Monday, June 29, 2009
No More Commercials
The Supreme Court denied cert on an appeal by the entertainment industry to block Cablevision Systems Corp new DVR that saves the shows at the cable location, not the user location, making the DVR service more like download on demand than a DVR. Licensing rates for broadcast is different than download on demand. The entertainment industry claimed it violated their copyrights, but the Second Circuit differed.
Florida 2008-9 Legislative Update
The Sun-Senitnel has an article giving an update regarding laws to go in effect July 1, 2009.
Cigarette tax
Florida's cigarette tax increases by $1 per pack, to $1.34. The tax on other tobacco products, including pipe and smokeless tobacco, also goes up by a similar rate. Cigars are exempt from the increase. With the hike, Florida's cigarette tax -- previously unchanged since 1990 and among the lowest in the nation -- is now slightly higher than average. The extra $1 tax is expected to generate more than $900 million in income, used to fund cancer research and defray Medicaid costs.
Pill mills
Despite privacy concerns, anyone who buys addictive prescription drugs at pain clinics will be reported to a state database designed to crack down on clinics and doctors that distribute painkillers. Florida becomes the 39th state to create such a pain-pill database, but it could take a while to gear up. The state has to raise millions from private sources to operate the database and the Department of Health has until October 2010 to instruct pain clinics and their doctors on how to report their sales.
Seat belts
Drivers in Florida can now be pulled over for not wearing their seat belts -- and get slapped with tickets that could run more than $100 depending on the county. Until now, drivers could only be cited for not wearing their seat belts if they were pulled over for something else, such as speeding. The state fine for seat-belt violations is $35, but counties can tack on additional fees and court costs.
Insurance
Customers with state-run Citizens Property Insurance Co. will see their premiums rise, for the first time in two years. Most of Citizens' 1 million policyholders, the majority of whom live in South Florida, will see rates rise 10 percent a year for at least five years, beginning Jan. 1. Private insurers also are likely to raise premiums in 2010, although they'll still have to get permission from the state Office of Insurance Regulation. A change to state law provides a quicker process for private insurers to boost premiums up to 10 percent a year.
Property tax appeals
Florida property owners will now have an easier time winning an appeal if they think a county appraiser valued their homes too high. The burden is now on county appraisers to justify their values. In prior years, homeowners had to clear a high legal hurdle to prove the government appraisal was wrong. With the change, more homeowners should be able to win reductions on their tax bills through quasi-judicial Value Adjustment Boards, state analysts predict.
KidCare
Parents who lose their jobs -- or can no longer afford health care premiums -- will now have an easier time enrolling their children in KidCare, a federal-state subsidized health care program for children under 18. The waiting period to switch from private insurance to KidCare has been reduced to two months, from six months. And parents who fall behind on the $15 or $20 monthly co-pay for KidCare will have to wait only 30 days to re-enroll, instead of 60 days. The state also cut down administrative barriers to KidCare enrollment. For example, income eligibility now is verified electronically rather than in person. A family of four making $44,000 or less is eligible for KidCare, which currently insures about 1.5 million Florida children.
Bright Futures
Changes to popular but expensive Bright Futures scholarships will make the program less lucrative for college students. Now, Bright Futures students will receive a flat scholarship award, from $95 to $126 per credit hour, rather than the traditional scholarship that covered up to 100 percent of tuition costs. The flat rate will not cover this year's 8 to 15 percent tuition hikes at state universities, meaning students will pay potentially thousands more out of pocket for each year in school.
Prepaid college
Parents who save for their children's education through so-called 529 prepaid plans will now have additional flexibility to transfer the money to private and out-of-state colleges and career centers. Until now, parents could only get the full benefit from 529 savings plans if their children enrolled in Florida public universities and community colleges.
Phone rates
Florida's home phone service is now deregulated, with the Public Service Commission no longer having authority to set rates and service standards. Under the new system, phone companies such as AT&T will be allowed to raise rates with no state oversight on most home phone packages, by up to 10 percent a year. Telecommunications executives, though, point out that competition is driving prices down rather than up. In addition, phone companies will be able to post their rate schedules online rather than with the PSC. The changes also expand the state's Lifeline program, which provides subsidized basic phone service to the poor. A single person making less than $16,245 will now qualify for free or reduced-cost phone service.
