Requires Division of Taxation conduct audits of out-of State contractors that have entered into State and private contracts.

A2079

ASSEMBLY, No. 2079

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman LINDA S. CARTER

District 22 (Somerset and Union)

Assemblyman ANTHONY S. VERRELLI

District 15 (Hunterdon and Mercer)

SYNOPSIS

���� Requires Division of Taxation conduct audits of
out-of State contractors that have entered into State and private contracts.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
concerning audits of certain State contractors and
supplementing chapter 18A of Title 52 of the Revised Statutes.

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

���� 1.��� a.� The Division of
Taxation shall be responsible for conducting audits of out-of-State contractors
that have entered into a State contract with a contracting agency or a private
contract.� The audits shall include:

���� (1)�� a determination that
administrative expenses related to the State or private contract have been
properly allocated and are reasonable;

���� (2)�� a review of the internal
financial controls related to the State or private contract; and

���� (3)�� a review of the annual
financial report of the out-of-State contractor.

���� b.��� The division shall
submit the results of an audit of an out-of-State contractor to the contracting
agency that awarded the State contract.

���� c.���� The division shall
submit an annual audit report of all audits performed to the Governor, and the
Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).

���� d.���
The
division shall establish a toll-free information telephone hotline number
through which persons may confidentially report suspected incidents of
wrongdoing or other possible issues in connection with out-of-State
contractors.

���� e.���� As used in this
section:

���� �Contracting agency� means the
State or any board, commission, committee, authority or agency of the State
which possesses the legal authority to award and make contracts.

���� �Out-of-State contractor�
means a contractor or subcontractor that provides goods or services to a State
agency and whose principal place of business is located outside of this State.

���� �State contract� means any
purchase, contract or agreement the cost or contract price of which is to be
paid, in whole or in part, with or out of State or contracting agency funds.

���� 2.��� This act shall take
effect immediately.

STATEMENT

���� To ensure that out-of-State
contractors are capable of handling the State or private contract they were
awarded, the State should perform audits of those contractors.

���� This bill requires the
Division of Taxation to conduct audits of out-of-State contractors.� The audits
would be related to the State or private contract awarded to the contractors
and would include: (1) a determination that administrative expenses have been
properly allocated and are reasonable; (2) a review of the internal financial
controls; and (3) a review of the annual financial report of the out-of-State
contractor.� The division would also establish a toll-free hotline number
through which persons may confidentially report suspected incidents of
wrongdoing or other possible issues in connection with out-of-State
contractors.

���� The division would submit the
results of an audit of an out-of-State contractor to the contracting agency
that awarded the State contract.� The division would also submit an annual
audit report to the Governor and the Legislature.