Understanding the New Jersey Elections Transparency Act (ETA)

On April 3, 2023, New Jersey Governor Phil Murphy enacted the Elections Transparency Act (ETA). This act brings substantial changes to the state’s campaign finance and pay-to-play regulations. Representing the most significant revision in nearly twenty years, the ETA will significantly impact the management of political campaigns and public contracts in New Jersey.

On June 11, 2024, during their monthly meeting, the NJBMDA Legislative Committee was joined by Rebecca Moll Freed, a partner at K&L Gates, who shared her expertise on political activity compliance considering recent legislative changes brought on by the state of New Jersey’s recent adoption of the Elections Transparency Act. Below is a brief overview of topics discussed during Rebecca’s presentation.

Introduction to the Elections Transparency Act (ETA)

The Election Transparency Act marks a significant shift in New Jersey’s campaign finance and pay-to-play regulations. Enacted over a year ago, the ETA aims to simplify and streamline the legal framework surrounding political contributions and government contracting. However, businesses and individuals must still exercise diligence to remain compliant with these updated laws.

Key Changes Introduced by the ETA

1. Increased Contribution Limits:
   • The ETA has doubled and, in some cases, tripled the limits for political contributions. For instance, contributions to non-gubernatorial candidates have increased from $2,600 to $5,200 per election.
   • Contributions to Political Action Committees (PACs) and political party committees have similarly seen significant increases.
2. Lower Reporting Threshold:
   • The threshold for reporting political contributions has been lowered from $300 to $200. This means that any contribution exceeding $200 must be detailed in reports filed with the Election Law Enforcement Commission (ELEC).
3. Streamlined Pay-to-Play Laws:
   • The ETA has consolidated local pay-to-play ordinances into a single statewide law. This change simplifies compliance for businesses that provide supplies to government entities.
   • Pay-to-play restrictions now only apply to non-competitive contracts, with contributions affecting eligibility for government contracts set at specific thresholds.

Implications for NJBMDA Members

1. Good Government PAC Contributions:
   • NJBMDA members can now contribute up to $14,400 annually to the Good Government PAC, doubling the previous limit.
   • The PAC itself can make higher contributions to other PACs or candidates, reflecting the increased limits.
2. Compliance and Reporting:
   • NJBMDA members must be vigilant in tracking their contributions to ensure they do not exceed the new limits without proper reporting.
   • Contributions over $200 must be reported, detailing the contributor’s name, occupation, employer, and address.
3. Political Activity Considerations:
   • Political activity can take various forms, including direct contributions, in-kind contributions, independent expenditures, and hosting political events.
   • Businesses need to be aware of the potential impact of their employees’ political activities on compliance status.

Practical Compliance Tips

1. Record-Keeping:
   • Maintain detailed records of all political contributions to ensure accurate reporting and compliance.
   • Regularly review contribution limits and thresholds to stay within legal boundaries.
2. Understand Pay-to-Play Restrictions:
   • Be aware that contributions to government officials or entities may affect eligibility for government contracts.
   • Distinguish between fair and open processes versus non-fair and open processes to understand applicable pay-to-play laws.
3. Seek Expert Guidance:
   • Consult with legal experts or compliance officers to navigate the complexities of the ETA and related regulations.
   • The NRLA Government Affairs Staff is also a valuable resource for NJBMDA members seeking guidance on these changes. Members can contact the government affairs staff by emailing govtaffairs@nrla.org for more information.
4. Additional Resources:
   • For those who would like to delve deeper into the details of the June 11 meeting, a video recording of the meeting and an update to BMDGG’s FAQs are available.