S305

SENATE, No. 305

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Senator INVERSO

An Act requiring disclosure to the Election Law Enforcement Commission of the receipt and disbursement of funds in connection with certain fund-raising functions and establishing the permissible uses of those funds, and supplementing "The New Jersey Campaign Contributions and Expenditures Reporting Act," P.L.1973, c.83 (C.19:44A-1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. (1) Whenever any person or any group of two or more persons, other than a candidate committee, joint candidates committee, political committee, continuing political committee, political party committee, or legislative leadership committee, sponsors a testimonial, celebratory, commemorative or other such function, including but not limited to a cocktail party, breakfast, luncheon, dinner, dance, picnic, reception, entertainment or similar affair, in honor, or under the leadership, at the direction or suggestion, or otherwise involving the substantial participation, of any person holding an office which is filled by an election to which the provisions of P.L.1973, c.83 (C.19:44A-1 et seq.) apply, or the spouse, natural or adopted child, parent, or sibling of such an officeholder, or under circumstances reasonably indicative to the ordinary attendee at the function that the sponsor thereof is acting under such leadership, at such direction or suggestion, or with such participation, and the sponsor of the function or the agent of that sponsor solicits any person attending the function for payment or a pledge to pay, whether as a donation, contribution, subscription or otherwise, of money or other thing of value in amounts which in the aggregate may be expected to exceed the cost of holding the function, that sponsoring person or group shall appoint a treasurer for the function, who shall be responsible for receiving those payments, and shall designate a bank authorized by law to transact business in this State as the depository into which all payments of money that are made in connection with the holding of the function shall be deposited. The sponsor shall duly certify that appointment and designation in writing to the Election Law Enforcement Commission, on such form as the commission shall prescribe, not later than (a) the day on which the first such payment or pledge of payment is received or any expenditure in connection with the function is made or liability therefor incurred, or (b) the 20th day preceding the date on which the function is to be held, whichever is earlier.

(2) The sponsor shall, not later than the third day after the last day for filing the certification of the appointment of a treasurer and the designation of a depository or, if later, the third day following receipt of donations, contributions, subscriptions, or other payments or pledges of payment in connection with the holding of the event of amounts which, together with all such donations, contributions, subscriptions, payments and pledges previously received, exceed in the aggregate the amount which, if raised or expended by two or more persons or an association organized to aid or promote the nomination, election or defeat of a candidate for public office in any election, would qualify those persons or that association as a "political committee" under subsection i. of section 3 of P.L.1973, c.83 (C.19:44A-3), file with the commission a statement of registration which shall include (a) the name of the sponsor or, in the case of a sponsor consisting of a group of two or more persons which has no independent or continuing legal existence, the names of those persons, and (b) the mailing address or addresses of the sponsor or those persons, as the case may be.

b. The treasurer for such a function shall make a written record of all funds or pledges of payment which the treasurer receives from any donor, contributor, subscriber or other person in connection with the function, including in that record the name and mailing address of the person, the amount and date of the donation, contribution, subscription or other payment or pledge thereof, and where the person is an individual, the occupation of the individual and the name and mailing address of the individual's employer. The treasurer shall retain that record for a period of not less than two years following the date on which the function is held. All funds so received shall be deposited by the treasurer for the function in the depository designated for that purpose as prescribed in subsection a. of this section no later than the 10th day after the receipt of those funds.

c. The treasurer for any function, the sponsor of which is required to file a statement of registration under the provisions of paragraph (2) of subsection a. of this section, shall file with the commission a cumulative report, upon a form prescribed by the commission, of all funds or other things of value received by the treasurer and all expenditures made, incurred or authorized by the treasurer or by the sponsor of the function, in connection with the holding of the function, during the period ending 48 hours preceding the date of the report and beginning on the date on which the first of those funds or other things of value were received or the first of those expenditures were made, whichever occurred first.

The cumulative report shall, except as hereinafter provided, contain the name and mailing address of each person or group from whom moneys, loans, paid personal services or other things of value, or the pledge thereof, have been received since 48 hours preceding the date on which the previous such report was made and the amount of each such donation, contribution, subscription or other payment or pledge of payment by each such person or group, and where an individual has made such a payment or pledge, the report shall indicate the occupation of the individual and the name and mailing address of the individual's employer. In the case of any loan reported pursuant to the provisions of this subsection, the report shall indicate the name and mailing address of each person who has cosigned such loan since 48 hours preceding the date on which the previous such report was made, and if an individual has cosigned such loans, the report shall indicate the occupation of the individual and the name and mailing address of the individual's employer. The report shall also contain the name and address of each person, firm or organization to whom expenditures or other disbursements have been paid since 48 hours preceding the date on which the previous such report was made and the amount and purpose of each such expenditure or other disbursement, including in the identification of that purpose a full description of any goods, services or other thing of value which shall have been received by the treasurer or any other person in consideration or exchange for that expenditure or disbursement.

