Unless exempt, every property owner in Allegheny County is required to pay property taxes to the county, the local government and the school district in which the property is located. The amount of taxes owed is based on the assessed value of the property. The assessed value of most properties in Allegheny County is based on the county’s 2012 assessment (the “Base Year Value”). Since 2012, each time a property is transferred for more than the Base Year Value, taxing authorities have filed appeals to the Allegheny County Board of Property Assessment Appeals and Review (“BPAAR”) asking BPAAR to increase the property’s assessed value.  

At BPAAR hearings, taxing authorities typically argue that the assessed value of a property should be increased because the current market value of the property is greater than the Base Year Value. If BPAAR agrees, BPAAR will take the market value and reduce it by Allegheny County’s Common-Level Ratio (“CLR”). The CLR is a factor created by the State Tax Equalization Board (“STEB”) based on sales data that is submitted to the STEB by the county. While the CLR is intended to equalize current market valuations with Base Year Values, most BPAAR hearings result in an increased assessment and a corresponding tax increase for property owners. So, for example, if a property’s Base Year Value is $60,000, and BPAAR finds its current market value to be $100,000, BPAAR would use Allegheny County’s current CLR of .811 to arrive at an assessment of $81,100, resulting in an increased assessment of $21,100. 

A Consent Order filed in the Allegheny Court of Common Pleas on April 27 directed Allegheny County officials to resubmit sales data to the STEB so that the county’s CLR can be recalculated. Based on the Consent Order, the CLR could be adjusted to as low as .635. If the new CLR is adopted, property owners with recently increased assessments may benefit from seeking a reduced assessment by filing an appeal with BPAAR. The deadline to file an appeal is March 31 of each year. It is unclear whether the results of the STEB recalculation and the Consent Order will require BPAAR to extend that deadline for the 2022 tax year. 

Whether you have already received a BPAAR hearing notice or if you think you can benefit from your own property tax assessment appeal, we recommend that property owners do not attend BPAAR hearings alone. The attorneys at Strassburger McKenna Gutnick & Gefsky are trained in advocacy at the BPAAR and are prepared to help. Should you have any questions, please reach out to Matt Morella at (412) 227-0289 or mmorella@smgglaw.com, Robyn Eisen at reisen@smgglaw.com, Alexis Wheeler at awheeler@smgglaw.com, or any of our attorneys in the firm’s real estate practice group

It was April Fools’ Day, but it was not a joke. On April 1, the U.S. House of Representatives voted to legalize marijuana. The bill, dubbed the MORE Act, was passed mostly along party lines by a vote of 220-204. Just three Republicans voted in favor and two Democrats opposed. 

If the MORE Act becomes law, it would deschedule marijuana by removing it from the list of federally banned drugs under the Controlled Substances Act. Marijuana products would be subject to a federal excise tax, starting at 5% for the first two years after enactment and rising to 8% by the fifth year of implementation. An “Opportunity Trust Fund” would be created, where half of the tax revenue would support a “Community Reinvestment Grant Program,” ten percent would support substance abuse programs, and forty percent would go the federal Small Business Administration to support implementation of a newly created equitable licensing grant program. Marijuana producers and importers would need to obtain a federal permit, and they would also need to pay $1,000 per year in federal taxes for each premises they operate. 

The MORE Act, however, is expected to fail in the Senate. Partly because of the politics, but also because the Senate has its own comprehensive bill on marijuana reform called the Cannabis Administrative and Opportunity Act (the “CAO Act”), which is set to be reintroduced later this month following several months of public comment and revisions. As opposed to the MORE Act, the CAO Act would impose a 25% excise tax on marijuana products. The gap, experts suggest, is too wide, creating what seems will be an inevitable deadlock, and another year of failed reforms. 

Strassburger McKenna Gutnick & Gefsky is tracking this evolving issue at the federal and state levels. Questions about marijuana or CBD businesses?  Contact me at mmorella@smgglaw.com or (412) 281-5423.  Questions about marijuana use by you or your employees can be directed to Jean Novak, who is Chair of the Allegheny County Bar Association’s Medical Marijuana and Hemp Committee, is also co-chair of SMGG’s Employer-Employee Relations practice and regularly advises clients on marijuana-related issues. She can be reached at jnovak@smgglaw.com or at (412) 281-5423.

