Category: Administrative & Regulatory

Detecting FMLA (Family and Medical Leave Act) Abuse

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Dealing with employees who abuse FMLA can be difficult. Letting abuse run rampant, however, can impact business productivity and put a damper on company morale (as present employees often have to pick up the slack of someone on leave). Employers who detect abuse must proceed with caution because it is very easy to run afoul of regulations.

Under the FMLA, it is unlawful for any employer to interfere with, restrain, or deny the exercise of any right provided by the Act. Further, employers cannot use the taking of FMLA leave as a negative factor in employment actions, such as hiring, promotions, or disciplinary actions. Violating these provisions can lead to employee lawsuits for interference or retaliation. Having said that, an employer is not helpless in thwarting employees’ ill-intentioned leaves.

If there is suspected abuse, it should be documented in detail. Who reported it? Is the source credible? Is there evidence (i.e., photographs)? Employers should refrain from overzealously playing detective or prompting other employees to snoop on a coworker – doing so may violate privacy laws. However, if there is a reasonable belief or honest suspicion that abuse is occurring, an employer may begin a confidential investigation, perhaps with the aid of private investigator. Surveillance of an employee should only be used in the most egregious situations and should always be conducted by a professional. Be sure to allow the employee the chance to refute the allegation and present his or her side of the story before taking any adverse action against him or her.

FMLA leave is a right for covered employees, but it does not act as a shield for misconduct nor does it prohibit termination of an employee who abuses the terms of an FMLA leave. You can terminate an employee on FMLA leave, but caution must be used. If you are an employer and detect abuse, it is highly recommended you contact an employment attorney about how to proceed so as to avoid costly lawsuits alleging interference or retaliation.

Article By:

Benjamin L. Riddle
Of: 
McBrayer, McGinnis, Leslie and Kirkland, PLLC

Centers for Medicare and Medicaid Services (CMS) Issues Data Listing Medicare Payments To Individual Physicians

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As it had promised to do, the Medicare program issued data listing the amounts paid to individual physicians for services rendered by those physicians to Medicare beneficiaries for calendar year 2012.  CMS indicated that the data was issued “in order to make our healthcare system more transparent, affordable, and accountable.”  The Wall Street Journal has created a tool which allows users to search the CMS data set by name, specialty and location.  The Medicare announcement and data set link can be found here: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trend….

Article By:

Beth Christian
Of:
Giordano, Halleran & Ciesla, P.C.

EB-5 Visas: A Source of Funding for US Businesses But Not Without Risk

Poyner Spruill

China’s wealthy investors are known for seeking secure havens for their money overseas.  In addition to being considered a secure environment for their money, the US offers the EB-5 program providing the investor and his or her immediate family with permanent US residence, known as getting “green cards” in return for making an investment.

Basically, in return for an investment of either $500,000 or $1,000,000, which can be shown to the satisfaction of the US Citizenship and Immigration Services to create 10 US jobs per investment over a two year period, the investor and his family get green cards.  Since it started in 1990, the EB-5 visa program has brought approximately $6.7 billion to the US and has created 95,000 jobs.  In fact, the EB-5 visa program was not very popular until the 2008 financial crisis when traditional sources of financing became more difficult to obtain.  Since then, numerous businesses have attempted to use the EB-5 program to raise money.  For example, Vermont’s Trapp Family Lodge of “Sound of Music” fame advertises that it seeks EB-5 investors to open a beer hall and renovate its existing resort facilities.

There are two distinct EB-5 routes — the Basic Program and the Regional Center Pilot Program. Both programs require that the immigrant make a capital investment of either $500,000 or $1,000,000 (depending on whether the investment is in a Targeted Employment Area [TEA]) in a new commercial enterprise located within the United States.  A TEA is defined by law as “a rural area or an area that has experienced high unemployment of at least 150% of the national average.”  The new commercial enterprise must create or preserve 10 full-time jobs for qualifying US workers within two years (or under certain circumstances, within a reasonable time after the two year period) of the immigrant investor’s admission to the US as a Conditional Permanent Resident.

Entrepreneurs across the nation have set up regional centers for foreign investment to market local EB-5 projects to investors.  There are over 230 such regional centers, some of which are state-run  like Vermont’s Jay Peak. The flexibility offered by a regional center is attractive to both the investor and developer since the investor does not have to play a role in the company. With a direct EB-5 investment, the investor must have some sort of “managerial” function.  Seeing a lucrative opportunity when connecting an investor with regional centers, an industry has sprung up, particularly in China, to connect US businesses with potential investors. These go-betweens charge the regional center as much as $175,000 per investor for making the introduction.

