H.B. NO.



H.D. 1
















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


contract and license agreements for electronic books

   -1 Definitions. As used in this chapter:

"Aggregator" means an individual or entity whose business is the licensing of access to electronic literary material collections that include electronic literary material from multiple publishers.

"Borrower" means a person or organization, including another library, to whom the library loans electronic literary materials of any sort.

"Digital audiobook" means a published work that is in the form of a voice recording or narrated and released as a digital audio file.

"Electronic book" means a published work that is in written form and released as a digital text file.

"Electronic literary materials" means digital audiobooks or electronic books.

"Library" means:

(1) Public libraries, including elementary or secondary school libraries;

(2) Academic libraries;

(3) Research libraries;

(4) Special libraries;

(5) Talking book libraries; and

(6) Archives.

"Loan" means to create and transmit to a borrower a copy of electronic literary material and delete it at the end of the loan period.

"Loan period" means the time between the transmission of electronic literary material to a borrower and the copy's deletion, as determined by any individual library.

"Publisher" means an individual or entity whose business is the manufacture, 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 aggregators who enter into contracts with libraries for the purposes of providing materials for purchase or license from the publishers.

"Technological protection measures" means any technology that ensures the secure loaning or circulation by a library of electronic literary materials.

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

   -2 Contracts between publishers and libraries. (a) No contract or license agreement entered into between any publisher and any library in the State shall:

(1) Preclude, limit, or restrict the library from performing customary operational functions, including:

(A) Licensing electronic literary materials;

(B) Employing technological protection measures as is necessary to loan electronic literary materials;

(C) A library's right to make non-public preservation copies of electronic literary materials; and

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

(2) Preclude, limit, or restrict the library from performing customary lending functions, 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 total number of times a library may loan any licensed electronic literary materials over the course of any license agreement, or restricts the duration of any license agreement, unless the publisher offers a license agreement to libraries for perpetual public use without such restrictions, at a price that is considered reasonable and equitable as agreed to by both parties; and

(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;

(3) Restrict the library from disclosing any terms of its license agreements to other libraries; and

(4) Require, coerce, or enable the library to violate the law protecting the confidentially of a patron's library records as specified in section 8-200.5-3, Hawaii Administrative Rules.

   -3 Remedies. (a) An offer to license electronic literary materials to a library that includes a prohibited provision listed in section    -2 shall constitute an unfair or deceptive act or 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 section 480-13 shall be available for the enforcement of this chapter. Actions for relief pursuant to this section may be brought by libraries, library officers, or borrowers. Parties shall be enjoined from enforcing license agreements that include a prohibited provision under section    -2.

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

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 shall take effect on June 30, 3000; provided that this Act shall apply to contracts between publishers and libraries entered into or renewed after the effective date of this Act.



Report Title:

Libraries; Publishers; Electronic Books; Contracts; Licensing Agreements; Unfair or Deceptive Acts or Practices



Prohibits any contract or license agreement between a publisher and library in the State from precluding, limiting, or otherwise restricting the library from performing customary operational and lending functions; restricting the library from disclosing any terms of its license agreements to other libraries; and requiring, coercing, or enabling a library to violate rules regarding confidentially of a patron's library records. Deems contracts that contain prohibited provisions an unfair or deceptive act or practice and void and unenforceable. Effective 6/30/3000. (HD1)




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