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2021 Albany Law School Grand Honor Award

Tue, 19 Oct 2021 17:45:18 GMT

JK Hage III Awarded 2021 Grand Honor Trustee Gold Metal from Albany Law School

The Trustees Gold Medal, first awarded in 1966, is the highest accolade bestowed by Albany Law School and is given to an individual who has demonstrated a record of exemplary support and dedication to the advancement of Albany Law School. This award is presented by the Board of Trustees from nominations provided by the National Alumni Association Board of Directors. The Trustee Gold Medal Awardee for 2021 is JK Hage III '78.

The distinguished list of Trustees Gold Medal honorees includes Warren M. Anderson ’40, Domenick L. Gabrielli ’36, Hon. Robert J. Sise ’49, Prof. David D. Siegel, Donald R. DeAngelis ’60, Hon. Harry J. D’Agostino ’55, Peter M. Pryor ’54, James N. Benedict ’74, E. Stewart Jones Jr. ’66, Edward P. Swyer, Daniel P. Nolan ’78, the Hon. Bernard J. Malone Jr. ’72 and the Hon. Randolph F. Treece ’76.

New York State Cannabis Licensing: What We Know So Far

Thu, 03 Jun 2021 20:39:53 GMT

On March 31, 2021 New York State became the fifteenth (15) U.S. state to legalize marijuana for recreational production, distribution and use, when Governor Andrew Cuomo signed into law the Marihuana Revenue and Taxation Act (“MRTA”). And yes, the MRTA uses an “h” instead of a “j” in the word “marijuana” for consistency with existing federal tax code language adopted in 1937. Go figure. The MRTA is sweeping, enabling legislation which establishes the New York State Office of Cannabis Management and a Cannabis Control Board –the bodies charged to establish and enforce NY’s licensing and regulatory standards and procedures.

Hage & Hage LLC (“H&H”) has been engaged in the development of recreational cannabis law across the United States over the last decade. The enactment of MRTA is a momentous first step for NY, but that’s just it: a first step. MRTA, though enacted, is not a complete solution – there are still several details to be settled to enable NY’s legal cannabis landscape to develop and take form. Perhaps the most impactful absence in MRTA’s provisions is the absence of a complete licensing process. This is particularly frustrating to aspiring cannabis entrepreneurs. New York is positioned in the center of an already vibrant Northeast cannabis ecosystem – Massachusetts, Vermont and Maine all legalized marijuana at the recreational level prior to NY – so NY’s cannabis entrepreneurs can readily see what is possible in neighboring economies and want to get started. However, there are other challenges to growth of the cannabis industry in NY – there will be a cap of unknown ceiling on licenses distributed by the Office of Cannabis Management, and certain applicants will have priority over others. So, adult-use licenses will be in high demand. Therefore, all potential recreational cannabis business applicants should make every effort to be prepared for the application process and be ready to apply as soon as possible when the application process opens – whenever that may be.

This article will explore the current state of MRTA’s licensing and license application standards and procedures. H&H is a staple law firm in the upstate NY community, with extensive business and regulatory compliance experience. If you or your business aspire to become a legitimate cannabis or marijuana related business, our firm can help you and your business make a complete and prompt license application. Now let’s discuss what we know so far about licensing for cannabis-related applications in NY.

Information Required for Application

While the application process has yet to be developed and completed, MRTA provides some pieces of information required for an application for a license to conduct a legitimate cannabis or marijuana related business. Such information includes:

a) the applicant's identity, including racial and ethnic demographics;

b) ownership and investment information, including the corporate structure; and

c) evidence of good moral character, including the submission of fingerprints by the applicant to the division of criminal justice services.

This is not the extent of the information required for an application. The Cannabis Control Board is empowered to set application standards and procedures – but further, or updated, standards and procedures, in addition to those currently established in MRTA, won’t arrive for some time. New York State government has expressed its intent to provide more information to the public no later than year-end 2021. NY is also providing its localities – cities, towns and villages – a 9-month window to decide whether to opt-out of retail and on-site consumption licensing within their respective jurisdictions. This 9-month window expires December 31, 2021. There is no indication as to how quickly NY’s licensing process standards and procedures will be developed to completion, but it seems likely that NY would wait to publish this information until all or most localities have determined whether to opt in or out.

Fees

One common argument for the legalization of recreational cannabis is the revenue which could be generated by the legal operation and taxation of the industry. Be not surprised, then, if the licensing fees are steep. Application and licensing fee amounts also have not been officially set, but MRTA indicates that there will be a non-refundable application fee which may change based on several factors such as the licensure sought by the applicant, production volume and/or “any other factors deemed reasonable and appropriate by the [Cannabis Control Board] to achieve the policy and purpose of [MRTA].”

The language of MRTA also provides for the possibility of charging a biennial license fee to keep the license active. This biennial fee will be based on multiple factors including, but not limited to, “the amount of cannabis to be cultivated, processed, distributed and/or dispensed by the licensee or the gross annual receipts of the licensee for the previous license period….” Fees may be reduced or waived completely for applicants who qualify as “social and economic equity applicants”.

