Hawaii Governor Signs First-of-Its-Kind Legislation to Circumvent Citizens United; Legal Challenges Expected
By: Michael Bayes and Matthew Petersen
On May 14, 2026, Hawaii Governor Josh Green signed constitutionally suspect legislation designed to circumvent the U.S. Supreme Court’s landmark free speech decision in Citizens United v. FEC by depriving corporations and other “artificial persons” of the power to spend on Hawaii campaigns and ballot measures. The law’s impact is not limited to Hawaiian entities. Organizations based in other states, from Fortune 500 corporations to local nonprofits, should be aware that the State of Hawaii just stripped them of their right to speak on Hawaii elections and ballot initiatives. If the new law — which its supporters frame as “undoing” Citizens United — survives inevitable legal challenges and goes into effect on July 1, 2027, Hawaii-based entities will face unique marketplace and political disadvantages while other states may be emboldened to test Citizens United through comparable speech restrictions.
Hawaii’s bill does five things.
First, the bill begins with the premise that corporations lack rights and exercise only those privileges granted by statute. Specifically, it declares that “artificial persons,” including corporations (both for-profit and nonprofit), limited liability companies, partnerships, and associations, have only those powers conferred upon them by statute. State corporate law traditionally grants corporations the same powers afforded to individuals and authorizes them to “do all things necessary or convenient to carry out its business and affairs,” including the power “[t]o make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation.” The new law vitiates these broad protections by asserting that “artificial persons created under Hawaii law possess only those powers that are necessary or convenient to carry out lawful business and charitable or organizational purposes, and that those powers do not include the power to spend money or contribute anything of value to influence elections or ballot measures” (emphasis added). Thus, the new law redefines the scope of corporate power for all organizations that are not Hawaii or federal candidate committees or non-candidate political committees.
Second, the day the law goes into effect, it strips each Hawaii entity of the powers it held the day before. The new law asserts that “[t]he creation and continued existence of a corporation is not a right but a conditional grant of legal status by the State and remains subject to complete withdrawal at any time. All powers previously granted to corporations under the laws of this State are revoked in their entirety. A corporation operating under the jurisdiction of this State shall possess no power unless specifically granted by this section.” In short, a Hawaii corporation’s power and authority to act are entirely subject to the whim of the current state government.
Hawaii-based candidate and noncandidate political committees, and similar committees organized under federal law, are exempted from the new law and retain the ability to engage in political activity, but politically active Section 501(c) organizations are not. The law does not specifically address candidate committees and PACs from other states, but appears to apply to such entities.
Third, following the full revocation of every entity’s powers, the bill re-grants those powers, but withholds the power to engage in “acts that constitute election activities or ballot-issue activities.” Engaging in election activities or ballot-issue activities will be forbidden if the law goes into effect. “Election activity” is defined to mean “paying, contributing, or expending money or anything of value to support or oppose a candidate, political party, or political committee.” “Ballot-issue activity” means “paying, contributing, or expending money or anything of value to support or oppose a constitutional amendment, county charter amendment, or other ballot question after it has been formally certified or submitted to the electors of the State or any county.” Both terms include exceptions for media companies.
Fourth, the new law imposes severe penalties on corporations and other organizations that exercise their political speech rights. The statute proclaims that “[a]ny act undertaken by a corporation that constitutes an election activity or ballot-issue activity is ultra vires [beyond the powers] and void,” and the penalty is the loss of corporate status “as a matter of law.” The statute references a yet-to-be-developed procedure for “administrative forfeiture, reinstatement upon disgorgement and certification of compliance, and related civil enforcement.” In other words, any Hawaii corporation or other organization that spends money on election activity or ballot-issue activity automatically loses its legal status and faces an administrative enforcement process.