Medical spas (“Medspas”) offer luxurious treatments like massages, salt glows, and seaweed wraps. They also offer clinical procedures like Botox, laser hair removal, and dermabrasions. In Pittsburgh and the surrounding areas, these services are in high demand, and medical professionals and entrepreneurs are eager to break into the industry. But before they do, or if they already have, they should be aware of Pennsylvania’s Corporate Practice of Medicine Doctrine (the “CPOM”).

The CPOM stems from a 1938 Pennsylvania Supreme Court Case in which the Court determined that a department store could not employ optometrists in an optometry practice owned by the store. The Court’s decision focused on the principle that “a licensed practitioner of a profession may not lawfully practice his profession among the public as the servant of an unlicensed person or a corporation”. Following precedent from other state courts, the Court held that a corporation “cannot possess the personal qualities required of practitioners of a profession” because the licensed professionals would “owe their primary allegiance and obedience to their employer rather than to the clients or patients of their employer.” 

In light of Gimbel Bros., Pennsylvania’s layered statutory and regulatory scheme produces the CPOM which generally requires that all medical services be rendered exclusively by (i) licensed medical professionals  or (ii) business entities wholly owned by licensed medical professionals. This is not only to ensure safety, it is also to ensure medical professionals maintain high professional standards and retain autonomy over decisions related to the provision of medical services. Medspas that do not comply with the CPOM risk criminal and civil liability or enforcement from the state’s licensing boards.

Questions often arise as to what qualifies as a medical service, who qualifies as a licensed medical professional, and who should perform what Medspa services. The lawyers at Strassburger McKenna Gutnick & Gefsky are prepared to answer these questions, provide startup consultation, and offer solutions regarding compliance issues. Should you have any questions or wish to discuss how the CPOM affects your Medspa, please contact Matt Morella at mmorella@smgglaw.com, Mike Nicolella, at mnicolella@smgglaw.com, or Erica Laughlin at elaughlin@smgglaw.com. You can also reach us by phone at 412-227-0289.

1 Neill et al. v. Gimbel Bros., 199 A. 178 (Pa. 1938)

2 Id. at 219, quoting McMurdo v. Getter, 10 N.E.2d 139, 140 (Mass. 1937). 

3 Id.

4 63 P.S. § 422.10; 63 P.S. § 271.3. 

5 15 Pa.C.S.A. § 8105;  15 Pa.C.S.A. §  8996(b); 15 Pa.C.S.A. § 2923(a) (all providing that “all of the ultimate beneficial owners of the interests in” a limited liability company or corporation that provides medical services must be licensed persons in the profession the entity practices).

In a 4-1 ruling today, the Pennsylvania Commonwealth Court declared the “Order of the Acting Secretary of the Pennsylvania Department of Heath Directing Face Coverings in School Entities” (“Masking Order”) void ab initio. The Masking Order, issued on August 31, 2021, directed each person inside a school building to wear a face covering, regardless of vaccination status. 

Challengers argued that the Acting Secretary exceeded her statutory authority and circumvented the requirements set forth in the Commonwealth Documents Law (“CDL”) and Regulatory Review Act (“RRA”) in issuing the Masking Order. The Commonwealth Court agreed. It held that the Masking Order was a regulation that had the force and effect of law because it was a “blanket rule that affects all School Entities in the Commonwealth.” As a regulation, its promulgation was required to be in conformance with the formal rulemaking requirements set forth in the CDL and RRA. These laws require, among other things, agencies to submit proposed regulations to the Independent Regulatory Review Commission for public and legislative comment and proscribe certain time periods pursuant to which proposed regulations either fail or become law. Because the Masking Order was not properly promulgated under the CDL and RRA, the Commonwealth Court decided in favor of Petitioners and deemed the order void ab initio.