Selection Criteria

The selection criteria, while also not fully developed, are a robust and nuanced set of requirements by which the Office of Cannabis Management will assess each applicant. Under MRTA, applicants shall be selected “based on, but not limited to, the following criteria:

(a) the applicant is a social and economic equity applicant;

(b) the applicant will be able to maintain effective control against the illegal diversion or inversion of cannabis;

(d) the applicant and its officers are ready, willing, and able to properly carry on the activities for which a license is sought including with assistance from the social and economic equity and incubator program, if applicable;

(e) where appropriate and applicable, the applicant possesses or has the right to use sufficient land, buildings, and equipment to properly carry on the activity described in the application or has a plan to do so if qualifying as a social and economic equity applicant;

(f) the applicant qualifies as a social and economic equity applicant or sets out a plan for benefiting communities and people disproportionally impacted by enforcement of cannabis laws….”

Applicants must also be aware that not all applications will be considered equally—applicants who qualify as “social and economic equity applicants” will be given priority status by the Office of Cannabis Management; may have reduced, or completely waived, application fees; and, as you can see in the selection criteria above, will not be required to provide all the information required of an applicant who is not a social and economic equity applicant. The selection criteria regulations are plentiful and dense, as regulations tend to be, and there are varying requirements based on the license sought and the identity of the applicant. The learning curve of this application process will be challenging, and many changes will happen at a moment’s notice—therefore, applicants should be diligent in their preparation to apply.

Priority

New York State established in MRTA a clear goal to “promote diversity in commerce, ownership and employment, and opportunities for social and economic equity in the adult-use cannabis industry” and, to that end, MRTA’s text indicates that New York State plans to distribute 50% of its initial licenses, whatever the cap may be, to social and economic equity applicants. MRTA defines a social and economic equity applicant as “an individual or entity who is eligible for priority licensing” under the criteria discussed above. Specifically, under MRTA, social and economic equity applicants are:

(a) individuals from communities disproportionately impacted by the enforcement of cannabis prohibition;

(b) minority-owned businesses;

(e) distressed farmers; and

(f) service-disabled veterans.

Additionally, under MRTA, a business which is owned by a person who is a woman and a minority may identify itself as either a minority-owned business, a woman-owned business, or both.

Conclusion

While the standards and procedures in connection with licensing in NY are not completed under MRTA at this time, there is enough information in MRTA that potential applicants should be preparing their business plans, establishing and organizing the legal entity to apply for the license, and be ready to apply early and effectively. Applications will be abundant and rapid; half of the initial licensees will be distributed to qualified social and economic equity applicants who are afforded priority under MRTA, with an undetermined ceiling on the number of licenses distributed. Applicants will have many decisions to make and must be prepared for further requirements in addition to those discussed in this article. H&H offers new business strategy and formation guidance, as well as regulatory and state application support, to individual and corporate applicants. If you are unsure whether you qualify as a social and economic equity applicant, H&H may assist you. If you are unfamiliar with the regulations, struggling to develop a business plan, or need assistance getting started with your business, H&H has the tools, experience and expertise to assist you. Call us anytime at (315)-797-9850 or email gabriel@hagelaw.com when you are ready to get started.

COVID-19 Notice

Mon, 30 Mar 2020 20:58:37 GMT

The ripple effect caused by the Coronavirus Pandemic and the impact it has had on us and our way of life is, in a word, unprecedented. Yet, as we have been for almost 90 years, Hage & Hage LLC (“H&H”) is open and working hard to ensure that you are not blindsided by the constantly-changing legal and business landscapes during the Pandemic. Below see a brief breakdown of some important sections of latest legislation from both The White House and New York State:

Emergency Paid Sick Leave Act

BACKGROUND INFORMATION

Enacted Date: 18 March 2020|Effective Date: 2 April 2020|Expiration Date: 31 December 2020

The recently enacted federal Emergency Paid Sick Leave Act, which is one of two parts of the Families First Coronavirus Response Act (the “Act”) requires private employers that employ fewer than five hundred (500) employees and public employers to provide an additional eighty (80) hours of emergency paid sick leave (“E-PSL”) to full-time and part-time employees who are unable to work or telework for certain reasons related to the coronavirus (“CV19”) outbreak .

FULL-TIME EMPLOYEE BENEFITS

The Act permits full-time employees to use E-PSL. E-PSL is available to employees who are unable to work or telework for the following reasons and at the applicable pay rates noted. The Act allows a full-time employee to take up to 80 hours of paid sick leave , when:

The employee is subject to a federal, state, or local quarantine or isolation order related to CV19.
The employee has been advised by a health care provider to self-quarantine because of CV19 concerns.
The employee chooses to obtain a medical diagnosis because the employee is experiencing symptoms of CV19.

Pay is at the greater of the employee’s regular rate or applicable minimum wage, but capped at $511 per day and $5,110 in the aggregate.

The Act allows a full-time employee to take up to 80 hours of paid sick leave , when:

The employee is caring for or assisting an individual who is subject to an order or recommendation as described in 1 or 3 above.
The employee is caring for the employee’s child because of school or daycare closure, or because the child care provider is unavailable, due to CV19.
The employee is experiencing any other substantially similar condition specified by Human Health Services.

