The Third Circuit acknowledged that the tax exemption for the UCUA's bonds benefited the UCUA (in addition to the bond purchasers) because the exemption made the bonds more attractive and thus led to the UCUA having "more money in its proverbial pocket (thanks to the federal government) than it would if it had to issue non-tax-exempt bonds at a regular interest rate," as Garg had argued.
Even granting Garg this point-that UCUA has effectively received a direct financial subsidy from the federal government-his argument still fails.
While the UCUA might have sold more bonds by virtue of the bonds' tax-exempt status, any connection between the proceeds from the UCUA's sale of its bonds, on one hand, and the revenues foregone by the federal government as a result of not taxing bondholders on their income from those bonds, on the other, seems excessively remote.
Under a nexus test, an FCA action based on the facts in Garg would not be sustainable because an insufficient nexus exists between the tax expenditure at issue (a tax exemption granted to purchasers of the UCUA's bonds) and the funds that were used to pay the false claims (the UCUA's own revenues from all sources).
This is the first facility in the country with this system," says Bryan Christensen, deputy executive director of UCUA
. The county already collects batteries to be recycled, attacking one major source of mercury at the incinerator, and UCUA
soon plans to collect fluorescent light bulbs, another great trouble maker.