S1616

An Act concerning political contributions made by certain business entities, amending various parts of the statutory law, and supplementing P.L.1973, c.83 (C.19:44A-1 et seq.).

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

1. (New section) a. Not later than December 1, 2025 and every year thereafter, the Election Law Enforcement Commission shall adjust the applicable values for transactions engaged in and contracts entered into by a business entity and a State agency, county, municipality, independent authority, board of education, or fire district under section 2 of P.L.2004, c.19 (C.19:44A-20.3), section 3 of P.L.2004, c.19 (C.19:44A-20.4), section 4 of P.L.2004, c.19 (C.19:44A-20.5), section 2 of P.L.2005, c.51 (C.19:44A-20.14), section 3 of P.L.2005, c.51 (C.19:44A-20.15), or section 2 of P.L.2005, c.271 (C.19:44A-20.26). To the maximum extent possible, the adjustment shall be equal to the public bidding threshold established for counties and municipalities pursuant to subsection c. of section 3 of P.L.1971, c.198 (C.40A:11-3) or for school districts pursuant to subsection b. of N.J.S.18A:18A-3, or both, if the applicable thresholds are the same. Not later than December 15, 2025 and every year thereafter, the commission shall report to the Legislature and make public its adjustment to the applicable transaction and contract values in accordance with the provisions of this section.

b. The adjusted transaction and contract values shall be applicable to the State and any of its purchasing agents or agencies or those of its independent authorities, and to any county or municipality, or agency or instrumentality thereof, or board of education, or fire district, which has designated a purchasing agent pursuant to subsection a. of section 9 of P.L.1971, c.198 (C.40A:11-9). Any county or municipality, or agency or instrumentality thereof, or board of education, or fire district without a qualified purchasing agent shall be subject to the applicable transaction or contract value provided by law, without adjustment pursuant to this section.

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 or an amount deemed applicable pursuant to section 1 of P.L. , c. (C. ), 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 any candidate committee established by that presiding officer; and

a business entity that has entered into a contract having an anticipated value in excess of $17,500 or an amount deemed applicable pursuant to section 1 of P.L. , c. (C. ) 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 any candidate committee established by that presiding officer, 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.2023, c.30, s.10)

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 or an amount deemed applicable pursuant to section 1 of P.L. , c. (C. ), 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 candidate committee of any person serving in an elective public office of that county when the contract is awarded; and

a business entity that has entered into a contract having an anticipated value in excess of $17,500 or an amount deemed applicable pursuant to section 1 of P.L. , c. (C. ) 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 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.

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

Notwithstanding the provisions of any other law, rule, or regulation to the contrary, a contract having an anticipated value in excess of $17,500 but below the applicable public bidding threshold shall not be required to be awarded by the governing body of a county, or any agency or instrumentality thereof, and may be awarded by the qualified purchasing agent of the contracting unit.

(cf: P.L.2023, c.30, s.11)

4. Section 4 of P.L.2004, c.19 (C.19:44A-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 or an amount deemed applicable pursuant to section 1 of P.L. , c. (C. ), 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 candidate committee of any person serving in an elective public office of that municipality when the contract is awarded; and

a business entity that has entered into a contract having an anticipated value in excess of $17,500 or an amount deemed applicable pursuant to section 1 of P.L. , c. (C. ) 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 candidate committee of any person serving in an elective public office of that municipality when the contract is awarded, 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.

Notwithstanding the provisions of any other law, rule, or regulation to the contrary, a contract having an anticipated value in excess of $17,500 but below the applicable public bidding threshold shall not be required to be awarded by the governing body of a municipality, or any agency or instrumentality thereof, and may be awarded by the qualified purchasing agent of the contracting unit.