Pay is at two-thirds of the greater of the employee’s regular rate or applicable minimum wage , but capped at $200 per day and $2,000 in the aggregate.

PART-TIME EMPLOYEE BENEFITS

The Act allows a part-time employee to take up to the number of hours equal to the number of hours that such employee works, on average, over a two-week period, of paid sick leave, paid at the employee’s regular rate , when:

The employee is subject to a federal, state, or local quarantine or isolation order related to CV19 .
The employee has been advised by a health care provider to self-quarantine because of CV19 concerns.
The employee chooses to obtain a medical diagnosis because the employee is experiencing symptoms of CV19.

The Act allows a part-time employee to take up to the number of hours equal to the number of hours that such employee works, on average, over a two-week period, of paid sick leave, paid at two-thirds the employee’s regular rate , when:

The employee is caring for or assisting an individual who is subject to an order or recommendation as described in 1 or 3 above.
The employee is caring for the employee’s child because of school or daycare closure, or because the child care provider is unavailable, due to CV19.
The employee is experiencing any other substantially similar condition specified by Human Health Services.

Part-time employees or those who work irregular schedules, must be paid based on the average number of hours they worked in the six (6) months prior to taking the emergency sick leave.

Employees who have worked for less than six (6) months must be paid based on the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.

An employer may not change its current paid leave policy after enactment , to avoid the obligations of the additional leave mandated by the Act.

Emergency Family and Medical Leave Act

BACKGROUND INFORMATION

The Emergency Family and Medical Leave Act (“E-FMLA”), which is the second part of the Families First Coronavirus Response Act and expands the current federal Family and Medical Leave Act (“FMLA”).

E-FMLA compels employers with fewer than five hundred (500) employees to provide paid family leave to employees with up to 30 days or more of tenure , who are unable to work or telework due to childcare needs triggered by COVID-19.

E-FMLA allows an employee, who is unable to telework , to take up to 12 weeks of job-protected leave to care for the employee’s child (under the age of 18), if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to a public health emergency.

E-FMLA applies to employees who have been employed for at least thirty (30) calendar days prior to taking the E-FMLA.

The first ten (10) days of E-FMLA can be unpaid, although employees may elect to use other paid benefits (accrued vacation/PTO, accrued sick leave, etc.) to cover that time.

New York State Covid-19 Leave Law

BACKGROUND

The NY COVID-19 Leave Law (“NYLL”), signed into law on March 18, 2020 by Governor Cuomo, provides emergency paid sick leave and job protection to certain New York-based employees who have been impacted by CV19. Please note that as of 2 April 2020, The Act will replace the NYLL .

Quarantine and isolation leave required by the NYLL goes into effect immediately.

EMPLOYEE BENEFITS

NYLL provides sick leave and other benefits to employee’s subject to mandatory or precautionary orders of quarantine or isolation issued by New York State, the department of health, local board of health or any other governmental entity duly authorized to issue such order due to CV19.

NYLL’s requirements vary based on the employer’s number of employees as of January 1, 2020 and, in some cases, net income.

Quarantine and isolation leave are required as follows:

Large Employers and Public Employers (100 or more employees as of Jan. 1, 2020)— paid sick leave up to a total of fourteen (14) days, plus full job protection.
Medium Sized Employer (11-99 employees as of Jan 1, 2020)— paid sick leave for five (5) days and unpaid sick leave until the termination of any order of quarantine or isolation, plus full job protection.
Small Employers (10 or fewer employees as of Jan. 1, 2020, and net income of more than $1 million in the previous tax year)— paid sick leave for at least 5 days paid and unpaid sick leave until the termination of any quarantine or isolation, plus full job protection.
Small Employers (10 or fewer employees and a net income of $1 million or less) – unpaid leave until the termination of any order of quarantine or isolation, the ability to qualify for paid family leave and temporary disability benefits, plus full job protection.

NYLL will offset the difference of any benefits offered by the federal government, but in addition to any accrued sick leave provided by an employer’s policies, if any.

H&H advises relentless vigilance and due diligence because the legal landscape is constantly changing and businesses are constantly updating or changing their protocols so as to comply with the law, keep their business alive and to ensure the safety of their employees.

If you or your employer needs assistance, please call us at 315-797-9850 for a complete analysis of the Families First Coronavirus Response Act and how it applies to you.

Solar in New York, The Legal Landscape of Sustainable Energy Part 2: Solar Developers

Fri, 23 Aug 2019 16:00:00 GMT

Solar developers face some similar legal issues as the property owners discussed in Part 1, but also have some unique legal issues of their own. A point which is common to solar installation generally, but of particular importance to developers, is the property tax abatement offered by New York state. Put simply, solar arrays are taxed as real property, thus a landowner’s tax assessment may increase once the array is put into service.

