The ability of school districts to raise additional revenue through means other than tax increases just got a bit more difficult. In an eagerly awaited decision, the Pennsylvania Supreme Court has upheld the ability of taxpayers to challenge on constitutional grounds the practice in certain school districts of engaging in selective assessment appeals – that is, appealing the assessments of only certain classes of properties (commercial properties), while not appealing the assessments of other (residential) properties.

McNees’ Paul Morcom, of the State and Local Tax Practice Group, has the details on this important decision, at the McNees PA Tax Blog, Adding Value.

Pennsylvania State Senators John Blake, John DiSanto, and Mike Folmer recently introduced a trio of new municipal debt reform bills that follow on the package of reform bills introduced in the Senate in March. The new bills – Senate Bill 694, Senate Bill 695, and Senate Bill 696 – would expand the power of the Office of Attorney General to prosecute political crimes at the municipal level, increase the statute of limitations for such crimes, and require third class cities to put out for competitive bid all contracts for professional services.

Continue Reading Pennsylvania Senators Introduce New Municipal Debt Reform Bills

On June 7, 2017, new IRS regulations that change the way state and local governments issue tax-exempt bonds went into effect. The new rules change the way municipal issuers determine the issue price of tax-exempt bonds they issue, and amend existing IRS regulations under section 148 of the Internal Revenue Code. The new rules have produced immediate changes to many common documents used by municipal issuers and their advisors in municipal bond transactions.

Continue Reading New IRS Regulations Change the Game for Municipal Bond Issuers

On May 17, 2017, the Pennsylvania Environmental Quality Board (“EQB”) greenlighted a proposal that would substantially increase fees for public water suppliers regulated by the Department of Environmental Protection (“PADEP”).  In addition to seeking the fee hike, the proposal would amend other regulations under the Pennsylvania Safe Drinking Water Act (“SDWA”), with some changes being even more stringent than federal standards.  The proposal now will be published in the Pennsylvania Bulletin followed by a public comment period of at least 30 days.

Stakeholders should carefully review the proposal and consider submitting comments, including all community water systems, noncommunity water systems, and bottled, vended, retail, and bulk water suppliers.  Those affected may include municipalities with water supply systems and businesses that supply water to the public or their own employees.

Continue Reading Public Water Suppliers Face Proposed Fee Increase and More-Stringent Standards

Following his inauguration on January 20th, President Trump issued several Executive Orders, one of which was issued on January 25, 2017 and titled, “Enhancing Public Safety in the Interior of the United States” (referred to herein as the “Order”). Among other things, this Order punishes so-called “sanctuary jurisdictions” by stripping them of federal grants. As justification for this punitive measure, the Order states that “sanctuary jurisdictions … willfully violate Federal law in an attempt to shield aliens from removal…. These jurisdictions have caused immeasurable harm to the American people and to the very fabric of our Republic.”

In the months since the Order, many state and local entities have parsed the Order to determine whether they would be considered a “sanctuary jurisdiction,” what funding may be in jeopardy, and whether they can modify their policies to limit or eliminate application of the Order. In the midst of these uncertainties, many municipalities also have been faced with the issue of how to address the potential consequences of “sanctuary jurisdiction” status in their public offering documents when they are considering issuing municipal bonds for sale to the investor public.

Continue Reading Sanctuary Jurisdictions and Municipal Bond Disclosure

The National Association of Bond Lawyers (NABL) and the Securities Industry and Financial Markets Association (SIFMA) recently released model issue price documents in connection with the soon-to-be effective Treasury Regulations on establishing the issue price of a tax-exempt bond issue. NABL’s model documents can be accessed here; SIFMA’s documents can be accessed here.

These model documents have been issued in response to the finalized Treasury Regulations on issue price, published by the Department of the Treasury on December 9, 2016.  The final regulations – which become effective on June 7, 2017 – retain the existing rule that in general, the issue price of a series of bonds is the first price at which a substantial amount (10%) of the bonds is sold to the public. The regulations add two special rules, however, which may be selected by the issuer in connection with the determination of the issue price: a special rule for competitive sales, and a special rule where the underwriter or underwriters agree to “hold the price” on the initial sale of the bonds to a price that is not higher than the initial offering price.