Some projects have not produced the requisite number of jobs that would prompt US immigration authorities to withhold green cards – resulting in exposure to lawsuits from the investor against the developer or regional center that has solicited the investment.  Approximately 31 investors, 15 from China, filed a federal lawsuit alleging the only thing they had to show for a $15.5 million investment was an undeveloped plot of land across the Mississippi River from New Orleans.  In San Bruno, California, three Chinese investors alleged in a lawsuit filed last year that they lost $3 million when an EB-5 developer disappeared with his associates concocted a story about his death.

In contrast, the Marriot and Hilton hotel chains have successfully solicited and obtained EB-5 investment funds to build new hotels; Sony Pictures Entertainment and Warner Brothers have used the EB-5 program to raise funds for film projects; and the new home of the NBA’s Brooklyn Nets, Barclay Center, was funded through EB-5 investment.

Even if successful, EB-5 visa approval has become much slower due to suspicion of fraud and developers’ inaccurate estimate of creating 10 jobs per investor.  With the economic downturn, the USCIS has hired economists and securities lawyers to review EB-5 applications. Now showing it that it means business, the Securities Exchange Commission has filed its first lawsuit against an EB-5 project alleging that the promoters of a Chicago hotel and convention center project fraudulently sold more than $145 million in securities and collected $11 million in administrative fees from over 250 Chinese investors.

The Canadian government has decided recently to halt its immigrant investor program due to the number of Chinese applications.  This has left Chinese investors potentially turning their attention to the US equivalent as they seek a financially and politically stable haven for themselves and their families.

Article By:

Jennifer G. Parser
Of:
Poyner Spruill LLP

McSweeny Confirmed to Fill Vacancy at Federal Trade Commissions (FTC)

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The Federal Trade Commissions will soon be back to having a full complement of five commissioners.  Today, the U.S. Senate, by a vote of 95 to 1, confirmed Terrell McSweeny to fill a vacancy at the agency created by the departure of Jon D. Leibowitz more than a year ago.  Her term runs through September 26, 2017.

The White House announced the nomination of McSweeny in June 2013.  Although her nomination was not controversial, her confirmation was delayed because the Senate failed to take a vote before year’s end.

McSweeny is currently Chief Counsel for Competition Policy and Intergovernmental Relations at the Department of Justice Antitrust Division.  She has been at the Antitrust Division since 2012.  Prior to that, she served as Deputy Assistant to the President and Domestic Policy Advisor to the Vice President at the White House.  McSweeny received an A.B. from Harvard University and a J.D. from Georgetown University Law School.

McSweeny’s arrival at the FTC will provide the agency with a Democratic majority that should avoid two-to-two deadlocks and enable Chairwoman Edith Ramirez to pursue her agenda.

The FTC recently described itself as “collegial, bipartisan, and consensus-driven.”  However, there has certainly been some disagreement among the four current commissioners.

During questioning by the Commerce Committee last year, McSweeny discussed the need for offering guidance to business.  Noting that the FTC was primarily a law enforcement agency dealing with issues on a case-by-case basis, she said that it was incumbent on agency leaders to clearly articulate their reasoning, to apply the law as written, and to follow the case law.  She committed to doing just that if confirmed.

Article By:
Bruce A. Colbath

Of:
Sheppard, Mullin, Richter & Hampton LLP

Department of State Releases May 2014 Visa Bulletin

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Bulletin shows minor forward movement in the EB-2 China category and the EB-3 India category, with no movement in the EB-2 India category or the EB-3 China category.

The U.S. Department of State (DOS) has released its May 2014 Visa Bulletin. The Visa Bulletin sets out per-country priority date cutoffs that regulate the flow of adjustment of status (AOS) and consular immigrant visa applications. Foreign nationals may file applications to adjust their statuses to that of permanent residents or to obtain approval of immigrant visas at a U.S. embassy or consulate abroad, provided that their priority dates are prior to the respective cutoff dates specified by the DOS.

What Does the May 2014 Visa Bulletin Say?

The May Visa Bulletin indicates minor forward movement of the cutoff date in the EB-2 China category and no movement in the EB-3 China category. The May Visa Bulletin also indicates minor forward movement of the cutoff date in the EB-3 India category and no movement in the EB-2 India category.