H&H has vast experience with the issues associated with sustainable energy. We stand ready to assist you, whether you are a homeowner looking to install your own solar panels or a commercial developer looking to install large commercial solar arrays

New York has chosen to encourage solar development in the state by passing legislation which offers some relief to property owners in the form of tax abatement. §487 of the New York Real Property Tax Law provides an exemption from property tax increases assessed as a result of the installation of solar panels. However, municipalities can opt out of this exemption. In most cases, if a municipality opts out of the §487 exemption, large scale commercial solar development is not economically feasible.

The obstacles do not end there. Even if the municipality has not opted out of the §487 exemption, many municipalities require larger commercial projects to enter into a Payment-in-Lieu-of-Taxes (“PILOT”) Agreement with the municipality, school district, and/or the county. The PILOT amount may be less than the current property tax levy but could also be more than the current property tax levy. Further, the tax payment will most certainly increase over the life of the PILOT.

The negotiation of these PILOT agreements may impact the long-term economic feasibility of the project for the developer. This means that the application for and negotiation of the PILOT amount is of paramount importance.

Finally, developers must also ensure that the proper permits and zoning approvals are obtained from the appropriate municipal agency. Failure to do so could endanger the project before it even begins.

H&H stands ready to assist you with all of your sustainable energy needs. Please contact us today for a consultation.

Solar in New York, The Legal Landscape of Sustainable Energy Part 1: The Property Owner

Fri, 23 Aug 2019 16:00:00 GMT

Are you a homeowner looking to “get off the grid” by installing a solar panel on your roof or property? Are you a rural landowner who was approached by a solar company looking to lease a portion of your land to install solar panels? Or are you a solar developer looking to break into the New York solar market? Whatever category you are in, there are a variety of legal issues that you may encounter throughout the process. You need a legal advisor with experience.

H&H has extensive experience with the issues associated with sustainable energy. We stand ready to assist you, whether you are a homeowner looking to install your own solar panels or a commercial developer looking to install large commercial solar arrays.

Homeowners can certainly benefit from installing solar panels on their property. Installing solar panels can typically lower (or even eliminate) the need to purchase electricity from the power grid. Depending on the electric rates in your area, you could save a significant amount of money each year. Further, there may be federal, state, and local tax incentives available to reduce the cost of installation.

There are specific legal issues which may complicate your installation efforts, though. For example, homeowner associations or neighbors may object to your plans; and local municipalities may have specific ordinances regarding installation, including zoning restrictions and adequate permitting and inspections after installation. Finally, solar installers have their own agreements which determine the terms and conditions of installation, maintenance, and repair which are important for you to understand.

In the rural areas of New York, more and more landowners are being approached by solar developers looking to lease portions of farmland that may be suitable for large-scale commercial solar arrays. At first glance, many landowners are excited when presented with the opportunity for a guaranteed income stream on portions of their land which they may or may not use. However, in many cases these leases are not as beneficial for landowners as it may seem.

For example, solar developers may install large arrays on your property, but decline to connect your home to those arrays. Thus, you, the landowner, must still purchase electricity from the grid and will not directly benefit from the energy generated from the arrays on your property.

Typically, solar leases are in the 15 to 25-year range. With such long life-spans, an issue to consider is whether the solar company will still exist at the end of the lease term. If it does not survive, what happens to the solar array? Who is responsible for maintenance and, eventually, removal of the array if the company ceases to exist, or the lease term expires?

There are also many issues associated with the lease payment itself. A few questions that a landowner must ask include: what is the value of the land to be leased (taking into account its present use but also other potential uses)? How much does the developer stand to profit from the array, and should you, the landowner, share in those profits? Is the land more valuable as farmland, or is it (or will it become) unsuitable for agricultural use after the lease? Will the lease payment stay the same or will it escalate over the years to account for factors such as inflation?

You should also know that there may be penalties assessed when converting the use of agricultural land from an agricultural use to a nonagricultural use. Who pays those penalties?

These and many other unique issues can present themselves when a homeowner or developer pursues solar or any other sustainable energy development.

In all of these cases, the need for experienced and effective legal representation is key. H&H stands ready to assist you with all of your sustainable energy needs. Please contact us today for a consultation.

SUNY Poly Holds Ribbon Cutting with Hage Family Members for the New “Hage Family Robotics Lab”

Thu, 27 Dec 2018 16:00:00 GMT

SUNY Poly Holds Ribbon Cutting with Hage Family Members for New ‘Hage Family Robotics Lab’

Lab Supports Hands-on High-Tech Student Learning at the Institution’s New Center for Global Advanced Manufacturing Located at its Utica campus

UTICA, NY – In recognition of decades of significant support for SUNY Polytechnic Institute (SUNY Poly), the institution held a ribbon cutting Thursday, December 20, 2018, for the new “Hage Family Robotics Lab.” The laboratory, located at SUNY Poly’s new Center for Global Advanced Manufacturing (CGAM), is home to research, development, and educational opportunities based on robotics and automation capabilities that are available to faculty, students, and the community, and it will now serve to honor the meaningful impact of the Hage family’s donations, time, and service over nearly a quarter century.

