Hawaii Redefines Corporate Powers to Exclude Election Spending

Hawaii has enacted one of the most significant state-level laws concerning corporate election activity since the U.S. Supreme Court’s landmark decision in Citizens United v. Federal Election Commission. Senate Bill 2471, signed into law by Governor Josh Green, redefines the scope of corporate powers for entities organized or transacting business in Hawaii by explicitly excluding election-related spending. The law is set to take effect on July 1, 2027, though legal challenges are anticipated before that date.

Understanding what the law allows, which entities it covers, and what penalties apply is essential for any organization with a presence in the state.

What Hawaii’s SB 2471 Changes for Corporate Election Activity

At its core, SB 2471 removes election and ballot-issue activity from the scope of powers available to corporations and other artificial legal entities in Hawaii. This means that covered entities will be effectively prevented from paying, contributing, or expending money or anything of value, whether directly or indirectly, to support or oppose a candidate, political committee, or political party.

The law applies beyond candidate elections. Covered entities are also prevented from spending to support or oppose constitutional amendments, county charter amendments, or other ballot questions once those measures have been formally certified or submitted to voters. Additionally, the law removes the authority for covered entities to make donations of any kind, except  charitable donations.

There is an exception for bona fide news stories, commentaries, and editorials. However, even that exception does not apply if the broadcasting, print, online, or digital distribution facility is owned or controlled by a candidate, political committee, or political party.

Which Entities Are Covered Under the New Hawaii Election Spending Law

SB 2471 applies broadly across entity types. The law covers domestic and foreign corporations, professional corporations, credit unions, agricultural cooperative associations, consumer cooperative associations, limited-equity housing cooperatives, limited liability partnerships, limited partnerships, limited liability companies, nonprofit associations, and nonprofit corporations other than committees.

A critical provision of the bill conditions its applicability on ongoing enforcement against foreign entities transacting business in Hawaii. 

Candidate committees, noncandidate committees, and similar committees created under federal law are explicitly granted the power to engage in election and ballot-issue activity.  These carve-outs preserve the ability of political committees to operate within established campaign finance frameworks 

Penalties for Violations of  Hawaii’s Corporate Powers Limits

Any election or ballot-issue activity by a covered entity will be deemed void. Beyond that, the consequences for violations can include suspension of the entity’s authority to operate or transact business in Hawaii, ineligibility for state contracts, designation as a non-compliant entity, revocation of the entity’s operating instrument, involuntary dissolution, and revocation of tax-exempt status where applicable.

Enforcement authority is limited to two state officials: the attorney general and the director of commerce and consumer affairs. This centralized enforcement structure means that private parties and local officials cannot independently pursue violations, Hawaii’s Law in the Context of the Post-Citizens United Landscape

Hawaii is not acting in isolation. The state is one of several jurisdictions that have introduced measures this year addressing the role of corporate powers in elections. These efforts represent an ongoing legislative response to the 2010 Citizens United decision, which held that the federal government’s restriction on independent political expenditures by corporations, associations, and labor unions violated the First Amendment.

While the Citizens United ruling remains the law of the land at the federal level and as applied throughout the states,  Hawaii is approaching the issue in a novel way. SB 2471 received overwhelming bipartisan support in both chambers of the Hawaii legislature, signaling broad political backing for the measure. However, the law is expected to face legal challenges before its effective date of July 1, 2027.

Organizations operating in Hawaii or monitoring state-level campaign finance developments should track the progress of any litigation closely, as court rulings could shape the future  of similar measures in other states.

Steps for Businesses and Organizations to Prepare

Even though the law does not take effect until July 2027, companies and organizations with operations in Hawaii should begin evaluating their existing election and ballot-issue spending activity. Assess whether your entity type is covered under the law. Identify any planned contributions, expenditures, or ballot-measure spending that would need to be curtailed before the effective date.

For organizations operating across multiple states, Hawaii’s new law adds another layer to an already complex patchwork of state-level campaign finance and corporate governance requirements. State and Federal Communications provides compliance consulting services to help government affairs professionals and corporate counsel navigate these evolving obligations.

