House Bill No. 5312, or File No. 444, is designed to regulate the terms of electronic book and digital audiobook license agreements between libraries and publishers, ensuring that certain restrictive terms are unenforceable. The bill defines key terms related to electronic literary materials and applies to contracts or license agreements entered into or renewed by libraries in the state with publishers after July 1, 2026. It prohibits contract terms that limit libraries' lending capabilities, restrict the number of loans or licenses, prohibit nonpublic preservation copies, prevent disclosure of contract terms to other libraries, limit contract duration without reasonable terms, or require libraries to disclose confidential patron information. The bill also allows for certain limitations, such as on the number of simultaneous borrowers and the use of technological protection measures to prevent access beyond the loan period. Violations of these provisions are considered unfair trade practices enforceable by the Attorney General.

The bill's fiscal impact statement indicates potential savings for publicly funded entities that provide e-books and potential revenue gains from enforcement actions starting in fiscal year 2027. The bill also clarifies that while it prohibits certain terms, it permits others, such as limiting the number of simultaneous borrowers and requiring technological measures to prevent access beyond the loan period. The Government Administration and Elections Committee gave the bill a joint favorable vote, indicating legislative support for the proposal. The bill's effective date is set for July 1, 2026, and it will apply to all relevant contracts or license agreements from that date forward.