How the Elections Transparency Act Changes New Jersey’s Political Contribution Landscape

Governor Murphy signed into law one of the most sweeping campaign and political law reform bills since the enactment of The New Jersey Campaign Contributions and Expenditures Reporting Act in 1977. The Elections Transparency Act (“Act”) has been the focus of much attention due to the changes in the leadership and enforcement operations at the New Jersey Election Law Enforcement Commission (NJELEC). However, the Act’s most significant impacts will be felt in the areas of campaign contribution limits, reporting requirements, and the standardization of the state’s pay-to-play laws.

Campaign Contributions

Current law provides for contribution limits on a per election or per year basis, ranging from $2,600 to “no limit” contributions between leadership and party committees. These limits remain in effect until after the June 2023 Primary Election.

Following the June 2023 Primary Election, the contribution limits dramatically increase to double, or in some instances, triple the current limits. For example, individuals, corporations, unions, associations, and groups will be subject to the following limits:

• $5,200 per election cycle to a Candidate Committee
• $14,400 per election cycle to a Political Committee
• $14,400 per year to a Continuing Political Committee or Municipal Political Party Committee
• $75,000 per year to a Legislative Leadership Committee, State Political Party Committee, or County Political Party Committee

Contribution limits will also be subject to an increase indexed to increase every two years.

Campaign Contribution Reporting

New Jersey law previously required that all candidate committees, joint candidates committees, political committees, continuing political committees, political party committees, and legislative leadership committees report any contribution above $300. The Act reduces that threshold to $200. Moreover, the Act changes the reporting of contributions and expenditures that occur within 13 days of an election from the current requirement of “within 48 hours” to “within 72 hours,” except that contributions received and expenditures made between the seventh day prior to an election and the day of the election must be reported “within 24 hours.”

Pay-to-Play and Business Entity Impacts

Prior to the Act, New Jersey law permitted a county, municipality, independent authority, board of education, or fire district to adopt its own local ordinance, resolution, or regulation limiting the awarding of public contracts to business entities that have made a contribution. The Act sunsets all those laws and creates one uniform standard for all public entities at the state, county, and local levels. An entity seeking a contract from:

• the state or any of its agencies or authorities, shall not have made a reportable contribution within the past 18 months prior to the contract, or during the contract period, to the candidate committee or election fund of any candidate or holder of the office of Governor or Lieutenant Governor. The restrictions on reportable contributions to any state or county political party committee are removed.
• an agency in the legislative branch, shall not have made a reportable contribution within the preceding one-year period, or during the contract period, to a candidate committee of the presiding officer. The Act permits contributions to a state committee or legislative leadership committee without disqualifying an entity from receiving a contract and permits contributions to a state committee or legislative leadership committee during the term of the contract.
• a county, municipality, or any of its authorities, shall not have made a reportable contribution within the prior calendar year, or during the contract term, to any candidate committee of any person serving in an elective public office of the county or municipality within the prior calendar year. Contributions are permissible to a county or municipal political committee prior to and during the term of the contract.

Current law remains the same in that a contract that is awarded pursuant to a fair and open process is excluded from the above contract award limitations, but the Act extends the fair and open process exclusion to state contracts. The Act also clarifies that the term “fair and open process” includes public bidding or competitive contracting pursuant to state contracts law and processes permitted by the Local Public Contract Law.

Disclosures of reportable contributions when entering into contracts, as well as the annual Business Entity filing for entities, remain the same, except that the Act no longer requires disclosure of reportable contributions made to a state, county, or municipal political party committee or a legislative leadership committee.

Remaining Compliant With the Act

Because the Act makes such significant changes to the campaign contribution limits, reporting of contributions, and eligibility for public contracts, it is critical that any entity that makes or accepts reportable contributions update its internal processes accordingly. Please contact a member of the Gibbons Government & Regulatory Affairs Group for assistance in navigating the Act and the anticipated forthcoming regulations from NJELEC.