“On behalf of the SUNY Poly Foundation, I am grateful for the generous contributions of the Hage family, who have been steadfast supporters of the hands-on educational opportunities that SUNY Poly students have always received,” said SUNY Poly Foundation Executive Director Andrea LaGatta. “We are thrilled to be able to name this state-of-the-art robotics lab after a family whose impact is helping support SUNY Poly students as they gain highly relevant skills that will help them succeed while strengthening our local, regional, and New York State workforce.”

“Hage & Hage is a longtime leader in technology innovation, and this recognition is a continuation of that tradition,” said J.K. Hage III. “SUNY Poly represents the future of technology in Central New York, and we, as rural New Yorkers, are committed to full participation in the 21st century economy.”

The Hage Family Robotics Lab is located in Donovan Hall at the institution’s Utica campus and is home to a number of robotics technologies that enable unique experiential learning opportunities and collaboration. For example, Baxter, a smart, collaborative robot is housed in the lab, aiming to redefine the use of industrial automation in manufacturing environments. Baxter is also currently being used in the research of Dr. Yu Zhou, SUNY Poly Associate Professor of Mechanical Engineering.

“It is hard to summarize the impact that the Hage family has had on the SUNY Poly Foundation because their influence extends across so many areas, including providing financial support for student scholarships, bringing forth innovative ideas for promoting the college and the foundation in the community, and supporting opportunities for students through mentoring programs,” said Anita Brown, SUNY Poly Foundation Chairperson.

The Hage Family Robotics Lab is accessible to any SUNY Poly student who is inspired to pursue a robotics project of his or her own upon completion of a baseline safety test. In addition, the lab supports the institution’s Fabrication Club, as well as FIRST Robotics Team #5030, The Second Mouse, an award-winning FIRST robotics team that has earned a berth to the FIRST robotics world championship in three out of the last five years. The team is comprised of area high school students mentored by SUNY Poly Engineering and Computer Science mentors. For more information on The Second Mouse, please visit: www.team5030.com ; and for more information about CGAM, please visit https://sunypoly.edu/academics/cgam.html .

A SUNY Poly mechanical engineering technology student, with assistance from a leader in SUNY Poly’s Machine Shop, fabricated a donor sign that was hung in the Hage Family Robotics Lab as part of Thursday’s ceremony. The donor sign memorializes gratitude for the family’s consistent contributions.

For more information on how you may also donate to SUNY Poly, please visit: https://sunypoly.edu/foundation/giving.html . There are many ways to give to the SUNY Poly Foundation, and gifts help support academic programs, campus enhancements, faculty development, and student success.

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About SUNY Polytechnic Institute (SUNY Poly)

SUNY Poly is New York’s globally recognized, high-tech educational ecosystem. SUNY Poly offers undergraduate and graduate degrees in the emerging disciplines of nanoscience and nanoengineering, as well as cutting-edge nanobioscience and nanoeconomics programs at its Albany campus, and undergraduate and graduate degrees in technology, including engineering, cybersecurity, computer science, and the engineering technologies; professional studies, including business, communication, and nursing; and arts and sciences, including natural sciences, mathematics, humanities, and social sciences at its Utica/Rome campus; thriving athletic, recreational, and cultural programs, events, and activities complement the campus experience. As the world’s most advanced, university-driven research enterprise, SUNY Poly boasts billions of dollars in high-tech investments and hundreds of corporate partners since its inception. For information visit www.sunypoly.edu .

An Examination of Cryptocurrency: The 21st Century’s Competitor to the Dollar Economy

Thu, 03 May 2018 16:00:00 GMT

You probably have heard about online money, or cryptocurrencies, such as Bitcoin. You even may have considered investing in one of the many cryptocurrencies now in circulation. But what are cryptocurrencies?

Are they secure?
How do cryptocurrencies differ from one another?
Can a cryptocurrency replace traditional currency?
Are there legal issues you need to be aware of?

Hage&Hage is an innovative, technologically savvy law firm; we stand ready to assist you in analyzing 21st century technology issues like those presented by cryptocurrency.

Traditional currency relies on trusted third parties like the Federal Reserve and banks which create a payment network with accounts, balances, transaction ledgers. The traditional financial system employs systems to stabilize the money supply and to prevent currency fraud. All transactions can be verified by the centralized network of banks. Bank account holders trust that the bank is holding their money, protected to a point by insurance, and that the balance and transaction detail is what the bank says it is.

Cryptocurrencies, on the other hand, are a type of digital currency that is non-trust based; that is, there is no centralized authority verifying accounts, balances, and transactions. Cryptocurrencies uses cryptography, rather than a centralized banking authority, to secure and validate the transactions, to create additional units, and to verify the transfer of assets.

It works like this:

When a cryptocurrency like Bitcoin is exchanged, the “seller” signs off on the transaction with a private key. After the seller enters the key, the transaction is then broadcast over a peer-to-peer network of individual computers. Almost immediately, everyone on the network will know about the transaction. The transaction is not final, however, until a third party confirms the transaction. Those third parties, called miners, use computers to solve a mathematical puzzle. The answer to that puzzle, called a hash, then is used to create a block which is then added to the blockchain. Once in the blockchain, the transaction cannot be forged, changed, or cancelled – the transaction is final, and the same unit of currency cannot be spent again by that seller.