Gov. Josh Green signed Senate Bill 2471 concerning the powers of corporations and certain other artificial legal entities. Beginning July 1, 2027, the bill excludes election and ballot-issue activity from the powers of corporations and other non-committee artificial legal entities organized and transacting business in Hawaii. Election and ballot-issue activity by such entities will be deemed void and result in penalties, including forfeiture of state charter privileges. The prohibition is based on the premise that artificial persons such as corporations were never intended to be imbued with the power to influence elections. The bill is conditioned on its ongoing applicability to foreign entities transacting business in the state. Hawaii is one of a number of states with measures introduced this year (e.g., Arizona Senate Concurrent Resolution 1053, Kansas House Bill 2766, Oklahoma House Joint Resolution 1075) addressing the grant of corporate powers related to election influence in the continuing wake of the U.S. Supreme Court decision in Citizens United v. Federal Election Commission.

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Comply with state and local procurement lobbying rules. Our online guidebooks make it easy to view regulations all in one place. Learn more here.

The Hawaii Legislature adjourned sine die on May 8. Lawmakers passed bills related to campaign financing. Pursuant to Senate Bill 2532, political committees will be required to electronically file organizational reports, fundraiser notices, and terminations with the Campaign Spending Commission. Under Senate Bill 2247, executive branch employees who were nominated and confirmed to compensated positions with influence on procurement and contract management are prohibited from attending or participating in political fundraising activities until the employment ends.

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The Hawaii Legislature has fundamentally changed the landscape for government contractors by enacting House Bill 412. Effective January 1, 2027, this law expands the definition of “lobbying” to include certain procurement activities. If your organization pursues state contracts, these changes may require you to register as a lobbyist even if you have never considered your activities to be traditional lobbying.

Understanding the New Definition of Lobbying

Previously, Hawaii law defined lobbying primarily as communicating with officials to influence legislative or executive action or ballot issues. Under the new provisions of HB 412, lobbying now includes:

• Financial Disclosure Personnel: Communications with any person required to file financial disclosure statements with the state regarding the following procurement matters.
  • Contract Solicitation and Awards: Any communication regarding the solicitation or award of a contract by proposal before an administrative agency.
  • Vendor Relationships: Discussions concerning potential future vendor relationships with an administrative agency.

It is important to note that the law specifically excludes communications that are initiated by a legislator or a state employee.

Consequences of Non-Compliance

The state has introduced significant penalties to ensure adherence to these transparency requirements. Any contract or action entered into by the state that is found to be in violation of lobbying laws may be voidable within 60 days after a violation is determined. The Attorney General, in coordination with the affected purchasing agency, holds the authority to enforce these penalties.

Determining If You Must Register

Not every vendor interaction will trigger a registration requirement. Registration is typically based on specific thresholds, including:

• The amount of compensation received for lobbying activities.
• The total time spent lobbying during a specific reporting period or calendar year.
• The total expenditures made toward lobbying efforts.

Frequently Asked Questions

When do these procurement lobbying changes actually take effect? While the bill was enacted on May 16, 2025, the expanded definition, specifically targeting procurement and vendor relationships, does not take effect until January 1, 2027. This provides organizations a window to assess their current business development strategies and internal compliance protocols.

Does this mean every sales meeting with a state agency is now “lobbying”? Not necessarily. The law focuses on communications concerning the “solicitation or award of a contract by proposal” or “potential future vendor relationships”. Standard administrative inquiries or communications initiated by the state employee are generally excluded. However, because the line between “sales” and “influence” is now thinner, a formal assessment of your activities is highly recommended.

How can I stay updated on these and other state compliance changes? Rules regarding procurement and lobbying are subject to frequent shifts. For in-house teams who need a reliable reference, our Guidebooks provide up-to-date regional data and statutory summaries. If your organization requires a more tailored approach to navigate these new Hawaii requirements, our Consulting team offers hands-on assistance to ensure your procurement efforts remain compliant and your contracts secure.

