Authorized By: Election Law Enforcement Commission, Jeffrey M. Brindle, Executive Director.

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1 41 N.J.R. 12(2) December 21, 2009 Filed November 17, 2009 OTHER AGENCIES ELECTION LAW ENFORCEMENT COMMISSION Regulations of the Election Law Enforcement Commission Proposed Readoption with Amendments: N.J.A.C. 19:25 Proposed New Rule: N.J.A.C. 19: Authorized By: Election Law Enforcement Commission, Jeffrey M. Brindle, Executive Director. Authority: N.J.S.A. 19:27A-17, 19:44A-6, 19:44A-38, 19:44B-7 and 52:13C Calendar Reference: See Summary below for explanation of exception to calendar requirement. Proposal Number: PRN The sitting New Jersey Election Law Enforcement Commission (hereafter, Commission ) will conduct a public hearing concerning this proposal on February 16, 2010 at 11:15 A.M. at: Election Law Enforcement Commission Edward J. Farrell Memorial Conference Room 28 West State Street, 12th Floor Trenton, New Jersey Persons wishing to testify are requested to reserve time to speak by contacting Administrative Assistant Elbia L. Zeppetelli at (609) , no later than Friday, February 12, Submit written comments by February 19, 2010 to: Michelle R. Levy, Esq., Associate Legal Director Election Law Enforcement Commission P.O. Box 185 Trenton, New Jersey The agency proposal follows: Summary In accordance with Executive Order No. 66 (1978) as codified in N.J.S.A. 52:14B-5.1, N.J.A.C. 19:25 will expire on May 26, As the Commission filed this notice of readoption with the Office of Administrative Law prior to May 26, 2010, this expiration date is extended 180 days to November 22, 2010 pursuant to N.J.A.C. 52:14B-5.1c. The Commission proposes the

2 readoption with amendments of its rules at N.J.A.C. 19:25, and a new rule N.J.A.C. 19: The rules of the Commission implement the provisions of the following laws: the New Jersey Campaign Contributions and Expenditures Reporting Act, N.J.S.A. 19:44A-1 et seq. (hereafter, the Campaign Reporting Act ); the Gubernatorial Legislative Disclosure Statement Act, N.J.S.A. 19:44B-1 et seq. (hereafter, the Financial Disclosure Act ); the Legislative and Governmental Process Activities Disclosure Act, N.J.S.A. 52:13C-18 et seq. (hereafter, the Lobbying Act ); and, the Uniform Recall Election Law, N.J.S.A. 19:27A-1 et seq. (hereafter, the Recall Act ). The Commission has examined the text of the rules and, with the exception of the amendments and new rule proposed below, has determined the rules to be necessary, reasonable and proper for the purpose for which they were promulgated, see N.J.S.A. 52:14B A description of the subchapters follows: Subchapter 1, General Provisions, sets forth the statutory authority for the Commission's rules and includes rules dealing with construction, relaxation and amendments. This subchapter also contains definitions of general application. Subchapter 2, Administrative, includes rules establishing Commission office hours, rules for access and release of documents and rules dealing with authorized signatures on Commission documents. Subchapter 3, Electronic Filing, establishes procedures for using the Commission's computer software to file reports with the Commission. Subchapter 4, Establishment of Reporting Committees, set forth the requirements, including filing of specific reports, to establish a candidate committee, a joint candidates committee, a political committee, a continuing political committee and a legislative leadership committee and for designation by a political party committee. Subchapter 5, Appointment of Campaign Officers and Depositories, includes the requirements for campaign or committee officers, campaign or committee depository accounts and for appointment of deputy treasurers and additional depositories. Subchapter 6, Receipt and Use of Funds, establishes rules for the receipt and deposit of candidate and committee funds. The subchapter also includes rules to establish the permissible campaign and office holding uses of funds by a candidate, a candidate committee or a joint candidates committee. Subchapter 7, Recordkeeping, describes the records which must be kept by candidates, committees and treasurers and the period of retention applicable to such records. Subchapter 8, Candidate, Joint Candidates, and Political Committee Reporting, establishes the rules, including due dates, for filing election cycle reports, quarterly reports and certified statements by candidate committees, joint candidates committees and political committees. Rules for reporting contributions received and expenditures made immediately before an election and for termination of reporting are also included.

