DEFERRING TAXES ON §1033 EXCHANGES
Eminent domain lawyers work hard to secure just compensation for property owners. However, in gain situations, the IRS and most states want their share, too. Fortunately, solutions are available that seek to soften or eliminate the tax bite. When property is involuntarily converted, I.R.C. §1033 provides guidelines to defer capital gains and other taxes. Known as a “1033 exchange”, the code allows for non-recognition status if the proceeds are invested in similar property within 2 years after the close of the first taxable year in which any part of the gain is realized. Similar generally means property that is “similar or related in service or use” to the property so converted, terms that the IRS narrowly defines. Note that this period is extended to 3 years for condemnations of investment property, and more liberal “like-kind” rules apply to replacement property. The longer exchange period provides ample opportunity for tax planning. If properly structured, property owners can […]
DEFERRING TAXES ON §1033 EXCHANGES
The Pennsylvania Commonwealth Court has ruled for Sunoco Pipeline in the matter of Delaware Riverkeeper Network v. Sunoco Pipeline, No. 952 C.D. 2017 (Feb. 20, 2018). The court reasoned that a township lacks zoning authority to prohibit a pipeline facility regulated by the Pennsylvania PUC.
Pennsylvania law allows public utility corporations to use eminent domain power when the proposed use is “for the public”. If the proposed use is for the corporation and the public, Pennsylvania law looks to who is the primary and paramount beneficiary. If it is the corporation, Pennsylvania law precludes eminent domain power.
Transource sues landowners for access to properties where power lines are proposed
Transource Energy has sued 24 landowners, asking a Franklin County, Pa., judge to allow the public utility’s representatives to access properties to perform studies, tests and surveys as it proceeds with plans for 29 miles of overhead electric-transmission lines.
The company, through a subsidiary, requested in court documents immediate right of entry onto defendants’ properties. It claims landowners are prohibiting access despite “numerous contacts” since October.
“As a Pennsylvania public utility, Transource Pennsylvania has the power of eminent domain pursuant to the Pennsylvania Business Corporation Law of 1988,” lawyers said in filings.
Transource Pennsylvania made its filings a week ago at […]
The Pennsylvania Public Utility Corporation, Bureau of Investigation and Enforcement, issued a report requesting an emergency order to stop the use of Mariner East 1 for transportation of explosive natural gas ligquids. The well grounded safety concerns compelled the PUC Chairman to stop the transportation of the hazardous liquids. Inspections and monitoring will follow.
PUC shuts down Mariner East 1 pipeline, citing public safety concerns raised by sinkholes
Pennsylvania’s Public Utility Commission on Wednesday ordered a temporary shutdown of the Mariner East 1 natural gas liquids pipeline, saying it could have a “catastrophic” effect on public safety if it leaks.
PUC Chairman Gladys Brown approved a request by the commission’s Bureau of Investigation and Enforcement for an emergency order that would halt operation of the line until inspectors are satisfied that it meets safety standards.
The panel, in a petition issued earlier Wednesday, argued that the pipeline had been exposed by the appearance of sinkholes near the construction of two other pipelines – Mariner […]
Eminent domain power is available only for a public use with the need for certain property rights. Public use and the need are two issues raised in a county suit to protect property rights.
Northampton County challenging PennEast on eminent domain
Northampton County wants a jury to decide whether publicly protected open space should be disturbed by the proposed PennEast Pipeline.
The county is one of dozens of landowners in Northampton and Upper Bucks counties targeted by the consortium of energy companies for property acquisition through eminent domain.
These properties are part of the proposed route for the 36-inch-diameter natural gas line connecting Pennsylvania’s Marcellus Shale region 120 miles southeast to Mercer County, New Jersey.
PennEast opened eminent domain proceedings, suing property owners in federal court after efforts failed to purchase land for the route.
Federal regulators approved the $1 billion pipeline Jan. 19, conditioned on PennEast securing other necessary approvals.