The model documents published by SIFMA and NABL provide a uniform solution for underwriters and issuers to ensure compliance with the final regulations, in particular in determining which of the three rules for determining issue price apply, and ensuring that the requirements for application of the rule are met. It is expected that both SIFMA and NABL will finalize these forms in the coming weeks after receipt of any comments from the public. Professionals working in the public finance industry should carefully review the forms now to get familiar with their requirements in advance of the effective date for the final regulations.

 

 

 

In City of Allentown, the Pennsylvania Supreme Court ordered the City to implement an interest arbitration award which contained (among modifications to wages, sick leave, vacation, pension and overtime) a minimum staffing requirement of 25 firefighters per shift.

Continue Reading Another Attempt to Control Rising Pension Costs in Pennsylvania Thwarted

Litigation can often be long and tiresome. Unfortunately, a successful verdict does not always lead to the desired outcome – the defendant paying up. Previous parts of this series addressed other aspects of collecting and enforcing judgments. Part I of this series discussed collecting a money judgment through the garnishment process. Part II explained a second option, conducting a sheriff’s sale of the defendant’s real or personal property. In the second part of this series, the article assumed that no liens existed against the defendant’s property.

For the third installment in the series, however, we will look at the effect that previous liens against the defendant have on one’s ability to collect on a judgment.

The entry of a judgment by a court acts as a lien on all real property in that county. The judgment essentially acts as an underlying security for the debt owed by the defendant. When a defendant sells his or her real property, the defendant is obligated to first satisfy any liens on the real property, or the new owner cannot take a clean title.

So, how does a judgment creditor know where they stand in relation to other judgments and liens?

State statute dictates the priority in which liens must be paid, and defendants pay liens with the highest priority first. Filed state tax liens have priority over all other liens. Mortgage liens have second priority, and include, but are not limited to, standard mortgages, open-end mortgages, and defeasible deeds in the nature of mortgages. Next in line are verdicts for a specific sum of money. Other adverse judgments from a court have fourth lien priority, followed by amicable judgments, and then writs issued by the court of common pleas. Last are other instruments that, when filed and indexed with the prothonotary of the court of common pleas, create liens against real property.

Lien priority does not last forever, and in many instances priority will be lost if a plaintiff does not take the necessary steps to revive the judgment lien within five years after its entry. Note, tax liens and mortgage liens are distinct from judgment liens because they are not the result of a court judgment. Therefore, plaintiffs do not need to revive tax liens and mortgage liens in order to maintain priority.

Judgment revival occurs in two ways. The first way is through an agreement to revive, which requires the defendant’s signature. If the defendant refuses to sign the agreement to revive or cannot be found, then the plaintiff must pursue the second option and file a praecipe for writ of revival. Defendants have a limited number of defenses against the writ of revival and therefore courts are likely to issue the revival writ upon the filing of the praecipe.

Understanding lien priority is important to ensuring that you are in the best position to receive your long over-due payment. The litigation group at McNees Wallace & Nurick can aid clients in understanding lien priority and avoiding any associated pitfalls.

The author extends special thanks to Erica Koser for her assistance with this article.

In January 2015, the Seventh Circuit, recognizing that it was an outlier among the Circuits in holding that pretrial detainees could not sue under the Fourth Amendment but rather instead sued under the Due Process Clause to challenge his/her detention, stated that a request by a detainee to overturn settled Circuit precedent was “better left for the Supreme Court.” In the Supreme Court’s words, it granted cert “on cue,” and on March 16, 2017, overturned the Seventh Circuit’s precedent by holding that pretrial detainees retained the right to sue under the Fourth Amendment over their detention for unlawful search and seizure. The Court held that the Fourth Amendment governs a claim for unlawful pretrial detention even beyond the start of legal process.

Continue Reading Supreme Court Reins in the Seventh Circuit and Reaffirms Fourth Amendment Protections