There are many issues surrounding cryptocurrencies that prevent them from replacing traditional currencies. Since the legal landscape of cryptocurrency is in its infancy, many of these issues have yet to be definitively resolved, and more issues are continually arising.

The anonymity inherent in cryptocurrency transactions brings a host of potential criminal abuses such as money laundering and funding of terrorism which are crimes under state and federal law.
Since cryptocurrencies are contained in digital wallets rather than banks, the value is not backed by insurance or by the full faith and credit of any government. Further, cryptocurrency is subject to drastic fluctuations in value. Thus, there is no way to truly protect the value of your cryptocurrency.
Various state and federal agencies treat cryptocurrency differently, thus there are several sets of laws and regulations which must be considered. For example, the IRS treats cryptocurrency as property, thus income derived from cryptocurrencies may be reportable on your tax return, while losses may not be. The Commodity Futures Trading Commission, alternatively, defines cryptocurrency as a commodity. Finally, the SEC has found that in certain cases, cryptocurrency is a security subject to federal securities laws.
Municipalities take a keen interest in cryptocurrency mining operations within their respective municipalities because of the amount of electricity needed to validate cryptocurrency transactions.
The protections contained in the Electronic Funds Transfer Act, which affords consumers safeguards when purchasing goods online, do not apply to cryptocurrency transactions.

In 2015, New York enacted cryptocurrency regulations in the form of the Bitlicense regulatory scheme, 23 NYCRR Part 200 – Virtual Currencies. In essence, New York now requires certain individuals and businesses to apply for, and obtain, a license to engage in what New York terms “Virtual Currency Business Activity”.

Hage&Hage stands ready to advise you about cryptocurrency issues, New York’s regulatory scheme, and a host of other, innovative technologies. Contact us today for a consultation.

“Blockchain, A Primer”

Thu, 29 Mar 2018 16:00:00 GMT

You hear the term “blockchain” quite frequently these days, usually in the context of Bitcoin or other cryptocurrencies, but blockchain technology has a wide variety of applications and the potential for even more. But, as with all things new, use and experimentation will shed light on the ways in which blockchain technology can impact our lives (i.e., internet use, financial transactions, information storage, etc.).

To many of us, though, blockchain is a mystery. Even those who are more familiar with blockchain freely admit that they do not fully comprehend it. Our firm advises clients on technology legal and business issues, and we intend in this blogpost to offer you a primer on blockchain and to explore possible blockchain applications beyond cryptocurrencies.

A blockchain is a continuously growing network (a chain ) of encrypted digital records stored simultaneously on many computers. A cryptographic hash function is a mathematical algorithm which maps a bit string of data (a block ). Each cryptographic hash is designed to be a one-way function which is infeasible to corrupt. The input data is called the message and the output data is called the hash value or hash . Each block in a chain contains a hash of the previous block in the chain, a timestamp and transaction data.

Decentralization, though, is the central feature of blockchain technology.

Decentralization renders the blockchain highly resistant to alteration. The mass collaboration of the computers comprising the peer-to-peer decentralized network and the offer-and-acceptance dynamic of each transaction create a reliable, robust workflow. The blockchain cannot be controlled by any single entity and it allows for simultaneous access and revision to all users involved. All the information on the blockchain is updated and re-verified in ten-minute intervals, and multiple parties are required to authorize any alteration to information on the blockchain. Virtually anything of value can be processed on the blockchain, so it’s use is not limited to financial transactions. To compromise any of the data on the blockchain, a hacker would have to simultaneously override the entire network, which requires enormous computing power. Therefore, from a security perspective, decentralization seems rather appealing compared to the centralization of financial institutions.

An additional feature of decentralization is the lack of an intermediary such as a bank. For example, if one individual wishes to make a payment to another individual on the blockchain, no intermediary is necessary to verify or process the payment, the way banks do so. Instead, the blockchain verifies and processes the payment, and accordingly updates the data every ten minutes as usual. Removing the intermediary from the equation creates a more efficient system which can instantaneously process and verify transactions, as opposed to waiting for a bank to verify and approve the transaction, which can take days. This level of low cost efficiency and self-verification has the potential to replace banks at the center of financial management.

Let’s recap—a blockchain is a network of many computers (that’s the chain) which controls and stores bit strings of data (blocks) and duplicates them across the entire peer-to-peer network. All users on that network may simultaneously access and revise the information, and the entire blockchain updates itself at regular intervals. To relate it to something many people have used, Google Docs is a helpful analogy: when a Google Doc is created, the creator can set the number of users who may access and revise the document; the users may access that document through their Google accounts at any location and make any revisions they wish.

Where Google Docs and a blockchain differ is that a single user can alter a Google Doc, and a blockchain requires the consensus of multiple unrelated users to modify a blockchain (all previous blocks must also be changed if necessary). A blockchain retains each iteration of a document or ledger for the duration of its lifespan on the blockchain.

Each block contains a timestamp and a link to the previous block, which forms a chronological chain of information that is reinforced and secured by unique digital signatures. This ensures that this chronological recordkeeping mechanism cannot simply be altered at any moment by a single user. Such a mechanism makes the blockchain a viable domain for the creation, storing and sharing of legal documents.

