So…you’ve read our first two columns and are pretty confident that you know who is covered within your organization for pay-to-play purposes. You may even be fairly confident that you understand how to track contribution limits taking relevant election cycles into account. You also may be thinking that you have other things to focus on and if somebody makes or approves a contribution that they should not have made or approved, you will simply request a refund, and all will be good. It’s not quite so simple…

Under New Jersey’s statewide pay-to-play laws, the period for requesting and receiving a refund ranges from 30 days to 60 days (30 days under Executive Branch pay-to-play restrictions and 60 days under the statewide pay-to-play law applicable to legislative, county, and municipal contracts). This limited window means that you need to track contributions in real-time so that if your company or a covered individual makes a contribution in excess of applicable pay-to-play limits, you are able to act quickly to request and receive your refund within the allotted time period. One additional fun fact is that under Executive Branch pay-to-play restrictions, there is essentially a black-out period when we get within 60 days of a gubernatorial primary or general election. This means that you need to be extra vigilant during these time periods because a refund will not cure a violation!

The ability to use refunds to cure a violation varies on the local level. Some local pay-to-play ordinances contain specified time-periods similar to those set forth under statewide law. Other local ordinances allow vendors to request and receive a refund within 30 days after the applicable ELEC report is published. So, your company could conceivably make a contribution in excess of applicable pay-to-play limits on January 1^st, discover the mistake on April 20^th (just after the relevant ELEC report is published) and still have time to request and receive a refund!

Compliance Tip: Although refunds are a useful mechanism for curing a violation of a pay-to-play law IF you request and receive the refund in a timely fashion, refunds should be a last resort – not your primary tool for adhering to pay-to-play limits. If your company holds government contracts or wishes to pursue government contracts in the future, track contributions in real-time and pay attention to refund provisions in case you ever need to use them!

Rebecca Moll Freed is Partner & Chair of Genova Burns, LLC’s Corporate Political Activity Law Practice Group.

This column is for educational and informational purposes only and is not intended and should not be construed as legal advice. It is recommended that readers not rely on this column, but that professional advice be sought for individual matters.