A3987

An Act requiring greater disclosure by business entities with certain government contracts and by certain political committees, and amending, supplementing, and repealing various parts of the statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) Notwithstanding the provisions of any other law to the contrary:

a State agency in the Executive Branch shall not enter into a contract having an anticipated value in excess of $17,500, as determined in advance and certified in writing by the State agency, with a business entity if, during the preceding one-year period, that business entity has made a contribution to any candidate committee of the Governor and the Lieutenant Governor serving when the contract is awarded, or to a political committee or continuing political committee; and

a business entity that has entered into a contract having an anticipated value in excess of $17,500 with a State agency in the Executive Branch shall not make a contribution to any candidate committee of the Governor and the Lieutenant Governor serving when the contract is awarded, or to a political committee or continuing political committee, during the term of that contract.

No such committee shall accept such a contribution from a business entity during the term of its contract with a State agency in the Executive Branch.

2. Section 2 of P.L.2004, c.19 (C.19:44A-20.3) is amended to read as follows:

2. Notwithstanding the provisions of any other law to the contrary:

a State agency in the Legislative Branch shall not enter into a contract having an anticipated value in excess of $17,500, as determined in advance and certified in writing by the State agency, with a business entity, that requires approval by a presiding officer of either or both houses of the Legislature[, except a contract that is awarded pursuant to a fair and open process,] if, during the preceding one-year period, that business entity has made a contribution, reportable by the recipient under P.L.1973, c.83 (C.19:44A-1 et seq.), to [the State committee of the political party of which that presiding officer, serving when the contract is awarded, is a member, or to] a legislative leadership committee or any candidate committee established by that presiding officer, or to a political committee or continuing political committee; and

a business entity that has entered into a contract having an anticipated value in excess of $17,500 with a State agency in the Legislative Branch, that requires approval by a presiding officer of either or both houses of the Legislature, [except a contract that is awarded pursuant to a fair and open process,] shall not make a contribution, reportable by the recipient under P.L.1973, c.83 (C.19:44A-1 et seq.), to [the State committee of the political party of which that presiding officer is a member, or to] a legislative leadership committee or any candidate committee established by that presiding officer, or to a political committee or continuing political committee, during the term of that contract.

No such committee shall accept such a contribution from a business entity during the term of its contract with a State agency in the Legislative Branch.

(cf: P.L.2004, c.19, s.2)

3. Section 3 of P.L.2004, c.19 (C.19:44A-20.4) is amended to read as follows:

3. Notwithstanding the provisions of any other law to the contrary:

a county, or any agency or instrumentality thereof, shall not enter into a contract having an anticipated value in excess of $17,500, as determined in advance and certified in writing by the county, agency or instrumentality, with a business entity[, except a contract that is awarded pursuant to a fair and open process,] if, during the preceding one-year period, that business entity has made a contribution that is reportable by the recipient under P.L.1973, c.83 (C.19:44A-1 et seq.), to [any county committee of a political party in that county if a member of that political party is serving in an elective public office of that county when the contract is awarded or to] any candidate committee of any person serving in an elective public office of that county when the contract is awarded or to a political committee or continuing political committee; and

a business entity that has entered into a contract having an anticipated value in excess of $17,500 with a county, or any agency or instrumentality thereof, [except a contract that is awarded pursuant to a fair and open process,] shall not make such a contribution, reportable by the recipient under P.L.1973, c.83 (C.19:44A-1 et seq.), to [any county committee of a political party in that county if a member of that political party is serving in an elective public office of that county when the contract is awarded or to] any candidate committee of any person serving in an elective public office of that county when the contract is awarded, during the term of that contract or to a political committee or continuing political committee.

No such committee shall accept such a contribution from a business entity during the term of its contract with the county.

