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HB831
HOUSE OF REPRESENTATIVES
H.B. NO.
831
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
RELATING
TO ANTITRUST
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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The legislature finds and declares that Hawaii is in the midst of
an affordable housing crisis, with the highest median rent in the nation.
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Data shows that more than half of renters in
Hawaii are housing cost burdened, which means an individual spends more than
thirty per cent of income on rent.
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The legislature further finds that
recent national data indicates that landlords of residential rental housing use
property management software to collude and raise residential rental housing
prices, which may have contributed to recent increases in the State.
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Landlords engaging with the property
management software supply real-time prices and additional lease information to
companies managing the software, who proceed to use algorithms to fix rental
prices.
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As a result, competition
decreases and rental prices typically increase.
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The legislature acknowledges that a
leading property management software company in the United States hinted at the
outcome of using its software by stating on its website that it enables
landlords to "outperform the market" by two to five per cent, with a
company executive publicly stating that the software could be responsible for
rent increases of up to 14.5 per cent.
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Therefore, the purpose of this Act
is to prevent artificially inflated rental prices by prohibiting the use of
algorithmic price-setting in Hawaii's rental market.
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SECTION 2.
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Chapter 480, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:
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"
�480-
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Rent
price-fixing; declared unlawful; civil actions; public education program.
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(a)
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It shall be unlawful and a violation of this
chapter for:
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(1)
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A rental
property owner, or any agent, representative, or subcontractor thereof, to
subscribe to, contract with, or otherwise exchange any form of consideration in
return for the use of services of a coordinator;
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(2)
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A coordinator
to facilitate an agreement among rental property owners that restricts
competition with respect to residential dwelling units, including by performing
a coordinating function; or
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(3)
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Two or more
rental property owners to engage in consciously parallel pricing coordination.
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(b)
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In
a civil action filed pursuant to this section, a complaint:
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(1)
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Plausibly
pleads a violation of section 480-4(a), if the complaint contains factual
allegations demonstrating that the existence of a contract, combination in the
form of trust or otherwise, or conspiracy in restraint of trade or commerce is
among the realm of plausible possibilities; and
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(2)
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Need not allege
facts tending to exclude the possibility of independent action.
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(c)
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The
department of the attorney general shall develop and undertake a public education
program to inform the citizens of the State about this section.
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A component of the public education program
shall include information posted on the website of the department of the
attorney general and the steps a consumer may take if the consumer suspects a
violation of this section.
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(d)
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The
department of the attorney general shall adopt rules pursuant to chapter 91 for
the purposes of this section.
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(e)
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For
the purposes of this section:
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"Consciously parallel pricing coordination" means a tacit
agreement between two or more rental property owners to raise, lower, change,
maintain, or manipulate pricing for the purchase or sale of reasonably
interchangeable products or services.
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"Coordinating function" means:
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(1)
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Collecting historical or
contemporaneous prices, supply levels, or lease or rental contract termination
and renewal dates of residential dwelling units from two or more rental
property owners;
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(2)
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Analyzing or processing of the
information described in paragraph (1) through use of a system, software, or
process that uses computation, including by using the information to train an
algorithm; and
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(3)
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Recommending rental prices, lease
renewal terms, or ideal occupancy levels to a rental property owner.
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"Coordinator" means any person who operates a software or data
analytics service that performs a coordinating function for any rental property
owner, including a rental property owner performing a coordinating function for
their own benefit.
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"Residential dwelling unit" means any house, apartment,
accessory unit, or other unit intended to be used as a primary residence in the
State.
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"Residential dwelling
unit" shall not include inpatient medical care, licensed long-term care,
or detention or correctional facilities.
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SECTION
3
.
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Section 480-16,
Hawaii Revised Statutes, is amended by amending subsection (a) to read as
follows:
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"(a)
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Any person who violates section 480-4, 480-6,
480-9, [
or
] 480-17,
or 480- ,
including any
principal, manager, director, officer, agent, servant, or employee, who had
engaged in or has participated in the determination to engage in an activity
that has been engaged in by any association, firm, partnership, trust
,
or corporation, which activity is a violation of section 480-4, 480-6, 480-9, [
or
]
480-17, [
is punishable if
]
or 480- , shall be
punished as follows in the discretion of the court:
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(1)
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If the person
is
a natural person
,
by a fine not exceeding $100,000 or [
by
]
imprisonment not exceeding three years, or [
by
] both [
such fine and
imprisonment, in the discretion of the court; if
]
; or
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(2)
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If
the
person is not a natural person [
then
]
,
by a fine not exceeding
$1,000,000."
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SECTION
4.
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This Act does not affect rights and
duties that matured, penalties that were incurred, and proceedings that were
begun before its effective date.
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SECTION
5.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.
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SECTION 6.
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This Act shall take effect upon its approval.
INTRODUCED BY:
_____________________________
Report Title:
Attorney
General; Antitrust; Rental Housing; Price-fixing; Public Education Program
Description:
Prohibits
the use of algorithmic price-setting in Hawaii's rental market.
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Requires the Department of the Attorney
General to develop and undertake a public education program regarding the
prohibition.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.