Sixteen years after Citizens United started laying waste to America’s elections, the Hawaii legislature is poised to put that tool to unusually good use. S.B. 2471—a bill under which Hawaii would no longer grant artificial entities, including corporations, the power to spend in Hawaii’s politics—has passed both chambers with overwhelming bipartisan support. It is in conference committee now, one step away from Gov. Josh Green’s (D) desk.
Gov. Green has said he will sign a good bill that meets constitutional muster. That is the right test. S.B. 2471 meets it.
The bill, which is based upon the Center for American Progress’ “Corporate Power Reset,” is not a regulation of speech. It is a redefinition of corporate power. Aviam Soifer, former dean of the University of Hawaii’s law school, has studied the measure closely and concluded that it is squarely constitutional.
Soifer wrote to Gov. Green earlier this month. “As someone who has taught and written about American legal history, the First Amendment, and Constitutional law over many decades,” he wrote, “I can say unequivocally that States have exercised such authority for over two centuries—and the U.S. Supreme Court has affirmed this state authority repeatedly.”
While this state authority is not new or novel, it is dusty; no state legislature has redefined corporate powers this directly in roughly a century. It is natural that questions have arisen, including from Gov. Green, Hawaii Attorney General Anne E. Lopez, and some legislators. Here are some answers.
1. What does S.B. 2471 do?
The bill redefines the powers Hawaii grants to the corporations that operate within the state. It does not regulate what corporations say. It does not regulate what they spend. It defines what powers they have in the first place—and the powers Hawaii grants would no longer include the power to spend in Hawaii’s politics.
Natural persons like you and me keep every political right they have today.
Political committees remain governed by existing campaign finance law. This bill applies to corporations, LLCs, partnerships, and similar artificial persons—entities that operate in Hawaii only because Hawaii law creates them or empowers them to do so.
2. Doesn’t this violate Citizens United?
No. As Dean Soifer put it: Citizens United “struck down a federal regulation that prohibited an already-empowered corporation from spending its resources in elections. Neither that case nor any other has addressed whether a state must grant political spending power in the first place.”
Every Supreme Court case on corporate political speech has assumed the corporation already had the underlying power to spend. S.B. 2471 does not regulate that power—rather, it no longer grants it. Citizens United does not reach the question because the question is upstream of where Citizens United operates.
Last week, the Montana Supreme Court recognized the same powers-versus-rights distinction in a related ballot-initiative case. Reviewing a Montana initiative built on the same architecture as S.B. 2471, the court rejected the attorney general’s claim that the measure revoked constitutional rights. The initiative, the court held, “speaks only to powers, not rights, and it does not expressly revoke any constitutional rights.” A state supreme court has now recognized the core distinction on which this approach rests.
3. Can Hawaii really define what out-of-state corporations can do here?
Yes. When a Delaware corporation registers to do business in Hawaii, Hawaii is doing something more than giving permission. It is affirmatively empowering that corporation to operate as a corporation in Hawaii. Without Hawaii’s recognition and authorization, the Delaware corporation cannot operate in Hawaii as a corporation. Delaware cannot reach across state lines and confer corporate status in Hawaii; only Hawaii can do that. Hawaii is not altering Delaware’s charter; it is defining the powers and privileges an entity may exercise while operating as a corporation in Hawaii.
This has been the law for a very long time. As the Supreme Court put it in Bank of Augusta v. Earle in 1839, a corporation “must dwell in the place of its creation, and cannot migrate to another sovereignty.” Recognition elsewhere happens only by the comity of the receiving state, on whatever terms that state chooses.
When Hawaii shortens the list of powers it grants its own corporations, the same shorter list applies to out-of-state corporations operating here. That is what every state’s foreign-corporation law has meant for a century.
Delaware can charter and empower a corporation to act in Delaware. Only Hawaii can empower an entity to act as a corporation in Hawaii.
4. What about the Commerce Clause?
Not an issue. The Commerce Clause, found in Article I, Section 8 of the U.S. Constitution, gives Congress authority over interstate commerce. It also limits what individual states can do—particularly when a state tries to favor its own businesses over those from other states. When states get into trouble under the dormant Commerce Clause, the central concern is usually discrimination against or undue burdens on interstate commerce.
That is not what S.B. 2471 does. By disempowering domestic corporations from spending in Hawaii’s politics, the state is simultaneously disempowering out-of-state corporations to the exact same extent. Domestic and foreign entities are treated identically. There is no discrimination, no protectionism, no economic favoritism—none of the things the Commerce Clause exists to prevent. Nor is this a law that burdens interstate commerce as commerce; it defines the powers of entities operating under Hawaii’s legal authority and applies the same rule to domestic and foreign entities alike.
5. In a recent interview, Gov. Green said the bill “would prevent this kind of spending here in our state, but it would not prevent spending from the outside. You have a lot of big super PACs from the outside that would weigh in and then it becomes you know, outside forces controlling us.” Is that right?
The governor is raising something real. But the bill addresses it more fully than may be apparent.
The bill does not get rid of super PACs. But it does stop the one-two punch of dark-money groups giving to super PACs, which is what has been hiding the source of huge sums of money for the past 16 years.
The bill stops corporations—no matter where they’re from—from spending in Hawaii’s politics. This includes the dark-money groups that hide the people, corporations, and special interests that give to them. So super PACs would still be able to spend in Hawaii’s politics, but they could only spend money they’ve received from human beings. Any “outside forces” spending in Hawaii’s politics would be human—with their names disclosed.
6. Does this bill create a new burden on Hawaii state agencies?
No. S.B. 2471 does not create a new regulatory scheme—it operates inside the oldest one in American law.
When a corporation acts beyond the powers its state has granted, the act is ultra vires: outside the entity’s authority and void as a matter of law. The doctrine is older than the country. It dominated American corporate law enforcement throughout the 19th century, when corporate charters routinely listed specific powers, and acts beyond those powers were routinely struck down. It hasn’t been heavily used in recent decades only because state legislatures stopped writing limited-power charters—they shifted to all-purpose grants that left little to challenge. The doctrine itself never went away.
What that means in practice: The consequence of an unauthorized corporate act runs through ordinary litigation. A shareholder, the corporation itself, a contracting party, or the attorney general can raise the issue in court. Hawaii’s Department of Commerce and Consumer Affairs (DCCA) records the resulting status change after a court has ruled—the same administrative work the department performs whenever any corporate status changes for any reason. DCCA is not investigating, prosecuting, or policing. It is recording.
The bill creates no new enforcement bureaucracy and does not turn DCCA into a campaign finance police force. It uses a centuries-old mechanism that has handled exactly this kind of question for as long as American corporations have existed.
7. Gov. Green has said he will sign a “good bill” that “meets constitutional muster.” Does this bill meet that test?
Yes. The constitutional questions about S.B. 2471 have been raised, examined, and answered. The First Amendment question has an answer. The Commerce Clause question has an answer. The federalism question—whether Hawaii can reach corporations chartered elsewhere—has been settled Supreme Court doctrine for nearly two centuries.
Hawaii’s own constitutional drafters anticipated exactly this kind of legislation when they wrote Article I, Section 21. S.B. 2471 is a literal exercise of the power that provision preserves. As Dean Soifer notes, Hawaii “may have the strongest constitutional foundation for such legislation of any state.”
The bill is constitutional. Once it clears conference, it is ready to be signed.