First-responder fees
Cities and counties are now banned from charging a so-called "crash tax," a concept once considered by Davie and other municipalities. Local governments are now prohibited from charging a first-responder fee for a police officer to respond to the scene of an accident or for ambulance rides.
Cigarette tax
Florida's cigarette tax increases by $1 per pack, to $1.34. The tax on other tobacco products, including pipe and smokeless tobacco, also goes up by a similar rate. Cigars are exempt from the increase. With the hike, Florida's cigarette tax -- previously unchanged since 1990 and among the lowest in the nation -- is now slightly higher than average. The extra $1 tax is expected to generate more than $900 million in income, used to fund cancer research and defray Medicaid costs.
Pill mills
Despite privacy concerns, anyone who buys addictive prescription drugs at pain clinics will be reported to a state database designed to crack down on clinics and doctors that distribute painkillers. Florida becomes the 39th state to create such a pain-pill database, but it could take a while to gear up. The state has to raise millions from private sources to operate the database and the Department of Health has until October 2010 to instruct pain clinics and their doctors on how to report their sales.
Seat belts
Drivers in Florida can now be pulled over for not wearing their seat belts -- and get slapped with tickets that could run more than $100 depending on the county. Until now, drivers could only be cited for not wearing their seat belts if they were pulled over for something else, such as speeding. The state fine for seat-belt violations is $35, but counties can tack on additional fees and court costs.
Insurance
Customers with state-run Citizens Property Insurance Co. will see their premiums rise, for the first time in two years. Most of Citizens' 1 million policyholders, the majority of whom live in South Florida, will see rates rise 10 percent a year for at least five years, beginning Jan. 1. Private insurers also are likely to raise premiums in 2010, although they'll still have to get permission from the state Office of Insurance Regulation. A change to state law provides a quicker process for private insurers to boost premiums up to 10 percent a year.
Property tax appeals
Florida property owners will now have an easier time winning an appeal if they think a county appraiser valued their homes too high. The burden is now on county appraisers to justify their values. In prior years, homeowners had to clear a high legal hurdle to prove the government appraisal was wrong. With the change, more homeowners should be able to win reductions on their tax bills through quasi-judicial Value Adjustment Boards, state analysts predict.
KidCare
Parents who lose their jobs -- or can no longer afford health care premiums -- will now have an easier time enrolling their children in KidCare, a federal-state subsidized health care program for children under 18. The waiting period to switch from private insurance to KidCare has been reduced to two months, from six months. And parents who fall behind on the $15 or $20 monthly co-pay for KidCare will have to wait only 30 days to re-enroll, instead of 60 days. The state also cut down administrative barriers to KidCare enrollment. For example, income eligibility now is verified electronically rather than in person. A family of four making $44,000 or less is eligible for KidCare, which currently insures about 1.5 million Florida children.
Bright Futures
Changes to popular but expensive Bright Futures scholarships will make the program less lucrative for college students. Now, Bright Futures students will receive a flat scholarship award, from $95 to $126 per credit hour, rather than the traditional scholarship that covered up to 100 percent of tuition costs. The flat rate will not cover this year's 8 to 15 percent tuition hikes at state universities, meaning students will pay potentially thousands more out of pocket for each year in school.
Prepaid college
Parents who save for their children's education through so-called 529 prepaid plans will now have additional flexibility to transfer the money to private and out-of-state colleges and career centers. Until now, parents could only get the full benefit from 529 savings plans if their children enrolled in Florida public universities and community colleges.
Phone rates
Florida's home phone service is now deregulated, with the Public Service Commission no longer having authority to set rates and service standards. Under the new system, phone companies such as AT&T will be allowed to raise rates with no state oversight on most home phone packages, by up to 10 percent a year. Telecommunications executives, though, point out that competition is driving prices down rather than up. In addition, phone companies will be able to post their rate schedules online rather than with the PSC. The changes also expand the state's Lifeline program, which provides subsidized basic phone service to the poor. A single person making less than $16,245 will now qualify for free or reduced-cost phone service.