A cutoff date of April 15, 2012 will remain in effect for individuals in the F2A category chargeable to Mexico, while a cutoff date of September 8, 2013 will remain in effect for individuals in the F2A category chargeable to all other countries.

EB-1: All EB-1 categories will remain current.

EB-2: The cutoff date of November 15, 2004 for individuals in the EB-2 category chargeable to India will remain unchanged from the April Visa Bulletin. The cutoff date for individuals in the EB-2 category chargeable to China will advance by 38 days to April 15, 2009. The EB-2 category for all other countries will remain current.

EB-3: The cutoff date for individuals in the EB-3 category chargeable to India will advance by 16 days to October 1, 2013. The cutoff date for individuals in the EB-3 category chargeable to China will remain unchanged at October 1, 2012. The cutoff date for individuals in the EB-3 category chargeable to the Philippines will advance by 139 days to November 1, 2007. The cutoff date for individuals chargeable to Mexico and the Rest of the World will remain unchanged at October 1, 2012. We note that the EB-3 China category remains ahead of the EB-2 China category.

The relevant priority date cutoffs for foreign nationals in the EB-3 category are as follows:

China: October 1, 2012 (no movement)
India: October 1, 2003 (forward movement of 16 days)
Mexico: October 1, 2012 (no movement)
Philippines: November 1, 2007 (forward movement of 139 days)
Rest of the World: October 1, 2012 (no movement)

Developments Affecting the EB-2 Employment-Based Category

Mexico, the Philippines, and the Rest of the World

The EB-2 category for individuals chargeable to all countries other than China and India has been current since November 2012. The May Visa Bulletin indicates no change to these categories. This means that individuals in the EB-2 category chargeable to all countries other than China and India may continue to file AOS applications or have applications approved through May 2014.

China

The April Visa Bulletin indicated a cutoff date of March 8, 2009 for EB-2 individuals chargeable to China. The May Visa Bulletin indicates a cutoff date of April 15, 2009, reflecting forward movement of 38 days. This means that individuals in the EB-2 category chargeable to China with a priority date prior to April 15, 2009 may file AOS applications or have applications approved in May 2014.

India

In December 2013, the cutoff date for EB-2 individuals chargeable to India retrogressed by 3.5 years to November 15, 2004 due to unprecedented demand for EB-2 visa numbers from applicants in this category. This cutoff date has since remained constant, and the May Visa Bulletin again indicates no change. This means that only individuals in the EB-2 category chargeable to India with a priority date prior to November 15, 2004 may file AOS applications or have applications approved in May 2014.

Developments Affecting the EB-3 Employment-Based Category

China

From September through December 2013, the cutoff date for EB-3 individuals chargeable to China advanced by 2.75 years, and, from January through April, this cutoff date advanced by an additional 366 days. The May Visa Bulletin indicates a cutoff date of October 1, 2012, reflecting no change to the cutoff date from April. This means that individuals in the EB-3 category chargeable to China with a priority date prior to October 1, 2012 may continue to file AOS applications or have applications approved in May 2014.

India

In March, the cutoff date for EB-3 individuals chargeable to India advanced by 14 days to September 15, 2003. There was no change to this cutoff date in April. The May Visa Bulletin indicates a cutoff date of October 1, 2013, reflecting forward movement of 16 days. This means that only EB-3 individuals chargeable to India with a priority date prior to October 1, 2003 may file AOS applications or have applications approved in May 2014.

Rest of the World

From September through December 2013, the cutoff date for EB-3 individuals chargeable to the Rest of the World advanced by 2.75 years, and, from January through April, this cutoff date advanced by an additional 366 days. The May Visa Bulletin indicates a cutoff date of October 1, 2012, reflecting no movement of this cutoff date. This means that individuals in the EB-3 category chargeable to the Rest of the World with a priority date prior to October 1, 2012 may continue to file AOS applications or have applications approved in May 2014.

Developments Affecting the F2A Family-Sponsored Category

Beginning in October 2013, a cutoff date of September 1, 2013 was imposed for F2A spouses and children of permanent residents from Mexico, and a cutoff date of September 8, 2013 was imposed for F2A spouses and children of permanent residents from all other countries. In March, as a result of heavy demand in the F2A Mexico category, the cutoff date for F2A applicants born in Mexico retrogressed by 504 days to April 15, 2012; the cutoff date for F2A applicants from all other countries remained unchanged. There was no change to these cutoff dates in April, and the May Visa Bulletin again indicates no change to these cutoff dates. This means that those applicants from Mexico with a priority date prior to April 15, 2012 will be able to file AOS applications or have applications approved in May 2014, and those applicants from the Rest of the World with a priority date prior to September 8, 2013 may file AOS applications or have applications approved through May 2014.

