The Role of Municipalities in Regulating Fireworks
As we near July 4th and the summer season in general, we as solicitors are frequently asked what role municipalities play in regulating fireworks displays within the municipal boundaries. The answer is that local municipalities and police departments are the primary regulators of consumer fireworks and public fireworks displays and so municipal officials must be prepared to properly handle requests for fireworks displays within the municipality.
The Pennsylvania Fireworks and Explosives Act of 1939 (the “Fireworks Law”) authorizes municipalities to issue permits to individuals or groups for fireworks displays. Section 1534 of the Second Class Township Code also allows Townships to “[g]rant permits for supervised public displays of fireworks and adopt rules and regulations governing the displays.” In fact, the use of most fireworks is prohibited in Pennsylvania without a permit. Only the use of items defined as “ground and hand-held sparkling devices”, “novelties” and “toy caps” in American Pyrotechnics Association (APA) Standard 87-1 are not currently regulated by State Law; therefore, their sale and use are permissible. These “non-fireworks” are the only types allowed to be sold from tents, stands, convenience stores, retail establishments and other various outlets not licensed by the Department of Agriculture. A municipality may adopt rules and regulations for fireworks displays by ordinance in order to regulate where, when, how and what fireworks may be displayed, or the municipality may simply administer the basic regulatory framework set forth in the Fireworks Law, which largely just requires the fireworks display be operated by a competent operator and be located in a safe place.
Under the Fireworks Law, the permit for a fireworks display is issued by the municipality where the display will take place. The municipality is the only governing body with authority to issue this permit; there is no State fireworks permit. Before issuing a permit, the municipality must: (1) verify the person applying for the permit is a competent operator (if you are hiring someone to perform the display, that person or corporation must be registered with the Pennsylvania Office of Attorney General and must obtain a local permit); (2) direct it’s local fire chief to inspect the site to ensure it is safe for the intended fireworks display and in compliance with the International Fire code if deemed necessary; and (3) require the operator to post at least a $500 bond (PSATS recommends a $1,000,000 bond be required).
Permits that are issued for public fireworks displays are non-transferable. The permits should also be issued for specific days. The Fireworks Law contains a specific provision for extending permits when the displays are delayed due to bad weather.
Local permits are also available to agricultural operations that will use fireworks to protect crops from pests such as crows or deer. The Fireworks Law does not require a fire chief inspection for agricultural use, but such an inspection should still be considered. The municipality should also place conditions on the permit for drought conditions to minimize the risk of brush fires. Permits for agricultural use are good for one calendar year after issuance.
Consumer and display fireworks may only be purchased and sold in Pennsylvania under certain conditions. Pennsylvania residents may only purchase or possess consumer fireworks if they have a display permit issued by the municipality wherein the display will take place. As a result of a 2004 amendment to the Fireworks Law, non-residents may, upon proof of out-of-state residency status, purchase consumer fireworks from a facility licensed by the Pennsylvania Department of Agriculture provided the consumer fireworks are transported directly out of state by the seller or purchaser.
Violations of the Fireworks Law can be enforced by any law enforcement official having jurisdiction over the municipality in which the violation occurs. The Fireworks Law allows law enforcement officials to make arrests and confiscate fireworks. To report a violation of the Fireworks Law simply contact the Police Department servicing your area in the same manner as you would report any other crime.
If you have any questions about the Fireworks Law or how it affects your municipality, please contact Andrew Miller at amiller@mpl-law.com or (717) 845-1524 ext. 112.
Amendments to UCC Article 9 Effective July 1, 2013
Article 9 of the Uniform Construction Code (the “UCC”) governs secured transactions and is an integral part of most business and commercial transactions. UCC Article 9 was substantially revised in 1998 and eventually adopted in all 50 states. Now, more than a decade on, UCC Article 9 is being revised again to clarify some issues that remained uncertain after the revisions of the late 1990’s. The new changes will be effective July 1, 2013 in at least 26 states, including Maryland and New York. Pennsylvania currently has legislation pending to adopt the amendments, but the legislation may not be adopted until after July 1, so Pennsylvania creditors will need to stay tuned.
UCC Article 9 currently requires the name of a party on a UCC financing statement to match the name of the entity on a “public record.” Because of the uncertainty about what constitutes a “public record,” the amendments to UCC Article 9 provide for using the name that appears on a “public organic record” which will include records filed with or issued by the state to form the entity (i.e., articles of incorporation, certiifcate of organization or certificate of limited partnership).
The amendments to UCC Article 9 will also clarify the identification of individual debtorsto be named on a financing statement. The amendment offers two alternatives for each state:
- Alternative A (the “only if” option) provides for the use of the debtor’s name as it appears on a driver’s license issued by the state where the financing statement is to be filed. If the debtor does not have a driver’s license, either the debtor’s actual name or the debtor’s surname and first personal name may be used.
- Alternative B (the “safe harbor” option) provides that any of the above-mentioned three options may be used.
