Compliance Corner: Important Changes to ELEC Pre-Election Reporting

With just over two weeks remaining until election day, now is the time for reporting committees, individuals and corporations, and organizations to prepare for and understand their ELEC reporting obligations. Under the Elections Transparency Act, a wider range of organizations are required to file ELEC reports, and a broader range of transactions are subject to pre-election reporting.

PACs/CPCs and Registered Super PACs

For committees that have already been registered with ELEC, the concept of pre-election reporting hasn’t dramatically changed. Instead, as usual, the goal is to ensure public disclosure of activities that have occurred since the close of books for the October 15 3Q report. (If not for pre-election reporting, activity between October 1 and election day by these quarterly filers would remain undisclosed until the 4Q reports are published in January.)

What has changed under the ETA is the timing and scope of those reports. Instead of 48-hour reporting of transactions that exceeded $1,900, the following reporting schedule applies for the 2023 general election:

· Activity between October 1 – October 24 – report on one cumulative pre-election report due October 27;

· Activity between October 25 – October 30 – report due within 72 hours of the transaction; and

· Activity between October 31 – November 7 – report due within 24 hours of the transaction.

Keep in mind that activity subject to pre-election reporting are those transactions that exceed $200 as:

1) contributions received, and

2) political expenditures made (but operating expenditures do not need to be included).

Pre-election activity is always reported twice—once before the election, and then again on the next regular quarterly report.

Independent Expenditure Committees

The ETA created a new category of committee that now needs to register with, and report to, ELEC. This new committee, called an Independent Expenditure Committee, is specifically defined to include 527 political organizations, 501(c)(4) social-welfare organizations, and 501(c)(6) trade associations that spend more than $7,500, in the aggregate, per election on independent expenditures to support or oppose candidates for New Jersey state or local office.

Prior to the ETA, an organization that was not otherwise registered as a New Jersey political-reporting committee had to file Form IND reports with ELEC to disclose the money spent on independent expenditures. (Form IND is still available for independent-expenditure reporting by individuals and corporations that use their own treasury funds for independent expenditures, without fundraising.) But there was no requirement for such an organization to publicly disclose its donors or any of the funding received.

Now, for an Independent Expenditure Committee that exceeds the $7,500 threshold on independent expenditures in the aggregate for any one election period, there is a new requirement to file a registration statement with ELEC using Form D-6 for the particular election period in which the organization will be active in New Jersey. Once the registration statement is filed, the Committee must disclose:

1. All of its donors or members that donated more than $7,500 to the Committee, for the purpose of furthering the independent expenditure; and

2. All of its independent expenditures.

Independent Expenditure Committees file reports according to the candidate-schedule (that is, 29 and 11 days before an election, and 20 days following the election) and not on the quarterly schedule.

But there remains a lack of clarity under the ETA as to any pre-election reporting for an Independent Expenditure Committee and how ELEC is defining the words “for the purpose of furthering the independent expenditure” when it comes to reporting of donors.

Organizations seeking to comply with these new reporting requirements should seek specific guidance until ELEC clarifies some of the open questions under the ETA.

Avi D. Kelin is a Partner with Genova Burns LLC, and chairs the firm’s Corporate Political Activity Law and Autonomous Vehicle Law Practices. He regularly assists companies with developing and implementing Political Activity compliance policies and procedures.

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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