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It’s an unlucky number for a lucky sports trick – 13 holes in one.

Kent Frandsen only gives luck partial credit.

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On June 21, 2016 the FAA issued its final rule on small Unmanned Aircraft Systems (sUAS) codified at 14 C.F.R. Parts 107 (Parts 21, 43, 61, 91, 101, 107, 119, 133, and 183 are also impacted).  The primary effect of this final rule is that commercial use of qualified small UAS that are operated in accordance with the sUAS rule will no longer require special airworthiness certificates, section 333 exemptions, or certificates of waiver or authorization (COAs).

The sUAS rule:

  • Classifies “small” UAS
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On May 18, 2016, the Department of Labor announced the publication of its final rule updating the overtime regulations (“Overtime Rule”) under the Fair Labor Standards Act (FLSA). The FLSA applies to “Covered Enterprises” as well as individuals. Covered Enterprises include businesses with annual sales or business of at least $500,000. However, hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies are “named enterprises,” meaning they are covered by the FLSA regardless of their total annual sales or business done. Under individual coverage, employees may be entitled to FLSA protection if they themselves are engaged in interstate commerce or in the production of goods for interstate commerce.

The Overtime Rule, both current and revised, applies to an employee of a CE unless the employee is “exempt.” The FLSA’s exemptions include ”bona fide” Executive, Administrative, and Professional employees as well as certain computer professionals and outside sales employees. The DOL’s revised rule will increase the number of employees that are not exempt from the Overtime Rule. The newly revised rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the revised rule:

1. Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);

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Many nonprofit organizations in Indiana have either a duty or a policy of disclosing minutes of board meetings upon the request of certain stakeholders and allowing stakeholders to attend board meetings.  Often, this duty arises under state law, such as the general Non-Profit Corporation Act, if applicable, or the specific act under which the organization is organized, such as the Rural Electric Membership Corporation Act codified at Ind. Code ch. 8-1-13 (the “REMC Act”).  Transparency is generally a good thing.  It fosters open dialog among stakeholders and it leads to a more accountable board.  However, the organization must also protect its competitively sensitive information, as well as the privacy and dignity of its employees and stakeholders.

Therefore, the board of any nonprofit organization should understand how to effectively use Executive Session to balance the policy of transparency with need to protect sensitive information.  The board must also understand how to appropriately document and maintain a record of the discussions that do occur in Executive Session.

The board should use Executive Sessions for robust discussion of matters that should not be discussed in a public forum.  So what matters should not be discussed in a public forum?

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In 2015, the Tax Court of Indiana ruled that sewer system development charges and connection fees that are paid by a developer or builder and not by the retail customer are not gross receipts subject to the utility receipts tax (URT). Hamilton Southeastern Utils., Inc. v. Indiana Dept. of State Revenue, 40 N.E.3d 1284 (Ind. Tax 2015). The Indiana Department of State Revenue completed an audit of Hamilton Southeastern Utilities, Inc. proposing URT assessments on receipts from sewer system development charges and connection fees. Hamilton Southeastern protested, and after an administrative hearing denied the protest, Hamilton Southeastern appealed.

In determining that the sewer system development charges and connection fees paid by a developer or builder and not by the retail customer were not subject to the URT, the court examined I.C. 6-2.3-1-4 and I.C. 6-2.3-3-10. Under I.C. 6-2.3-1-4, the court determined that ‘utility services for consumption’ simply refers to the removal of sewage and does not give indication of a broader definition. The Department of State Revenue argued that because the fees are necessary, they should be included in the URT; however, the court found that was not grounded in the words of the statute. Under I.C. 6-2.3-1-10, gross receipts “are: 1) received for an enumerated service, 2) the enumerated service is provided to a consumer, and 3) the enumerated service is directly related to the delivery of utility services to the (same) consumer.” At 1288 (emphasis in original). In the case of system development and connection fees, the charges are not paid by the retail consumer, but by the developer and builder.

The court granted summary judgment to Hamilton Southeastern under I.C. 6-2.3-1-4 and I.C. 6-2.3-1-10, but decided the issue of needing to separate receipts on records and returns of the taxpayer under I.C. 6-2.3-3-2 separately. Later, the court determined that the system development and connection fees were separated from the taxable receipts in accordance with the statute. Hamilton Southeastern Utils., Inc. v. Indiana Dept. of State Revenue, Cause No. 49T10-1210-TA-00068 (Ind. Tax April 29, 2016). Although Hamilton Southeastern did not report the amount of fees that was not required – simply separating the fees from the taxable receipts was sufficient. This was accomplished by only reporting the taxable receipts.