The decision comes just two days after Governor Wolf announced that the choice to require face coverings in Pennsylvania’s public schools would likely revert to local leaders in January 2022. We recommend schools consult with their Solicitors about the potential for an appeal and whether or not any changes to their policies should be made at this time.

Should you have any questions regarding the impact of this decision, or need general education law advice, please contact Alan Shuckrow at ashuckrow@smgglaw.com or Kathy Clark a kclark@smgglaw.com.

Today the United States Court of Appeals for the Fifth Circuit granted an emergency motion to stay enforcement of OSHA’s November 5, 2021 Emergency Temporary Standard. A number of parties, including several businesses, advocacy groups, and the states of Texas, Louisiana, Mississippi, South Carolina, and Utah filed the motion for a permanent injunction. Citing “grave statutory and constitutional issues,” the court ordered the government stay enforcement of the ETS pending expedited judicial review.

Solicitor of Labor Seema Nanda said the U.S. Department of Labor is “confident in its legal authority” to issue the rule, stating that the Occupational Safety and Health Act of 1970 “explicitly gives OSHA the authority to act quickly in an emergency” and the Department is “fully prepared to defend [the ETS] in court.” 

The court ordered the government to respond to the petitioners’ motion by 5:00 PM on Monday, November 8th

We are monitoring this situation as it develops. Please contact Jean Novak, at jnovak@smgglaw.com, or Matt Morella, at mmorella@smgglaw.com, if you have questions.

On June 30, 2021, Governor Wolf signed Senate Bill 664 (the “Bill”) into law.  The Bill amends the Public School Code of 1949 to provide students with an optional year of education due to lost educational opportunities caused by COVID-19.

Under the Bill, parents or guardians of children under the age of eighteen may elect to have their minor children repeat a grade level during the 2021-2022 school year. Prior to the Bill’s passage, the decision to hold a student back was made solely by the school. Students over the age of eighteen must make the election themselves if they wish to repeat a grade level. If elected, students who repeat a grade level during the 2021-2022 school year will be allowed to participate in academic or extracurricular activities, including interscholastic athletics; however, such students will not receive an additional year of interscholastic athletics eligibility.

The Bill also provides parents or guardians of students with disabilities who were enrolled during the 2020-2021 school year and who reached age twenty-one during the 2020-2021 school year or between the end of the 2020-2021 school year and the beginning of the 2021-2022 school year the right to elect to enroll their children for an additional year. The parent or guardian and the student must make the election. In effect, this provision provides students with disabilities who would have otherwise aged out of schooling an additional year of education. If elected, school entities are required to implement the student’s most recent IEP and provide extended school year services during the summer after the 2020-2021 school year. School entities are also required to take all steps necessary to comply with the Individuals with Disabilities Education Act.

Note, the deadline to make an election under the Bill is July 15, 2021. Accordingly, parents, guardians and students will only have fifteen days to make their decision. The Pennsylvania Department of Education is required to make election forms available on its website.

Should you have any questions regarding the Bill, please contact Matt Morella, Esquire at mmorella@smgglaw.com or (412) 227-0289.

You can’t miss them: signs reading “CBD PRODUCTS SOLD HERE” are appearing in gas stations and drug stores across the country. Cannabidiol (“CBD”), a naturally occurring non-psychoactive compound derived from the cannabis plant, is a mainstream product marketed as a supplement that provides health benefits to its users. Proponents claim CBD provides pain relief and reduces feelings of anxiety and depression, among other health benefits. In 2018, the United States Food and Drug Administration (“FDA”) approved Epidiolex, a CBD oral solution, for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome, diseases that generally appear in early childhood.

While CBD’s effects are promising, the FDA considers CBD a “new drug” under the Food, Drug and Cosmetic Act (“FD&C”). Under the FD&C, it is generally illegal to introduce a new drug into interstate commerce. The question, therefore, begs – if the FDA considers the sale of CBD illegal, then why are we seeing CBD for sale everywhere?

