On Friday, the Hawaiʻi State Senate passed a measure clarifying the powers granted to corporations and other artificial legal entities, particularly concerning political spending in elections and ballot measures.
Senate Bill 2471 (SB 2471), Conference Draft 2 (CD2), reaffirms that artificial persons created under state law possess only those powers necessary or convenient to carry out their lawful business or organizational purposes.
The measure makes clear that those powers do not include the ability to spend money or contribute anything of value to influence elections or ballot measures.
“The foundation of our democracy is that political power belongs to the people,” said Sen. Jarrett Keohokalole, chair of the Senate Commerce and Consumer Protection Committee. “Corporations and other artificial entities exist because the state grants them legal privileges, including limited liability and lucrative tax benefits that individuals cannot claim. SB 2471 clarifies that those privileges do not include the power to spend corporate money to influence our elections.”
The measure applies to a range of entities organized or authorized to do business under Hawaiʻi law, including corporations, nonprofit corporations, limited liability companies, limited partnerships, limited liability partnerships, and certain associations.
It also authorizes the attorney general and the director of commerce and consumer affairs to impose penalties or bring enforcement actions for violations.
“This bill does not regulate the rights of natural persons to speak, petition, or associate,” Keohokalole added. “It simply defines the powers that the state grants to artificial entities and makes clear that participation in election activity and ballot-issue activity is not among them.”
SB 2471 CD2 will now be transmitted to Gov. Josh Green for consideration.