First-responder fees
Cities and counties are now banned from charging a so-called "crash tax," a concept once considered by Davie and other municipalities. Local governments are now prohibited from charging a first-responder fee for a police officer to respond to the scene of an accident or for ambulance rides.
Friday, June 19, 2009
Dowload Case
A Minneapolis jury awarded the RIAA $1.92 million against Jammie Thomas-Rasset for illegal file sharing.
Right to Privacy?
Applicants for jobs in the city of Bozeman are being asked for passwords to their social networking sites. It is suposedly designed to verify personal information. But I find it had to believe that there's anything on somebody's facebook or myspace page that could not be verified by other means. The city attorney is looking into alternatives, such as requiring the job applicant to friend the city.
Thursday, June 18, 2009
Las Vegas Paper to Produce Online Records
The Las Vegas Review-Journal will comply with a Federal Grand Jury subpoena compelling the identities of two people who posted comments on the newspaper's website about a criminal tax trial that could be construed as threatening to the jurors and/or judge. The paper said there isn't much to produce given that most of their postings are anonymous.
Tuesday, June 16, 2009
SEC Rule Proposal
Below is a letter sent to the SEC with regards to their newest rule proposal allowing shareholders to nominate directors on the company's proxy statement:
Ms. Elizabeth M. Murphy
Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Security and Exchange Commission
Re: File Number S7-10-09
To Whom It May Concern:
I would like to take this opportunity to comment on the Security and Exchange Commission’s proposed rules regarding shareholder nominations for the Board of Directors. Although I am an attorney this letter is being sent on my own individual behalf and neither on behalf of my firm, nor any particular client.
The SEC’s proposed rule would allow shareholders to nominate directors and require the company to include such nominations on its proxy statements. Although noble in its efforts to the proposal is troubling in several aspects.
First, the boards of directors of corporations in the United States of America have essentially two functions, namely, as an advisor to the executive management of the corporation and as a monitor on behalf of the shareholders. These duties may be in tension at times or namely when the board feels that the executive management of a corporation is not performing on behalf of shareholders, and on the flip side, whereas management has a vested interest in the long term success of the corporation, shareholders do not. The SEC’s proposed rule would favor a huge swing in Board responsibility toward a monitoring activity of a board rather than serving as advise and counsel to management. Such a swing could exacerbate adverse and confrontational roles between Boards and management, where the board of directors becomes more interested in the short terms goals of the shareholders than long term goals of management. This is especially true in that the proposed rules allow shareholders with as little as one percent, (including shareholders aggregating their shares to reach the one percent threshold who are more likely to be pro-holder activists and special interest holders).
Second, the SEC’s role may be overlapping with existing state laws. By way of example, Delaware General Corporate Law, Section 112, provides certain procedures for shareholders to include in the corporation solicitation of proxies their own nominees and slate for directors. Historically, the federal government has left states to determine the internal affairs of the corporation recognizing that the internal affairs of the corporation regulation allow states to compete for various state businesses. The SEC’s entry into the internal governance market may put some states that compete with Delaware at a significant disadvantage if this proposal were to be adopted.
Third, the rules proposed by the SEC provide that only certain significant shareholders or groups of shareholders would be allowed to nominate directors. Shareholders of the size proposed by the Security and Exchange Commission already have significant direct and indirect participation in management. Such a rule simply would not benefit ordinary investors whose investments do not quality under the rules.
Fourth, I am troubled with the priority system if there are more shareholder nominations than slots available. The current rule as it is stated would allow the shareholders who get to the company first their nominations to be put on the proxy regardless of size. This is counter-productive to the shareholder democracy movement which would require the SEC’s rule to allocate director nominations spots according to size by way of example, a long term institutional investor holding in excess of five percent of a company’s equity would be subject to smaller shareholders who can run faster with their director nominations. This system will create an incentive for routine election contests rather than facilitate smooth an orderly corporate governance.
