Compliance Corner: Pay-to-Play for New Jersey Legislative Elections

Statehouse

By Avi D. Kelin

While 2021 has been circled on New Jersey political calendars for years now as the time for a gubernatorial election, it can sometimes be overlooked that all 120 state legislative seats are on the ballot this year as well. With changing demographics in some districts and a number of notable open seats, the 2021 legislative races promise to be competitive and heated.

While it is generally true that contributions to legislative candidates are “safe” when it comes to pay-to-play restrictions, the answer – as is often the case with New Jersey’s pay-to-play laws –depends on your specific contracting goals. Therefore, as businesses and individuals consider how to get involved in New Jersey’s legislative races, it is important to determine whether any of the limited circumstances under which pay-to-play restrictions apply to legislative-candidate-committee contributions will be important to your company.

When it comes to contributions to a candidate for the State Legislature, those contributions aren’t relevant for determining eligibility for contracts with the New Jersey Executive Branch (which are the majority of State of New Jersey contracts). Therefore, a business entity may make reportable contributions to a candidate for the New Jersey Senate or Assembly without jeopardizing eligibility for Executive Branch contracts. (Note that this is not the case for contributions to Legislative Leadership Committees, which are covered recipients for purposes of eligibility for New Jersey Executive Branch contracts; thus, state vendors and prospective state vendors must limit their contributions to a legislative leadership committee to no more than $300 per calendar year.)

However, contributions from covered contributors to a candidate for the New Jersey Legislature are subject to a $300-per-election limit to maintain eligibility for:

  1. State of New Jersey Legislative Branch contracts—these are somewhat rare, but the Legislative Branch itself does award contracts occasionally and may utilize other than a fair-and-open process, and a business entity that wishes to remain eligible for such contracts must ensure that its covered contributors avoid reportable contributions to certain legislative candidates.

 

  1. Redevelopment Agreements, and professional services to support redevelopment agreements, with the New Jersey redevelopment entities for projects located within the legislative district—for example, a redeveloper that wishes to remain eligible for active state redevelopment solicitations and agreements with a State redevelopment entity – currently defined to include the New Jersey Redevelopment Authority, the New Jersey Sports and Exposition Authority, and the Capital City Redevelopment Corporation – must ensure that its covered contributors refrain from making reportable contributions to legislative candidates representing the district in which the relevant State redevelopment project is located.

Compliance Tip: Even though contributions to legislative candidates are generally “safe,” it is still important to determine your specific contracting goals, including whether your business is interested in pursuing Legislative contracts or participating in a State redevelopment agreement.

Avi D. Kelin, Esq. is a Senior Associate in Genova Burns LLC’s Corporate Political Activity Law Practice Group and Chair of the firm’s Autonomous Vehicle Law Practice.

This column is for educational and informational purposes only and is not intended and should not be construed as legal advice. It is recommended that readers not rely on this column, but that professional advice be sought for individual matters.

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