The May Visa Bulletin indicates that demand in the F2A category continues to increase dramatically and that the cutoff date for individuals from Mexico and all other countries is therefore likely to retrogress in the coming months.

How This Affects You

Priority date cutoffs are assessed on a monthly basis by the DOS, based on anticipated demand. Cutoff dates can move forward or backward or remain static. Employers and employees should take the immigrant visa backlogs into account in their long-term planning and take measures to mitigate their effects. To see the May 2014 Visa Bulletin in its entirety, please visit the DOS website here.

McSweeny Joins FTC as Fifth Commissioner as Republican Commissioners Continue to Make Waves – Federal Trade Commission

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On April 9, 2014, Terrell McSweeny was confirmed by the Senate as the fifth and final Federal Trade Commissioner. She joins fellow Democrat appointees Chairwoman Edith Ramirez and Commissioner Julie Brill. It is the two Republican appointees, Commissioners Maureen Ohlhausen and Josh Wright, however, who have been making the most news in the last several months with dissents and speeches. Now that the FTC is at full-strength, clients should be on the lookout for a more active discussion of new FTC initiatives.

McSweeny is a relative newcomer to the antitrust community, serving as Senior Counsel for Competition Policy in the Justice Department’s Antitrust Division since 2012. She held several positions supporting Vice President Joseph Biden, both as Vice President and Senator, and worked on earlier Democratic presidential campaigns. At her confirmation hearing, she pledged to “continue the [FTC’s] tradition of collegiality and consensus-oriented decision making,” but described no specific initiatives she planned to pursue. She received support from the few Senators present at the hearing and her confirmation vote was 95-1.

During the many months when there were two Democrat and two Republican Commissioners, the FTC continued to be very active in clearing mergers, challenging fraudulent activities and issuing rules and guidance for businesses of all types. Almost all those actions that required votes of the Commissioners received unanimous support. The two Republican Commissioners, however, have publicly dissented from some current and past FTC actions involving intellectual property, FTC Act Section 5 and particular mergers. Also, the lack of a fifth vote caused a rare 2-2 split on claims of collusion in the recent McWane case.

On intellectual property, Ohlhausen vigorously dissented to a portion of the Commission’s late 2012 Robert Bosch consent agreement resolving merger issues. She objected only to the finding of an unfair method of competition when the patent holder sought injunctive relief on a standard essential patent over which there was dispute about a fair, reasonable and non-discriminatory license (FRAND). Ohlhausen saw that issue as one better left to courts or standard setting organizations adjudicating contract provisions. She similarly dissented early in 2013 when the FTC obtained a consent agreement in Google/Motorola Mobility that again required a patent holder to forego unrestricted use of injunction actions as part of a FRAND dispute. While Wright took no part in those actions, he reiterated his earlier academic writing in an April 2013 speech that patent and contract law were better than antitrust law in dealing with FRAND disputes involving standard essential patents. In a March 2014 speech, he called those decisions deviations from the principle embedded in past FTC decisions and guidelines that the antitrust analysis should be symmetrical whether the rights were for intellectual property or real property.

Wright has taken the lead on the Section 5 issues. As explained in our earlier alert, FTC Section 5 allows the FTC to go beyond the Sherman Act and prevent “unfair methods of competition,” but opinions about the extent of that power have varied with the identities of the commissioners. Wright proposed specific guidance to be issued by the FTC that would tether the FTC’s power here to modern antitrust’s “harm to competition” concept. In a July 2013 speech, Ohlhausen endorsed the concept of guidance from the FTC and suggested a limited use of Section 5 similar to Wright’s. Brill questioned the need for such guidance, pointing to the limited number of recent Section 5 actions and no groundswell from business for such guidance, and thought it only made sense when the Commission was back to full strength. On several occasions, Chairwoman Ramirez has said that the periodic Commission actions and Commissioners’ speeches were sufficient guidance on the issue.

