Less Than One Month: NJ ELEC Broadens Annual Pay-to-Play Form & Requires Companies to Disclose Additional Information

Recent changes in the annual filing requirement for companies doing business with local, county or state government in New Jersey may make the process for completing this year’s ELEC Business Entity Annual Statement (“Form BE”) more complicated and time consuming. Although ELEC has yet to issue guidance on these additional requirements, government vendors must still electronically file the disclosure form by the March 30 submission deadline.

In effect since 2006, Form BE requires every company that receives payments of $50,000 or more from New Jersey government entities to disclose those contracts as well as its reportable New Jersey political contributions. All businesses that receive such payments must file regardless of whether the company or certain associated people have made any reportable contributions, but the level of detail required by Form BE depends on whether you have any contributions to report.

There are two new requirements for the 2015 reporting year (due March 30):

  • Fair-and-Open Check Box Requirement: Check a box to indicate whether each contract was awarded pursuant to a “fair-and-open-process”; and
  • Certification Requirement: Certify that the statements and/or information contained in Form BE are true and acknowledge that if any of the statements or information are willfully false that you may be subject to punishment.

Expect completing your 2015 Form BE to be more time consuming than in the past. Here are some obstacles to be on the alert for:

  • Businesses may find it challenging and time consuming to identify whether a contract was awarded pursuant to a “fair-and-open-process” given that your 2015 Form BE may cover long-term contracts that could very well have been awarded years ago.
  • In many cases it will be unclear how vendors should classify Executive Branch contracts awarded pursuant to a competitive process because the phrase “fair-and-open process” is a term of art with respect to county, municipal and legislative contracts.
  • In past years, ELEC asked the person filing Form BE to simply “acknowledge” that he or she was familiar with the information contained in the Form BE. Now, ELEC is asking the person filing Form BE to certify to the accuracy of the statement and to acknowledge that he or she may be subject to punishment for willfully false information.

New Jersey Lobbying Reports Due on February 16, 2016

A business that engages in New Jersey lobbying must electronically file an annual report with the New Jersey Election Law Enforcement Commission. Although the filing is normally due on February 15, this year’s deadline is moved to February 16 because of Presidents’ Day.

Any business that expended at least $2,500 on New Jersey lobbying during the 2015 calendar year is required to file the annual lobbying disclosure—but the specific form to be used depends on the particular facts and circumstances of the company’s lobbying efforts.

Short-Form Disclosure (Form L-2) – A business that is represented by only one lobbyist may file a short-form disclosure that merely designates the lobbyist to file the annual report on behalf of the business. The lobbyist’s report would then cover all relevant information about the lobbying efforts of the business.

Compliance Tip: If you are relying upon an outside lobbyist to file on your behalf be sure to communicate that expectation to your outside lobbying firm.

Full Disclosure (Form L1-L) – In contrast, a business that is represented by more than one lobbyist (either in-house or through an outside lobbying firm) must file its own lobbying form. As you prepare this form, you will need the following information for each of your lobbyists or lobbying firms:

  • Lobbyist information;
  • Lobbying purpose;
  • Compensation of lobbyist;
  • Prior government service of lobbyist; and
  • Communications expenses.

Compliance Tip: For an in-house lobbyist who performs functions other than lobbying for your organization, you are not required to report that individual’s total compensation; rather, you should report only the portion of his or her compensation that pertains to lobbying.

Grassroots-Lobbying Disclosure (Form L1-G) – This form is geared specifically toward a business whose only lobbying activity is communicating with the general public, also known as grassroots lobbying. The information required to be disclosed on this form is focused on the relevant expenditures and communications of the business.

Compliance Tip: A communication with the general public for the purposes of this form does not include communications by a business to its members, partners, individuals, or stockholders. Similarly, communications required to be made by law are not communications with the general public in this context.  

Consent to Service of Process (Form L-3) – An out-of-state business that engages in New Jersey lobbying must consent to service of process within the State of New Jersey by filing this form.

Compliance Tip: This form is required for any company that is not authorized to do business in New Jersey and for any individual who is not a resident of New Jersey.

