Hawai‘i just became the first state in the nation to enact legislation associated with what advocates are calling the “Corporate Power Reset” movement, a novel legal strategy designed to test whether states can restrict corporate political spending through state corporate law rather than traditional campaign finance regulation.
The broader goal of the movement is to prohibit corporations and other artificial entities — a category that includes nonprofit corporations and associations — from spending money to influence candidate elections or ballot measures.
The legal theory is this: corporations are creatures of state law. States create corporate charters and define the powers corporations possess. Rather than directly regulating election spending, proponents argue states can instead rewrite their corporate codes to clarify that corporations were never granted the authority to engage in electoral spending in the first place.
Supporters contend that if political spending is outside the powers granted by the state, then the constitutional protections recognized in cases like Citizens United v. FEC and Buckley v. Valeo would be rendered irrelevant.
Hawai‘i’s SB 2471 sailed through both chambers of the legislature and was signed into law by Governor Josh Green on May 14, 2026.
The legislation, which takes effect July 1, 2027, will:
- prohibit corporations, LLCs, partnerships, nonprofit associations, and other artificial entities from spending money or contributing anything of value to influence candidate elections or ballot measures;
- repeal and redefine existing grants of corporate and entity powers under Hawai‘i law to clarify that political spending is not among those powers;
- provide that foreign entities authorized to do business in Hawai‘i are subject to the same restrictions, duties, penalties, and liabilities as domestic entities;
- authorize enforcement actions and penalties against entities engaging in prohibited election or ballot-measure activity.
The Hawai‘i proposal is part of a much broader legislative push. More than 50 bills related to corporate political spending and constitutional theories of corporate personhood have been introduced at the state and federal level this legislative cycle. Broadly, the legislation falls into three categories:
- Corporate Power Reset legislation These bills seek to restrict or eliminate the authority of corporations and other artificial entities to engage in electoral spending through changes to state corporate law.
- Constitutional amendment proposals These measures seek to overturn or limit the effects of Supreme Court precedent through constitutional amendment, either by declaring that corporations are not entitled to constitutional rights reserved for natural persons or by permitting broader restrictions on political spending.
- Other corporate political spending reforms A smaller number of bills pursue narrower reforms short of banning corporate political spending outright. For example, New York’s NYS 4266 would require certain corporate political contributions to be approved by shareholders. In Wisconsin, several unsuccessful bills sought to end corporate donations to segregated funds of political parties and legislative campaign committees.
Approximately 27 bills introduced in 14 states and Congress explicitly reflect the Corporate Power Reset approach. For example, California’s AB 1984 would:
- prohibit corporations, nonprofits, and other business entities from spending money to influence candidate elections or ballot measures;
- subject corporations engaging in prohibited political activity to potential forfeiture of corporate privileges, including limited liability protections; and
- assert state jurisdiction over out-of-state corporations that finance or direct political activity in California.
Meanwhile, Montana Initiative 194 has been cleared for signature gathering. If it qualifies for the ballot, Montana voters will have the opportunity to decide whether to prohibit corporate entities from contributing to state and local candidate and ballot measure elections this November.
Since Citizens United, corporate political spending has increased dramatically. Whether courts will accept this new state-law-based approach, or conclude that it conflicts with existing constitutional precedent, remains an open legal question.
Notably, every lawmaker who has introduced these proposals thus far has been a Democrat. Should any of these measures become law, they are likely to trigger highly partisan litigation battles that could ultimately test the boundaries of existing Supreme Court precedent.
Federal tax law has long permitted tax-exempt organizations to engage in certain forms of advocacy and political activity. Under the Internal Revenue Code, 501(c)(3) public charities may lobby within established limits, including by supporting or opposing ballot measures. 501(c)(4) social welfare organizations may engage in lobbying as a primary purpose, including ballot measure advocacy and, as a secondary activity, support or oppose candidates. If states are permitted to restrict these longstanding advocacy practices, it could significantly alter the legal frameworks that have historically governed nonprofit advocacy and political activity. Whatever happens next, organizations engaged should continue monitoring development