Signed by Governor Josh Green

Vote Smart's Synopsis:

Vote to adopt a conference report that prohibits corporations from engaging in activities related to elections or ballot-issues in Hawaii.

Highlights:

• Specifies that this act applies to all entities organized under state law unless expressly identified as a public body (Sec. 2).

• Specifies that credit unions are subject to the provisions detailed in Section 6 of this act (Sec. 3).

• Defines “artificial-person powers” as the same powers as an individual to do all things necessary or convenient to carry out the corporation’s lawful business and affairs, excluding any power to engage in election activity or ballot-issue activity (Sec. 4).

• Defines “ballot-issue activity” as 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 certified or submitted to voters (Sec. 4).

• Defines “election activity” as paying, contributing, or expending money or anything of value to support or oppose a candidate, political committee, or political party (Sec. 4).

• Specifies that the definitions of ballot-issue activity and election activity do not include various forms of news publications (Sec. 4).

• Prohibits any power or activity related to election activity or ballot-issue activity from being deemed necessary or convenient for a corporation’s lawful business purpose or affairs (Sec. 5).

• Specifies that the creation and continued existence of a corporation shall not be deemed a right but shall be a conditional grant of legal status by the state which is subject to complete withdrawal (Sec. 6).

• Prohibits a corporation operating under the jurisdiction of the state from expending money or participating in any election activity or ballot-issue activity, beginning July 1, 2027 (Sec. 6).

• Repeals existing provisions which grant corporations with the same powers as an individual, and instead authorizes corporations to have artificial-person powers (Sec. 6).

• Authorizes sanctions or penalties to be applied to any corporation that exercises a power in violation of this act’s prohibition against election or ballot-issue activities (Sec. 6).

• Specifies that a foreign corporation shall be subject to the same duties, restrictions, penalties, and liabilities as a domestic corporation, and that any election or ballot-issue activity by a foreign corporation in the state qualifies as domestic business and subjects it to penalties or sanctions (Sec. 6).

• Amends sections of state statute to conform with the provisions of this act described above (Sec. 7-10).

• Specifies that candidate committees, noncandidate committees, and other similar committees created for the purpose of engaging in election or ballot-issue activity are authorized to do so, provided that they exist solely for those purposes and claim no charter privilege other than limited liability (Sec. 10).

• Specifies that the provisions of this act do apply to the following types of corporations (Sec. 12-15): 

• Professional corporations;

• Associations; and

• Limited-equity housing cooperatives.

• Extends the prohibition against engaging in election or ballot-issue activities to limited liability partnerships, limited liability corporations, and nonprofit associations (Sec. 16-21).

• Specifies that this act takes effect July 1, 2027 (Sec. 27).

Full Bill Text

Vote Smart's Synopsis:

Vote to adopt a conference report that prohibits corporations from engaging in activities related to elections or ballot-issues in Hawaii.

Highlights:

• Specifies that this act applies to all entities organized under state law unless expressly identified as a public body (Sec. 2).

• Specifies that credit unions are subject to the provisions detailed in Section 6 of this act (Sec. 3).

• Defines “artificial-person powers” as the same powers as an individual to do all things necessary or convenient to carry out the corporation’s lawful business and affairs, excluding any power to engage in election activity or ballot-issue activity (Sec. 4).

• Defines “ballot-issue activity” as 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 certified or submitted to voters (Sec. 4).

• Defines “election activity” as paying, contributing, or expending money or anything of value to support or oppose a candidate, political committee, or political party (Sec. 4).

• Specifies that the definitions of ballot-issue activity and election activity do not include various forms of news publications (Sec. 4).

• Prohibits any power or activity related to election activity or ballot-issue activity from being deemed necessary or convenient for a corporation’s lawful business purpose or affairs (Sec. 5).

• Specifies that the creation and continued existence of a corporation shall not be deemed a right but shall be a conditional grant of legal status by the state which is subject to complete withdrawal (Sec. 6).

• Prohibits a corporation operating under the jurisdiction of the state from expending money or participating in any election activity or ballot-issue activity, beginning July 1, 2027 (Sec. 6).

• Repeals existing provisions which grant corporations with the same powers as an individual, and instead authorizes corporations to have artificial-person powers (Sec. 6).

• Authorizes sanctions or penalties to be applied to any corporation that exercises a power in violation of this act’s prohibition against election or ballot-issue activities (Sec. 6).

• Specifies that a foreign corporation shall be subject to the same duties, restrictions, penalties, and liabilities as a domestic corporation, and that any election or ballot-issue activity by a foreign corporation in the state qualifies as domestic business and subjects it to penalties or sanctions (Sec. 6).

• Amends sections of state statute to conform with the provisions of this act described above (Sec. 7-10).

• Specifies that candidate committees, noncandidate committees, and other similar committees created for the purpose of engaging in election or ballot-issue activity are authorized to do so, provided that they exist solely for those purposes and claim no charter privilege other than limited liability (Sec. 10).

• Specifies that the provisions of this act do apply to the following types of corporations (Sec. 12-15): 

• Professional corporations;

• Associations; and

• Limited-equity housing cooperatives.

• Extends the prohibition against engaging in election or ballot-issue activities to limited liability partnerships, limited liability corporations, and nonprofit associations (Sec. 16-21).

• Specifies that this act takes effect July 1, 2027 (Sec. 27).

Full Bill Text