New Jersey-2012-A2054-Introduced

An Act to ensure proper expenditure and accounting for public funds and supplementing Title 34 of the Revised Statutes.

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

1. The Legislature hereby finds and declares:

a. Sound fiscal management, the protection of taxpayer funds, and the proper use of the State and local governmental resources require vigilance to ensure: that funds appropriated or granted by the State for or in connection with the purchase of services, the performance of public contracts or public works, and the provision of services for or on behalf of the State or its citizens, are ultimately expended solely for the purposes for which they were appropriated or granted; that public agencies, and vendors and suppliers to, contractors with, and grantees of the State, perform their functions in the most economical and efficient manner consistent with the requirements of law and public policy; and that subsidized projects are conducted so as to fulfill the goals and objectives which led to the State's involvement therein; and

b. When public funds are diverted from their intended use for the purchase of services, the performance of public contracts or public works, the provision of services, or the completion of subsidized projects, and the funds are instead used to attempt to exert influence on employees, that diversion tends to cause interruptions in the supply or impairments in the quality of the services, the performance of the contracts or public works, the provision of services, and the completion of the subsidized projects; the fiscal and proprietary interests of the State are adversely affected; the State is compelled to subsidize partisan positions on controversial questions concerning employee representation; and the scarce resources of the State are misused.

2. For the purpose of this act:

"State" means the State; and any agency, office, officer, department, division, board, commission, authority, instrumentality or political subdivision of the State, and any corporation, entity, or body created by State law.

"Commissioner" means the Commissioner of Labor and Workforce Development.

"Employee" means any individual employed by a publicly-funded employer, including but not limited to, any individual engaged in performing work, providing services, or fulfilling contracts that are, in whole or in part, directly or indirectly, paid for, financed, derived, or subsidized by, with, or from public funds, and any individual employed by any employer in connection with a subsidized project.

"Employee influence activity" means any activity, effort, or attempt by a publicly-funded employer to encourage, discourage, deter or otherwise influence one or more of its employees with respect to their supporting or opposing unionization, joining or refraining from joining a labor organization or other form of employee self-organization or activity for mutual aid or protection, or any effort by a labor organization to represent some or all of its employees. The conduct of a meeting with one or more employees during working hours or at the worksite shall be deemed to be an employee influence activity, if the meeting, or any portion of the meeting, is conducted for the purpose of, or in connection with, an employee influence activity. "Employee influence activity" does not include lawful activities by the employer, employees or labor organization in connection with addressing grievances, negotiating or administering a collective bargaining agreement, performing actions required by federal or State law or a collective bargaining agreement, or negotiating, entering into, or carrying out any other agreement between the employer and a labor organization, including, but not limited to, a voluntary recognition agreement between the employer and a labor organization.

"Employee influence expenditure" means any cost or expense made or incurred, directly or indirectly, by a publicly-funded employer, where the expense is made or incurred: for or in connection with any employee influence activity; to train managers, supervisors, or other personnel regarding methods or techniques of, or related to, employee influence activities; or to hire, retain, pay a salary or other compensation to, or defray any expenses of, any individual, corporation, unincorporated association, partnership, firm, consultancy or other entity, or any individual acting on the entity's behalf, for the entity or individual to plan, advise, prepare, coordinate, carry out, research, or engage in, employee influence activities. "Employee influence expenditure" also includes the pro rata share of administrative, accounting, and legal costs and managerial, administrative, or supervisory salaries and compensation attributable to considering, planning, preparing, training for carrying out, or engaging in, employee influence activities.

"Employer" means any individual, corporation, unincorporated association, partnership, institution, trustee, trustee in bankruptcy, receiver, government agency or body, legal entity or association that employs at least one person in the State, or any director, officer, or managerial employee acting as an agent for the individual, corporation, unincorporated association, partnership, institution, trustee, trustee in bankruptcy, receiver, government agency or body, legal entity or association.

"Prohibited expenditure" means any employee influence expenditure made by a publicly-funded employer which is defrayed with, or for which reimbursement is sought from, public funds, in whole or in part.

"Publicly-funded employer" means the State or any employer that receives public funds during the current or any preceding calendar year, whether the funds are received through payment, grant, allocation, reimbursement, or subsidy, for supplying services to the State, for or in connection with the provision of services to or on behalf of the State or its citizens, for or in connection with the performance of any contract with the State. "Publicly-funded employer" shall also include any employer that benefits from a subsidy in connection with any subsidized project.

"Public funds" means revenues and moneys of the State from whatever source derived, including, but not limited to, tolls charged for the use of public facilities, subsidies, and any money drawn from any fund of the State insofar as those revenues and moneys are appropriated, expended, granted, transferred or contributed to any other person or entity for, or in connection with: a subsidized project; the performance of public works; the provision of services to or on behalf of the State or its citizens; or the performance of any other contract with the State.

