New Jersey Corporate Reforms Become Law

A package of bills that reform the New Jersey Business Corporation Act (“NJBCA”) were signed into law on January 16, 2018. We previously wrote about this legislation which was modeled upon provisions of the “Delaware Business Corporation Law” and was recommended for enactment by the “New Jersey Corporate and Business Law Study Commission.” These revisions generally benefit corporate boards of directors and modernize provisions of the NJBCA. Inspections of Corporate Books and Records (P.L. 2017, c.364) Assembly Bill 2975 (Diegnan/Pinkin) modifies the NJBCA to allow corporations to impose reasonable limitations or conditions on the use or distribution of requested corporate books and records. While the law does not define such “limitations and conditions,” the legislative statement provides an example of conditioning the receipt of requested materials on the demanding shareholder agreeing to customary confidentiality obligations. The measure preserves the ultimate authority of a court to decide and order relief in actions brought by shareholders for inspection of materials. Derivative Proceedings and Shareholder Class Actions (P.L. 2017, c.362) Assembly Bill 2970 (Diegnan/Pinkin) gives corporations greater flexibility to vary the applicability or effect of commencing and maintaining a derivative proceeding and shareholder class action. This new law deviates from the prior standards and requires that...

Governor Murphy Takes the Oath of Office, Executive Action on Pay Equity

Phil Murphy was sworn in as New Jersey’s 56th Governor on January 16, 2018. Also assuming office was New Jersey’s second Lt. Governor, Sheila Oliver. In his Inaugural Address, Governor Murphy’s theme was one of inclusiveness and making New Jersey fairer and stronger for all residents. He spoke of restoring confidence in state government, leading through progressive policies based on common sense, and enacting a State Budget that was both fiscally and morally responsible. He specifically challenged the Legislature to send him legislation to restore funding for women’s healthcare and Planned Parenthood; raise the minimum wage to $15 per hour; provide equal pay for women; require employers to provide earned sick leave; expand voting rights; and enact new gun safety laws. The Governor noted that each of these bills would be met with a signing ceremony upon its passage. The Governor also took action and signed an Executive Order barring state workers from asking job applicants seeking positions with the state about their previous salaries. At the signing ceremony, the Governor publicly stated he would sign a bill that extended these same provisions to private sector employers. As Governor Murphy takes office, he has already nominated most of his Cabinet and...

Committee Assignments for State Senate and General Assembly Announced

Senate President Steve Sweeney and Assembly Speaker Craig Coughlin announced the committee chairpersons and committee members for the 218th Legislative Session. While most committee chairs remained the same, several important committees will see new leaders in both the Assembly and Senate. Assemblywoman Eliana Pintor Marin (D-28) became Chairwoman of the Assembly Budget Committee, succeeding Assemblyman Gary Schaer (D-36) who had chaired the committee for the past several sessions. Assemblyman Gordon Johnson (D-37) returned to his chairmanship of the Assembly Commerce Committee after having relinquished that role last session, and Assemblyman John McKeon (D-27) assumed the Chairmanship of the Assembly Financial Institutions and Insurance Committee. A new committee, the Assembly Science and Technology Committee, was formed and will be chaired by Assemblyman Andrew Zwicker (D-16). Lastly, Assemblywoman Nancy Pinkin (D-18) will chair the Assembly Environment and Solid Waste Committee. Senator Bob Gordon (D-38) took over the chairmanship of the Senate Transportation Committee, a position previously held by Senator Nick Sacco (D-32). By becoming Chair of Senate Transportation, Senator Gordon relinquished his Chairmanship of the Senate Legislative Oversight Committee, which will now be led by Senator Brian Stack (D-33). Senator Nilsa Cruz-Perez (D-5) is the new Chairwoman of the Senate Economic Growth...

