honolulu, Hawaii

RE: H.B. No. 2137

H.D. 3

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committees on Commerce and Consumer Protection and Judiciary, to which was referred H.B. No. 2137, H.D. 3, S.D. 1, entitled:

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

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Prohibit certain harmful uses of and mandate disclosure for realistic digital imitations generated by artificial intelligence (AI);

(2) Establish certain exemptions;

(3) Provide for civil actions and civil remedies for individuals injured by unauthorized AI-generated realistic digital imitations;

(4) Require the disclosure of the use of synthetic performers in advertising; and

(5) Establish civil fines.

Your Committees received testimony in support of this measure from the Hawaii State Commission on the Status of Women, University of Hawaii Professional Assembly, Imua Alliance, and two individuals.

Your Committees received testimony in opposition to this measure from the Motion Picture Association.

Your Committees received comments on this measure from the Department of the Attorney General and Computer and Communications Industry Association.

Your Committees find that with the advance of artificial intelligence, individuals are increasingly vulnerable to having their likenesses or voices used in unauthorized "deepfakes" to manufacture false endorsements, spread misinformation, or damage their professional or personal reputations. This measure would establish clear prohibitions and penalties for the harmful distribution of realistic digital imitations.

Your Committees have amended this measure by:

(1) Inserting language to clarify that the definition of "digital imitation" means any highly realistic AI-generated depiction, audio, or video that is derived from or based upon identifying characteristics of an actual, particular individual and portrays that individual's voice, face, or likeness in a sound recording or audiovisual work in which the individual did not actually perform or appear;

(2) Replacing language that would have made it unlawful to knowingly publish a realistic digital imitation of an identifiable individual with the knowledge that the individual did not consent with language to clarify that it shall be unlawful to knowingly publish a realistic digital imitation of an identifiable individual without that individual's consent;

(3) Inserting language to clarify that the requirements of the proposed new chapter relating to digital imitation shall not apply to content generated or altered by artificial intelligence that is:

(A) A form of criticism, scholarship, or political or educational expression;

(B) A representation of the applicable individual as the individual in a documentary or in a historical or biographical manner, including some degree of fictionalization; and

(C) An advertisement or commercial announcement for exempted content where the applicable digital imitation is relevant to the subject of the work so advertised or announced;

(4) Deleting language that would have exempted from the requirements of the proposed new chapter relating to digital imitation content generated or altered by artificial intelligence that is for:

(A) A non-commercial artistic or educational use, where the content is clearly labeled pursuant to disclosure requirements and no harm is intended or reasonably foreseeable; and

(B) Any other use protected by the First Amendment of the United States Constitution or article I, section 4, of the Hawaii State Constitution; and

(5) 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 Commerce and Consumer Protection and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2137, H.D. 3, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as H.B. No. 2137, H.D. 3, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Judiciary,

________________________________ KARL RHOADS, Chair

________________________________ JARRETT KEOHOKALOLE, Chair