This Week in Dover: House Bill 306

By Evan R. Park

Representative Cyndie Romer has advanced House Bill 306 (HB 306), which focuses on how businesses use artificial intelligence (AI) when interacting with customers.

What the Bill Would Do
Under HB 306, it would be illegal for a business to use computer technology in a way that could reasonably make a consumer believe they are speaking with a real person—unless the business clearly discloses that the interaction is automated.

In simple terms: If a customer is chatting with an AI system (such as a chatbot or virtual assistant), the business must clearly inform the customer that they are not speaking with a human.

This is aimed at improving transparency as AI becomes more common in customer service, sales, and online communication.

Business Community Concerns
While many agree that consumers should know when they are interacting with AI, the State Chamber and other stakeholders have raised concerns about one key part of the bill: the private right of action.

This provision would allow individuals to file lawsuits even if they did not suffer actual harm or financial loss. Business leaders have expressed concern that this could lead to unnecessary litigation and increased legal exposure for companies.

Amendments Introduced to Address Concerns
To address concerns and improve clarity, lawmakers have proposed two important amendments:

1. Safe Harbor Provision (House Amendment 1 – Rep. Romer)
Representative Romer agreed to include a “safe harbor” provision designed to protect businesses that follow the rules. Under this amendment, a business would be considered in compliance if it clearly states at the beginning of any interaction: “You are interacting with a computer, not a human.

This means businesses using AI tools such as chatbots, virtual assistants, and automated messaging systems could avoid violations under the Act, provided they clearly disclose upfront that the interaction is AI-generated or automated.

2. Clarifying Damages in Lawsuits (House Amendment 3 – Rep. Sean Lynn)
Representative Sean Lynn introduced an additional amendment that focuses on how damages would be awarded in lawsuits under the law. If a claim is successful, the court would award either the actual proven financial loss, or $1,000 in statutory damages, whichever amount is higher would apply.
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What this means in practice:

• If a loss is small or difficult to prove, the plaintiff could still receive $1,000
• If the actual loss is greater than $1,000, the higher amount would be awarded instead

This provides a clearer structure for courts while ensuring minimum compensation in qualifying cases.

The Delaware State Chamber remains in opposition to HB 306 as amended because we would like more clarity around the safe harbor.  We will engage with members of the Senate to express our concerns. As the bill continues through the legislative process, businesses may want to review how they are currently using AI tools and ensure clear communication practices are in place.

Broader Legislative Update: Rep. Jeff Hilovsky to Step Down
In separate news from Legislative Hall, State Representative Jeff Hilovsky (R–Oak Orchard, Long Neck, Angola) has announced that he will not seek reelection this fall. Rep. Hilovsky, who has served two terms, said his decision is driven primarily by a desire to spend more time with his family.

He has represented the 4th District since redistricting in 2022. The district, located in central Sussex County between Georgetown and Rehoboth Beach, is one of the fastest-growing areas in Delaware.

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