3 Subchapter 9, Continuing Political Committee, Political Party Committee and Legislative Leadership Committee Reporting, governs the filing of quarterly reports and certified statements by continuing political committees, political party committees and legislative leadership committees. The rules include the due dates for filing such reports. Reporting of contributions received and expenditures made immediately before an election is also addressed. Subchapter 10, Contribution Reporting, establishes the detailed information that must be reported by all candidates and committees for each contribution that exceeds a threshold amount. This subchapter describes the standard for reporting of occupation and employer information and the rules for receipt and reporting of currency contributions and reporting associated with "political communications." Rules for reporting of interest income and loans, as well as for reporting contributions by minors and contributions made by electronic transfers of funds are also included. The rules also provide instructions for correct reporting of contributions received by means of checks from different types of contributors. Subchapter 11, Contribution Limits, sets forth the limit on a contribution made by an individual, a corporation or union, an association or group, a candidate committee, a political committee, a continuing political committee, a political party committee or a national political party committee to a candidate committee, a political committee, a continuing political committee, a legislative leadership committee or to a State, county or municipal political party committee. The rules also address county political party committee contribution limits and calculation of the contribution limit for contributions made to a candidate participating in both a candidate committee and a joint candidates committee. The subchapter also establishes rules for the return of excessive contributions and determination of affiliation between or among contributors. The rules establish the prohibition on partnership contributions. Subchapter 12, Reporting of Expenditures; Independent Expenditures, establishes the rules for correct reporting of expenditures by candidates and committees, including expenditures made by credit and debit cards and expenditures for the purpose of "street money." Subchapter 12 also defines and establishes rules for reporting of independent expenditures and expenditures for inaugural or other election-related events. Subchapter 13, Political Identification Statements, establishes the requirement to include "paid for by" information on a political communication and recordkeeping requirements by other vendors. Subchapter 14, Recall Elections, establishes reporting and other requirements applicable to a recall committee or a recall defense committee. Subchapter 14 also sets forth the permissible use of funds received by a recall defense committee. Subchapter 15, Public Financing, General Elections for the Office of Governor and Subchapter 16, Public Financing of Primary Election for Governor, establish the rules by which gubernatorial primary and general election candidates may apply and qualify for receipt of public matching funds. These two subchapters establish the gubernatorial primary and general election contribution and public financing expenditure limits, the expenses, which are not subject to

4 expenditures limits, and the rules for reporting coordinated expenditures. The rules also concern the mandatory debates for publicly-financed candidates and applications by debate sponsors. Subchapter 15 includes rules for the gubernatorial ballot statement program and the inaugural event contribution limit and reporting requirements. Subchapter 17, Complaints and Other Proceedings; Violations, provides for complaint and hearing procedures and penalties for violations of the Campaign Reporting Act and the Recall Act. Subchapter 18, Advisory Opinions, establishes procedures for requesting a Commission Advisory Opinion. Subchapter 19, Personal Financial Disclosure Statements, implements the requirement that gubernatorial and legislative candidates file personal financial disclosure statements pursuant to the Financial Disclosure Act. Subchapter 20, Lobbyists and Governmental Affairs Agents, implements the provisions of the Lobbying Act. It includes exemptions from lobbying reporting, definitions applicable to lobbying activity, rules for filing quarterly reports of lobbying activity and rules for the contents of annual financial reports. The rules also concern annual lobbying fees. Chapter 21, Professional Campaign Fund Raisers, defines professional campaign fund raiser, and requires professional campaign fund raisers to register with the Commission, file reports, pay an annual fee and also provides for penalties for violations of this subchapter. Subchapter 22, Severability Clause, contains a severability clause. Chapter 23 is reserved for future use. Chapter 24, State Contractor Contributions Prohibited, implements the provisions of the pay-toplay prohibition law regarding State contracts, which disqualify a business entities from receiving contracts with New Jersey State agencies if a contribution was made prior to the award of the contract and provides that a business entity that receives a State contract is prohibited from making certain campaign contributions during the term of the contract. Chapter 25, Legislative, County and Municipal Contractor Contributions Prohibited, implements the pay-to-play prohibition law regarding legislative, county and municipal contracts, which disqualify a business entity from receiving contracts with New Jersey legislative, county and municipal agencies if a contribution was made prior to the award of the contract, and provides that a business entity that receives such a contract is prohibited from making certain campaign contributions during the term of the contract. Chapter 26, Contribution Disclosure by For-Profit Entities and Nonprofit Entities, implements the pay-to-pay disclosure law, which requires that prior to entering a governmental contract of more than $17,500 that is not publicly advertised, a business entity must disclose to that governmental entity certain contributions made during the past year. Further, a business entity

