On Tuesday, February 7th, Governor Wolf presented his 2017 budget address to a joint session of the Pennsylvania General Assembly.   The Governor’s proposal includes a $1 Billion increase in the tax burden on Pennsylvania businesses and individuals. While the Governor stated that he was proposing no “broad-based tax increases,” his budget does raise revenues significantly while not addressing pension liability. We are currently analyzing the specifics of the Governor’s budget proposal and will provide more information in future posts. For now, however, here are some high level takeaways on the tax front:

Continue Reading Governor Wolf Calls for Major Business Tax Increases in 2017 Budget Proposal

For boroughs, townships, municipalities, and cities, eminent domain is a tool used to better the communities in which we live, whether than means widening an increasingly busy road or constructing a new community park.  While eminent domain is an important and powerful tool, condemnors must be sure that they follow the proper procedures, including notice to all property owners, both those of record and those who are not.

Continue Reading How Adverse Possession Can Affect The Eminent Domain Process

Who has not heard of the Bridgegate scandal?  The George Washington Bridge spanning the Hudson River between New Jersey and New York City is the busiest motor vehicle bridge in the world.  Two of three toll lanes for a street entrance from Fort Lee, NJ to the George Washington Bridge were closed for five days in September 2013.  This resulted in huge backups in Fort Lee.  As one of the individuals convicted in the incident emailed, “Time for some traffic problems in Fort Lee.”

Continue Reading Bond Issue Disclosure: When Politics and the Law Intersect

McNees attorney Steve Matzura recently covered for the McNees Energy and Environmental User Blog the proposal by the Susquehanna River Basin Commission (SRBC) of a new rule that would expand the scope of its current authority over projects that withdraw and use water in Pennsylvania, Maryland, and New York. Per Steve’s analysis:

The proposal would amend application requirements and SRBC’s review standards for projects, as well as add an entire subpart to its regulations for registration and reporting of “grandfathered” projects (which previously were not regulated).   Water users should expect additional regulation and scrutiny of all projects that involve withdrawals of surface water or groundwater and/or consumptive uses exceeding SRBC thresholds, whether they are new, existing, or (now) grandfathered projects.

Steve’s complete analysis of the new rule can be found here. In particular, the public comment period on SRBC’s proposal closes on January 30, 2017. We expect further developments on this issue of interest to municipalities thereafter.

Just a few short months after essentially re-writing the rules on management contracts for bond-financed property, the IRS is at it again. On January 17th the IRS gave advance notice of the publication of Revenue Procedure 2017-13. While Rev. Proc. 2017-13 won’t officially be published until February 6th, the IRS has made a copy of the new guidance available immediately for review.

Continue Reading IRS Announces Additional Guidance on Management Contracts for Bond-Financed Facilities

You won your lawsuit, and now you want to be paid.  But how do you get an unwilling defendant to cough up the cash?  You have several options.  Part I of this series discussed collecting a money judgment through the garnishment process.  This article explains a second option:  conducting a sheriff’s sale of the defendant’s real or personal property in order to be made whole.

Continue Reading I Have a Judgment, Now What?: Collecting and Enforcing a Money Judgment Through a Sheriff’s Sale

Following its announcement in August that it had entered into settlements with over seventy municipal issuers in connection with the Municipalities Continuing Disclosure Cooperation (MCDC) initiative, there was speculation as to whether additional settlements would be announced, or if this first round of settlements represented all of the enforcement actions against municipal issuers that would come from MCDC.

It now appears that the SEC has elected to formally close the book on the MCDC Initiative. LeeAnn Gaunt, the chief of the SEC enforcement division’s public finance abuse unit, recently indicated that the SEC would not bring any additional settlements under MCDC. However, Gaunt also issued a warning: the SEC had begun looking at those underwriters and issuers that chose not to participate in the initiative despite committing violations.

From The Bond Buyer:

“We currently do not expect to recommend enforcement action against any additional parties under the initiative,” [Gaunt] said. “We now think it is appropriate to turn our attention to issuers and underwriters and obligors that didn’t participate.”

The unit’s enforcement lawyers view the underwriters and issuers who may have committed violations but did not self-report as part of MCDC as a high risk for future violations, Gaunt said, adding, “That is a group of particular interest to us and we intend to devote significant resources to identifying violations by those parties.”

Which underwriters and issuers could the SEC go after next? Obvious low-hanging fruit would be those underwriters and issuers that chose not to participate despite their counterpart doing so.

There is also the question of how aggressive the SEC will be in going after individual government officials that participated in violations. After prevailing in a securities fraud case against the City of Miami and its budget director, the SEC saw its request for a fine of $450,000 reduced to only $15,000 by the Judge presiding in the case. While actions against individuals will likely continue, the Judge’s decision on the fine to be imposed may be of sufficient chastening effect for the SEC to reserve enforcement actions against individuals for only particularly egregious behavior.

In this podcast, McNees Public Finance attorney Tim Horstmann discusses the recent announcement by the Internal Revenue Service of a major change in its treatment of management contracts entered into by governmental entities and nonprofit associations exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code.

View the podcast here.

Prefer text? You can read an article that Mr. Horstmann authored for The Legal Intelligencer about this development here.

As a plaintiff, you often roam a long and weary road before you achieve your ultimate litigation goal: a judgment against a defendant. Now that you have your prize, what do you do with it? With any luck, the defendant recognizes the error of his or her ways and willingly pays you the full amount that the court has awarded you. Many times, however, the opposing party is not willing to voluntarily pay up. Now what?

