STAND. COM. REP. NO. 3078

Honolulu, Hawaii

RE: S.B. No. 3001

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 3001, S.D. 1, entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Require operators of conversational artificial intelligence services in the State to issue certain disclosures to account holders and users;

(2) Require operators to develop protocols to prevent the production of suicidal ideations in account holders and users;

(3) Establish protections for minor account holders of conversational artificial intelligence services;

(4) Beginning January 1, 2028, require operators to submit annual reports to the Department of Commerce and Consumer Affairs containing certain information;

(5) Allow the Department of the Attorney General to bring a civil action against operators who violate certain requirements; and

(6) Establish statutory penalties.

Your Committee received testimony in support of this measure from the Department of Education, Google, and three individuals.

Your Committee received comments on this measure from the Department of the Attorney General and Office of Consumer Protection of the Department of Commerce and Consumer Affairs.

Your Committee finds that artificial intelligence is becoming a standard part of modern digital life. However, this increased use of artificial intelligence will result in an increased risk to these tools being used to mislead or manipulate individuals. Your Committee further finds that certain vulnerable groups are at a higher risk of being deceived by artificial intelligence that mimics human empathy or provides false information. Additionally, the psychological well-being of minors is particularly at risk due to minors lacking the maturity to distinguish between simulated empathy and genuine human interaction. This measure will establish necessary safeguards to ensure that technology serves the public without compromising their safety or privacy.

Your Committee has amended this measure by:

(1) Specifying that the requirements for an operator to:

(A) Limit the collection, use, and retention of personal data to what is reasonably necessary to operate the conversational artificial intelligent eservice and ensure safety and security;

(B) Use heightened data minimization and security safeguards in relation to sensitive data;

(C) Not use personal data for target advertising; and

(D) Not profile certain users for engagement optimization or behavioral manipulation,

apply to all account holders or users, not just minors;

(2) Specifying that any violation of the requirements established by this measure constitutes an unfair or deceptive act or practice in the conduct of trade or commerce within the meaning of section 480-2, Hawaii Revised Statutes;

(3) Inserting a definition of "personal data"; and

(4) 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 Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3001, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3001, S.D. 2.

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

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KARL RHOADS, Chair