These amendments will give secured parties more certainty when determining the proper names to use on a financing statement and should provide an additional level of comfort to filers.
The amendments to UCC Article 9 also clarify the rules for determining where to file against a federally-organized entity (e.g. banks and other legal entities created by federal charter or statute). Under the new rules, the financing statement will be filed in the organization’s “main office” or “home office.”
The amendments to UCC Article 9 also eliminate the requirement that a financing statement include the debtor’s type of organization, jurisdiction of organization and organizational identification number. The changes will make it easier to file a financing statement without fear of it being rejected. We, however, still recommend a secured party include this information to more clearly identify the debtor. The information has proven very useful in past transactions to differentiate between debtors when doing lien searches.
The amendments to UCC Article 9 also change the name of the UCC-5 Correction Statement to an Information Statement which may now be filed by a debtor or a secured party when information contained on a financing statement needs to be clarified. Despite the name change, the Information Statement will continue to have no legal force or effect.
The amendments to UCC Article 9 will also provide greater protection for an existing secured party having a security interest in after-acquired property when a debtor relocates to another state or merges with another entity.
The Uniform Law commission has also proposed new national forms for UCC filings that incorporate these changes.
Remember the revisions to UCC Article 9 will go into effect on July 1, 2013 in most states. Creditors with debtors in Pennsylvania stay tuned for the effective date!
If you have any questions regarding the amendments to UCC Article 9, or for any other secured transaction matters, please contact Andrew Miller, at amiller@mpl-law.com or (717) 845-1524, or visit the Business and Commercial Law Practice Areas of our website.
Townships May Not Designate Exclusive Providers of Emergency Medical Services
The Pennsylvania Commonwealth Court, in EmergyCare, Inc. v. Millcreek Twp., No. 2195 C.D. 2011 (Cmwlth. Ct. May 23, 2013), affirmed a lower court decision that granted a preliminary injunction to Plaintiff EmergyCare, Inc. prohibiting Defendant Millcreek Township from enforcing an ordinance that designated Millcreek Paramedic Service as the provider of EMS in the Township.
EmergyCare provided EMS in the Township for 25 years and marketed its own phone number as an alternative to 911. EmergyCare sold annual subscriptions to residents for emergency services generating around $1 million per year from Township residents. The Township passed an ordinance making it illegal to advertise or use a phone number for EMS other than 911. The Township also made it illegal for any provider other than the designated EMS provider to service the Township.
The lower court granted EmergyCare’s request for a preliminary injunction stopping the Township from enforcing the ordinance. On appeal by the Township, a Commonwealth Court panel held the ordinance violates the United States and Pennsylvania Constitutions. The panel first agreed that the Pennsylvania Emergency Medical Services System Act of 2009 and the Second Class Township Code both allow the Township to regulate EMS within the Township borders. The regulation could even go as far as designation of a “primary” proider to the Township, but could not prohibit another provider from servicing the Township. The panel held that a prohibition on emergyCare’s ability to contract for EMS with Township residents directly contravenes the Contracts Clause of the U.S. and Pennsylvania Constitutions. The Contracts Clause prevents States from passing laws to impair the obligation of contracts. Only where a State has a “significant and legitimate public purpose behind the regulation” may it impede on the freedom of contract. The panel found that the Township’s ordinance was a blatant attempt to quash competition by EmergyCare and protect Millcreek Paramedic Service from any other competitors. The panel found no evidence to demonstrate how doing so would further any public purpose.
This case is interesting because it does not answer the question how far a municipality may go to regulate EMS providers that do not have identifiable contracts with residents. Presumably, the commonwealth Court’s message is that you may designate a primary provider, but you may not designate an exclusive provider. However, it is not clear that to do so would violate the Contracts Clause where there is no existing or reasonably certain future contract.
MPL Law Firm represents municipalities and local governments in York County and surrounding areas. If you have any questions about this case or Municipal Law in general, please contact Andrew Miller at amiller@mpl-law.com, or (717) 845-1524.
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Employees’ Management Status and the Creation of a Fiduciary Duty
Employers are routinely concerned with a departing employee’s competitive rights the employer’s business, especially when the ex-employee held a management position with employer. In PTSI, Inc. v. Haley, PICS, Case No. 13-1178 (Pa.Super. May 24, 2013), the Pennsylvania Superior Court helped to define these rights where the ex-employee was considered at-will. Generally speaking, no fiduciary duty exists between an employer and management level employee simply by virtue of the employment relationship, and such ex-employee is free to compete against the former employer.
In PTSI, Inc., two management level employees of a sports training business decided to open their own sports training business which directly competed with their former employer’s business. Both of the former employees were considered at-will and were not subject to non-compete, non-disclosure or non-solicitation agreements. Prior to their resignations, the two employees incorporated a new business entity, leased a facility, and informed their current clients that they were starting their own sports training business. In an effort to stop the two employees’ competition, the original employer filed suit for conversion, breach of the duty of loyalty, and breach of the fiduciary duty of loyalty. The case was dismissed in favor of the former employees holding that no cause of action existed. The Pennsylvania Superior Court upheld the dismissal.