(cf: P.L.2023, c.30, s.12)

5. Section 2 of P.L.2005, c.51 (C.19:44A-20.14) is amended to read as follows:

2. The State or any of its purchasing agents or agencies or those of its independent authorities, as the case may be, shall not enter into an agreement or otherwise contract to procure from any business entity services or any material, supplies or equipment, or to acquire, sell, or lease any land or building, except for a contract or agreement awarded pursuant to a fair and open process, where the value of the transaction exceeds $17,500 or an amount deemed applicable pursuant to section 1 of P.L. , c. (C. ), if that business entity has solicited or made any contribution of money, or pledge of contribution, including in-kind contributions to a candidate committee or election fund of any candidate or holder of the public office of Governor or of Lieutenant Governor: (i) within the eighteen months immediately preceding the commencement of negotiations for the contract or agreement; (ii) during the term of office of a Governor and a Lieutenant Governor, in the case of contributions to a candidate committee or election fund of the holder of one of those offices; or (iii) within the eighteen months immediately preceding the last day of the term of office of Governor and Lieutenant Governor, in which case such prohibition shall continue through the end of the next immediately following term of the office of Governor and Lieutenant Governor, in the case of contributions to a candidate committee or election fund of the holder of one of those offices.

(cf: P.L.2023, c.30, s.15)

6. Section 3 of P.L.2005, c.51 (C.19:44A-20.15) is amended to read as follows:

3. No business entity which agrees to any contract or agreement, except for a contract or agreement awarded pursuant to a fair and open process, with the State or any department or agency thereof or its independent authorities either for the rendition of services or furnishing of any material, supplies or equipment or for the acquisition, sale, or lease of any land or building, if the value of the transaction exceeds $17,500 or an amount deemed applicable pursuant to section 1 of P.L. , c. (C. ), shall knowingly solicit or make any contribution of money, or pledge of a contribution, including in-kind contributions, to a candidate committee or election fund of any candidate or holder of the public office of Governor or Lieutenant Governor.

(cf: P.L.2023, c.30, s.16)

7. 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 or an amount deemed applicable pursuant to section 1 of P.L. , c. (C. ), 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 candidate committee of a candidate for, or holder of, a State elective office, or any continuing political committee. 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 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 continuing political committee.

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.

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.

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.

(cf: P.L.2023, c.30, s.20)

8. This act shall take effect immediately.

STATEMENT

Under current law, the State and its purchasing agents and agencies, and those of its independent authorities, and counties and municipalities, and their agencies and instrumentalities, and boards of education, and fire districts, are prohibited from engaging in a transaction or entering into a contract having an anticipated value in excess of $17,500 with a business entity, unless the contract is awarded pursuant to a fair and open process, if, during the preceding one-year period, that business entity has made a campaign contribution reportable to the Election Law Enforcement Commission (ELEC) to any candidate committee of any person serving in an elective public office in the applicable jurisdiction where the contract is awarded. Likewise, a business entity that has engaged in a transaction or entered into a contract having an anticipated value in excess of $17,500 with the State or any of its purchasing agents or agencies or those of its independent authorities, or any county or municipality, or agency or instrumentality thereof, or board of education, or fire district is prohibited from making a reportable campaign contribution to any candidate committee of any person serving in an elective public office of that jurisdiction where the contract is awarded, during the term of that contract, unless the contract is awarded pursuant to a fair and open process.

This bill directs ELEC to adjust the applicable monetary threshold by December 1 of each year to be equivalent to the applicable public bidding threshold established by the Governor and the State Treasurer for purposes of allowing certain contracts in counties, municipalities, and school districts to be awarded by a qualified purchasing agent. The current adjusted public bidding threshold is $44,000, and it is adjusted every five years.

Under the bill, the adjusted transaction and contract value thresholds will be applicable to the State and any of its purchasing agents or agencies or those of its independent authorities, and to any county or municipality, or agency or instrumentality thereof, or board of education, or fire district, which has designated a purchasing agent for purposes of engaging in transactions or entering into contracts below the value threshold. Any county or municipality, or agency or instrumentality thereof, or board of education, or fire district without a qualified purchasing agent will continue to be subject to the applicable transaction or contract value provided by law, without adjustment, which is currently $17,500.