Hawaii signs first state law to strip corporations of political spending power

Hawaii Gov. Josh Green signed SB 2471 into law on May 15, 2026, making Hawaii the first state to redefine corporate powers to exclude political spending. The law, designated Act 11, takes effect July 1, 2027.

The measure applies to corporations, nonprofit corporations, limited liability companies, limited partnerships, limited liability partnerships, and certain associations organized or authorized to do business under Hawaii law. It declares that the powers granted to these "artificial persons" don't include spending money or contributing anything of value to influence elections or ballot measures.

The Hawaii Senate passed SB 2471 unanimously, 24-0, including all three Republican senators. The House approved it 50-1, with 41 Democrats and nine Republicans voting in favor.

Rep. Chris Muraoka, a Republican, cast the lone dissenting vote. Muraoka warned that Attorney General Anne Lopez had already concluded the measure would likely be struck down and that taxpayers would bear the cost of defending it in court.

The law builds on a legal theory developed by the Center for American Progress called the "Corporate Power Reset." Tom Moore, a senior fellow at CAP, argued that states retain constitutional authority to define what powers they grant to entities they create under state law.

The theory draws a distinction between powers and rights. Every Supreme Court case on corporate political speech assumed the corporation already had the underlying power to spend. SB 2471 doesn't regulate that power; it stops granting it. Supporters contend Citizens United doesn't reach the question because the issue is upstream of where the ruling operates.

Republican state Rep. K. Kanani Souza co-sponsored the House companion measure alongside Democratic Rep. Della Au Belatti. In a joint op-ed, the two wrote that dark money is poisoning democracy and that Hawaii has the authority to stop it.

Souza opened House floor debate by asking whether democracy belongs to "the people of Hawaii whose voices, votes and lived realities give meaning to this institution" or to "corporations, entities created by the state, empowered by law, enriched by privilege, but never intended to stand as political equals."

Hawaii's attorney general opposed the bill throughout the legislative process. Deputy Attorney General Christopher Han told lawmakers that the department "greatly sympathizes with the frustration" with federal case law but said SB 2471 raises "serious constitutional concerns and substantial adverse litigation risk."

Han called the bill's legal theory "untested" and warned that it relied on "an unprecedentedly dangerous mechanism" of revoking all corporate powers related to political spending. The AG's office argued that defending the law would cost taxpayers significant legal fees.

Former Federal Election Commission member Bradley Smith, a Republican, dismissed the legal strategy. Smith told Hawaii Public Radio the approach amounts to "semantic lawyerly tricks" that lower courts won't accept.

Smith argued that courts would likely reject any law that ties the provision of general government services to surrendering constitutional rights, invoking the "unconstitutional conditions" doctrine. He predicted the law would face an immediate legal challenge once it takes effect in July 2027.

The bill is modeled after the Montana Plan, a parallel ballot initiative effort in Montana that uses the same legal framework. Montana's Initiative 194, drafted by a bipartisan team of former state officials, is headed for Montana's 2026 ballot.

Issue One, a cross-partisan democracy reform group, called Hawaii's law "a model for the rest of the country" and praised the bipartisan vote margins. If either Hawaii's law or Montana's initiative survives legal challenge, the Supreme Court could be forced to decide whether this approach constitutes a viable workaround to Citizens United.

The Citizens United v. FEC decision in January 2010 allowed corporations and unions to spend unlimited amounts on political advertising. The 5-4 ruling, written by Justice Anthony Kennedy, struck down provisions of the Bipartisan Campaign Reform Act and overruled Austin v. Michigan State Chamber of Commerce. Outside spending in federal elections grew from $574 million in 2008 to $4.5 billion in 2024.

Dark money spending hit a record $1.9 billion in the 2024 federal races alone, according to the Brennan Center for Justice. In Hawaii, two super PACs aligned with the Carpenters Union spent $8.6 million in the 2024 state election cycle.

Free Speech For People, a national nonpartisan nonprofit, helped pass similar legislation in Minnesota in 2023, San Jose in 2024, and Seattle in 2020. Hawaii's version is the broadest yet, covering all artificial entities organized under state law rather than targeting specific entity types.

The approach differs from traditional campaign finance reform by operating through corporate law rather than election law. By redefining the powers that accompany a state corporate charter, the strategy aims to sidestep the First Amendment framework that doomed previous restrictions after Citizens United.

Bloomberg Law reported that success in either Hawaii or Montana would likely force the Supreme Court to decide whether states can limit corporate election spending through corporate law rather than campaign finance regulation.

Critics raised three constitutional objections beyond the First Amendment: the Commerce Clause argument that applying the law to out-of-state companies could burden interstate commerce, the unconstitutional conditions doctrine preventing states from conditioning government services on surrendering rights, and preemption concerns that federal election law may override state corporate law changes.