The U.S. District Court for the District of Hawaii recently ruled that a 2024 state law (Act 191) aimed at regulating deceptive election media is unconstitutional. In the case of The Babylon Bee, LLC and Dawn O’Brien v. Anne E. Lopez, et al., the court granted a permanent injunction against the law, finding that it violated the First and Fourteenth Amendments. While the state argued the law was necessary to protect electoral integrity from AI-generated “deepfakes,” the court determined the restrictions were too broad and lacked the narrow tailoring required by the Constitution.

Understanding Act 191 and the Court’s Ruling

Act 191 was designed to prevent the reckless distribution of “materially deceptive” election media. This included any video, audio, or images created via digital technology or artificial intelligence that depicted a candidate engaging in speech or conduct that did not actually happen. The law specifically targeted content intended to harm a candidate’s reputation or influence voter behavior from February through Election Day.

The court’s decision centered on several key legal principles:

• Content and Speaker Discrimination: The court found that Act 191 discriminated based on the content of the speech and the identity of the speaker.
• Failure of Strict Scrutiny: Even though protecting elections from deceptive media is a “compelling interest,” the law failed the strict scrutiny test because it was not narrowly tailored.
• Vagueness and Overbreadth: Under the Fourteenth Amendment, the law was ruled unconstitutionally vague because it required speakers to guess at the “risk” of their content rather than following clear, objective standards.
• Compelled Speech: The requirement to include a state-mandated disclaimer was found to impermissibly alter the intended message and effect of the political speech.

Frequently Asked Questions

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Why did the court rule against a law meant to stop deceptive AI content?

While the state has a valid interest in protecting elections, the court found that Act 191 was “substantially overbroad”. Instead of focusing solely on clearly harmful misinformation, it created a system in which creators of political satire or commentary had to assess vague risks of “harming reputation” before publishing. The court noted that less restrictive methods, such as electoral literacy campaigns or existing defamation laws, could address these concerns without infringing on free speech.

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Does this ruling mean all AI-generated political content is now unregulated?

No, this specific ruling applies to the enforcement of Hawaii’s Act 191. The court suggested that the state could use speech-neutral alternatives to combat deepfakes, such as targeted counter-speech or enforcement of laws related to actual harm or defamation, rather than broad preventive restrictions.

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What was the issue with the disclaimer requirement in Act 191?

The court determined that forcing a speaker to use a specific disclaimer is a form of compelled speech. In the context of political satire or parody, such a disclaimer would fundamentally change the content and the message the creator intended to convey, which is a violation of First Amendment protections.

Gov. Green signed multiple bills related to lobbying. House Bill 413 clarifies lobbyist contributions are prohibited in periods during which both chambers are in session. House Bill 412 establishes certain presumptions regarding lobbying on behalf of private clients; makes contracts voidable when entered into in violation of the state lobbying law under certain conditions; and expands the definition of lobbying to include certain communications with government officials regarding procurement decisions. Senate Bill 289 establishes uniform provisions for the assessment of administrative penalties under the State Ethics Code and Lobbyist Law. House Bill 413 and Senate Bill 289 are effective immediately. House Bill 412 will take effect January 1, 2027.

The Hawaii Legislature adjourned sine die on May 2 after 60 days in session. During the session, lawmakers passed multiple bills related to lobbying. House Bill 413 clarifies lobbyist contributions are prohibited in periods during which both chambers are in session. House Bill 412 establishes certain presumptions regarding lobbying on behalf of private clients; makes contracts voidable when entered into in violation of the state lobbying law under certain conditions; and expands the definition of lobbying to include certain communications with government officials regarding procurement decisions. Senate Bill 289 establishes uniform provisions for the assessment of administrative penalties under the State Ethics Code and Lobbyist Law. If signed, House Bill 413 will take effect immediately and House Bill 412 will take effect January 1, 2027. Senate Bill 289 was signed by Gov. Green on April 11 and took effect upon its approval.

The third special session of the Hawaii Senate on judicial appointments adjourned sine die October 20.

The appointments considered were nominees Timothy E. Ho for District Court of the First Circuit; John Alberto Montalbano for District Family Court of the First Circuit; and James S. Kawashima for the Circuit Court of the First Circuit.

Lobbyists and lobbyist employers who engage in lobbying activities or who make expenditures for the purpose of attempting to influence legislative action considered during a special session must file a special report on or before November 19, covering the period from May 1 through October 20.