Finally, Wright dissented (Ohlhausen was recused) from the September 2013 challenge to the Nielsen/Arbitron merger. The Commission was concerned about the effect of the merger on a market that does not now exist. While acknowledging that merger review necessarily involves some level of prediction, he thought the effects of a merger on such a “future market case” beyond the ability of any enforcer to predict. Finally, Wright was the lone dissent from the December 2013 decision to require changes in the Fidelity National/Lender Processing merger before allowing it to proceed. Wright would have allowed the merger to close with no changes, observing that “modern economics” required something more before concluding that the mere reduction in competitors would increase the likelihood of post-merger collusion in the industry.

In the McWane matter, FTC complaint counsel claimed the company excluded some competitors from a slice of the ductile iron pipe fitting market through a loyalty rebate program while also colluding with those same competitors to raise prices in the overall market. The FTC Administrative Law Judge found exclusion but not collusion. The four sitting commissioners missed two deadlines to issue an opinion because, according to media reports, they were deadlocked. Finally, the deadlock was broken but only on exclusion — Wright dissented from a finding that there was sufficient evidence that the rebate program constituted anticompetitive exclusive dealing. The commissioners deadlocked 2-2 on the collusion claims so the ALJ’s finding of insufficient evidence was allowed to stand and those claims were dismissed.

These dissents and deadlocks can overstate the differences among the commissioners. Since Chairwoman Ramirez rose to her current role last year and the Commission was left shorthanded, the FTC’s enforcement and education activities have continued apace, usually supported by unanimity from the four commissioners. Also, Ramirez has not publicly indicated any particular initiatives she had been unable to pursue because of the lack of a third Democratic vote. Still, the McSweeny addition will give her the opportunity to regain the initiative from her Republican colleagues. Clients should be alert for any changes in the debates or new initiatives now that the Commission is back to full strength.

Article By:

Steven J. Cernak
Gregory L. Curtner
Jacob K. Danziger
William M. Hannay
Sondra A. Hemeryck
Richard J. Hoskins
Of:
Schiff Hardin LLP

PTO Litigation Center Report – April 11, 2014

Sterne Kessler Goldstein Fox

Listed below are all new filings before PTAB of requests for inter partes review (IPR) and covered business methods review (CBM).  Also listed are any newly-posted requests for ex parte reexamination at the USPTO.  This listing is current as of 9:45 AM on Friday, April 11, 2014.

New IPR Requests

Trial Number – IPR2014-00604
Filing Date – 4/10/2014
Patent # – 6,896,775
Title – HIGH-POWER PULSED MAGNETICALLY ENHANCED PLASMA PROCESSING
Assignee –  ZOND, INC.
Petitioner – THE GILLETTE COMPANY
Status – Pending
Tech Center – 1700

Trial Number – IPR2014-00605
Filing Date – 4/10/2014
Patent # – 7,348,723
Title – EMISSION DEVICE, SURFACE LIGHT SOURCE DEVICE, DISPLAY AND LIGHT FLUX CONTROL MEMBER
Assignee –  ENPLAS CORPORATION
Petitioner – Seoul Semiconductor Co., Ltd.
Status – Pending
Tech Center – 2800

Trial Number – IPR2014-00606
Filing Date – 4/10/2014
Patent # – 6,833,404
Title – HOT MELTS UTILIZING A HIGH GLASS TRANSITION TEMPERATURE SUBSTANTIALLY ALIPHATIC TACKIFYING RESIN
Assignee –  H.B. FULLER COMPANY
Petitioner – HENKEL CORPORATION
Status – Pending
Tech Center – 1700

Trial Number – IPR2014-00607
Filing Date – 4/10/2014
Patent # – 7,870,249
Title – NETWORKED SYSTEM FOR INTERACTIVE COMMUNICATION AND REMOTE MONITORING OF INDIVIDUALS
Assignee –  ROBERT BOSCH HEALTHCARE SYSTEMS, INC.
Petitioner – Medtronic, Inc.
Status – Pending
Tech Center – 2400

Trial Number – IPR2014-00610
Filing Date – 4/10/2014
Patent # – 7,490,151
Title – ESTABLISHMENT OF A SECURE COMMUNICATION LINK BASED ON A DOMAIN NAME SERVICE (DNS) REQUEST
Assignee –  VIRNETX INC.
Petitioner – Microsoft Corporation
Status – Pending
Tech Center – 2100