5 that has received $50,000 or more through government contracts in a calendar year must file an annual statement with the Commission. In general, throughout N.J.A.C. 19:25, the Commission has corrected these regulations, these rules and herein to this chapter and this section as appropriate. Amendment to N.J.A.C. 19:25-6.5, Use or Disposition of Campaign Funds In 2007, N.J.S.A. 19:44A-11.2 was amended by P.L. 2007, c. 202 to prohibit contributions of candidate committee funds to a charitable organization (which is organized under section 170(c) of the Internal Revenue Code of 1954 that is exempt from taxation under section 501(c)) where a candidate or member of the candidate s immediate family is a paid officer, director or employee or receives compensation for goods or services provided to the organization. The statutory amendment defined member of the candidate s immediate family as the candidate s spouse, child, parent or sibling, and the child, parent or sibling of the candidate s spouse. The Commission proposes to amend N.J.A.C. 19:25-6.5(a)2 to incorporate these recently enacted statutory amendments. Amendments to N.J.A.C. 19: and 9.6, Time and Place of Filing Reports Time of Filing of Electronically Transmitted Reports The Commission proposes to add electronically transmitted reports to N.J.A.C. 19: (a) and 9.6(a) to specify that an electronically transmitted report must be received at the Commission offices no later than 5:00 P.M. on the date the report is due for filing in order to be deemed timely filed, but that only one transmission is necessary. These additions will clarify that the deadline for filing of electronically transmitted reports is the same as for paper copies. Deletion of N.J.A.C. 19: (b) Pursuant to a regulatory provision adopted at 25 N.J.R. 4753(a), filing of election cycle reports by candidates in primary and general elections could be effectuated by filing an original and three copies with the appropriate county clerk, with subsequent transportation of the original and one copy of each report to the Commission s offices in Trenton. This practice was not statutorily mandated, and the rule initiating this method was adopted without comment; see P.L. 1993, c. 65. The Commission proposes to amend N.J.A.C. 19: , Time and place of filing reports, to require filing of the original and one copy of election cycle reports directly with the Commission; this amendment will not change the statutory requirement that an additional copy must be filed with the county clerk, see N.J.S.A. 19:44A-16(c). Technological changes, such as electronic filing, make direct filing more convenient and cost-effective than physical transportation of reports from the various clerks offices to the Commission. In 2007, due to economic concerns, the Commission discontinued the practice of conveying reports filed with the county clerks to Commission offices, and the Commission s compliance staff provided notice at that time to the candidates and the clerks of the discontinuation of the practice. Candidates in primary and general elections have therefore filed election cycle reports directly with the Commission since The Commission proposes to delete subsection (b) of N.J.A.C. 19: , recodify subsections (c) and (d), and delete reference to subsection (b) in existing subsection (c), to comport with current Commission procedures.

6 Professional Campaign Fund Raisers must certify the Correctness of Quarterly Reports Filed with the Commission N.J.S.A. 19:44A-19.2, Professional campaign fund raisers, provides penalties for a professional campaign fund raiser who fails to certify required reports; see N.J.S.A. 19:44A-19.2(g)(2). This provision is also found in Commission rule N.J.A.C. 19: The Commission proposes to amend N.J.A.C. 19: , Quarterly reports, to make specific the obligation of professional campaign fund raisers to certify the correctness of quarterly reports filed with the Commission. The Commission believes that the legislative requirement to impose penalties for incorrect certification or failure to certify imposes an affirmative obligation to certify reports. Amendments to N.J.A.C. 19: , 25.1 and 26.1, Definitions to Require Reporting of Currency Contributions N.J.S.A. 19:44A-11.8, enacted as P.L. 2004, c. 28, effective January 1, 2005, requires reporting of every currency contribution, regardless of amount, received by a candidate, candidate committee, joint candidates committee, political committee, continuing political committee, political party committee, legislative leadership committee or other person or group required to report a contribution to the Commission. Reports of currency contributions include the name and mailing address of each contributor, occupation and employer information and the amount of the currency contribution. The Commission proposes to amend the definition sections in the following subchapters: Subchapter 24, State Contractor Contributions Prohibited; Subchapter 25, Legislative, County and Municipal Contractor Contributions Prohibited; and Subchapter 26, Contribution Disclosure for For-Profit and Nonprofit Entities, to include currency contributions in the definitions defining contribution reportable by recipient. The proposed amendments also reiterate the definition of currency and currency contribution found at N.J.A.C. 19: The Commission proposes to define currency and include currency contributions in Subchapters 24, 25 and 26, the pay to play prohibition and disclosure provisions. Amendment to N.J.A.C. 19: A to include Currency Contributions in any Amount N.J.S.A. 19:44A-11.8 (P.L. 2004, c. 28) requires that every currency contribution, regardless of amount, received by a candidate committee, joint candidates committee, political committee, continuing political committee, political party committee, legislative leadership committee or other person or group required to report a contribution to the Commission, be disclosed in detail. In 2005, the Commission adopted rules codifying this provision, see 37 N.J.R. 2228(a), but did not amend N.J.A.C. 19: A at that time. The Commission proposes to add currency contributions to subsection (a), to comport with the requirements of N.J.S.A. 19:44A-11.8, that a candidate committee, joint candidates committee, political committee, continuing political committee, political party committee or legislative leadership committee must report occupation and employer information for each individual contributor whose contribution is a currency contribution in any amount. Nonprofit Entities Excluded from "Pay to Play" Disclosure Requirements P.L. 2005, c. 271 (Chapter 271), added a comprehensive disclosure component to the pay to play reform initiative. Shortly thereafter, the Commission adopted rules specifically requiring both for-profit and nonprofit entities to comply with disclosure rules; see 38 N.J.R. 1864(a), Amendments to Section 3 of Chapter 271, were enacted in 2008, which specify that a

