New Law Targets AI, Deepfakes for the Purpose of Harassment or Extortion – NJ State Policy Updates

Public Administration

Bill Criminalizing Deepfakes Becomes Law – On April 2^nd, Governor Phil Murphy signed Bill A3540 (P.L.2025, c.40.) into law, criminalizing the creation or distribution of AI-generated media, commonly referred to as deepfakes, for unlawful purposes such as harassment or extortion. The law establishes penalties of up to five years in prison or $30,000 in fines. The law’s passage follows a recent growing trend of states passing laws to regulate deceptive AI content, particularly in relation to online harassment and election-related misinformation.

Governor Signs Bill Increasing Penalties for Shoplifting and Retail Theft – On April 1^st, Governor Phil Murphy signed Bill S3587 (P.L.2025, c.39.) into law, upgrading penalties for certain retail thefts, including shoplifting, and increasing sentencing for repeat offenders, among other provisions. State officials and business groups, including the New Jersey Business and Industry Association (NJBIA) and the New Jersey Retail Merchants Association, supported the measure. They argued that the law would deter organized retail theft and increase protections for retail workers.

Education

New Jersey Schools at Risk of Losing Federal Funding Over DEI Initiatives – On April 3^rd, the Trump administration warned states that federal education funding could be revoked if all schools do not eliminate diversity, equity, and inclusion (DEI) initiatives. The U.S. Department of Education directed states to certify within 10 days that districts are not operating programs that “advantage one’s race over another.” New Jersey receives over $1 billion in annual federal education aid for its nearly 600 school districts. Governor Murphy’s office and state Department of Education officials are assessing the next steps. At the same time, Attorney General Matt Platkin has defended DEI programs and pledged to challenge any effort to withhold the funding.

Supreme Court Allows Freezing of Teacher Grant Programs Amid Legal Fight – On April 4^th, the U.S. Supreme Court ruled 5-4 to permit the Trump administration to freeze millions of dollars in federal teacher training grants that support “divisive ideologies,” such as diversity, equity, and inclusion (DEI) initiatives, while a legal challenge surrounding the move continues. If states ultimately win the case, they can still recover withheld funds from the federal government through further litigation. Attorney General Matt Platkin and attorney generals of seven other states initially filed the lawsuit in March 2025, arguing the federal administration overstepped its executive authority by targeting congressionally approved funds.

Economics

President Trump’s Tariffs Take Effect, Threaten to Raise New Jersey Prices – Starting on April 3^rd, a 25% tariff on all imported vehicles took effect, threatening to raise car prices across the state and nationwide. Imported cars accounted for roughly half of the vehicles sold in the US in 2024. Beginning in May 2025, the 25% tariff is also planned to apply to vehicle parts.

On April 4^th, President Trump announced additional tariffs on all imported goods from most countries. Business organizations and leaders, including the New Jersey Business & Industry Association (NJBIA), argued that tariffs are likely to increase costs for most consumer goods and negatively impact businesses. President Trump contended the tariffs would raise $600 billion in annual revenue and incentivize domestic production. In 2024, New Jersey was the 6^th highest importer of all states, importing $164 billion worth of goods.