Fifth, the law subjects any corporation or other organization based in another state that transacts business or holds property in Hawaii to the same political speech restrictions applicable to domestic corporations. Specifically, “[a] foreign corporation that directly or indirectly undertakes, finances, or directs election activity or ballot-issue activity in [Hawaii] shall be conclusively deemed to be transacting business in [Hawaii].” To ensure that out-of-state organizations cannot spend on Hawaii elections and ballot issues, the term “transacting business” is defined to include engaging in election activities or ballot-issue activities in Hawaii. The application of this requirement has multiple parts. Under the new law, if an out-of-state entity spends funds to support a Hawaii candidate, that out-of-state entity would be “transacting business” in Hawaii. To transact business in Hawaii, though, the entity must first register as a foreign corporation (or other foreign entity type). Upon spending on election activity or ballot initiative activity, the foreign entity would lose its foreign registration status and no longer be able to transact business in Hawaii, and presumably would become subject to an administrative enforcement process.
The new law includes corresponding provisions that implement the same changes for credit unions, for-profit corporations, nonprofit corporations, professional corporations, cooperative associations, limited-equity housing cooperatives, limited liability partnerships, limited partnerships, limited liability companies, and unincorporated nonprofit associations.
Supporters of the legislation, including the left-wing advocacy group that spawned the idea, contend that Citizens United can be “made irrelevant” by restricting corporate powers, which they argue are fundamentally distinct from the “rights” at issue in Citizens United. The promoters of the new legislation emphasize the state’s broad authority to determine the scope of corporate power, while downplaying, or simply ignoring, the implications of using that authority expressly for the purpose of suppressing corporate political speech. Their view misreads the nature of the speech right recognized in Citizens United and mistakenly assumes that a corporation’s statutory powers can be separated from the First Amendment rights of the individuals who make up that corporation.
Hawaii Attorney General Anne Lopez warned the state legislature that the legislation, SB 2471, was likely unconstitutional, explaining that Citizens United did not confer First Amendment speech rights on corporations per se, but rather, recognized that corporations are “associations of citizens” who do not lose their speech rights when they obtain corporate status. This distinction is not merely semantic and indicates that efforts to prohibit corporate political speech face a steep uphill battle.
As forecast by the Attorney General, Hawaii’s law is likely to be invalidated on First Amendment grounds. As the majority in Citizens United explained, “[t]he Court has thus rejected the argument that political speech of corporations or other associations should be treated differently under the First Amendment simply because such associations are not ‘natural persons.’” 558 U.S. 310, 343 (2010). Moreover, according to the Court, “[i]f the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.” Id. at 349 (emphasis added). In other words, the First Amendment rights at issue in Citizens United belong not to corporations but to the citizens who choose to associate using the corporate form.
Hawaii’s law rests on the same premise the Supreme Court rejected in Citizens United — that corporate spending on political speech should be restricted because it has a “corrosive and distorting” effect on the political system. As the Court explained, accepting this rationale “would permit Government to ban political speech simply because the speaker is an association that has taken on the corporate form.” Id. at 349. Hawaii’s attempt to revive this repudiated theory, albeit indirectly through its corporate code, will likely prove unsuccessful.
Attorney General Lopez also advised legislators that SB 2471 was subject to challenge as a content-based speech restriction because it “disfavors political speech.” In addition, she warned it may impose an unconstitutional condition on corporations by requiring them to forego a constitutional right (i.e., the First Amendment right to speak on political matters) in order to receive a public benefit (i.e., corporate status). Hawaii’s law may also violate the federal Commerce Clause to the extent it imposes burdensome restrictions on out-of-state corporations seeking to transact business in Hawaii.
In short, the Hawaii law suffers from multiple constitutional defects that make its survival unlikely. Its attempt to engineer an end-run around Citizens United is likely to collide with the same constitutional barriers that have doomed many other efforts to undermine the speech and associational rights of American citizens. If proponents succeed in placing a similar matter on Montana’s ballot this year, Montana organizations may soon face the same restrictions and uncertainties.