7 business entity for purposes of "pay to play" disclosure legislation means a for-profit entity. See P.L. 2007, c The Commission proposes amendments to N.J.A.C. 19: , Definitions, and to the heading of Subchapter 26, to delete reference to nonprofit entities, in order to conform with the recent statutory amendments. New Rule N.J.A.C. 19: , Recordkeeping; Period of Retention for Business Entities A business entity, which receives $50,000 or more in the aggregate through agreements or contracts with a public entity or public entities must file an annual disclosure statement with the Commission pursuant to N.J.S.A. 19:44A-20.27, see also N.J.A.C. 19: N.J.S.A. 19:44A (e) provides penalties for a business entity that fails to comply with the reporting requirements. The Commission proposes to add new rule N.J.A.C. 19: , Recordkeeping; period of retention, to provide that a business entity that is required to file an annual disclosure statement must make or obtain and maintain records that the disclosure statement is based upon. The Commission believes that the legislative requirement for failure to comply with the annual disclosure requirement supports an obligation to maintain records, so that the Commission may fully investigate any allegation that a business entity has violated the provisions of Subchapter 26. Winning Primary Election Candidates Designating Primary Election Depository Accounts as Joint Candidates Committee Depository Accounts for the General Election The Commission proposes to amend N.J.A.C. 19:25-8.2A(c), Winning primary election candidates, to add a reference to N.J.A.C. 19:25-4.2(c), Establishment of a joint candidates committee, and to amend the grammatical structure of this subsection. This added cite will parallel the reference to N.J.A.C. 19:25-4.1A, Establishment of a candidate committee, and clarifies the correct requirement that winning primary election candidates forming a joint candidates committee must also file a certificate of organization and designation of campaign depository. Addition of Campaign Treasurer in N.J.A.C. 19: , Partnership Contributions Prohibited The Commission proposes to add campaign treasurer to subsection (e). N.J.A.C. 19: prohibits contributions from partnership entities as defined at subsection (b). Subsections (a) and (c) provide directions to the campaign and organizational treasurers regarding the receipt and recordkeeping of contributions by partnership entities. Subsection (e) inadvertently failed to reference campaign treasurer in specifying how to report contributions received from partnership entities. The purpose of N.J.A.C. 19: would be frustrated if only organizational treasurers were required to file reports detailing partnership entity contributions. The Commission proposes to add campaign treasurer, to make clear that both classes of treasurer are subject to this reporting requirement. Correction of Committee Category in N.J.A.C. 19:25-9.4A, Political Party Committee and Legislative Leadership Committee Expenditures made immediately before a Primary or General Election N.J.A.C. 19:25-9.4A(a)1 inadvertently refers to a continuing political committee rather than a political party committee or legislative leadership committee, which entities are the subject of the requirement; see N.J.S.A. 19:44A-8c. The Commission proposes to make the correction.

8 The use of the term continuing political committee was an inadvertent error made in the notice of proposal to implement a new rule, and was not corrected at the time of adoption; see 37 N.J.R. 754(a) and 2228(a). Cite Correction for N.J.A.C. 19:25-8.1, Candidate or Joint Candidates Committee Election Fund Reports The Commission proposes to amend N.J.A.C. 19:25-8.1(e), to correct an error to a citation. The correct reference for a candidate final report is N.J.A.C. 19:25-8.7, not Cite Correction for N.J.A.C. 19: , Expenditures made by Credit Card The Commission proposes to rectify an inaccurate cite within N.J.A.C. 19: (g). The correct citation is N.J.A.C. 19: (a) and (d), rather than the current cite to subsections (a) and (c). Amendment of the Definition of Continuing Political Committee in Subchapter 26 The Commission proposes to amend the definition of continuing political committee at N.J.A.C. 19: , Definitions, to remove duplicative language and instead incorporate the definitions and requirements in N.J.S.A. 19:44A-8(b) and N.J.A.C. 19: and 4.5. Amendment to N.J.A.C. 19:25-1.1, Scope of Regulations, to Reflect the Name Change of P.L. 1971, c. 183, and to add Reference to P.L. 2004, c. 19, P.L. 2005, c. 51 and P.L. 2005, c. 271 In 2004 the Legislative Activities Disclosure Act of 1971, P.L. 1971, c. 183 was amended by P.L. 2004, c. 27, and the name was changed to the Legislative and Governmental Process Activities Disclosure Act. The Commission proposes to amend N.J.A.C. 19: and 2.4 to reflect this name change. Additionally, the Commission proposes to add reference to the socalled pay to play laws enacted at P.L. 2004, c. 19, P.L. 2005, c. 51 and P.L. 2005, c. 271, which are the subject of Commission rules in Subchapter 24, State contractor contributions prohibited, Subchapter 25, Legislative, county and municipal contractor contributions prohibited, and Subchapter 26, Contribution Disclosure by for-profit and nonprofit entities. Housekeeping Changes 1. The Commission proposes to amend its rules to capitalize the word Commission throughout Commission rules for references to the New Jersey Election Law Enforcement Commission. 2. The Commission proposes to capitalize the word Act throughout Commission rules, where the reference is to The New Jersey Campaign Contributions and Expenditures Reporting Act, P.L. 1973, c. 83, as amended, N.J.S.A. 19:44A-1 et seq. 3. The Commission proposes to change chairman to the gender neutral chair, in N.J.A.C. 19: and The Commission proposes to delete an unnecessary article in the definition of continuing political committee in N.J.A.C. 19:

9 5. The Commission proposes to amend N.J.A.C. 19: to eliminate dates relative to the start of the Commission s electronic filing program, as those dates have passed. 6. The Commission proposes to remove (Form DX) from N.J.A.C. 19:25-5.4, as Form DX is not used for all committee types required to file notices of additional depositories. The Commission also proposes to correct a grammatical error in the use of made instead of make at paragraph (c)4. 7. The Commission proposes to delete N.J.A.C. 19: (b), to eliminate dates relative to the start of business entity annual disclosure statement filing, as that date has passed. The Commission proposes to recodify subsection (c) as (b) and delete an obsolete date therein as well. As the Commission has provided a 60-day comment period on this notice of proposal, this notice is excepted from the rulemaking calendar requirements, pursuant to N.J.A.C. 1:30-3.3(a)5. Social Impact The rules proposed for readoption with amendments at N.J.A.C. 19:25 are designed to carry out the disclosure, contribution limit, political identification and other salutary purposes of the Campaign Reporting Act, the Financial Disclosure Act, the Lobbying Act and the Recall Act, and will promote the integrity of the electoral and legislative processes in this State. The rules and amendments will provide governmental affairs agents, candidates, various reporting committees and their treasurers with guidelines on how to comply with various reporting requirements. The rules therefore will assist the public in a fuller understanding of campaign reports, gubernatorial and legislative financial disclosure statements, and governmental affairs agent registration statements and reports. The Commission notes that candidate and committee reports may be accessed by the political community and the public on the Commission s website at Amendment to N.J.A.C. 19:25-6.5, Use or Disposition of Campaign Funds The amendments to N.J.A.C. 19:25-6.5, prohibiting the use of campaign funds to a charitable organization in which a candidate or a candidate s immediate family receives compensation have the positive social impact of precluding a candidate from obtaining personal gain from campaign funds. This prevents a candidate from using charitable donations to circumvent the personal use prohibitions in the Act; see N.J.S.A. 19:44A Furthermore, it prevents the use of charitable organizations as clearinghouses for the receipt of campaign donations to enrich candidates and their families. Amendments to N.J.A.C. 19: and 9.6, Time and Place of Filing Reports 1. Time of Filing of Electronically Transmitted Reports The proposed additions to N.J.A.C. 19: (a) and 9.6(a) will have a positive social impact by stipulating when an electronically transmitted report is due, thus preventing uncertainty as to filing deadlines and preventing unnecessary duplication of transmission of electronic reports.

10 2. Deletion of N.J.A.C. 19: (b), Time and Place of Filing Reports Since 2007, direct filing of reports with the Commission has eliminated the transport of reports from the various county clerk offices within New Jersey, which has streamlined the processing of reports by the Commission, lowered the burden on county clerks and outweighs any minor inconvenience to filers. The ability to file reports with the Commission electronically, by hand, by mail or through overnight delivery services to Commission offices provides viable straightforward filing options that mitigate any negative social impact of requiring original reports to be filed directly with the Commission. Professional Campaign Fund Raisers must certify the Correctness of Quarterly Reports Filed with the Commission By adding language that professional fund raisers must certify the correctness of reports filed with the Commission, the proposed amendments have the salutary effect of reducing ambiguity regarding the obligation to certify and will increase the veracity and standard of reporting. Amendment to N.J.A.C. 19: , 25.1and 26.1, Definitions to Require Reporting of Currency Contributions The requirement that currency contributions in any amount must be reported has been in existence since January 1, 2005, the effective date of P.L. 2004, c. 28. The Commission proposes to include currency contributions in Subchapters 24, 25 and 26, the pay to play prohibition and disclosure provisions. This will have the clarifying and salutary effect of including currency contributions in the category of contribution reportable by recipient. The proposed amendments will have a favorable social impact by increasing public disclosure regarding the identity of contributors and decrease the possibility that individuals can circumvent pay to play requirements by giving anonymous currency contributions. Amendment to N.J.A.C. 19: A to include Currency Contributions in any Amount The amendment to add currency contributions in any amount to N.J.A.C. 19: A, Reporting of occupation and employer information, does not expand the scope of reporting, as the requirement to report such contributions has been in effect since 2005, see N.J.S.A. 19:44A By requiring detailed contributor information, including occupation and employer information regarding currency contributions in any amount, these proposed amendments will decrease the possibility that individuals can circumvent contribution limits by giving anonymous currency contributions. Nonprofit Entities Excluded from "Pay To Play" Disclosure Requirements The proposed amendments to N.J.A.C. 19: serve the salutary purpose of specifically identifying the business entities, candidates, committees, State government agencies and local units that are involved in to "pay to play" disclosure of political contributions, and thereby avoiding confusion among the regulated community. New Rule N.J.A.C. 19: , Recordkeeping; Period of Retention for Business Entities The proposed new rule, requiring business entities to make and maintain records for a certain period of time, has the salutary effect of reducing ambiguity regarding the maintenance of records relating to annual disclosure statements.