(cf: P.L.2004, c.19, s.3)

4. Section 4 of P.L.2004, c.19 (C.44A-20.5) is amended to read as follows:

4. Notwithstanding the provisions of any other law to the contrary:

a municipality, or any agency or instrumentality thereof, shall not enter into a contract having an anticipated value in excess of $17,500, as determined in advance and certified in writing by the municipality, agency or instrumentality, with a business entity[, except a contract that is awarded pursuant to a fair and open process,] if, during the preceding one-year period, that business entity has made a contribution that is reportable by the recipient under P.L.1973, c.83 (C.19:44A-1 et seq.), to [any municipal committee of a political party in that municipality if a member of that political party is serving in an elective public office of that municipality when the contract is awarded or to] any candidate committee of any person serving in an elective public office of that municipality when the contract is awarded or to a political committee or continuing political committee; and

a business entity that has entered into a contract having an anticipated value in excess of $17,500 with a municipality, or any agency or instrumentality thereof, [except a contract that is awarded pursuant to a fair and open process,] shall not make such a contribution, reportable by the recipient under P.L.1973, c.83 (C.19:44A-1 et seq.), to [any municipal committee of a political party in that municipality if a member of that political party is serving in an elective public office of that municipality when the contract is awarded or to] any candidate committee of any person serving in an elective public office of that municipality when the contract is awarded or to a political committee or continuing political committee, during the term of that contract.

No such committee shall accept such a contribution from a business entity during the term of its contract with the municipality.

(cf: P.L.2004, c.19, s.4)

5. (New section) Notwithstanding the provisions of any other law to the contrary:

a local board of education, or any agency or instrumentality thereof, shall not enter into a contract having an anticipated value in excess of $17,500, as determined in advance and certified in writing by the board, agency, or instrumentality, with a business entity if, during the preceding one-year period, that business entity has made a contribution to any candidate committee of any person serving on that elective board when the contract is awarded or to a political committee or continuing political committee; and

a business entity that has entered into a contract having an anticipated value in excess of $17,500 with a local board of education, or any agency or instrumentality thereof, shall not make such a contribution to any candidate committee of any person serving on that elective board when the contract is awarded or to a political committee or continuing political committee, during the term of that contract.

No such committee shall accept such a contribution from a business entity during the term of its contract with the local board of education.

6. (New section) Notwithstanding the provisions of any other law to the contrary:

a board of fire commissioners of a fire district, or any agency or instrumentality thereof, shall not enter into a contract having an anticipated value in excess of $17,500, as determined in advance and certified in writing by the board, agency, or instrumentality, with a business entity if, during the preceding one-year period, that business entity has made a contribution to any candidate committee of any person serving on that board when the contract is awarded or to a political committee or continuing political committee; and

a business entity that has entered into a contract having an anticipated value in excess of $17,500 with a board of fire commissioners of a fire district, or any agency or instrumentality thereof, shall not make such a contribution to any candidate committee of any person serving on that board when the contract is awarded or to a political committee or continuing political committee, during the term of that contract.

No such committee shall accept such a contribution from a business entity during the term of its contract with the board.

7. Section 6 of P.L.2004, c.19 (C.19:44A-20.7) is amended to read as follows:

6. As used in sections 2 through 11 of [this act] P.L.2004, c.19 (C.19:44A-20.3 through 19:44A-20.12), sections 2 and 3 of P.L.2005, c.271 (C.19:44A-20.26 and C.19:44A-20.27), and sections 1, 5, 6, and 14 of P.L. , c. (C. ) (pending before the Legislature as this bill):

"business entity" means any natural or legal person, business corporation, professional services corporation, limited liability company, partnership, limited partnership, business trust, association or any other legal commercial entity organized under the laws of this State or of any other state or foreign jurisdiction;

“contribution” means a contribution of more than $1,000 in the aggregate by a business entity or collectively by individuals or entities with an interest in the business entity;

“independent expenditure group” means a person, a group of two or more people, or an organization organized under section 527 of the federal Internal Revenue Code (26 U.S.C. s.527), or under paragraph (4) of subsection c. of section 501 of the federal Internal Revenue Code (26 U.S.C. s.501), that does not fall within the definition of any other organization subject to the provisions of P.L.1973, c.83 (C.19:44A-1 et seq.), that engages in influencing or attempting to influence the outcome of any election or the nomination, election, or defeat of any person to any State or local elective public office, or the passage or defeat of any public question, or in providing political information on any candidate or public question, and raises or expends $3,000 or more in the aggregate for any such purpose annually, but does not coordinate its activities with any candidate or political party;