Pennsylvania law provides various means to assist a plaintiff in collecting and enforcing a money judgment. One common way of obtaining money from a recalcitrant judgment debtor is through a garnishment action. Garnishment is essentially the process of retrieving a judgment debtor’s assets from a third party. Often times, as many of our financial institution clients know all too well, this means requiring the defendant’s bank to put a hold on their account and for the financial institution to subsequently turn over all non-exempt funds to the plaintiff. This is usually a quick, easy, and fairly inexpensive way to collect on a judgment.

While garnishments are primarily something that financial institutions must deal with, many other clients may be subject to such actions as well. The garnishment rules clearly apply to any party holding an asset for the benefit of a judgment debtor. Such assets are not always bank account funds, but rather could also include collateral such as cars, trucks, heavy equipment, or other tangible assets. For example, we recently assisted a client with a garnishment action where the plaintiff sought to obtain gambling winnings which the client held for a defendant.

If you are not a banking institution, it is unlikely that you have had to navigate the garnishment process. An understanding of that process, however, could prevent major headaches and consequences down the road.

A properly garnished account entails several steps, some mandatory, others optional. First, a writ of execution in garnishment must be filed with the court and served by a sheriff on the party holding the defendant’s assets. Once the writ is received, the garnishee must be very careful to prevent the dissipation of the assets listed in the writ. At this point, we would advise seeking advice from counsel about how to proceed. Many times, the proper response is to turn over the named assets to the plaintiff. That is not always the case, however, as certain types of assets are exempt from execution.

In addition to the writ of execution in a garnishment, you may also receive garnishment interrogatories. Although not mandatory, garnishment interrogatories more often than not accompany the writ of execution. A strong word of caution here: garnishment interrogatories are in essence the start of a complaint, just as if you were being sued in court by the plaintiff. If the interrogatories are not answered within a certain time-frame, the plaintiff is permitted to enter a judgment against you, as the garnishee, for the same amount that the judgment debtor owes the plaintiff. Having an appreciation and understanding of what to do when you are served with these type of documents is essential to preventing the judgment debtor’s woes becoming your own.

Dana W. Chilson is the chair of McNees Wallace & Nurick LLC’s Insurance Group, as well as a member of the Public Sector, Litigation, Financial Services, and Injunction groups. She can be reached at 717-237-5457 or dchilson@mcneeslaw.com

A recent decision by the Pennsylvania Public Utility Commission (“PUC” or “Commission”) confirms that Pennsylvania public utilities with combined sewer systems (i.e., systems that collect both sewage and stormwater) may incorporate stormwater charges in their service charges.  While some public utilities have already been incorporating stormwater collection charges in their sewage rates, not all utilities have carried forth this practice.  As a result, this decision could increase sewage rates for some large commercial and industrial customers experiencing significant stormwater flows.

On March 30, 2016, the Pennsylvania American Water Company (“PAWC”) and the Sewer Authority of the City of Scranton (“SSA”) filed an Application with the PUC to permit PAWC to purchase the SSA’s combined sewer system.  As indicated above, combined sewer systems collect sewage and stormwater, so the PUC’s disposition of this Application would clarify the ability of a Pennsylvania public utility to include stormwater charges in its wastewater service rates.  Although Administrative Law Judges David A. Salapa and Steven K. Haas recommended that the PUC reject the proposed Application, the PUC approved it on October 19, 2016.

As a result of the PUC’s approval, statutory enabling legislation was required.  Senate Bill No. 881 was revived and amended to make necessary changes to the Public Utility Code.  Specifically, the Bill amends the Public Utility Code to change the reference of “sewer” to “wastewater,” and expanded the definition of wastewater to include certain “stormwater.”  This bill passed both chambers [October 26 (Senate) and October 27 (House)] and was signed by Governor Wolf.

The Bill provides as follows:

Wastewater.  Any used water and water-carried solids collected or conveyed by a sewer, including:

(1)  Sewage, as defined in Section 2 of the act of January 24, 1966 (1965 P.L. 1535, No. 537), known as the Pennsylvania Sewage Facilities Act.

(2)  Industrial waste originating from an establishment.  For the purposes of this paragraph, the terms “industrial waste” and “establishment” shall be as defined in Section 1 of the Act of June 22, 1937 (P.L. 1987, No. 394), known as the Clean Streams Law.

(3)   Infiltration or inflow into sewers.

(4)   Other water containing solids or pollutants.

(5)  Storm water which is or will become mixed with waters described under paragraph (1), (2), (3) or (4) within a combined sewer system.

The term does not include storm water collected in a Municipal Separate Storm Sewer, as that term is defined by 40 CFR 122.26(b)(8) (Relating to storm water discharges (applicable to state NPDES programs, see § 123.25)), that does not flow into a combined sewer system.

This legislation, now codified as PA Act 154, allows Pennsylvania utilities providing wastewater service to include, in certain cases (i.e., combined sewer systems), stormwater charges into rates.  While some Pennsylvania municipal wastewater service providers (e.g., Philadelphia Water Department) have been including stormwater charges in wastewater rates for some time, it will be much more commonplace with PUC-regulated service providers with this new legislation.

McNees Energy and Environmental attorney Aly Hylander assisted in the writing of this article.