New Jersey Legislature Reorganizes and Governor Christie Delivers His Final State of the State Address

The 218th Session of the New Jersey Legislature began on January 9, 2018 with the swearing-in of new members, remarks from Senate President Stephen Sweeney (D-3) and newly elected Speaker Craig Coughlin (D-19), and the final State of the State Address from Governor Chris Christie. Senate Reorganization Senate President Stephen Sweeney retained his role as leader of the Senate. Democrats control the chamber by a 25 to 15 margin, a one seat gain from the prior session. The Senate has five new members: Chris Brown (R-2); Troy Singleton (D-7); Vin Gopal (D-11); Declan O’Scanlon (R-13); and Joe Cryan (D-20). Senate President Sweeney outlined his priorities for the 218th Session. The Senate will convene a joint panel on taxation, led by Senator Paul Sarlo (D-36) and Senator Steve Oroho (R-24). The Senate will also focus on equalizing the school funding formula among towns, expanding pre-K education and focusing on higher education affordability. The Senate President called for a new round of higher education investment and for expanding the progress made on vocational employment. Transportation infrastructure will be a focus for the Senate. Specifically, the Senate President spoke of expanding light rail service along the Hudson-Bergen Rail and the creation of the...

What’s a “Pocket Veto” Anyway? – A Guide to the End of New Jersey’s 217th Legislative Session

At noon on January 9, 2017, the New Jersey Legislature’s 217th session comes to a close. That means any bill not presented to the Governor for his consideration before then will become moot and must be reintroduced in the 218th session. But certain constitutional rules also apply to bills passed by the Legislature and presented to the Governor in the last days of the session. During the two year legislative cycle, the New Jersey Constitution (Art. V, §1, ¶14(b) and (c)) allows the Governor 45 days to either sign the bill or veto it, with the veto being either absolute or conditional. This time frame can be extended if the house of origin (the Senate or General Assembly) is not in session on the 45th day. If the Governor takes no action within the allotted time, the bill becomes law. Any bill presented to the Governor on or after November 25, 2017, cannot receive 45 days of consideration before the end of the session on January 9, 2018. The New Jersey Constitution (Art. V, §1, ¶¶14 (c) and (d)) provides special procedures for this situation: Any bills presented on November 25, 2017, must be signed by noon on January 9, 2018, or...

NJEDA Proposes Readoption and Changes to Administrative Rules

Notwithstanding recent headlines about attempts to “kill” off the New Jersey Economic Development Authority (NJEDA), reports of the NJEDA’s death are greatly exaggerated. On November 20, 2017, the NJEDA proposed for readoption with amendments the administrative rules for its assistance programs. This includes changes to the Grow NJ Assistance Program (the “Grow NJ Program”) that implement the recently enacted law creating incentive areas around colleges and universities; modifications to the submission dates for the Economic Redevelopment and Growth Program (the “ERG Program”); and revisions to the Angel Investor Tax Credit Program (the “Angel Investor Program”). Interested parties may submit written comments by January 19, 2018. The NJEDA is an independent State agency that finances small and mid-sized businesses, administers tax incentives to retain and grow jobs, revitalizes communities through redevelopment initiatives and supports entrepreneurial development by providing access to training and mentoring programs. We have previously written about some of the NJEDA’s programs, and the most important proposed changes to the NJEDA’s program rules are listed below. Grow NJ Grow NJ encourages economic development and job creation by offering tax credits to businesses looking to relocate to the State, or that are currently located in New Jersey but are in danger of...

Murphy Wins Governor’s Race, Democrats Pick Up Seats in the Legislature

On Tuesday, November 7th, New Jersey voters elected Democrat Phil Murphy as the next Governor of New Jersey. Mr. Murphy defeated the State’s Republican Lieutenant Governor, Kim Guadagno, by a margin of 56% to 42%. All 120 seats in the State Legislature were also on the ballot, and the Democrats retained their majority in both houses. Democrats will pick up one Senate seat and two Assembly seats, bringing their control to 25 seats in the Senate, and 54 seats in the Assembly. Lastly, voters approved two ballot questions related to borrowing for library improvements and the dedication of funds for environmental cleanups. Governor’s Race Phil Murphy was the favored candidate from the start of the general election, having outpolled Lieutenant Governor Guadagno by as much as 20 percent in some surveys. This campaign marked Governor-Elect Murphy’s first time running for public office. He is a former Goldman Sachs executive, and the former Finance Chair of the Democratic National Committee. Mr. Murphy also served as Ambassador to Germany during President Obama’s first term. The Murphy campaign focused on three main issues: growing the economy, economic fairness, and investing in New Jersey. Governor-Elect Murphy’s platform included raising new tax revenues through closing...