"Subsidized project" means any contract, arrangement, agreement, or development project in which the State provides, approves, authorizes, facilitates or administers a subsidy for the project or involves itself with the project as an owner, borrower, creditor, lender, lessor, guarantor, pledger, investor, or contributor.

"Subsidy" means any funds or resources, including the value of any loans, loan guarantees, expenditures, investments, tax exemptions or other incentives or financial assistance, which are provided, approved, authorized, facilitated or administered by the State in connection with a subsidized project.

3. Notwithstanding any other provision of law, it shall be unlawful for a publicly-funded employer to make any prohibited expenditure as defined by this act. The State shall not appropriate, pay, grant, or transfer public funds, or, with public funds, reimburse a vendor, supplier, grantee, contractor, or any other individual or entity, or contribute, administer, or approve a subsidy in connection with any subsidized project, to defray costs arising from any employee influence activity. As a condition of receiving public funds or benefiting from a subsidy, a publicly-funded employer other than the State shall certify to the State that it shall not make prohibited expenditures and that it shall otherwise comply with all requirements of this act.

4. Publicly-funded employers other than the State shall maintain records sufficient to show that no reimbursement is sought for employee influence expenditures, and that no public funds are, have been, or will be used for prohibited expenditures. Nothing in this act requires that those records be maintained in any particular form. The records shall be made available for inspection to the commissioner or to the Attorney General within 10 business days of receipt of a request from the commissioner or the Attorney General. The publicly-funded employer shall certify the validity and accuracy of the records on request of the commissioner or the Attorney General, or on the motion of any party to a civil action as provided in section 7 of this act.

5. Any citizen or taxpayer of the State alleging that a publicly-funded employer has made or is making a prohibited expenditure in violation of this act may file a request for the commissioner to investigate the matter. If the commissioner determines that he has reasonable cause to believe a violation has occurred, is occurring, or is likely to occur, he shall commence an investigation and prepare and deliver a report summarizing his investigation findings and conclusions to the complainant, the publicly-funded employer, and the Attorney General not later than 45 days after the request is filed. In conducting the investigation, the commissioner shall, in a manner consistent with regulations adopted pursuant to this act, provide prompt notice to the publicly-funded employer and permit the publicly-funded employer, the complainant, and any other party whom the commissioner believes may have relevant evidence or information in the matter to be heard and submit evidence.

6. The Attorney General shall promptly review the commissioner's report and conduct whatever further investigation he deems appropriate, upon notice to the complainant and the publicly-funded employer. The Attorney General shall attempt to resolve the matter by agreement of the parties, provided that, if the Attorney General has reasonable cause to believe that a prohibited expenditure was made or that prohibited expenditures continue to made by a publicly-funded employer, he shall require, as a condition of the resolution, the cessation of prohibited expenditures and whatever restitution to the State he, in his reasonable discretion, deems appropriate.

7. If a request for an investigation of an alleged violation of this act is filed pursuant to section 5 of this act and the commissioner does not conduct an investigation and issue a report pursuant to that section, a civil action may be brought by any citizen or taxpayer of the State in the Superior Court not more than three years after the request is filed. If the commissioner investigates the alleged violation and provides a report to the Attorney General pursuant to section 5 of this act and the Attorney General does not bring about a resolution of the matter pursuant to section 6 of this act, a civil action may be brought by any citizen or taxpayer of the State or by the Attorney General in the Superior Court not more than three years after the request is filed. The citizen or taxpayer who commences the action shall notify the Attorney General. If at any time after a citizen or taxpayer has commenced an action under this section 7, the Attorney General commences an action with regard to the same matter, the suit by the citizen or taxpayer shall be held in abeyance. If the Attorney General subsequently declines to proceed with his action, the action of the citizen or taxpayer shall be reopened and proceed. If the Attorney General's action is dismissed by the court or resolved by settlement between the parties, the citizen or taxpayer action shall be dismissed or otherwise resolved as provided in the settlement. If a citizen or taxpayer action is superseded by an action brought by the Attorney General with regard to the same matter, the court may, in its discretion and for the assistance of the court, permit the citizen or taxpayer to intervene and participate in any proceedings connected with the Attorney General's action.