New CBM Review Requests

Trial Number – CBM2014-00115
Filing Date – 4/10/2014
Patent # – 7,970,674
Title – AUTOMATICALLY DETERMINING A CURRENT VALUE FOR A REAL ESTATE PROPERTY, SUCH AS A HOME, THAT IS TAILORED TO INPUT FROM A HUMAN USER, SUCH AS ITS OWNER
Assignee –  ZILLOW, INC.
Petitioner – TRULIA, INC.
Status – Pending
Tech Center – 3600

Newly-Posted Reexam Requests

Control # – 90/013,207
Date – 4/10/2014
Patent # – 7,489,423
Inventor –  Nachman, Marvin J. et al.
Assignee –  INFINITY COMPUTER PRODUCTS, INC.
Title – INTERFACE CIRCUIT FOR UTILIZING A FACSIMILE MACHINE COUPLED TO A PC AS A SCANNER OR PRINTER
Co-pending Litigation – Infinity Computer Products, Inc. v. Toshiba America Business Solutions, Inc., No. 2:12-cv-06796-LDD (E.D. Pa.) and 11 other litigations.

Control # – 90/013,208
Date – 4/10/2014
Patent # – 6,894,811
Inventor –  Nachman, Bruce G. et al.
Assignee –  INFINITY COMPUTER PRODUCTS, INC.
Title – INTERFACE CIRCUIT FOR UTILIZING A FACSIMILE COUPLED TO A PC AS A SCANNER OR PRINTER
Co-pending Litigation – Infinity Computer Products, Inc. v. Toshiba America Business Solutions, Inc., No. 2:12-cv-06796-LDD (E.D. Pa.) and 11 other litigations.

Control # – 90/013,209
Date – 4/10/2014
Patent # – 8,040,574
Inventor –  Nachman, Bruce G. et al.
Assignee –  INFINITY COMPUTER PRODUCTS, INC.
Title – INTERFACE CIRCUIT FOR UTILIZING A FACSIMILE MACHINE TO A PC AS A SCANNER OR PRINTER
Co-pending Litigation – Infinity Computer Products, Inc. v. Toshiba America Business Solutions, Inc., No. 2:12-cv-06796-LDD (E.D. Pa.) and 11 other litigations.

Control # – 90/013,210
Date – 4/10/2014
Patent # – 8,294,915
Inventor –  Nachman, Bruce G. et al.
Assignee –  INFINITY COMPUTER PRODUCTS, INC.
Title – INTERFACE CIRCUIT FOR UTILIZING A FACSIMILE MACHINE COUPLED TO A PC AS A SCANNER OR PRINTER
Co-pending Litigation – Infinity Computer Products, Inc. v. Toshiba America Business Solutions, Inc., No. 2:12-cv-06796-LDD (E.D. Pa.) and 11 other litigations.

Article By:

PTO Litigation Center
Of:
Sterne, Kessler, Goldstein & Fox P.L.L.C.

Miami-Dade County Road Impact Fees Increasing by 23% on April 22, 2014

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On April 22, 2014, the roadway impact fee will increase by 23%. Developers should be aware of these increases in impact fees, as substantial cost savings can be achieved by paying the applicable impact fees and pulling building permits on or before April 21, 2014, which is the last day to pay fees at current rates.

Miami-Dade County Impact Fees

If plans have been filed but the building permit is not yet ready for issuance, it would be worthwhile to attempt to pay the impact fee at the current rate prior to April 22. In addition, some exemptions or credits against road impact fees may be available for certain projects and locations, particularly for many uses proposed in the downtown Miami or Brickell area.

This increased amount is only for road impact fees; other applicable impact fees will also be due.

 

Unless subject to an applicable exemption or credit (such as certain uses in a development of regional impact), new developments in both unincorporated and incorporated areas of Miami-Dade are levied Miami-Dade County roadway impact fees. These fees must be paid or bonded prior to obtaining a building permit for new construction or increased development.

Miami-Dade County adopted a schedule to increase road impact fees in phases commencing in 2009. The phases were expressed as a discount off of the eventual full impact fee rate to be implemented in the future. However, in order to help alleviate the impact of the increased fees during the economic downturn, the Board of County Commissioners twice-passed legislation that delayed implementation of the increased fees, thus extending the discount. The discount is slated to increase on April 22, 2014 from 65% of the full rate to 80% of the full rate. While this may appear to be a 15% change, the net result is actually a 23% increase over current rates. However, coupled with the “present day cost multiplier” annual increase incorporated into the County Code, the fees have increased exponentially over the last several years.

