Governmental Affairs

On April 3rd, Governor Murphy signed S2866 -- the "Elections Transparency Act" P.L.2023, c.30. The legislation will significantly impact the political contributions landscape in New Jersey. It allows for more giving and more spending, while at the same time imposing tighter reporting requirements. On the whole, it favors disclosure over restriction. It is retroactive to January 1, 2023, with some exceptions.

The legislation makes significant changes to the New Jersey Campaign Contributions and Expenditures Reporting Act, N.J.S.A. 19:44A-1 et seq., originally enacted in 1973. For convenience, the Assembly Appropriations Committee’s full statement summarizing the law is provided below. However, we anticipate the following provisions are among those which will have the most immediate and direct impact on New Jersey’s business community:

1. The legislation sets a two year statute of limitations on enforcement actions. Because the law is retroactive, any matters older than two years, that have not yet been the subject of an enforcement action, should be time-barred.
2. The law decreases contribution reporting limits from $300 to $200 – pretty much across the board. This new $200 threshold will need to be ingrained amongst contributors.
3. Contribution limits to candidates from individuals, corporations, political committees, and continuing political committees are doubled. This means corporations can give $5,200 per election (primary and general) instead of $2,600. (This provision is not retroactive and takes effect after the 2023 primary election).
4. Reporting thresholds are changing for independent expenditure committees.
5. The statute defangs some of the existing “anti-wheeling” measures. For example, business entities will now be permitted to make contributions to State political party committees and legislative leadership committees and still be awarded public contracts – including those awarded by the State’s many independent authorities.
6. State agencies and independent authorities will now enjoy the same flexible “fair and open process” exemption that has traditionally been relied upon by local government entities. This means that these State entities can now award a contract to a contractor who has made reportable contributions so long as the award is made pursuant to a fair and open process.

The full summary from the latest Assembly Appropriations Committee Statement, is as follows:

• requires independent expenditure (IE) committees to report campaign contributions in excess of $7,500 and all expenditures;
• candidates and various committees to report campaign contributions in excess of $200 which decreases the current reporting threshold of $300;
• doubles the statutory maximum contribution limits, and increases those limits further for State political party committees, legislative leadership committees, and county political party committees.
• allows ELEC to adjust the contribution limits pursuant to an index, without the need for legislation.
• makes various changes to campaign contribution reports and other requirements;
• establishes a cumulative reporting requirement for IE committees and further modifies the definitions of IE and IE committee and electioneering communication;
• amends various pay-to-play provisions to remove the prohibition against business entity contributions to the State committee of a political party, legislative leadership committee, county political party committee and municipal political party committee.
• retains the pay-to-play prohibitions against business entity contributions to candidates in such State, county, and municipal government;
• extends a “fair and open process” (i.e., a contract awarded through public bidding or competitive contracting) exemption to contracts with the Executive Branch to include a contract awarded through public bidding or competitive contracting.
• sunsets any local pay-to-play ordinances, resolutions, or regulations limiting the awarding of public contracts to business entities that have made a contribution and limiting the contributions that the holders of a contract can make during the term of a contract;
• sets a $250 fine for any business entity that fails to disclose a contribution or the existence of a public contract;
• allows the State and county political party committees to create a “housekeeping account” to pay eligible expenses for non-political purposes and are permitted to raise funds for deposit into the housekeeping account, subject to a maximum contribution limit from any person equal to half the amounts established for the State or county committee;
• sets a two year statute of limitations for ELEC to bring an enforcement action for violations; and
• gives the Governor authority to make four bipartisan direct appointments to the Election Law Enforcement Commission within 90 days.

ASSEMBLY APPROPRIATIONS COMMITTEE STATEMENT TO [First Reprint] SENATE COMMITTEE SUBSTITUTE FOR SENATE, No. 2866 with committee amendments (MARCH 23, 2023).

If you would like a copy of a section-by-section breakdown, or have any questions about these important changes, please contact Mary Kay Roberts at mroberts@riker.com or Rudy Randazzo at rrandazzo@riker.com.