Every transaction or action requires the authorization of multiple users before the blockchain will reflect that transaction or action. This is the conceptual backbone which defines Bitcoin and other cryptocurrencies. Why does any single Bitcoin have value? Because multiple unrelated parties agree: a) that a Bitcoin has value, and b) on the amount of value the Bitcoin has. Consensus is the key. Yet, while this user-to-user consensus across a vast digital landscape is the key to a blockchain’s reliability, it is that very decentralization which makes many consumers and investors uncomfortable.

The U.S. Dollar is backed by the full faith and credit of the U.S. Government, which is overwhelmingly considered by our society and other societies across the globe to have value. The stock market reflects the consensus of investors: the increase in price of a particular stock is an indication of investors’ shared belief in the value and relevance of that stock. On a more micro level, a contract between two parties is deemed to have value because the two parties agree that it does and agree to be legally bound by its terms and conditions. In other words, consensus is value. Therefore, it may only be a matter of time before cryptocurrency replaces tangible money, or before blockchain technology becomes your everyday wallet, notebook and stock portfolio

As a closing point, let’s consider the growing preference for transparency. Nearly ubiquitous mobile broadband has created a world of easy and common access. The mobile use of tools, such as Google, Facebook and Twitter, has placed the world of information at one’s fingertips. The functions that blockchain technology serve in our lives have yet to unfold, and, while blockchain technology is not devoid of risk, its benefits potentially are many. Risk is, after all, the eternal companion of change.

Drone Law Update: Drone Regulation in New York

Wed, 21 Feb 2018 16:00:00 GMT

Prior to 2015, the use of non-commercial unmanned aerial vehicles, or drones, was largely unregulated. Sensing the growing popularity and risk of so many commercially available drones likely to populate the skies, the FAA issued new rules which required, among other things, registration with the FAA of all drones which fit certain criteria. To date, more than 900,000 individuals have registered to fly non-commercial drones in the United States.

The FAA’s regulation was not without some controversy. The registration requirement was challenged in a District of Colombia Circuit Court in 2017. The Circuit Court ruled that the registration requirement violated an earlier 2012 law which prevented the FAA from promulgating rules on the operation of model aircraft ( See Taylor v. Huerta , No. 15-1495).

That decision was rendered moot on December 12, 2017 when President Trump signed the National Defense Authorization Act of 2017 which brought the registration requirement back in force. Non-commercial drone pilots must again register their drones with the FAA and pay the $5 registration fee.

The effect of the registration requirement remains to be seen. The penalties for failing to register are severe – civil penalties of up to $27,500 and criminal penalties up to $250,000 or three (3) years in prison. The penalties are enough to encourage compliance with the registration requirements, but the reality of enforcement will be difficult, if not impossible, for the FAA in all but the most catastrophic circumstances.

Enforcement, then, will be largely left to local authorities. What is New York doing to deal with this new technology?

Enforcing registration is unlikely to be a high priority for local authorities. Judging by the majority of the laws currently on the books relating to drones, New York municipalities are primarily concerned with privacy – i.e. restricting the use of drones over personal or public property without consent. Additional laws address terrorism concerns by limiting drone use over public events. Two municipalities, New York City and Hempstead, require a user both to register with the FAA and to apply for a license or permit from the municipality.

That your municipality does not address drone use does not mean that you have the right to unmitigated use, however. In addition to the FAA regulations, privacy and trespass laws have been used to prosecute New York drone operators.

Hage and Hage has extensive experience in advising clients on cutting edge technology like drones. Call or email us today for an initial consultation.

So, You Started a Business, Now What?

Wed, 31 Jan 2018 16:00:00 GMT

You did it. You took your hobby, your passion, your part time side job and turned it into a career. Congratulations! Along the way, someone probably told you to incorporate or form an LLC to protect you and your family. You then paid an attorney or, more likely than not these days, a web-based legal service site to draft, file, and publish the necessary documents and notices. You may even have a shiny new binder with your company name on it and legal-looking documents inside as well. So, you and your family are protected now, right?

In many instances, the answer is no. Simply organizing an entity is only one, but certainly not the only thing you should do to ensure you will have the protection of NY’s business laws. Have you ever heard the phrase “pierce the corporate veil?” It describes what happens when a court disregards your business entity form because the business owner fails to follow the formalities of owning a NY business entity. In short, if the “veil” is pierced, then the owner, shareholder, director, or member is held personally liable for the debts, obligations and liabilities of the entity.

So, what should a business owner do to insulate him or herself from liability? Hage & Hage has long experience in advising business owners on avoidance of liability and exploitation of opportunity.

