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Bill

A 429

Authorizes provision of monetary awards to whistleblowers who report State tax law violations committed by employers in construction industry.

2026-2027 Regular Session Introduced by Rosy Bagolie and 18 co-sponsors

Creates a whistleblower reward program paying 15–30% (or up to 10% from certain sources) of recovered tax proceeds to insiders reporting construction industry tax violations.

Introduced, Referred to Assembly State and Local Government Committee
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Bill Summary · A 429

Summary of Bill A-429 (NJ, 222nd Legislature)

Purpose and Intent

  • This bill creates a whistleblower incentive program within New Jersey’s tax administration system.
  • Specifically, it authorizes monetary rewards for individuals who provide information leading to administrative or judicial actions against employers in the construction industry for state tax law violations.
  • The goal is to encourage reporting of tax violations by construction employers and to recover state tax proceeds (taxes, fees, penalties, interest).

Key Provisions

Who is Eligible

  • An “employee” who works for an employer in the construction industry and discloses information to the Director of the Division of Taxation about a tax violation by that employer.
  • An “employer in the construction industry” includes entities engaged in erection, construction, alteration, demolition, repair, or maintenance of a broad range of structures and facilities.

Awards for Whistleblowers

  • Awards are paid from the proceeds collected as a result of the action (taxes, fees, penalties, and interest under state tax law).
  • Award ranges:
    • At least 15% but up to 30% of the proceeds, if the action is based on specific and credible information provided by the whistleblower.
    • Up to 10% of the proceeds if the action is based principally on a disclosure arising from hearings, government reports, audits, investigations, or the news media.
  • The director determines the exact amount, based on how much the whistleblower’s information contributed to the outcome.
  • The director may reduce the award if the whistleblower planned or initiated the violation.
  • If the whistleblower is criminally convicted for conduct arising from their role in the violation, the director must not grant an award, and if conviction occurs after an award is granted, the state may recapture the full award.
  • Ineligible for an award:
    • Individuals who obtained information through their official duties as a Treasury Department employee.
    • Individuals who filed a claim based on information obtained from an ineligible person for the purpose of avoiding a claim rejection.

Protections and Administration

  • An employee receiving an award is protected from retaliation under the Conscientious Employee Protection Act (CEPA).
  • The Director of the Division of Taxation will issue rules and regulations necessary to implement these provisions.

Related Terms and Definitions

  • “Administrative or judicial action” covers actions against a taxpayer for violations under:
    • Corporation Business Tax Act
    • New Jersey Gross Income Tax Act
    • State Uniform Tax Procedure Law
  • “Proceeds” include taxes, fees, penalties, and interest collected under the relevant tax laws.

Administrative/Timeline Provisions

  • Any complaint regarding an award (award provided, reduced, or revoked) must be filed within 30 days after the date of the award decision, reduction, or revocation.
  • The bill’s effective date is 90 days after enactment.

Related Legislative Changes

  • The act also amends R.S.54:51A-14 to adjust complaint timing related to awards and clarifies filing deadlines.

Potential Impact

  • Increased enforcement leverage: Employers in the construction industry may face greater scrutiny due to the availability of whistleblower rewards.
  • Financial recoveries: The state could recoup more tax revenue through successful actions informed by insiders.
  • Protections: CEPA protections for whistleblowers may enhance job security and reduce fear of retaliation.
  • Compliance incentives: Firms in the construction sector may improve tax compliance to avoid investigations and potential penalties.
  • Administrative burden: The Department of Treasury will need to establish procedures, rules, and oversight for determining awards and handling claims.

Practical Considerations

  • Budgetary: Funding for awards would come from collected tax proceeds; the extent depends on enforcement outcomes.
  • Oversight: Clear rules are essential to prevent abuse, including safeguards on eligibility and award calculations.
  • Stakeholders: Construction industry employers, tax enforcement officials, potential whistleblowers, and labor groups may have varying views on effectiveness and fairness.

This summary highlights the bill’s core purpose, mechanisms for awarding whistleblowers, eligibility rules, and timeline requirements, along with its anticipated effects on enforcement and tax collection in New Jersey.

Compiled from official sources — confirm details with the bill’s official record.

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