Buckley seeks more disclosure from LLCs

Friday, May 6, 2005 | 11:27 a.m.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, plans to offer an amendment to a Senate bill to require more disclosure of the individuals who belong to limited liability companies.

Buckley on Thursday gave fellow members of the Assembly Judiciary Committee copies of a Las Vegas Sun story on the legal but secretive nature of limited liability companies, or LLCs.

The Sun found that local governments often don't know who they're dealing with when they work with LLCs because the ownership is not fully disclosed, in accordance with state law. The story also pointed out that LLCs can give money to political campaigns, but because there's no disclosure of ownership, it's often unclear who's behind the contribution.

LLCs, whose owners are known as members and which are taxed by the Internal Revenue Service as partnerships, have become increasingly involved in real estate and development transactions in the Las Vegas Valley and in political campaigns as contributors.

Yet state law does not require an LLC to fully disclose its members. Buckley said that is something she would like to change.

"We want to keep Nevada business-friendly but I think more disclosure is necessary in political campaigns and on issues like zoning changes in order to make sure that the public trust is not abused," Buckley said.

Assemblyman John Carpenter, R-Elko, one of Buckley's fellow committee members, said he would support her proposal.

"We had a situation up in Elko where one of these LLCs bought a piece of property and now they want to sell it with money from the Southern Nevada Public Lands Management Act, and we didn't know until quite a ways into the process who they were," Carpenter said.

"It would be great if we could get an amendment on that if an LLC has anything to do with a government entity the LLC disclose up front who they are. So I will wholeheartedly support Assemblywoman Buckley's amendment."

Buckley said she has asked legislative assistants to research LLC laws in other states. Her intent is to amend Senate Bill 338, which addresses business associations and real estate trusts and has already passed the state Senate.

She does not yet have specific provisions worked out but is considering a requirement of either full disclosure of all members or those who hold at least 1 percent interest in an LLC in cases where the company is involved in zoning decisions and other land matters or has contributed to a political candidate.

Las Vegas currently requires all LLCs that do business with the city to disclose all members who own more than 1 percent of the company. Clark County's requirement is somewhat looser -- only those individuals owning more than 5 percent must be disclosed. But those disclosure provisions do not cover situations such as zoning changes that are merely requested by an LLC.

Buckley said she intends to offer the amendment at a judiciary committee work session next week.