LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 1889
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: MARCH 7, 2022
SUMMARY
Synopsis: Prohibits government dealings with businesses associated with
Belarus or Russia.
Type of Impact: Indeterminate impact.
Agencies Affected: All State agencies, including independent authorities and institutions
of higher education; local government entities; boards of education;
county colleges.
Office of Legislative Services Estimate
Fiscal Impact Years 1-4
State and Local Impact Indeterminate
 The Office of Legislative Services (OLS) cannot determine the fiscal impact of this bill because
of a lack of information on the current contracts, investments, and banking relationships that
would be prohibited by the bill, or the alternatives that would be adopted if the bill’s
prohibitions take effect.
 The net fiscal impact of the bill may be positive, negative, or neutral depending on the behavior
of some contractors and private businesses, and on dynamic economic variables that cannot be
foreseen.
 The OLS anticipates that there may possibly be an indeterminate revenue increase from the
imposition of the penalties provided for in the bill.
 The bill imposes certain responsibilities on the Department of the Treasury that, the OLS
anticipates, could be absorbed within existing resources.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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BILL DESCRIPTION
This bill prohibits various government dealings with businesses associated with Belarus or
Russia.
Pursuant to the bill, a person that engages in investment activity with the government of Russia
or Belarus will be placed on a list by the Department of the Treasury and will not be permitted to:
contract with State agencies, file or renew a Public Works Contractor Registration, receive an
economic development subsidy from the Economic Development Authority, be awarded a
municipal property tax abatement, or make or enter into a payment in-lieu of property tax
agreement, apply for or receive a tax clearance certificate from the Division of Taxation, be
certified as an urban renewal entity for purposes of the "Long Term Tax Exemption Law," or be
designated as a redeveloper by a public agency for the purposes of the "Local Redevelopment and
Housing Law." A false certification could result in a civil penalty of $1,000,000 or twice the
amount of the bid or application.
The bill also prohibits the State from investing pension or annuity funds in a company owned
or controlled by the government of Russia or Belarus, and requires the divestment of any such
investments currently held within two years. Finally, the bill prohibits the State and its
subdivisions from: banking with, having or holding stock, debt, or other equity investments of, or
maintaining insurance coverage through a policy issued by a financial institution that has an equity
tie to the government of Russia or Belarus.
The bill expires four years after the effective date.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS cannot determine the fiscal impact of this bill because the OLS lacks information on
(1) how many and which companies would become ineligible to submit a bid or proposal or
otherwise enter into or renew a public contract in this State, and the types and contracting patterns
of the government entities in this State; and (2) what current investments may be required to be
divested and how those funds might alternatively be invested; or (3) what banking relationships
may need to change to comply with the bill.
The impact on future contracting costs may not be ascertainable due to unknown and dynamic
economic variables. Hypothetically, to the extent that this bill reduces the number of entities
eligible and competent to hold certain public contracts, the remaining eligible contractors may
increase their prices. However, the OLS has no information to indicate how likely such a situation
may be to present itself.
The bill’s impact on future investment returns may be positive, negative, or neutral depending
on the performance of assets that public entities would hold in the absence of the bill as compared
to those they would hold if prohibited from holding certain assets related to Russia or Belarus.
The OLS does not have information on the extent to which public resources are currently placed
in investments that the bill would require to be withdrawn. United States economic sanctions and
the current economic climate would likely prevent the State or its subdivisions from making any
substantial new investments in Russia or Belarus in the near future, even in the absence of this bill.
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Widespread economic sanctions against Russia and Belarus have caused substantial damage to
their economies, and likely led to a devaluation of many investments related to those countries. It
is unknown how the value of those assets may continue to change before the bill is enacted, or
during the following years during which the bill would be in effect.
The OLS anticipates that there may possibly be an indeterminate revenue increase from the
imposition of the penalties provided for in the bill.
The bill imposes certain responsibilities on the Department of the Treasury that, the OLS
anticipates, could be absorbed within existing resources.
Section: Revenue, Finance, and Appropriations
Analyst: David Drescher
Section Chief
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).