Senate committee advances bills relating to artificial persons and corporate election spending

Senate Commerce and Consumer Protection Chair Jarrett Keohokalole (District 24 – Kāneʻohe, Kailua) announced today that Senate Bill 2471 and Senate Bill 2829 have passed out of the Senate Commerce and Consumer Protection Committee. The measures clarify the scope of powers granted to corporations and other artificial entities under state law, particularly with respect to political spending in elections and ballot measures.  

SB 2471 reaffirms that political power in Hawaiʻi belongs to the people, not to corporations or other artificial entities created by the state. While individuals retain full constitutional rights to free speech, association, and political participation, corporations exist solely by authority granted by the state. As such, the Legislature retains the authority to define and limit the powers conferred upon these entities. 

“Corporations are not people, and do not enjoy the inherent right to influence our elections” said Keohokalole. “This measure draws a clear line between the constitutional rights of individuals and the privileges granted to corporations.”  

Current state law broadly authorizes corporations to exercise “the same powers as an individual to do all things necessary or convenient to carry out its business and affairs.” SB 2471 clarifies that these grants of authority were never intended to include the power to spend money or contribute anything of value to influence elections or ballot measures. The bill explicitly limits corporate powers to conducting lawful business and organizational activities, while preserving the full political rights of natural persons. 

“While corporations are a useful way to limit investor risk and drive the economy, the State is under no legal obligation to allow for their creation,” said Senate Judiciary Chair Karl Rhoads. “We have every right to limit the vast amounts of corporate money that pour into our political system.“

Senate Bill 2829 builds upon these principles by further reaffirming that corporations and other artificial entities possess only those powers necessary or convenient to carry out lawful business, charitable, or organizational purposes under state law. The measure clarifies that political spending authority was never intended to be among those powers and reinforces the Legislature’s ability to redefine and limit corporate authority in the interest of public welfare. 

Together, SB 2471 and SB 2829 reinforce the distinction between the constitutional rights of individuals and the privileges granted to state-created entities, ensuring that Hawaiʻi’s democratic processes remain centered on the voices of its people, according to Keohokalole.

“Ensuring public confidence in our elections requires clear distinctions between the rights of individuals and the powers granted to state-created entities, and these measures reinforce those boundaries in state law,” Keohokalole added. 

The Senate Commerce and Consumer Protection Committee held public hearings on both measures on Tuesday, Feb. 10. The bills passed with amendments and now advance to the Senate Judiciary Committee.