Senate Elections Committee to Consider LLC Bill (Updated)

Next Monday, the Senate Elections Committee will consider S.60 (Squadron), which would amend the Election Law to change how limited liability companies (LLCs) are treated.  The bill would require LLCs to be treated as corporations, rather than as individuals, as they are now.  The bill would also reduce the current annual limit on corporate political contributions from $5,000 to $1,000.

In the “justification” section of his sponsor’s memo, Senator Squadron writes:

The Election Law does not address the aggregate amount of political contributions that an LLC may make to candidates, parties and political committees in anyone year.  As a result, the State Board of Elections has opined that they should be treated as individuals for purposes of a limit and, therefore, under current practice, an LLC is allowed to make $150,000 in contributions in any one year.

This loophole allows both corporations and individuals to skirt their respective contribution limits. Equating LLC’s to corporations while
simultaneously lowering contribution limits will lessen the influence of money in politics.

It does not seem likely that the committee will approve the bill,

The vote on Squadron’s bill comes after the State Board of Elections declined to alter its 1996 opinion that reform advocates say created a major loophole in the state’s campaign finance laws that enables large donors to pump money into political campaigns.

Update:  The Assembly Elections Committee will be taking up a similar bill (A.6975-A Kavanagh) next week as well.

Also, read more about this issue in the Gotham Gazette.