The county disputes PennEast’s power to condemn publicly preserved open space through eminent domain. The parcels […]
The Sunoco Pipeline Mariner East 2 pipeline construction as resulted in many spills and permit violations. The Pennsylvania Department of Environmental Protection warned Sunoco Pipeline and then suspended construction. Later, the DEP agreed to allow the restart of construction via a $8,600,000 fine. Faherty Law Firm had negotiated temporary construction easement down from 36 months to 18 months. Now, Sunoco seeks an extension of the temporary construction easements to complete required work. Property owners are not obligated to sell the extension of the prior easements. Faherty Law Firm represents property owners threatened by additional property rights requests from Sunoco Pipeline.
A new volunteer organization is working to protect private property rights in Pennsylvania. Join in this admirable cause via ProtectOurPA@gmail.com.
Pennsylvania Landowners Coalition Fighting to Restrict Eminent Domain for NatGas Pipelines
A new coalition formed by landowners in Pennsylvania wants to strengthen private property rights and lobby lawmakers to limit the use of eminent domain by natural gas pipeline companies working across the state.
Protect Our Pennsylvania organized its first rally at the state Capitol in Harrisburg on Tuesday. It issued an invitation to supporters on social media, indicating the rally would be a public meeting to strengthen its mission of “individual rights to private property and public safety over statewide abuse of eminent domain.”
The coalition cited landowners’ struggles with Sunoco Logistics Partners LP’s Mariner East (ME) 2 pipeline and said it wants eminent domain to be applied more narrowly as more midstream companies work to build-out infrastructure to serve Marcellus and Utica shale production.
The 350-mile ME 2 would transport ethane, butane and […]
The New Jersey Department of Environmental Protection had previously presented concerns with the environmental impacts of the proposed pipeline from northeastern Pennsylvania into New Jersey. Now, the Department has taken the more agressive step of asking the federal regulators of FERC to reconsider the FERC approval from last month. Traditionally federal and state regulators have been very supportive of pipeline development. This filing follows the recent trend of more active regulatory oversight.
NJDEP asks Feds to reconsider PennEast pipeline decision, setting up potential legal battle
The NJDEP has asked FERC to place a stay on eminent domain proceedings by the controversial pipeline company.
The New Jersey Department of Environmental Protection filed a request with federal regulators Friday, asking that they reconsider a key decision regarding the controversial PennEast pipeline. The move signals an escalation in the DEP’s opposition to the project and could set the table for a legal battle.
In January, the Federal Energy Regulatory Commission granted a certificate to PennEast that would […]
A natural gas pipeline proposed for Luzerne County, Pennsylvania to Mercer County, New Jersey has been approved by FERC. The application still needs permits from the Delaware River Basin Commission and the New Jersey Department of Environmental Protection. The company has filed eminent domain documents. Property owners are encouraged to protect their property rights.
PennEast pipeline seeks eminent domain, plus U.S. marshals to protect workers
The PennEast Pipeline Co. filed eminent domain notices in federal court to obtain access to land owned by dozens of people in New Jersey and Pennsylvania who have refused its offers of compensation for building the proposed natural gas pipeline on their property.
Court documents were filed in both states on Tuesday, asking the courts to allow the company to immediately take possession of the rights of way where the pipeline would be built on individual properties.
The company also asked the court to approve the presence of federal marshals to “enforce the Court’s injunction” and to prevent landowners and their supporters from impeding construction.
The filing said that landowners and their supporters have […]
The Pennsylvania DEP ordered a January 3 halt to the Mariner East 2 pipeline construction following multiple permit violations. The DEP has now allowed a February 8 restart to construction following an agreement with Sunoco Pipeline with a fine of $12,600,000. The DEP will monitor further construction.
The delay has led Sunoco to offer the purchase of additional one year easements for ongoing construction/remediation work. Property owners are not obligated to agree. Faherty Law Firm is providing legal representation to owners approached by Sunoco Pipeline for additional property rights.
Sunoco fined $12M, but allowed to resume work on Pa. pipeline
Pennsylvania regulators are fining Sunoco more than $12 million for problems with a massive natural gas pipeline project, but letting work resume under a consent agreement.
The Department of Environmental Protection said Thursday that Sunoco Pipeline has made changes since work on the $2.5 billion Mariner East 2 pipeline was halted Jan. 3.
Rolfe Blume holds up bottles of water that he said came from […]