STAND. COM. REP. NO. 2650

Honolulu, Hawaii

RE: S.B. No. 2829

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2829 entitled:

"A BILL FOR AN ACT RELATING TO THE POWERS OF ARTIFICIAL PERSONS,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Prohibit any state-chartered corporation, limited liability company, limited partnership, limited liability partnership, cooperative, nonprofit, or other association to make expenditures or contributions in connection with elections or ballot measures; and

(2) Deem any election or ballot measure expenditure or contribution to be ultra vires or void as a matter of law, triggering administrative forfeiture of charter privileges, including limited liability and perpetual duration, until reinstatement.

Your Committee received testimony in support of this measure from Imua Alliance, Life of the Land, League of Women Voters of Hawaii, and one individual.

Your Committee received comments on this measure from the Department of the Attorney General, Business Registration Division of the Department of Commerce and Consumer Affairs, and Hawaii Credit Union League.

Your Committee finds that political power in the State is inherent in the people, not artificial corporations. Accordingly, under article I, section 21, of the Hawaii State Constitution, the Legislature has the authority to define or withdraw powers it has conferred on corporations or other entities. Following the campaign finance decision of Citizens United v. Federal Elections Commission, 558 U.S. 310 (2010), corporations and other entities have spent large sums of money on elections, creating imbalances in political influence and undermining public trust in the democratic process. This measure would enhance public trust in democracy by clarifying that political speech, activity, and expenditures are not rights inherently held by certain chartered entities in the State.

Your Committee has amended this measure by:

(1) Deleting language that would have made foreign entities subject to the prohibitions of this measure;

(2) Inserting language that clarifies that this measure does not invalidate any legal obligations previously entered into before its effective date;

(3) Inserting conforming language that clarifies that election activity undertaken by a limited partnership is ultra vires and void;

(4) Inserting additional legislative findings to demonstrate the relevance to the State of the principles prohibiting electioneering by certain entities under federal law; and

(5) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2829, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2829, S.D. 1, and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

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JARRETT KEOHOKALOLE, Chair