A bill sponsored by Assembly Democrats Jamel Holley, Gary S. Schaer and James Kennedy to facilitate transparency and protect taxpayers is now law.
Previous law required all bidders for public contracts to submit the names and addresses of all stockholders owning at least 10 percent interest in the entity prior to receiving a public contract. Recently, a number of bids were disqualified because of a new interpretation of the law that required disclosure of all 10 percent owners, including mutual funds and other institutional investors, and each 10 percent owner of every company or fund up the line until there are no other 10 percent owners.
The new law (A-3540) permits a bidder with any direct or indirect publicly-traded parent entity to submit the aforementioned names and addresses as of the last annual filing with the federal Securities and Exchange Commission and requires submission of links to the websites containing the last SEC filings.
“The SEC filing businesses already are required to submit shows their ownership annually to ensure transparency,” said Holley (D-Union). “This law removes red tape in an effort to make New Jersey more business-friendly while protecting taxpayers from paying more for the same services.”
“Despite the best intentions and success of prior legislation regarding bid documents, differing interpretations of the law unfairly burdened businesses and made compliance almost impossible” said Schaer (D-Bergen/Passaic). “This measure will allow publicly traded companies to more appropriately, fairly and efficiently comply with laws that foster transparency and accountability.”
“Transparency certainly is a priority, but so is making sure New Jersey doesn’t prevent good businesses from pursuing opportunities,” said Kennedy (D-Middlesex/Union/Somerset). “By amending the prior law, the state has taken action to make sure contracts go to the best bidders while maintaining its standards for open government.”
The measure received unanimous approval from both houses of the legislature before being signed into law by the governor.