It's no longer business as usual for limited liability corporations (LLCs) that want to give money to political candidates, parties or campaigns.

Colorado lawmakers passed a law in 2007 that delineated new rules intended to crack down on contributors who may have been using LLCs as a loophole to bypass existing campaign finance laws - just in time for the 2008 election cycle.  The policy change stems from House Bill 1233, sponsored by Rep. Joel Judd, D-Denver, and signed by Colorado Gov. Bill Ritter.

The law was amended in the 2008 session.  It requires LLCs that give money to candidates or campaigns to diclose the names of their owners.  Those owners are held to the same spending limits as individual contributors - even when the owners contribute through a number of different LLCs.

That means LLC donations to a political campaign would need to be divided among all board members and owners and subtracted from the maximum amount they'd be able to give to the campaign as individuals.

LLCs are subject to the same campaign contribution limits as political committees and individuals: $400 for legislative candidates and $1,050 for statewide races such as gubernatorial campaigns.

The new law requires LLCs to provide a written affirmation of their donations.  Previously, LLCs were subjected to the same dollar limitations as political committees, but owners could contribute through as many LLCs as they had legally registered, said Chantell Taylor, executive director of Colorado Ethics Watch, a nonprofit watchdog group that monitors elected officials and state and local governments.

The new las establishes a paper trail through which individuals can be identified and held accountable for adhering to the campaign finance limits, Taylor added.

While LLCs are expected to comply with the new law, the burden falls on the candidates, whose campaigns must return the money within 30 days if the LLC doesn't meet the requirements.  Failure to do so could result in fines to the campaigns that are as much as five times the contributed amount.

Taylor said that the new law is a "good fix' for the problem of people abusing LLCs to cicumvent campaign finance laws.  Before the law was approved, it was possible for someone who wanted to get around the campaign finance laws to establish bogus LLCs for that purpose.

In 2006, Taylor's group asked Colorado's secretary of state to investigate contributions given by nine LLCs owned by real estate developer Eric Bush.  The local businessman gave $9,000 in addition to his personal maximum contribution of $1,000 to the gubernatorial bid of Bob Beauprez, a Republican congressman who lost to Democrat Ritter.

Although the investigation resulted in no legal action against Bush, Taylor said there was a "persuasive pattern" that convinced state lawmakers that a change was needed to prevent LLC owners from abusing the system.

But Ryan Call, senior associate for the law firm of Zakhem Atherton LLC, said he believes the new law creates a disincentive for businesses to be involved in politics.

Call, who also is deputy counsel for the Colorado Republican Party, said that the bill targts the GOP more than Democrats.

"It's a fair characterization to say that this hurts us more then our Democratic counterparts," he said.

But Call doesn't expect the law to have much of an effect because LLCs don't contribute significantly to political campaigns, and there are still plenty of loopholes in the world of political contributions.

Call said despite the limits, the money will simply flow elsewhere.

"The result has been and will continue to be an increase in outside organizations not subject to the limits," Call said, citing the proliferation of special interest advocacy groups not officially alligned with a candidate or party that amass funds to air political advertisements. "Meanwhile, average citizens and even the candidates themselves are having a harder time getting their message out."

Taylor expressed concerns about a proposed rule from the Colorado Secretary of State's Office that requires LLCs to disclose contributors to the campaigns, but not to the secretary of state.

A spokesman for the Secretary of State Mike Coffman, a Republican, said the proposed rule was written to reflect recent changes in the law.

But Taylor said it violates the spirit of the law, since those who seek the information would have to file a complaint through the campaign to obtain it.

A hearing on the proposed rule is scheduled for Tuesday, July 1, att he Secretary of State's Office at 1700 Broadway.