New Jersey Legislature Considers Corporate and Business Law Reforms

A series of bills that would reform the New Jersey Business Corporation Act (“NJBCA”) are slowly churning their way through the New Jersey State Legislature. The pending legislation is modeled upon provisions of the “Delaware Business Corporation Law” and the recommendations of the “New Jersey Corporate and Business Law Study Commission.” In sum, the proposed revisions would generally benefit corporate boards of directors and modernize provisions of the NJBCA. Inspections of Corporate Books and Records Assembly Bill 2975 (Pinkin)/Senate Bill 2238 (Diegnan) modifies the NJBCA to allow corporations to impose reasonable limitations or conditions on the use or distribution of requested corporate books and records. While the bill does not define such “limitations and conditions,” the legislative statement accompanying A-2975/S-2238 provides an example of conditioning the receipt of requested materials on the demanding shareholder agreeing to customary confidentiality obligations. The bill preserves the ultimate authority of a court to decide and order relief in actions brought by shareholders for inspection of materials. On January 23, 2017, A-2975 passed the General Assembly by a vote of 69-0. On June 19, 2017, S-2238 passed the Senate Commerce Committee by a vote of 4-0. This bill is now awaiting a vote in the full...

With the 2017 Primary Over, It’s Murphy versus Guadagno for Governor

On Tuesday, June 6, 2017, New Jersey voters went to the polls to select their party’s nominees for Governor and all 120 seats in the Legislature. After a 2016 election cycle full of surprises, New Jersey’s 2017 primary resulted in wins for the gubernatorial front-runners, Democrat Phil Murphy and Republican Kim Guadagno. Those legislative districts with contested primaries also resulted in no major upsets and saw the expected candidates emerge with victories. Governor’s Race Former Ambassador Phil Murphy won the Democratic primary with 48 percent of the vote (241,353). His next closest competitor, former U.S. Treasury official Jim Johnson, garnered 22 percent (109,260), followed by Assemblyman John Wisniewski who also received 22 percent (107,872). Senator Raymond Lesniak came in fourth with 5 percent (24,136). Lt. Governor Kim Guadagno won the Republican primary with 47 percent of the vote (113,404). Assemblyman Jack Ciattarelli tallied 31 percent (75,275). In both contests, turnout was low. About one-quarter of Democratic voters, and only 20 percent of Republicans, participated in the primary. With New Jersey and Virginia being only states to hold a gubernatorial election in 2017, national groups are expected to make these two elections a referendum on President Trump and his agenda. Legislative...

21st Century Cures Act Lands in Federal Budget Blueprint

President Trump’s proposed FY 2018 Budget (a/k/a the “skinny budget”) presented a departure from his predecessor’s proposed annual budgets – namely a $54 billion increase in defense and military spending paired with corresponding cuts to virtually every other federal department. But one area President Trump did not cut was the implementation of the 21st Century Cures Act (the “Cures Act”), which also happens to be one of the last bills signed into law by then-President Obama. The FY 2018 budget blueprint proposes to appropriate $1.1 billion towards the Cures Act’s implementation in the upcoming fiscal year. The Cures Act strives to expedite the discovery, development, and delivery of new treatments and cures. Those in the medical, biotechnology, and pharmaceutical industry should look to the Cures Act as the potential game-changer that the bipartisan sponsors of the law hoped it would be. Not only does the Cures Act provide the National Institute of Health with significant new funds to speed up research into diseases like cancer and Alzheimer’s, but it also attempts to speed up the process by which new treatments are reviewed and approved by the FDA. The Cures Act also focuses on changes to the treatment of mental health and...