8. For a violation of this act, the court shall order a publicly-funded employer other than the State to cease and desist from the violation and reimburse the State in the amount of any prohibited expenditures plus interest, reasonable costs and attorneys fees, and an amount of liquidated damages not exceeding the amount of the prohibited expenditures. If the court finds that the employer willfully violated this act, it may order the violator to pay an additional sum not exceeding two times the amount of any prohibited expenditures. The court may provide any other legal and equitable relief as it, in its discretion, finds just and appropriate. Any monies recovered in an action under this section 8 shall be deposited in the State treasury or, if the prohibited expenditure was made with funds derived from a political subdivision or independent authority or instrumentality of the State, in the appropriate account of the subdivision, authority, or instrumentality; provided that a plaintiff other than the Attorney General in an action that results in a finding of a violation of this act shall receive the reasonable costs and attorneys fees paid by order of the court. A citizen or taxpayer who commences an action later superseded by an action brought by the Attorney General that results in a finding of a violation of this act may recover any reasonable costs and attorney's fees incurred prior to the initiation of the Attorney General's action. In the case of an action initiated by a citizen or taxpayer when the commissioner does not conduct an investigation of an alleged violation, if the publicly-funded employer is the prevailing party, the employer may recover reasonable costs and attorney's fees from the citizen or taxpayer. For a violation of this act by the State, the court shall restrain any continuing violations, order the responsible parties to cease and desist from the violation, and provide for payment by the State of reasonable costs and attorney's fees and any other legal and equitable relief, that the court, in its discretion, deems appropriate. If the court finds that an individual or individuals acting on behalf of, or with the authority of, the State engaged in a willful violation of this act, it may in its discretion order the individual or individuals responsible to make restitution to the State of whatever portion of the amount of a prohibited expenditures that the court deems appropriate.

9. The Superior Court shall have jurisdiction to restrain and enjoin violations of this act. If the court finds, in an action under this act, that prohibited expenditures are occurring or are likely to occur or to continue to occur unless restrained, the court may grant temporary, preliminary, or permanent injunctive relief to prevent the prohibited expenditures.

10. In any action under this act, it shall be presumed that any expenditure in connection with an employee influence activity is a prohibited expenditure, unless the publicly-funded employer establishes by a preponderance of the evidence that, prior to engaging in the activity, the publicly-funded employer made reasonable efforts to segregate its public funds from other revenue sources, and that the costs associated with the employee influence activity were entirely defrayed from revenues other than any public funds of which the publicly-funded employer is a recipient, grantee, payee, or beneficiary. If a publicly-funded employer commingles public funds and other revenue sources, any prohibited expenditure made by it shall be presumed to derive pro rata from public funds.

11. Nothing in this act shall be interpreted to limit in any way the right of a publicly-funded employer to express any views to its employees or others, or to take any otherwise lawful action in the nature of an employee influence activity, so long as the expression is made or action conducted without utilizing public funds.

12. The purpose of this act is to prohibit public funds from being used to promote or deter employee influenced activity and this act shall not be construed as prohibiting recipients of public funds from engaging in these activities with non-public funds.

13. The Commissioner of Labor and Workforce Development and the Attorney General shall each promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as needed by each to carry out their respective roles in effectuating the purposes of this act.

14. This act shall take effect immediately, but not apply to expenditures, contracts, grants or subsidies made before its effective date, unless the expenditures, contracts, grants or subsidies were continued, extended, renewed or modified after the effective date.

STATEMENT

This bill prohibits any employer, including the State or a local governmental employer, who receives or uses public funds to supply services to the State, a local government, or citizens of the State or receives funds in connection with a contract with the State or local government or a publicly subsidized project, to use any of those public funds to influence employees of the employer with respect to their supporting or opposing union representation. The prohibited expenditures include spending on the training of managers or hiring of consultants to influence employees on issues of unionization, but not spending on normal functions of an employer relating to unions, such as collective bargaining and responding to grievances.

The bill permits any citizen or taxpayer to file a request that the Commissioner of Labor and Workforce Development investigate an alleged violation by a publicly-funded employer. Upon a determination of reasonable cause by the commissioner, he is required to conduct an investigation and deliver a report of his findings to the Attorney General, who is required to review the report and attempt to resolve the matter by agreement of the parties and ensure a cessation of any violation.

If the commissioner does not investigate the alleged violation, any citizen or taxpayer may bring a civil action in Superior Court within three years after the request for investigation is filed. If the commissioner does investigate the alleged violation and issues a report, but the Attorney General does not bring about a resolution, any citizen or taxpayer, or the Attorney General may bring the civil action. If the court finds that there was a violation, it is required to order the violator to stop the violation and reimburse the amount of the prohibited expenditures plus liquidated damages, costs and legal fees, and interest. For a willful violation, the court may order the violator to pay an additional sum not exceeding two times the prohibited expenditures. A citizen or taxpayer who brings an action when the commissioner does not investigate an alleged violation is responsible for costs and attorney's fees if the employer prevails.

The bill also authorizes the Superior Court to restrain and enjoin violations and grant injunctive relief to prevent prohibited expenditures.

Finally, the bill affirms that its purpose is to prohibit public funds from being used to promote or deter employee influenced activity and stipulates that nothing in the bill shall be construed as prohibiting recipients of public funds from engaging in these activities with non-public funds.