11 Winning Primary Election Candidates Designating Primary Election Depository Accounts as Joint Candidates Committee Depository Accounts for the General Election The Commission believes that amending N.J.A.C. 19:25-8.2A(c) to add a reference to N.J.A.C. 19:25-4.2(c) will have a positive social impact in making clear that winning primary election candidates who wish to form a joint candidates committee must file a certificate of organization and designation of campaign depository (Form D-2). The grammatical changes will have the positive social impact of clarifying the responsibilities of winning primary election candidates. Addition of Campaign Treasurer in N.J.A.C. 19: , Partnership Contributions Prohibited By adding campaign treasurer to N.J.A.C. 19: (e), the proposed amendment has the beneficial social impact of being clear and inclusive both as an organizational treasurer and a campaign treasurer are subject to the reporting requirements relating to receipt of partnership entity contributions, as evidenced by current inclusion of a campaign treasurer in subsections (a) and (c). Correction of Committee Category in N.J.A.C. 19:25-9.4A, Political Party Committee and Legislative Leadership Committee Expenditures made immediately before a Primary or General Election The positive social impact of having correct designation of committee types prevents uncertainty. Cite correction for N.J.A.C. 19:25-8.1, Candidate or Joint Candidates Committee Election Fund Reports Correcting a typographical error in N.J.A.C. 19:25-8.1(e) will have the beneficial impact of directing candidate committees and joint candidate committees to the correct section of Commission rules regarding termination of candidate reporting. Cite Correction for N.J.A.C. 19: , Expenditures made by Credit Card The proposed amendment to fix an inaccurate citation has the positive social impact of preventing confusion within Commission rules. Amendment of the Definition of Continuing Political Committee in Subchapter 26 By eliminating duplicative language in the Commission s rules, the proposed amendments to the definition of continuing political committee streamline Commission rules, without making substantive changes. Amendments to N.J.A.C. 19:25-1.1, Scope of Regulations, to Reflect Name Change of P.L. 1971, c. 183 and add Reference to P.L. 2004, c. 19, P.L. 2005, c. 51 and P.L. 2005, c. 271 The proposed amendment to N.J.A.C. 19:25-1.1, Scope of regulations, to reflect a change in the title of legislation has the positive social impact of accurately reflecting the current name of the Act. The amendment to add reference to the pay to play laws enacted at P.L. 2004, c. 19, P.L. 2005, c. 51 and P.L. 2005, c. 271, reflects the increased scope of the Commission s jurisdiction and duties. Commission rules regarding these laws have been previously adopted at N.J.A.C. 19:25-24, 25 and 26.

12 Housekeeping Changes The proposed amendments have the salutary effect of bringing Commission rules into conformity with rulemaking editorial standards. Economic Impact The rules proposed for readoption with amendments and new rule will generate compliance costs for filing entities and possibly for contributors who are required to observe limits on the amounts they may contribute to candidates and various committees. However, the Commission believes these costs are justified by the public purposes in the Campaign Reporting Act in order to promote the integrity of the electoral and legislative process in this State. In general, the rules proposed for readoption with amendments and new rule do not generate any additional costs because they implement existing statutory requirements and practices. Amendment to N.J.A.C. 19:25-6.5, Use or Disposition of Campaign Funds The Commission anticipates that there will be an economic impact on 501(c) charities that would otherwise receive donations from campaign funds where the candidate or a candidate s immediate family member receives compensation from the charity. However, the social and ethical benefit of preventing donations by a campaign to enrich a candidate or candidate s immediate family outweighs the economic impact on those charities. Furthermore, the amendment reflects a statutory prohibition, which the Commission has a duty to administer. Amendments to N.J.A.C. 19: and 9.6, Time and Place of Filing Reports 1. Time of Filing of Electronically Transmitted Reports The proposed amendments to N.J.A.C. 19: (a) and 9.6(a) are not expected to have an economic impact on the regulated community, but instead will improve certainty as to when an electronically submitted report must be received by the Commission. 2. Deletion of N.J.A.C. 19: (b), Time and Place of Filing Reports Direct filing of reports with the Commission has increased efficiency both for the county clerks and for Commission staff. Direct filing has also eliminated the economic expense to the Commission s administration of the filing process of paying for having the reports transported to its offices in Trenton. Prior to 2007, the county clerks dedicated staff to process reports and prepare packages for delivery to the Commission. Reports arrived at Commission offices in large shipments on the day after the filing date, which often required overtime to process. Furthermore, the Commission had the additional expense of conveying such reports from the various clerks offices throughout the State to Commission offices. Currently, reports are filed electronically, by regular mail, via hand delivery or via overnight mail, resulting in a steady stream of reports intermittently received throughout the filing day, which reduces the burden on Commission staff. County clerks offices have an economic saving in omitting staff time to process the reports. The Commission believes that it is more efficient for the original and one copy to be filed directly with the Commission, rather than have the

