New Jersey Division of Local Government Services Local Finance Notice 2023-14
Local Finance Notice 2023-14 Pay to Play Law Updates for Local Governments
P.L. 2023, c. 30, known as the “Elections Transparency Act,” (the Act) made various significant changes to New Jersey’s pay-to-play laws. This Notice identifies key changes relevant to local government pursuant to N.J.S.A. 19:44A-20.4 and 20.5.
The term “business entity,” used in this Notice as an umbrella term for vendors or contractors, is defined by N.J.S.A. 19:44A-20.7 as “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.” Section 13 of the Act amended the definition of “fair and open process” in N.J.S.A. 19:44A-20.7 to expressly include contracts awarded under a public bidding or competitive contracting process pursuant to the Local Public Contracts Law.
Campaign Contribution Reporting Threshold; Non-Fair and Open Contract Awards
- A county or municipality may now award a non-fair and open contract over $17,500 to a business entity making reportable contributions toward a political party’s county or municipal committee. The business entity is still barred from making reportable contributions toward candidate committees.
- Section 20 of the Act eliminates the obligation to disclose reportable contributions made to any State, county, or municipal committee of a political party, or any legislative leadership committee. The new form still requires business entities to disclose reportable contributions made to any continuing political committee.
- The Business Entity Disclosure Certification, Model Non-Fair and Open Contract Award Resolution, Non-Fair and Open Contract Contribution Prohibition sample contract language, and Lists of Agencies with Elected Officials Required for Political Contribution Disclosure are required to be filed.
- Sections 11 and 12 of the Act amend N.J.S.A. 19:44A-20.4 and 20.5 to clarify that a municipality or county may delegate the authority to award a contract to a qualified purchasing agent.
State Pay to Play Law Now Preempts Local Pay to Play Restrictions
Local government entities are now prohibited from imposing pay-to-play provisions that are more restrictive than those in State law. Section 37 of the Act repealed N.J.S.A. 40A:11-51, the law that previously authorized counties, municipalities, independent authorities, fire districts, and boards of education to adopt additional local pay-to-play restrictions to further limit the award of public contracts to business entities making political contributions, and limited the contributions that individuals or entities awarded a contract can make during the term of the contract. The repeal is effective retroactive to January 1, 2023. As a matter of housekeeping, any local pay-to-play ordinances or resolutions originally authorized or grandfathered by N.J.S.A. 40A:11-51 that are currently in effect should be repealed.
Local Finance Notice 2023-14
Please follow the link below to read more about these items and guidance on how your local unit can implement them: https://www.nj.gov/dca/divisions/dlgs/lfns/23/2023-14.pdf
Contact Wielkotz & Company, LLC Today
For further information on Local Finance Notice 2023-07 and its implementation feel free to reach out to Steven Wielkotz at (973)-835-7900 ext. 201 or sdw@w-cpa.com.