The treasurer shall file the first cumulative report with the commission not later than the 10th day following the date on which the function is held and the second cumulative report on the January 15, April 15, July 15, or October 15 occurring at least 30 days after that 10th day. Thereafter, the treasurer shall file quarterly reports on each January 15, April 15, July 15, and October 15 following the date on which the second cumulative report is due. Concurrent with the filing of any cumulative report, the treasurer may certify to the commission that the fund established by the sponsor of the function in connection with the holding of the function, having been instituted for the purpose of underwriting the function, has wound up its business and been dissolved, and said certification shall be accompanied by a final accounting of any fund relating to that function including the final disposition of any balance in that fund at the time of dissolution. Until the certification has been filed, the treasurer shall continue to file the quarterly reports as provided under this subsection.

The treasurer shall certify to the correctness of each cumulative report required to be filed under this subsection.

In any report filed pursuant to the provisions of this subsection, the treasurer reporting may exclude from the report the name of and other information relating to any contributor, donor, subscriber, or other person whose contributions, donations, subscriptions, or other payments or pledges of payment in connection with the function did not exceed in the aggregate the amount of contributions by a single contributor to a testimonial affair which may be omitted from the accounting relative to that affair required to be filed under subsection h. of section 16 of P.L.1973, c.83 (C.19:44A-16).

The Election Law Enforcement Commission shall promulgate regulations providing for the implementation of reporting requirements applicable to the disclosure hereunder of funds received in connection with the holding of a function and expended or otherwise disbursed from the proceeds thereof, and also for the termination of those reporting requirements. The requirements to file reports after the first report may be waived by the commission, notwithstanding that the certification has not been filed, if the commission determines under any regulations so promulgated that the outstanding obligations of the sponsor of the function do not exceed 10% of the expenditures made with respect to the function or $1,000, whichever is less, or are likely to be discharged or forgiven.

d. All amounts received by a sponsor of a function subject to the provisions of this section shall be used only for the purposes of (1) paying the necessary and proper costs of holding the function, or (2) making contributions to any charitable organization described in section 170(c) of the Internal Revenue Code of 1954 or any nonprofit organization which is exempt from taxation under section 501(c) of the Internal Revenue Code of 1954, except that an officeholder, or the spouse, natural or adopted child, parent, or sibling of an officeholder, in whose honor such a function is held may receive from the proceeds of the function a token gift which shall not be in the form of cash and the purchase price of which shall not exceed $250.

e. This section shall not apply to any charitable organization exempt from taxation under section 501(c) of the federal Internal Revenue Code of 1954 (42 U.S.C.A. §501(c)) which sponsors a function, all of the net proceeds of which are actually received by the organization for its exclusive use.

2. This act shall take effect immediately.

STATEMENT

This bill supplements "The New Jersey Campaign Contributions and Expenditures Reporting Act" to require the disclosure of financial information concerning certain fundraising functions held in honor or with the substantial participation of any person, or the near relative of a person, who holds a public office filled by an election to which the Reporting Act is applicable. Events sponsored by campaign, political party, or political action committees are exempt from the provisions of the legislation, as all fundraising activity by those entities is already subject to disclosure and other requirements under existing provisions of the Reporting Act.

Under the bill, whenever such a function is to be held, the sponsor of the function is to name a treasurer for the function, who would be responsible for receiving payment for the purchase of tickets to the function and for depositing all such payments into an account at a bank designated by the sponsor. The sponsor is to certify the appointment of the treasurer and designation of the bank depository to the Election Law Enforcement Commission.

In addition, whenever the total amount received in connection with the function exceeds the threshold amount which qualifies a fundraising group as a "political committee" under the Reporting Act, the treasurer of the function must submit to the Election Law Enforcement Commission cumulative financial disclosure reports similar to those required of such committees. These reports are to disclose all funds received by the treasurer in connection with the holding of the function and all expenditures or other disbursements of those funds. The report is to contain the name and mailing address of each purchaser of tickets to the fundraising event and the amount paid; if the purchaser is an individual, the report is to indicate the occupation of the individual and the name and mailing address of the individual's employer. The report would also contain the name and address of each person, firm or organization to whom expenditures or other disbursements have been paid and the amount and purpose of each such expenditure or disbursement, including a full description of any goods or services received by the treasurer or any other person in consideration or exchange for that expenditure or disbursement. The bill allows the treasurer to omit from the financial disclosure report contributions from a single contributor which do not exceed in the aggregate the amount of contributions from a single source which may be omitted from the accounting presently required of sponsors of "testimonial affairs" under N.J.S.A.19:44A-16.

The bill would limit the permissible uses of the proceeds of a fundraising function to which the legislation is applicable to (1) payment of the necessary and proper costs of holding the function, and (2) contributions to charitable organizations and certain nonprofit corporations. It would, however, allow an elected official, or close relative of such an official, who is an honoree at the function to receive a token gift, but the gift could not be in cash and the purchase price of the gift could not exceed $250.

Requires disclosure to ELEC of receipts and disbursements by sponsor of nonpolitical fund-raising event honoring or otherwise substantially involving holder of any of certain elective public offices; limits uses of proceeds from such event.