13 expenses of process and conveying such reports from the various clerks offices to Commission offices. While the direct filing method may have an economic impact on those who wish to file using U.S. mail or overnight delivery services, the Commission believes that the available lowcost options of hand delivery or electronic filing in addition to the significant reduction in cost for clerks and the Commission, outweigh the economic impact on filers. Professional Campaign Fund Raisers must certify the Correctness of Quarterly Reports Filed with the Commission Certification of the correctness of a quarterly report that is required to be filed will have no economic impact on a professional campaign fund raiser who files the report, unless the report incorrectly states any of the information required to be included in such report. Amendment to N.J.A.C. 19: and 26.1, Definitions to Require Reporting of Currency Contributions As the law requiring currency contributions in any amount to be reported has been in effect for several years, the proposed amendments to the definition sections will not add additional reporting requirements, but will serve to make clear that currency contributions are reportable by the recipient. Amendment to N.J.A.C. 19: A to include Currency Contributions in any Amount The Commission does not anticipate any additional costs in processing reports and does not believe that the total amount of contributions raised by reporting entities will change, as the detailed reporting of occupation and employer information has been required for several years. This amendment merely codifies previously enacted legislation, see N.J.S.A. 19:44A-19:11.8, Additional reporting requirements on currency contributions. Nonprofit Entities Excluded from "Pay to Play" Disclosure Requirements The proposed amendments to "pay to play" disclosure legislation will have a positive economic impact upon nonprofit entities involved with contracts at all levels of New Jersey government, allowing nonprofit companies to save the costs associated with the recordkeeping and reporting requirements of Chapter 271. New Rule N.J.A.C. 19: , Recordkeeping; Period of Retention for Business Entities A business entity that is required to file an annual disclosure statement with the Commission likely has recordkeeping practices in place in order to gather the information necessary for reporting. The new rule requiring such business entities to make and maintain records for a period of time may have a small economic impact upon these business entities, which is outweighed by the positive social benefit of specifying what must be retained, and for how long, in order to promote the integrity of the reporting process. Winning Primary Election Candidates Designating Primary Election Depository Accounts as Joint Candidates Committee Depository Accounts for the General Election Amending N.J.A.C. 19:25-8.2A(c) to add a reference to N.J.A.C. 19:25-4.2(c) will have no economic impact on candidates forming joint candidates committees for the general election, as the cite reference does not add new obligations, but merely clarifies that the correct filing requirement for a joint candidates committee is a certificate of organization and designation of

14 campaign depository, that is, Form D-2. The grammatical changes will have no economic impact on winning primary election candidates. Addition of Campaign Treasurer in N.J.A.C. 19: , Partnership Contributions Prohibited Campaign treasurers are required to certify the correctness and file reports detailing contributions received by the campaign, see N.J.S.A. 19:44A-16. The inclusion of a campaign treasurer in this section does not add additional duties to his or her filing responsibilities, as N.J.A.C. 19: describes the prohibition of contributing by partners and members of partnership entities, and details the method by which attribution is determined. Therefore, the reference to a campaign treasurer in this section will not have an economic impact, as contributions received by a campaign were already required to be reported. Correction of Committee Category in N.J.A.C. 19:25-9.4A, Political Party Committee and Legislative Leadership Committee Expenditures made immediately before a Primary or General Election There is no expected economic impact in relation to correcting an inadvertent error, which does not impose a new requirement. Cite Correction for N.J.A.C. 19:25-8.1, Candidate or Joint Candidates Committee Election Fund Reports Correcting a citation error in N.J.A.C. 19:25-8.1(e) will have no economic impact on candidate committees and joint candidate committees, as there is no change to the requirements regarding termination of candidate reporting. Cite Correction for N.J.A.C. 19: , Expenditures made by Credit Card No economic impact results from correcting a citation within Commission rules. Amendment of the Definition of Continuing Political Committee in Subchapter 26 The amendment to N.J.A.C. 19: will not have an economic impact on continuing political committees. The proposed amendment does not change the definition of such committees, but merely incorporates the definition and requirements for establishing a continuing political committee found elsewhere in the Act. Amendment to N.J.A.C. 19:25-1.1, Scope of Regulations, to Reflect Name Change of P.L. 1971, c. 183 and to add Reference to P.L. 2004, c. 19, P.L. 2005, c. 51 and P.L. 2005, c. 271 The amendments to reflect a legislative title change and to add reference to legislation that is under the Commission s jurisdiction does not add any new substantive duties and, therefore, will have no economic effect on the regulated population. Housekeeping changes The proposed amendments will have no economic effect on the public or the regulated community. Federal Standards Statement

15 A Federal standards analysis is not required because the rules proposed for readoption with amendments, and proposed new rule concern New Jersey filing entities. The rules are not subject to any Federal requirements or standards. Jobs Impact The rules proposed for readoption with amendments and the proposed new rule are not expected to have any impact upon the number of persons employed by candidates, candidate committees, joint candidates committees, political committees, continuing political committees, political party committees and legislative leadership committees or in any other sector of the State. Agriculture Industry Impact The rules proposed for readoption with amendments and the proposed new rule are not expected to have any impact on the agriculture industry. Regulatory Flexibility Statement The rules proposed for readoption with amendments affect election campaign and legislative disclosure, contribution limit, political identification and other salutary purposes of the Campaign Reporting Act, the Financial Disclosure Act, the Lobbying Act and the Recall Act. As such, the rules proposed for readoption and the proposed amendments do not affect, impact or impose reporting, recordkeeping or other compliance duties on small businesses as that term is defined under the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq. However, proposed new rule N.J.A.C. 19: , Recordkeeping; period of retention, does impose a new recordkeeping obligation on small businesses (business entities) that have received $50,000 or more in the aggregate in any calendar year through agreements or contracts with a public entity. The small businesses that are affected by this new rule are currently subject to reporting requirements pursuant to the pay to play disclosure law, P.L. 2005, c. 271, amended P.L. 2007, c. 304, N.J.S.A. 19:44A-20.27, as they must file an annual disclosure statement with the Commission. The proposed new rule requires these business entities make or obtain and maintain the records and documents needed to support the annual disclosure statement for a period of time. The effect of the obligation to maintain records is outweighed by the clarity in document maintenance requirements and the social benefit of providing a record for the Commission to review in an audit or investigation of an alleged violation of the Act. Smart Growth Impact The rules proposed for readoption with amendments and the proposed new rule are not expected to have any impact on the achievement of smart growth and implementation of the State Development and Redevelopment Plan. Housing Affordability Impact The rules proposed for readoption with amendments and the proposed new rule are not expected to have any impact on affordable housing in New Jersey and it is unlikely that the rules would

