Provides that limited liability companies are not allowed to make political contributions to candidates for elected offices.
BILL NUMBER: S7063
TITLE OF BILL : An act to amend the limited liability company law and the election law, in relation to campaign contributions
PURPOSE : To prohibit limited liability companies from making campaign contributions.
SUMMARY OF PROVISIONS : Section 1 of the bill would amend the limited liability law to add a new section 1105 that would prohibit limited liability companies from making campaign contributions.
Section 2 of the bill would amend section 14-114 of the election law to add a new subdivision 9 that would prohibit limited liability companies from making campaign contributions.
Section 3 of the bill specifies the effective date.
JUSTIFICATION : It is widely believed that our campaign finance laws need substantial changes to ensure the integrity of elections in our state. This bill does not address the broad range of issues that might be addressed in a comprehensive reform package. However, this bill would close one enormous loophole in the current system. Under current law, as interpreted by the judiciary, each LLC is considered a separate contributor and may make the maximum allowable contribution. Since a single individual or a small group of individuals often control multiple limited liability companies (LLCs)-in some cases a very large number of such LLCs-the treatment of these LLCs as separate contributors effectively allows one or more individuals to make a virtually unlimited amount of campaign contributions. In addition, making contributions through LLCs often serves to mask the identity of the individuals making the choice to contribute.
This bill would rectify this by simply banning contributions from LLCs, as has already been done in New York City for municipal elections and in other jurisdictions.
PRIOR LEGISLATIVE HISTORY : This is a new bill.
FISCAL IMPLICATIONS : None.
EFFECTIVE DATE : This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 7063 IN SENATE March 10, 2010 ___________Introduced by Sen. SQUADRON -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions AN ACT to amend the limited liability company law and the election law, in relation to campaign contributions THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The limited liability company law is amended by adding a new section 1105 to read as follows: S 1105. PROHIBITION OF CAMPAIGN CONTRIBUTIONS. NO DOMESTIC OR FOREIGN LIMITED LIABILITY COMPANY SHALL MAKE A CONTRIBUTION TO THE CAMPAIGN OF ANY CANDIDATE FOR ANY ELECTED OFFICE. S 2. Section 14-114 of the election law is amended by adding a new subdivision 9 to read as follows: 9. NO DOMESTIC OR FOREIGN LIMITED LIABILITY COMPANY MAY CONTRIBUTE ANY AMOUNT OR SERVICES TO A CANDIDATE FOR ANY ELECTED OFFICE. S 3. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07237-01-9