In addition, lobbying firms must file their own specific forms to report their lobbying activity from the applicable calendar year.

If your business has not yet determined its lobbying-disclosure obligations, there is still time to do so before the February 16, 20 deadline.

Calling All New Jersey Government Contractors: The Clock is Ticking . . . Are you Ready for the March 30th Pay-to-Play Filing Deadline?

As we have previously discussed here, the New Jersey Pay-to-Play Annual Disclosure filing deadline is right around the corner.

Any entity that received payments of $50,000 or more as a result of payments from a New Jersey government entity during the 2014 calendar year is required to file Form BE electronically with the New Jersey Election Law Enforcement Commission no later than Monday, March 30, 2015.

Not sure whether your company is required to file Form BE? If you are not sure whether you are required to file Form BE, you may want to start your information-gathering process by compiling all of your New Jersey government-contract information. As you compile this information, please keep in mind that:

• Contracts with bi-state agencies, such as the Port Authority of New York & New Jersey and the Delaware River Port Authority, are not included.

• Contracts with Boards of Education and Fire Districts are included.

• The $50,000 threshold is an aggregate threshold – so, if you hold ten (10) contracts with New Jersey government entities and received payments totaling $10,000 for each contract during the 2014 calendar year, you are required to file Form BE.

Not sure whether you have any political contributions to report? Whether you need to file a “detailed” Form BE setting forth both contract and contribution information depends on whether you have any political contributions to report. So, if you know that you exceeded the $50,000 threshold and are not sure whether you have any contributions to report, you may want to start your information-gathering process by compiling contribution information. As you compile this information, please keep in mind that:

• The “reportable” threshold is $300 per election when the contribution was made to a candidate committee (election cycles may span multiple calendar years) and $300 per calendar year when the contribution was made to a party committee, political action committee/continuing political committee or a legislative leadership committee.

• The group of covered contributors is broader than under other pay-to-play laws (in addition to surveying owners of your company or firm, you will also need to survey officers and directors).

• The group of covered political recipients is broader than under other pay-to-play laws (with the exception of contributions to federal recipients, you are required to disclose contributions to all other New Jersey political recipients from the State level down to the school board level).

Not sure whether you are on the right track to file a timely and accurate disclosure? You still have time to gather all relevant information to make that determination. The key is to designate a point person within your organization who is responsible for gathering all contract and contribution information.

Remember – you may need to reach out to various individuals within your company so the sooner you begin to gather the information, the better!

Contributions by New Jersey Government Contractors Increased Dramatically in 2013: Will Pay-to-Play Reform Follow?

Late last month, ELEC issued its 2013 Annual Report, which includes an analysis of the Pay-to-Play Annual Disclosures (Form BE) filed by New Jersey government contractors. Although New Jersey has stringent pay-to-play restrictions in effect at virtually all levels of government, ELEC reported that contributions by public contractors jumped to $10.1 million in 2013 (up more than $2 million from 2012). Despite this increase, ELEC advised in its May ELEC-Tronic Newsletter that “overall contributions still are down 39 percent from a peak of $16.4 million in 2007.”

Given that contributions by New Jersey government contractors increased significantly in 2013, it raises the question of whether pay-to-play restrictions are working. Although the law has not changed in nearly five (5) years, changes may be taking place on the local level to spur an increase in giving. Perhaps more local government entities are moving to a “fair and open process”, which allows vendors to contribute up to the full limits of New Jersey campaign finance law during the term of a contract. Perhaps more local government entities are adopting less stringent pay-to-play restrictions, which contain higher contribution limits during both the pre-contracting period and during the term of a contract itself. Perhaps the increase is simply due to the fact that contributions to legislative candidates generally fall outside the scope of pay-to-play restrictions and 2013 was a big legislative election year. Or, perhaps the increase is based on the fact that more government contractors have become aware of their filing obligations. No matter the reason, there is still a push for pay-to-play reform in the Garden State. Despite the fact that legislation was introduced in the New Jersey Senate over a year ago, New Jersey’s statewide pay-to-play restrictions have not changed since 2008.

Now that the 2013 legislative elections are over, will 2014 be the year for reform?