16 evoke a change in the average costs associated with housing because the proposed rules concern the New Jersey Campaign Contributions and Expenditures Reporting Act, N.J.S.A. 19:44A-1 et seq. Smart Growth Development Impact The rules proposed for readoption with amendments and the proposed new rule are not expected to have any impact on smart growth and it is unlikely that the rules would evoke a change in housing production in Planning Areas 1 or 2 or within designated centers under the State Development and Redevelopment Plan in New Jersey because the proposed rules concern the New Jersey Campaign Contributions and Expenditures Reporting Act, N.J.S.A. 19:44A-1 et seq. Full text of the rules proposed for readoption may be found in the New Jersey Administrative Code at N.J.A.C. 19:25. Full text of the proposed amendments and new rule follows (additions indicated in boldface thus; deletions indicated in brackets [thus]): SUBCHAPTER 1. GENERAL PROVISIONS 19: Scope of regulations The provisions of this chapter are promulgated pursuant to the New Jersey Campaign Contributions and Expenditures Reporting Act, P.L. 1973, [c.83] c. 83, as amended, N.J.S.A. 19:44A-1 [and following] et seq. ( the [act] Act ); the Gubernatorial Legislative Disclosure Statement Act; N.J.S.A. 19:44B-1 et seq.; the Uniform Recall Election Law, P.L. 1995, c. 105, N.J.S.A. 19:27A-1, [and] the Legislative and Governmental Process Activities Disclosure Act [of 1971], P.L. 1971, c. 183, as amended, N.J.S.A. 52:13C-18 et seq., the pay to play laws, P.L. 2004, c. 19, as amended, N.J.S.A. 19:44A-20.3 et seq., P.L. 2005, c. 51, as amended, N.J.S.A. 19:44A et seq., and P.L. 2005, c. 271, as amended, N.J.S.A. 19:44A et seq. Such provisions shall constitute the rules and regulations of practice and procedure of the New Jersey Election Law Enforcement Commission ( the Commission ). 19: Liberal construction of [regulations] rules The provisions of this chapter shall be liberally construed to permit the [commission] Commission to discharge its statutory functions and to secure a just and speedy determination of all matters before it. 19: Relaxation The [commission] Commission may, upon notice to all parties or persons in interest, relax the application of this chapter whenever the interest of justice shall so require. 19: Amendment of regulations The [commission] Commission may at any time and from time to time, rescind, alter or amend the provisions of this chapter in the manner prescribed by law as may be necessary to carry out the purposes of the [act] Act. Any new regulation resulting from such action shall be filed with the New Jersey Office of Administrative Law.

17 19: Practice where regulations do not govern In any matter not governed by the provisions of this chapter, the [commission] Commission shall exercise its discretion so as to carry out the purposes of the [act] Act. 19: Definitions The following words and terms, when used in this chapter and in the interpretation of the [act] Act, shall have the following meanings unless a different meaning clearly appears from the context. The [act] Act means The New Jersey Campaign Contributions and Expenditures Reporting Act, [L.1973, c.83] P.L. 1973, c. 83, as amended, N.J.S.A. 19:44A-1 [and following] et seq. "Continuing political committee" includes any group of two or more persons acting jointly, or any corporation, partnership[,] or any other incorporated or unincorporated association, including a political club, political action committee, civic association or other organization, which in any calendar year contributes or expects to contribute at least $4,900 to aid or promote the candidacy of an individual, or the candidacies of individuals, for elective public office, or the passage or defeat of a public question or public questions, and which may be expected to make contributions toward such aid or promotion or passage or defeat during a subsequent election, provided that the group, corporation, partnership, association or other organization has been determined by the [commission] Commission to be a continuing political committee in accordance with N.J.S.A. 19:44A-8(b). A continuing political committee does not include: 1. A candidate committee, joint candidates committee, political committee, [a] political party committee[,] or a legislative leadership committee. 2. (No change.) Contribution includes every loan, gift, subscription, advance or transfer of money or other thing of value, including any in-kind contribution, made to or on behalf of any candidate committee, joint candidates committee, political committee, continuing political committee, political party committee or legislative leadership committee and any pledge or other commitment or assumption of liability to make such transfer. For purposes of reports required under the provisions of the [act] Act, any such commitment or assumption shall be deemed to have been a contribution upon the date when such commitment is made or liability assumed. Funds or other benefits received solely for the purpose of determining whether an individual should become a candidate are contributions.