HEATHER C.

BRICCETTI

President & CEO

April 15, 2015

James A. Walsh, Co-Chair
Douglas A. Kellner, Co-Chair
Andrew J. Spano, Commissioner
Gregory P. Peterson, Commissioner
New York State Board of Elections
40 North Pearl Street, Suite 5
Albany, New York 12207-2729
RE: Campaign Finance - Limited Liability Company Classification
Dear Commissioners Walsh, Kellner, Spano, and Peterson
On behalf of the Business Council of New York State, Inc. (The Business
Council), I respectfully request that the Board of Elections (Board) reject a
proposal to reclassify limited liability companies as corporations. We find this
proposal to be unsupported by, and in fact is contrary to, existing state statute.
Specifically, we are asking you to deny the proposed resolution to rescind a 1996
opinion that recognized that a Limited Liability Company (LLC) should be
treated as an individual pursuant to Election Law 14-116 and not contravene
current law by reclassifying LLCs as corporations. The result of this proposed
resolution would be to extend the existing annual aggregate corporate
contribution limit of $5,000 to LLCs instead of the higher limits allowed under law
for all other unincorporated entities such as individuals, trade associations and
labor organizations.
The Limited Liability Company Law 102(m) clearly states that an LLC is an
unincorporated organization and also specifies that such an entity is not a
partnership or trust. Furthermore, Election Law 14-116, which creates the
$5,000 annual aggregate limit on corporate campaign contributions, was created
in 1974. This is 20 years prior to an LLC becoming a legal entity in the State of
New York, indicating that the legislature did not contemplate inclusion of LLCs in
the definition of corporation.
In addition, there are several instances in the Election Law where the legislature
has made a clear distinction between a corporation and an unincorporated
business entity, including 14-100.13 in its definition of "general public
audience, 14-107.1(c) in its definition of the term "person," and 14-126
regarding violations. It would be contrary to statute for the Board to determine
that these terms have the same meaning for purposes of contribution limits.
Based on the above statutory references, The Business Council agrees with the
Boards original 1996 Opinion #1 that the definition of limited liability companies

very clearly states that they are unincorporated organizations; therefore, they
are not corporations and are not subject to the contribution limits placed on
corporations in Article 14 of the Election Law. Any changes to an LLC
contribution limit would require a statutory change to the Election Law.
The Board has acted within its administrative role and has refused outside calls
for it to exceed its legislative mandate. The Legislature was clear in its treatment
of LLCs under the law. Any action taken by the Board to further limit LLC
contributions, outside of an act of the Legislature, would be ultra vires and thus
invalid.
For these reasons, The Business Council requests that the Board deny any
proposed regulatory changes that circumvent the statute and reclassify LLCs as
corporations under Election Law 14-116.
Sincerely,

/kb

April 15, 2015

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