Lastly, this will only serve as an adverse affect on the valuation of companies because of the additional restrictions imposed by the commission. One major example is that shareholders would be required to certify that they are not holding their stock for the purposes of taking control of the company or gain more than a minority representation of the Board of Directors. By removing the possibility of the opportunity of changing control of the company, the commission would create a chilling effect on valuation of companies, in that in a company’s valuation there may be albeit however small, some percentage for possible takeover bids.
Overall, I would strongly urge the commission to reconsider this rule proposal because of the foregoing reasons.
Sincerely,
Joel McTague
Ms. Elizabeth M. Murphy
Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Security and Exchange Commission
Re: File Number S7-10-09
To Whom It May Concern:
I would like to take this opportunity to comment on the Security and Exchange Commission’s proposed rules regarding shareholder nominations for the Board of Directors. Although I am an attorney this letter is being sent on my own individual behalf and neither on behalf of my firm, nor any particular client.
The SEC’s proposed rule would allow shareholders to nominate directors and require the company to include such nominations on its proxy statements. Although noble in its efforts to the proposal is troubling in several aspects.
First, the boards of directors of corporations in the United States of America have essentially two functions, namely, as an advisor to the executive management of the corporation and as a monitor on behalf of the shareholders. These duties may be in tension at times or namely when the board feels that the executive management of a corporation is not performing on behalf of shareholders, and on the flip side, whereas management has a vested interest in the long term success of the corporation, shareholders do not. The SEC’s proposed rule would favor a huge swing in Board responsibility toward a monitoring activity of a board rather than serving as advise and counsel to management. Such a swing could exacerbate adverse and confrontational roles between Boards and management, where the board of directors becomes more interested in the short terms goals of the shareholders than long term goals of management. This is especially true in that the proposed rules allow shareholders with as little as one percent, (including shareholders aggregating their shares to reach the one percent threshold who are more likely to be pro-holder activists and special interest holders).
Second, the SEC’s role may be overlapping with existing state laws. By way of example, Delaware General Corporate Law, Section 112, provides certain procedures for shareholders to include in the corporation solicitation of proxies their own nominees and slate for directors. Historically, the federal government has left states to determine the internal affairs of the corporation recognizing that the internal affairs of the corporation regulation allow states to compete for various state businesses. The SEC’s entry into the internal governance market may put some states that compete with Delaware at a significant disadvantage if this proposal were to be adopted.
Third, the rules proposed by the SEC provide that only certain significant shareholders or groups of shareholders would be allowed to nominate directors. Shareholders of the size proposed by the Security and Exchange Commission already have significant direct and indirect participation in management. Such a rule simply would not benefit ordinary investors whose investments do not quality under the rules.
Fourth, I am troubled with the priority system if there are more shareholder nominations than slots available. The current rule as it is stated would allow the shareholders who get to the company first their nominations to be put on the proxy regardless of size. This is counter-productive to the shareholder democracy movement which would require the SEC’s rule to allocate director nominations spots according to size by way of example, a long term institutional investor holding in excess of five percent of a company’s equity would be subject to smaller shareholders who can run faster with their director nominations. This system will create an incentive for routine election contests rather than facilitate smooth an orderly corporate governance.
Lastly, this will only serve as an adverse affect on the valuation of companies because of the additional restrictions imposed by the commission. One major example is that shareholders would be required to certify that they are not holding their stock for the purposes of taking control of the company or gain more than a minority representation of the Board of Directors. By removing the possibility of the opportunity of changing control of the company, the commission would create a chilling effect on valuation of companies, in that in a company’s valuation there may be albeit however small, some percentage for possible takeover bids.
Overall, I would strongly urge the commission to reconsider this rule proposal because of the foregoing reasons.
Sincerely,
Joel McTague
2008 Delaware Year in Review
The Harvard Law School Forum on Corporate Governance has a terrific review of developments in Delaware in 2008 which you can find here.
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