"interest" means the ownership or control by a person, officer, principal, or partner of [more than] : (1) 10% or more of the profits or assets of a business entity [or] ; (2) 10% or more of the stock [in the case] of a business entity that is a corporation [for profit, as appropriate] ; or (3) 10% or more of the profits or assets of any other form of business entity organized under the laws of this State or any other state or foreign jurisdiction;

["fair and open process" means, at a minimum, that the contract shall be: publicly advertised in newspapers or on the Internet website maintained by the public entity in sufficient time to give notice in advance of the contract; awarded under a process that provides for public solicitation of proposals or qualifications and awarded and disclosed under criteria established in writing by the public entity prior to the solicitation of proposals or qualifications; and publicly opened and announced when awarded. The decision of a public entity as to what constitutes a fair and open process shall be final.]

"State agency in the Executive Branch" means any of the principal departments in the Executive Branch of the State Government, and any division, board, bureau, office, commission or other instrumentality within or created by such department, and any independent State authority, board, commission, instrumentality, or agency; and

"State agency in the Legislative Branch" means the Legislature of the State and any office, board, bureau or commission within or created by the Legislative Branch.

(cf: P.L.2005, c.51, s.14)

8. Section 7 of P.L.2004, c.19 (C.19:44A-20.8) is amended to read as follows:

7. a. Prior to awarding any contract, [except a contract that is awarded pursuant to a fair and open process,] a State agency in the Executive Branch or Legislative Branch, or a county, [or] a municipality, a local board of education, or a fire district shall require the business entity to which the contract is to be awarded to provide a written certification that it has not made a contribution that would bar the award of a contract [pursuant to this act].

b. A business entity shall have a continuing duty to report to the Election Law Enforcement Commission any contributions that constitute a violation of [this act] the law that are made during the duration of a contract.

(cf: P.L.2005, c.51, s.15)

9. Section 9 of P.L.2004, c.19 (C.19:44A-20.10) is amended to read as follows:

9. A business entity which is determined by the Election Law Enforcement Commission to have willfully and intentionally made a contribution or failed to reveal such a contribution in violation of [this act] P.L.2004, c.19 (C.19:44A-20.3 through C.19:44A-20.5), and sections 1, 5, and 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) may be liable to a penalty of up to the value of its contract with the public entity and may be debarred by the State Treasurer from contracting with any public entity for up to five years.

(cf: P.L.2004, c.19, s.9)

10. Section 10 of P.L.2004, c.19 (C.19:44A-20.11) is amended to read as follows:

10. Any person who is determined by the Election Law Enforcement Commission to have willfully and intentionally accepted a contribution in violation of the provisions of sections [1] 2 through 4, inclusive, of [this act] P.L.2004, c.19 (C.19:44A-20.3 through C.19:44A-20.5), and sections 1, 5, and 6 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall be liable to a penalty for each such violation equal to the penalties set forth in subsection e. of section 22 of P.L.1973, c.83 (C.19:44A-22).

(cf: P.L.2004, c.19, s.10)

11. (New section) The provisions of sections 2 through 4, inclusive, of P.L.2004, c.19 (C.19:44A-20.3 through C.19:44A-20.5), and sections 1, 5, and 6 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall not apply in circumstances when it is determined by the federal government or a court of competent jurisdiction that its application would violate federal law or regulation.

12. Section 2 of P.L.2005, c.271 (C.19:44A-20.26) is amended to read as follows:

2. a. Not later than 10 days prior to entering into any contract having an anticipated value in excess of $17,500, [except for a contract that is required by law to be publicly advertised for bids,] a State agency, county, municipality, independent authority, board of education, or fire district shall require any business entity [bidding thereon or negotiating therefor,] to submit [along with its bid or price quote,] a list of [political] contributions as set forth in this subsection that [are reportable by the recipient pursuant to the provisions of P.L.1973, c.83 (C.19:44A-1 et al.) and that] were made by the business entity during the preceding 12-month period, along with the date and amount of each contribution and the name of the recipient of each contribution. A business entity contracting with a State agency shall disclose contributions to any State, county, or municipal committee of a political party, legislative leadership committee, candidate committee of a candidate for, or holder of, a State elective office, or any political committee, continuing political committee, or independent expenditure group. A business entity contracting with a county, municipality, independent authority, other than an independent authority that is a State agency, board of education, or fire district shall disclose contributions to: any State, county, or municipal committee of a political party; any legislative leadership committee; or any candidate committee of a candidate for, or holder of, an elective office of that public entity, of that county in which that public entity is located, of another public entity within that county, or of a legislative district in which that public entity is located or, when the public entity is a county, of any legislative district which includes all or part of the county, or any political committee, continuing political committee, or independent expenditure group.