The Hawaii Senate convened a third special session on October 19 to consider and confirm judicial appointments.

The appointments being considered are nominees Timothy E. Ho for District Court of the First Circuit; John Alberto Montalbano for District Family Court of the First Circuit; and James S. Kawashima for the Circuit Court of the First Circuit.

Lobbyists and lobbyist employers who engage in lobbying activities or who make expenditures for the purpose of attempting to influence legislative action considered during a special session must file a special report within 30 days of adjournment sine die of the special session, covering the period from May 1 through adjournment sine die of the special session.

The adjournment date of the third special session has not yet been announced.

The Hawaii State Senate will convene a special session on June 20 to review judicial appointments.

Judicial appointments are for Jill M. Hasegawa and Joanna E. Sokolow to the District Family Court of the 3rd Circuit – Hawaii Island, and Gregory H. Meyers to the District Court of the 5th Circuit – Kauai.

The process will begin with a Senate Judiciary Committee hearing on Thursday, June 16 at 10:30 a.m.

Following the floor session on Monday, June 20 at 11 a.m., there will be a separate decision-making meeting of the Judiciary Committee at 11:30 a.m. Final Senate votes on the appointments are expected on Tuesday, June 21 at 10 a.m. This may affect lobbyist reporting.

A lobbyist and employer activity report must be filed if expenditures or contributions are made relating to legislative action considered during the special session.

Any such report would be due within 30 days of adjournment sine die of the special session covering the period from May 1 through the adjournment sine die date.

The Hawaii Legislature adjourned its regular session sine die May 5.

During the session, several bills related to campaign finance were introduced.

House Bill 1423, with its last action on March 18, was introduced but has not passed.

The bill set out to increase the fine for campaign spending law violations against a noncandidate committee making only independent expenditures and that has received at least one contribution of more than $10,000, or spent more than $10,000 in an election period.

House Bill 1423 would have allowed the campaign spending commission to order that the fine be up to three times the amount of the unlawful contribution or expenditure, and that the payment of the fine assessed against a noncandidate committee, or any portion thereof, be paid from the personal funds of an officer of the noncandidate committee.

This does not affect lobbyist reporting.

The Honolulu Ethics Commission is proposing to lower the permissible value of gifts to city employees from $200 to $25.

Commissioners chose not to pursue a recommendation to require gift disclosure forms.

The debate comes amid increased scrutiny over ethics rules after two former Hawaii legislators pleaded guilty to accepting thousands of dollars in bribes. Federal prosecutors brought charges of honest services wire fraud after ex-Senate Majority Leader J. Kalani English and ex-Rep. Ty Cullen failed to list the bribes on mandatory annual gift disclosures filed with the state.

The ethics commission plans to introduce its proposed legislation at the Honolulu City Council, giving council members the opportunity to review and possibly amend it.

The Hawaii Senate will convene for a third special session on October 28 to consider and confirm District and Circuit Court positions.

The Senate Judiciary Committee will hold a videoconference hearing on October 27 to submit testimony. Decision-making will occur after the convening of the special session and after the measures for Circuit Court positions are formally referred to the Judiciary Committee.

The special session will only address six pending judicial appointments, including nominees for District Court of the Third Circuit, Circuit Court of the First Circuit, Circuit Court of the Second Circuit and of the Third Circuit.

Final Senate votes on the appointments are expected at 11 a.m. October 29.

A lobbyist and employer activity report must be filed if expenditures or contributions are made relating to legislative action considered during the special session. Any such report would be due within 30 days of adjournment sine die of the special session covering the period from May 1 through the adjournment sine die date.

A Senate bill in Hawaii passed affecting the reporting of electioneering communications.

Senate Bill 404 provides persons, including corporations, making expenditures for electioneering communications in an aggregate amount of $1,000 instead of $2,000 during any calendar year must file reports within 24 hours of each disclosure date.

The bill also exempts communications that are actual expenditures of an organization from being considered electioneering communications and excludes candidate and candidate committees from the disclosure requirements.

The information is effective and applicable for the 2022 primary election.