In 2018, the Agriculture Improvement Act (“2018 Farm Bill”) removed hemp from the definition of marijuana under the federal Controlled Substances Act (“CSA”). Consistent with the 2018 Farm Bill, Pennsylvania adopted a Hemp Program. The program permits the Pennsylvania Department of Agriculture to grant licenses to entities to grow, cultivate, and sell hemp. Under the program, licensees are permitted to grow hemp for the purpose of producing CBD. Other states have adopted similar programs, and under lawful state programs, the industrial hemp industry is growing (pun intended). By 2024, the United States CBD market is expected to reach $20 billion in sales. By 2028,  the value of the global industrial hemp market is projected to reach $27.7 billion.

So what’s the hold up? Since 2015, the FDA has issued warning letters to more than a dozen CBD companies for alleged violations of the FD&C. In the warning letters, the FDA claims to have reviewed the companies’ websites (including social media accounts) for evidence of FD&C violations. The FDA explains that the marketed CBD products are “drugs” under the FD&C because the products are “articles intended for the use in the diagnosis, cure, mitigation, treatment, or prevention of disease and/or intended to affect the structure or any function of the body.” 21 U.S.C. § 321(g)(1). The FDA says that the products are “new drugs” because CBD is not generally recognized as safe and effective. See 21 U.S.C. § 321(p). Under the FD&C, new drugs may not be legally introduced or delivered for introduction into interstate commerce without prior approval from the FDA, or unless they are over-the-counter drugs lawfully marketed under 21 U.S.C. § 505G.

Clearly, there is conflict between state and federal authorities. While businesses face exposure under the FD&C, states like Pennsylvania permit CBD production. In the absence of regulation and consistent enforcement, it is likely that the CBD industry will continue to grow.  Due to the complexities in the laws, companies operating in the CBD sector may face difficulties in risk management, banking, and logistics. SMGG is tracking changes in the CBD laws and rulemaking process, and we are ready to advise you or your company in navigating CBD’s complex legal landscape. If you have any questions or would like to discuss, please contact Matt Morella, Esquire at (412) 227-0289 or mmorella@smgglaw.com.

Beginning February 10, 2021, group health plans and insurers that cover mental health/substance abuse disorder (“MH/SUD”) and medical/surgical benefits (“M/S”) are subject to two new federal requirements. Provisions in the Consolidated Appropriations Act, 2021 (“CAA”) now require group health plans to perform and document a comparative analysis of the design and application of nonquantitative treatment limits (“NQTLs”) and to disclose the analysis and related information to the Department of Labor (“DOL”) upon request.

NQTLs refer to qualitative limitations on the scope and duration of medical benefits. Examples of NQTLs include medical-management standards that limit or exclude coverage based on medical necessity or methods used to determine provider reimbursement rates. Under the Mental Health Parity & Addiction Equity Act (“MHPAEA”), the “processes, strategies, evidentiary standards and other factors” used to define plan terms and administer NQTLs for MH/SUD benefits must be comparable to and applied similarly to M/S benefits. The CAA requires group health plans and insurers to perform an analysis comparing these factors.

Although the CAA does not define the comparative analysis or explain how to document it, on April 2, 2021, the DOL released FAQs Part 45, which provides guidance on the type of information group health plans should include in the analysis, as well as the types of documents plans should make available to support it. Further, the analysis must contain a detailed explanation of the basis for a plan’s conclusion that NQTLs comply with the parity law. The DOL’s self-compliance tool provides guidance for group health plans, and plans that carefully apply the guidance are likely in compliance with the CAA.

Investigations into group health plans have increased as of late, and the DOL can bring enforcement actions against both fully insured and self-insured employer-sponsored plans for failing to meet the dictates of the MHPAEA. In fiscal year 2020, the DOL closed investigations of 180 health plans and found two NQTL violations. The DOL can require plans to correct parity violations by, for example, requiring the plans to reprocess improperly denied claims. Additionally, the DOL can refer violations to the IRS, which can assess civil penalties of up to $100 a day.

If you would like more information on the new requirements set forth by the CAA, please contact Matthew J. Morella, Esquire at mmorella@smgglaw.com.