The provisions of this section shall not apply to a contract when a public emergency requires the immediate delivery of goods or services.

b. [When a business entity is a natural person, a contribution by that person's spouse or child, residing therewith, shall be deemed to be a contribution by the business entity. When a business entity is other than a natural person, a contribution by any person or other business entity having an interest therein shall be deemed to be a contribution by the business entity. When a business entity is other than a natural person, a contribution by: all principals, partners, officers, or directors of the business entity or their spouses; any subsidiaries directly or indirectly controlled by the business entity; or any political organization organized under section 527 of the Internal Revenue Code that is directly or indirectly controlled by the business entity, other than a candidate committee, election fund, or political party committee, shall be deemed to be a contribution by the business entity.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

c. [As used in this section:

"business entity" means a for-profit entity that is a natural or legal person, business corporation, professional services corporation, limited liability company, partnership, limited partnership, business trust, association or any other legal commercial entity organized under the laws of this State or of any other state or foreign jurisdiction;

"interest" means the ownership or control of more than 10% of the profits or assets of a business entity or 10% of the stock in the case of a business entity that is a corporation for profit, as appropriate; and

"State agency" means any of the principal departments in the Executive Branch of the State Government, and any division, board, bureau, office, commission or other instrumentality within or created by such department, the Legislature of the State and any office, board, bureau or commission within or created by the Legislative Branch, and any independent State authority, commission, instrumentality or agency.] (Deleted by amendment, P.L. , c. )(pending before the Legislature as this bill)

d. [Any business entity that fails to comply with the provisions of this section shall be subject to a fine imposed by the New Jersey Election Law Enforcement Commission in an amount to be determined by the commission which may be based upon the amount that the business entity failed to report.] (Deleted by amendment, P.L. , c. )(pending before the Legislature as this bill)

(cf: P.L.2007, c.304, s.1)

13. Section 3 of P.L.2005, c.271 (C.19:44A-20.27) is amended to read as follows:

3. a. Any business entity making a contribution of money or any other thing of value, including an in-kind contribution, or pledge to make a contribution of any kind to a candidate for or the holder of any public office having ultimate responsibility for the awarding of public contracts, or to a political party committee, legislative leadership committee, political committee [or], continuing political committee, or independent expenditure group, which has received in any calendar year [$50,000] $17,500 or more in the aggregate through agreements or contracts with a single public entity, shall file an annual disclosure statement with the New Jersey Election Law Enforcement Commission, established pursuant to section 5 of P.L.1973, c.83 (C.19:44A-5), setting forth all such contributions in any amount made by the business entity during the 12 months prior to the reporting deadline.

b. The commission shall prescribe forms and procedures for the reporting required in subsection a. of this section which shall include, but not be limited to:

(1) the name and mailing address of the business entity making the contribution, and the amount contributed during the 12 months prior to the reporting deadline;

(2) the name of the candidate for or the holder of any public office having ultimate responsibility for the awarding of public contracts, candidate committee, joint candidates committee, political party committee, legislative leadership committee, independent expenditure group, political committee or continuing political committee receiving the contribution; and

(3) the amount of money the business entity received from the public entity through contract or agreement, the dates, and information identifying each contract or agreement and describing the goods, services or equipment provided or property sold.

c. The commission shall maintain a list of such reports for public inspection both at its office and through its Internet site.

d. When a business entity is a natural person, a contribution by that person's spouse, domestic partner, civil union partner, or child, residing therewith, shall be deemed to be a contribution by the business entity. When a business entity is other than a natural person, a contribution by any person or other business entity having an interest therein shall be deemed to be a contribution by the business entity. When a business entity is other than a natural person, a contribution by: all principals, partners, officers, or directors of the business entity, or their spouses; any subsidiaries directly or indirectly controlled by the business entity; or any political committee, continuing political committee, or independent expenditure group, or any political organization organized under section 527 of the Internal Revenue Code that is directly or indirectly controlled by the business entity, other than a candidate committee, election fund, or political party committee, shall be deemed to be a contribution by the business entity.