As noted above, although the County has, in the past few years, extended the discount in recognition of the downturn in the economy, there has been no County legislation filed as of yet that would do the same this year.

Represented below are the differences in roadway impact fees between April 1, 2014 and April 22, 2014:

Miami-Dade

As an example, roadway impact fees for a 200 unit condominium located in the urban infill area (UIA) would increase from $610,138 to $750,940, for an increase of $140,802.

Article By:

Brian S. Adler
Of:
Bilzin Sumberg

IRS Clarifies How Plan Sponsors Should Handle Same-Sex Spouses in Qualified Retirement Plans

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On April 4, 2014, the IRS issued Notice 2014-19, requiring that qualified retirement plans apply “spouse” and “marriage” to same-sex spouses just as the plan would to opposite-sex spouses and establishing criteria for what plan amendments are needed and the timing for doing so.

Background

In September of 1996, Congress enacted the Defense of Marriage Act (DOMA), which provided that same-sex marriages would not be recognized under federal law. On June 26, 2013, however, the U.S. Supreme Court held in the Windsor case that DOMA’s treatment of such marriages was unconstitutional. Following Windsor, the IRS issued Revenue Ruling 2013-17 on August 29, 2013 (effective September 16, 2013), requiring same-sex marriages legally performed under state law to be recognized for federal tax purposes in any state regardless of whether the state recognizes the validity of same-sex marriages. This Revenue Ruling further provided that individuals who entered into registered domestic partnerships, civil unions, or other similar relationships under state law did not qualify as “spouses” and that these relationships did not qualify as “marriages” for federal tax purposes.

The newly issued April 4 Notice gives further guidance respecting qualified retirement plans on a wide range of subjects including qualified joint and survivor annuity rules, the Retirement Equity Act’s spousal beneficiary safeguards, required minimum distribution calculations and timing, control group determinations, ESOP rules, and the QDRO exceptions to the Code’s anti-alienation rules.

Notice 2014-19

The new IRS Notice describes when qualified retirement plans must be in administrative and documentary compliance with Windsor and the August 2013 Revenue Ruling. Plan sponsors and recordkeepers must have been administering their retirement plans consistent with Windsor as of June 26, 2013, even if these plans did not contemplate valid same-sex marriages. The corollary to this is that failing to recognize same-sex marriages before June 26, 2013, will not disqualify a plan. Furthermore, because last summer’s Revenue Ruling was not effective until September 16, 2013, there will be no risk of disqualification during the gap period between the effective date of Windsor and September 16 for plans that recognized same-sex marriages only if a participant was domiciled in a state that recognized same-sex marriages. The IRS further clarified that plan sponsors could operate their plans prior to June 26, 2013 to reflect Windsor on some or all qualification requirements without risk of disqualification so long as the basic qualification rules were satisfied, i.e., plan sponsors could be more generous than the Code required if it was feasible administratively.

From a documentation standpoint, all qualified retirement plans must be consistent with Windsor and both the IRS Revenue Ruling and the new Notice. Depending on how a plan uses or defines the terms “spouse” and “marriage,” plan amendments may or may not be needed. If a plan uses or defines these terms in a neutral manner without reference to “opposite-sex” or DOMA and they can be reasonably construed in harmony withWindsor and the IRS guidance, then no plan amendment is likely needed. However, if a plan couches the terms “spouse” and “marriage” in accordance with DOMA or inconsistently with Windsor, then the plan will need to be amended retroactively to June 26, 2013 to maintain its qualified status.

The deadline for adopting any needed amendments is generally going to be December 31, 2014, although for some plan sponsors, the amendment deadline could be later depending on their unique circumstances.

Next Steps

In response to Notice 2014-19, plan sponsors will need to review the terms of their retirement plans to ensure each plan contains a proper definition of “spouse” and “marriage” and to timely amend their plans, as necessary. Additionally, plan sponsors should confirm the administrative aspects of their plans with their recordkeepers. Based on all of this, Notice 2014-19 is welcome news as it provides certainty: individuals can better plan their benefits and retirements, recordkeepers can confidently begin any needed programming and website changes, and plan sponsors can undertake any needed revisions to their plan documents, summary plan descriptions and other communications.

Article By:

Jorge M. Leon
Kirk A. Pelikan
Charles P. Stevens
Of:
Michael Best & Friedrich LLP