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Whether telecommunications providers have a private right of action under Section 253 of the Telecommunications Act of 1996 is an issue that will only be resolved in time. In November 2015, the Eighth Circuit joined the Second, Fifth, Ninth, and Tenth in holding that they do not. This decision split from the Sixth and Eleventh circuits holding they do.

Spectra Communications Group, LLC (“Spectra”) provided telecommunications services in the City of Cameron (“the City”) for several years. Spectra also maintained facilities in the City’s rights of way (“ROW”). The City enacted a ROW and Communications ordinance that required communications providers, like Spectra, to pay user fees and obtain use permits in order to maintain facilities in the City’s ROW.

The City sued Spectra for failure to pay municipal license taxes and user fees and failure to obtain use permits. After this suit, Spectra sought a construction permit. The City denied Spectra’s request for failing to comply with the City’s ROW code. Spectra then sued the City.

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Under a new Department of Justice (“DOJ”) and Department of Labor (“DOL”) initiative, more criminal cases will be pursued under the Occupational Safety and Health Administration Act (“OSHA”). The initiative seeks to protect workers’ health and safety by addressing related OSHA violations.

Since OHSA was enacted over 40 years ago, few criminal cases have been prosecuted under the Act. The cases prosecuted have primarily involved “cover-ups” by an employer of the initial crime and employers who have chronically violated worker safety laws. Few criminal cases have been pursued because it is difficult to prove a criminal violation and the consequences of these violations are less significant than other white-collar crimes.

Actions subject to criminal sanctions under OHSA include: willful violation of OSHA standards, rules, or orders; falsifying OHSA documents; providing advance notice of an OHSA inspection; committing perjury during OSHA proceedings; violating state criminal laws; and violating environmental statutes.

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An employee handbook or employee policies that are not up-to-date with current laws may hurt an employer later. An employee handbook or policies are often the first place an employee and employer turn when seeking guidance. If it is not up-to-date, the resulting actions may not be in line with current law.

At a minimum, “[a] well-written handbook and policies set forth [an employer’s] expectation for [their] employees, and describes what they can expect from [the] company. It also should describe [the employer’s] legal obligations as an employer, and [the] employee’s rights.” Writing Employee Handbooks, U.S. Small Business Administration, (last visited March 10, 2016).

Some recent changes in the law that may impact an organization’s employee handbook or policies include:

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The Indiana Tax Court recently examined in Aztec Partners, LLC v. Ind. Dep’t of State Revenue, No. 49T10-1210-SC-00067, 2015 Ind. Tax LEXIS 29 (Ind. Tax Ct. June 23, 2015), whether electricity that Aztec Partners, LLC (“Aztec”), who operates nineteen Qdoba Mexican Restaurants in Indiana, used to power electrical equipment was subject to Indiana sales tax. The Court found it was not and reversed the Department of State Revenue’s (the “Department”) final determination and remanded the case.

At Aztec’s Qdoba Restaurants, employees prepare food items that are ultimately combined and served as entrées. Those food items are held and preserved in electrical equipment, such as food warmers and cooling systems, until they are combined into entrées and sold. The electrical equipment is not used to cook the food. In June 2011, Aztec filed twelve refund claims with the Department for the refund of sales tax paid on the electricity used to power electrical equipment. The Department denied the refunds finding that the electricity was taxable. Aztec protested the refund denial. Thereafter, the Department held a hearing and issued a Memorandum of Decision on August 24, 2012 denying that protest. Aztec initiated an original tax appeal.
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The Indiana Court of Appeals recently revisited the “blue-pencil” doctrine in Clark’s Sales and Services, Inc., vs. John D. Smith and Ferguson Enterprises, Inc., 4 N.E.3d 772 (Ind. Ct. App. 2014), which concerned an employment agreement containing a restrictive covenant/noncompetition provision. Based on the employee’s (“Smith”) fourteen-year career with the former employer and Smith’s access to confidential information, the court found a protectable interest before moving onto the reasonableness of such restrictions.

The court found these particular clauses were unreasonable in both the scope of activities covered and geographic area. The clauses prohibited Smith from “providing services competitive to those offered by [employer], or those provided by Smith on behalf of [employer] to anyone who was a customer of [employer] during the term of Smith’s employment.” This clause was unreasonable because it applied to all customers regardless of whether Smith had any contact with them; applied to Smith’s entire term of employment with the employer; and the prohibited activities were unrelated to what Smith actually performed.
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