[As used in this section:

e. [Any business entity that fails to comply with the provisions of this section shall be subject to a fine imposed by the New Jersey Election Law Enforcement Commission in an amount to be determined by the commission which may be based upon the amount that the business entity failed to report.] Deleted by amendment, P.L. , c. )(pending before the Legislature as this bill)

(cf: P.L.2007, c.304, s.2)

14. (New section) A county, municipality, local board of education, or board of commissioners of a fire district, or any agency or instrumentality thereof, shall not adopt any ordinance, resolution, or regulation that limits the awarding of public contracts to business entities based on contributions made pursuant to P.L.1973, c.83 (C.19:44A-1 et seq.), or that limits the contributions that business entities awarded a contract can make during the term of the contract. The provisions of P.L.2004, c.19 (C.19:44A-20.3 et seq.) and sections 1, 5, and 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall supersede and preempt any such ordinance, resolution, or regulation. Any such ordinance, resolution, or regulation in effect on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be null and void.

15. Section 6 of P.L.2003, c.24 (C.48:3-93.3), section 13 of P.L.2004, c.19 (C.19:44A-11.3a), sections 1 through 8, inclusive, sections 10 and 11, and section 13 of P.L.2005, c.51 (C.19:44A-20.13 through C.19:44A-20.20; C.19:44A-20.22 and C.19:44A-20.23; and C.19:44A-20.25), and section 1 of P.L.2005, c.271 (C.40A:11-51) are repealed.

16. This act shall take effect on January 1 next following the date of enactment.

STATEMENT

This bill requires greater disclosure of the campaign contributions made by business entities that hold or seek contracts with the State, a State agency, or a county or municipality.

Under current law, political party committees, i.e., the State committee of a political party or any county or municipal committee of a political party, are prohibited from receiving a contribution from a business entity seeking to enter into or hold a contract with the public entity. The bill eliminates this prohibition and provides instead that a business entity seeking to enter into or hold a public contract would be prohibited from making a contribution to a political committee, or continuing political committee, a candidate committee or legislative leadership committee, or an independent expenditure group.

The bill defines an independent expenditure group to mean a person, a group of two or more people, or an organization organized under section 527 of the federal Internal Revenue Code (26 U.S.C. s.527), or under paragraph (4) of subsection c. of section 501 of the federal Internal Revenue Code (26 U.S.C. s.501), that does not fall within the definition of any other organization subject to the provisions of N.J.S.A.19:44A-1 et seq., that engages in influencing or attempting to influence the outcome of any election or the nomination, election, or defeat of any person to any State or local elective public office, or the passage or defeat of any public question, or in providing political information on any candidate or public question, and raises or expends $3,000 or more in the aggregate for any such purpose annually, but does not coordinate its activities with any candidate or political party.

In addition the bill would:

1) apply the law regarding contributions by business entities uniformly to all levels of government, including the Executive Branch, State authorities, the Legislative Branch, counties, municipalities, local elective boards of education, and fire districts;

2) eliminate the exclusion of contracts awarded pursuant to a “fair and open process” from current law and provide instead that only contracts that are valued at $17,500 or less will be excluded;

3) increase the contribution limits applicable to public contractors from $300 to $1,000;

4) redefine the term “interest” to mean the ownership or control by a person, officer, principal, or partner of 10% or more of the profits or assets of a business entity, or 10% or more of the stock of a business entity that is a corporation, or 10% or more of the profits or assets of any other form of business entity organized under the laws of this State or any other state or foreign jurisdiction; and

5) provide that any business entity that contracts with a single State agency, or a county, municipality, independent authority, board of education, or fire district for $17,500 or more and makes a contribution of money or other thing of value to an independent expenditure group to disclose all such contributions.

The bill also repeals sections of law that: 1) prohibit a government aggregator that is a county or municipality from awarding a contract to a licensed power supplier if that supplier has made a contribution to the committee of any candidate for public office; 2) address “pay to play” in the context of State Executive Branch contracting; and 3) allow local governments to adopt their own “pay to play” policies.