State Proposed Bills Would Restrict Free Speech Rights, Add Duplicative Reporting

By: Steve Roberts

Two bills in Hawaii and Wyoming may soon prohibit many companies from exercising their First Amendment rights and add duplicative and burdensome reporting requirements when using their federal PACs.

In Hawaii, Senate Bill 1179 would prohibit political spending by nearly any publicly traded company. As written, that legislation would stop a U.S.-based corporation from engaging in political activity in Hawaii if it has even nominal foreign ownership, including: 1) a single foreign shareholder that owns or controls even 1% or more of the corporation’s equity; 2) multiple foreign shareholders that own or control in the aggregate 5% or more of the corporation's equity; or 3) any foreign entity that participates directly or indirectly in the corporation’s decision-making process about political activities in the United States. The third point is already well-established law. The bill is still in committee as of February 28, 2023.

In Wyoming, Senate Bill 40 would subject federal political action committees (PACs) to duplicative state reporting requirements in addition to FEC required reporting when donating to candidates at the statewide to precinct levels. Federal PACs are already required by the FEC to file reports detailing dollars in and out of the PAC, with itemization requirements already in place for contributions or other expenditures of $200 or more. Any PAC that only contributes to federal candidates or federal issues would be exempt. An amendment proposing a $2,000 threshold to trigger the state reporting requirements failed. If Wyoming Governor Gordon signs the bill, any contribution or expenditure to any candidate statewide down to the precinct level would be subject to the state’s reporting requirements.

Check to ensure how this or future proposed legislation may impact your organization or committee.