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GM 1111

Informing the Legislature that on May 14, 2026, the Governor signed the following bill into law: SB2471 SD2 HD2 CD2 (ACT 011).

2026 Regular Session

Hawaii law restricts artificial persons from spending money or engaging in election or ballot-issue activities, effective July 1, 2027, with penalties and broad entity coverage.

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WeVote Research Nonpartisan
Bill Summary · GM 1111

Summary of Bill GM 1111 (SB 2471 SD2 HD2 CD2) – Hawaii, 2026

  • Topic and purpose

    • This act, titled “Relating to the Powers of Artificial Persons,” restates and restricts the powers granted to artificial persons formed under Hawaii law (e.g., corporations, LLCs, partnerships, associations, nonprofit and other statutory entities).
    • The core intent is to ensure artificial persons do not have powers to spend money or otherwise engage in election activities or ballot-issue activities, and to clarify that such powers are not a legitimate part of a company’s or organization’s lawful business purposes.

  • Key provisions and changes

    • Definitions and scope
    • Introduces and adds specific definitions for “Artificial-person powers,” “Election activity,” and “Ballot-issue activity,” distinguishing them from protections or rights enjoyed by natural persons. Election activity and ballot-issue activity are defined as spending money or resources to influence elections or ballot measures.
    • Clarifies that bona fide news, commentary, or editorials distributed by media facilities are excepted from “election activity” and “ballot-issue activity” when not controlled by candidates, committees, or parties.
    • Prohibition on election-related powers
    • Beginning July 1, 2027, any corporation, partnership, association, limited liability company, nonprofit association, or similar entity operating in Hawaii shall not have the power to expend money on or participate in election activity or ballot-issue activity.
    • Any power or activity related to election activity or ballot-issue activity is void if attempted, and acts in violation can be sanctioned.
    • Charter privileges and general powers
    • Artificial-person powers are limited to those necessary or convenient to carry out lawful business and organizational purposes, excluding election-related activities.
    • “Charter privileges” (e.g., limited liability, perpetual duration, corporate name succession, tax benefits) are recognized as separate from political rights of natural persons.
    • Broad statutory alignment across entity types
    • The act applies to multiple entity types including:
      • Corporations (Title 10 and related sections)
      • Credit unions (Chapter 412)
      • General corporations under Chapter 414
      • Professional corporations (Chapter 415A)
      • Associations and partnerships (Chapters 421, 421C, 421H, 425)
      • Limited liability partnerships (Chapter 425)
      • Limited liability companies (Chapter 428)
      • Nonprofit associations and nonprofit entities (Chapter 429)
    • For each, the act adds or references a limitation on election and ballot-issue powers, aligning with the central prohibition.
    • Enforcement and penalties
    • Creates enforcement mechanisms (Chapters A and B) allowing the Attorney General or the Director of Commerce and Consumer Affairs to impose penalties or initiate actions for ultra vires acts, including:
      • Temporary suspension of authority to operate or transact business
      • Prohibition from state procurement contracts
      • Revocation of tax-exempt status (where applicable)
      • Designation as a non-compliant entity or requirement for additional reporting
      • Revocation of charter/certificate or involuntary dissolution
    • Transition and effective date
    • The act takes effect on July 1, 2027.
    • Entities must adjust to the new limits beginning that date; prior to enactment, existing powers may continue, but any election-related actions after July 1, 2027, would be ultra vires.
    • Severability and state authority
    • Includes severability provisions ensuring remaining parts can stand if any provision is struck down.
    • Explicitly states that invalidation of any provision cannot be construed to restore or create new powers for artificial persons to engage in election activities.

  • Who is affected

    • All entities organized under Hawaii law that are artificial persons, including:
    • For-profit corporations, nonprofit corporations, limited liability companies, partnerships (including limited liability partnerships and limited partnerships), associations, and similar entities.
    • Foreign entities doing business in Hawaii are also subject to the same limitations and potential penalties if they engage in prohibited election activities.

  • Procedural/timeline aspects

    • Effective date: July 1, 2027.
    • The act provides a framework for enforcement and penalties through executive agencies (Attorney General; Director of Commerce and Consumer Affairs) and establishes potential sanctions consistent with other statutory enforcement regimes.
    • The act applies to entities unless statutes expressly identify a public body as exempt.

  • Notable nuances

    • The act preserves free speech rights for natural persons; it does not regulate individuals’ rights to speech, petition, or assembly.
    • It distinguishes “election activity” and “ballot-issue activity” from routine business actions, clarifying that corporate powers traditionally broad enough to conduct business do not include political spending.
    • Bona fide media coverage and editorial content is exempt from being treated as election-related activity, so long as the platform is not controlled by political actors.

If you’d like, I can provide a section-by-section mapping of the bill’s provisions to the Hawaii Revised Statutes it amends or adds, or a quick comparison to current law to highlight the changes in practice for businesses and nonprofits.

Compiled from official sources — confirm details with the bill’s official record.

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