Pennsylvania law generally imposes a fiduciary duty on officers and directors which stand in a fiduciary relation to the corporation or similar business entity. Contrary to the fiduciary relationship that exists with officers and directors, the Court in PTSI, Inc. found that no fiduciary duty is owed by an employee to an employer simply by virtue of their employment relationship as a manager, absent a showing that the employee committed some fraudulent, unfair or wrongful act in the course of employment. The generally recognized rule is that an employer cannot restrict the post employment activities of an at-will employee, or prevent them, while employed, from looking for other employment, including with a competing business. However, this rule only applies to at-will employees and not to employees subject to employment contracts.
In Pennsylvania, the rule is clear that the solicitation of customers and use of customer lists is permissible unless there is a breach of an express contract or violation of some confidence. Even before the termination of employment, an employee is entitled to make arrangements to compete, with the one caveat that he/she may not use confidential information peculiar to the employer’s business and acquired during employment. As such, before the end of employment, an employee can properly purchase/create a rival business and, upon termination of employment, immediately compete with the former employer. The acquisition of the former employer’s clients is not invalid or illegal so long as the act does not violate any express agreement or involve any fraud or misrepresentation inducing the clients to leave the former employer.
In order to protect against immediate competition, employers are permitted to enter preventive contracts with employees that restrict competition. As a caution, employment agreements utilizing restrictive covenants must be carefully drafted in order to avoid various pitfalls that the courts routinely use to strike them down.
As with most employment law cases, the facts and individual circumstances will affect the outcome of each case. An attorney should always be consulted prior to relying on any of the information provided above. If you have a question regarding the actions of a former employee or former employer, or a different employment law question, please contact Christian Miller at cmiller@mpl-law.com or (717) 845-1524 ext. 121
Pennsylvania Passes Stormwater Authority Bill
A bill authorizing the creation of stormwater management authorities passed both the Pennsylvania House and Senate on June 30, 2013. Senate Bill 351 amends the Municipality Authorities Act (the “Act”) to allow municipalities the ability to create independent stormwater authorities to oversee stormwater management practices. The Bill adds stormwater planning and management to the purposes and powers of municipal authorities under the Act.
Section 5607 of the Act enumerates the specific purposes and powers of municipal authorities. For example, the list currently includes purposes such as sewer systems, water systems, parking garages, industrial development projects, etc. Senate Bill 351 adds “storm water planning, management and implementation” as a purpose and power of municipal authorities. The bill is intended to help municipalities respond to escalating costs of stormwater management as ultimately imposed through federal and state regulatory requirements. The bill also expressly protects existing authorities already engaged in some types of stormwater controls as part of managing combined or sanitary sewer overflows, or for flood control projects.
Similar bills were opposed in prior legislative sessions. However, enough members were convinced this time around that a stormwater authority is another useful option to address federal and state requirements covering stormwater management. The Pennsylvania Municipal Authorities Association supported the bill and was successful in adding the amendment which protects authorities already practicing some types of stormwater management, as stated above.
Stormwater authorities may be particularly useful in carrying out watershed implementation plans (“WIPs”) and to manage costs of compliance with stricter stormwater regulations, particularly the WIPs that are required for the Chesapeake Bay Total Maximum Dialy Load (“TMDL”).
Additional information on the bill and related stormwater matters will be posted as it becomes available. If you have a question regarding stormwater management or general municipal law, please contact Christian Miller at cmiller@mpl-law.com or (717) 845-1524 ext. 121.
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National Flood Insurance Program Reform
The Biggert-Waters Flood Insurance Reform Act of 2012 (the “Act”) significantly reforms the National Flood Insurance Program (“NFIP”), which previously subsidized flood insurance rates to property owners. NFIP affords eligible owners lower flood insurance rates that do not reflect the true flood risk. The Act phases-out flood insurance subsidies, thereby increasing flood insurance rates, with an end result of flood insurance rates which accurately reflect flood risks and are fully paid by the property owner. The reforms to the NFIP and collateral phase-outs have already began for many property classifications.
Additionally, the NFIP permited “grand-fathering”, allowing structures built in compliance with then-existing flood risk standards to continue to receive subsidized rates despite revised increases in flood risk. These “grand-fathered” rates will also be phased-out as municipalities adopt new Flood Insurance Rate Maps (FIRM). Property located within a flood hazard area due to an updated FIRM will have their flood insurance rates increased over a five year period.
Owners may get relief through FEMA’s Community Rating System (CRS). If an owner’s local municipality is enrolled in the CRS, such owner may be entitled to a discount between 5% to 45% on their floor insurance. CRS participation involves an array of public information and floodplain management activities by the municipality. The extent of the discount depends on the extent of the municipalities’ participation.
If you have any questions regarding the flood insurance or the implementation of the new reform policies in your municipality, please contact Christian Miller at cmiller@mpl-law.com or (717) 845-1524 ext. 121.