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New Jersey donor disclosure law faces legal challenges

On June 25, Americans for Prosperity filed a lawsuit in U.S. District Court alleging New Jersey S150, which amended the New Jersey Campaign Contributions and Expenditures Reporting Act, violates the First Amendment. 

• Who are the parties to the suit?
  • Americans for Prosperity, the plaintiff, is a 501(c)(4) political advocacy group that describes itself as "an organization of grassroots leaders who engage citizens in the name of limited government and free markets on the local, state and federal levels." The defendants are New Jersey Attorney General Gurbir Grewal (D) and the commissioners of the Election Law Enforcement Commission: Eric Jaso, Stephen Holden, and Marguerite Simon.

• What is at issue?
  • Attorneys for Americans for Prosperity wrote. "The First Amendment safeguards individuals’ rights to associate privately and advocate anonymously throughout the United States. … Protecting the integrity of elections may be a sufficiently important reason to justify, under exacting scrutiny, regulation of electioneering communications, but the same is not true of issue advocacy. Rammed through in a rush to exact political revenge, [S150] obliterates this fundamental distinction and oversteps constitutional bounds by subjecting issue advocacy to the formidable regulations and burdens properly reserved for electioneering."

• What does the legislation do? 
  • S150 defines an independent expenditure committee as any person or group organized under sections 501(c)(4) or 527 of the Internal Revenue Code that spends $3,000 or more annually to influence or provide political information about any of the following:
    • "the outcome of any election or the nomination, election, or defeat of any person to any state or local elective public office"
    • "the passage or defeat of any public question, legislation, or regulation"
    • Independent expenditure committees will be required to disclose all expenditures exceeding $3,000. These committees will also be required to disclose the identities of their donors who contribute $10,000 or more.
    • Political context: New Jersey is a Democratic trifecta, meaning Democrats control the governorship and both chambers of the state Legislature.

• How have the defendants responded?
  • Neither the attorney general nor the Election Law Enforcement Commission have commented publicly on the litigation. 
• The case, Americans for Prosperity v. Grewal (case number 3:19-cv-14228), was filed in the U.S. District Court for the District of New Jersey. 

What we're reading

• Politico, "Treasury defends move to halt nonprofit disclosures amid Wyden threat," July 17, 2019
   
• San Francisco Examiner, "Voters to decide on increased campaign finance disclosures, new limits on contributions," July 15, 2019
   
• The Hill, "Democrats press IRS on guidance reducing donor disclosure requirements," July 11, 2019
   
• New Jersey Law Journal, "'Dark Money' Donor Law Faces Free Speech Challenge by Koch-Backed Group," June 26, 2019

The big picture

Number of relevant bills by state

We're currently tracking 72 pieces of legislation dealing with donor disclosure. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we're tracking.

Number of relevant bills by current legislative status

Number of relevant bills by partisan status of sponsor(s)

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills in the past two weeks. Bills are listed in alphabetical order, first by state then by bill number. Know of any legislation we're missing? Please email us so we can include it on our tracking list.

• New Hampshire SB105: This bill would establish disclosure requirements for certain contributions made to inaugural committees.
  • Enacted July 15.
• New Hampshire SB156: This bill would require that political contributions made by limited liability companies be allocated to individual members in order to determine whether individuals have exceeded contribution limits.
  • Vetoed July 15.

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