Some of the most common errors businesses make include:

Failure to follow formalities which include, but are not limited to, failure to keep entity records, hold annual meetings, take and adopt minutes, adopt bylaws or an operating agreement, electing directors and officers, and issuing stock.
Failure to supply adequate capital – in all its forms. You need money to start a business, but you also need money to stay in business. Leaving a business without the means to support its day-to-day activities and/or future growth is a tell-tale sign of abuse of the corporate form and its protections. Take distributions, dividends, and certain bonuses only when there is a surplus, and only when doing so will not hurt the business.
Failure to separate business and personal assets. Keep separate accounts for the business and personal banking. Don’t use corporate funds to purchase personal items. If you must do so, repay the corporation as soon as possible.
Failure to pay annual taxes and fees. Business entities, like individuals, must pay taxes. Depending on the type of entity, the business may be required to file annual tax returns. Further, New York business entities must pay annual fees to New York State.
Failure to obtain the requisite business licenses.
Failure to segregate personal assets from entity debts.
Failure to consider also, unemployment, worker’s compensation, and disability insurance benefits for those businesses which qualify. These requirements could subject a new business to crippling fees and penalties if not strictly followed.

At Hage & Hage , we offer a wide range of services to our business clients. We can help guide you through the process of starting your own business, the proper entity formation procedures, and advise on what is expected of you as a business owner to adequately protect you and your family. Contact us today for an initial consultation.

Buzzing Around the Mohawk Valley

Wed, 16 Aug 2017 16:00:00 GMT

MVCC is a member of the NUAIR Alliance, which is a New York based Not-For-Profit coalition to more than 100 private and public entities and academic institutions working together to operate and oversee drone test ranges.

Advanced technology is becoming a major player in the area. Steven DiMeo, President of Mohawk Valley EDGE, said, “we think the entire innovation strategy, which focuses on advanced electronics, unmanned aerial systems and cybersecurity are three pivotal strategic thrusts for the Mohawk Valley region.”

Griffiss International Airport (“Griffiss”) is the new hot spot for drone testing. Between Griffiss and Syracuse, New York there is a fifty (50) mile flight traffic management system that operates as a drone testing corridor.

Lawrence Brinker, Executive Director of the Northeast UAS Airspace Integration Research Alliance, maintains that the corridor’s main purpose is for drone companies to experiment with the ability to fly drones beyond the visual line of sight (“VLS”) of the pilot. However, the Federal Aviation Administration (“FAA”) restricts commercial and residential drones to be operated only within the remote pilot’s VLS, severely hindering the efficacy of drones as a commercial delivery system.

The drone testing corridor is lined with new technology, such as sensors on the ground that allow the remote pilot to receive feedback on the location of the drone without being able to see it.

With the implementation of this program and the growing interest of drone development the sky’s the limit in Oneida County. Contact Hage & Hage with any questions you have on drone law and applicable FAA Regulations.

Working Remotely: Changes to the Federal Aviation Administrative Law for Commercial Drones

Thu, 22 Sep 2016 16:00:00 GMT

A new era has begun. The Federal Aviation Administration (“FAA”) announced the implementation of the first operational rules for routine non-hobbyist use of small unmanned aircraft systems (“UAS” or “drones”) on August 29, 2016.

A small drone is any unmanned aerial vehicle that weighs less than fifty-five (55) pounds. Here is a summary of some of the salient rules:

To fly a drone commercially, the pilot either must hold a remote pilot certificate with a small UAS rating or be under the direct supervision of a person who does hold a remote pilot certificate. To qualify for a remote pilot certificate a person must demonstrate aeronautical knowledge by passing an initial aeronautical knowledge test. Moreover, a person operating a small UAS must be vetted by the Transportation Security Administration and be at least 16 years old.

While flying a drone, the operator must keep the drone within visual line of sight—meaning that the operator must be able to see the drone with the naked eye. Additionally, there must be a minimum weather visibility of three (3) miles from an operator’s control station. A drone may only be flown during daylight or during civil twilight hours if the drone has anti-collision lights. During operation, a drone cannot exceed 100 mph or exceed a maximum altitude of 400 feet above ground level. If an operator has plans to use a commercial drone which would violate FAA rules the operator can apply for a waiver. The FAA rules include an option to apply for a certificate of waiver, which, if granted, allows a small UAS to deviate from certain operating rules if the FAA finds that the proposed operation can be performed safely.

While the new rules are exciting, delivering packages by drone may be limited for a period of time. The new rules allow drones to carry external loads; however, the object being carried must be securely attached and cannot adversely affect the flight characteristics or controllability of the aircraft. Additionally, the payload/cargo and the drone must have a combined weight of no more than 55 pounds, the flight has to occur wholly within the boundaries of a single state and the drone has to remain within the visual line of sight of the operator. Therefore, long-distance travel for delivery may be thwarted by these rules.

“People are captivated by the limitless possibilities unmanned aircraft offer, and they are already creating business opportunities in this exciting new field,” said US Transportation Secretary Anthony Foxx. “These new rules are our latest step toward transforming aviation and society with this technology in very profound ways.”

Indeed, a new era has begun in the marketplace and at Hage & Hage. We stand ready to advise clients on UAS opportunities.

Photos from Landmarks Society Walks & Talks 2016

Wed, 24 Aug 2016 16:00:00 GMT

Monday, August 15th, Hage & Hage welcomed in the Landmarks Society of Greater Utica with their Monday Nights Walk & Talk program to learn the history of our building as well as discuss what it has become today. We had a great turnout for this event and certainly are anticipating any future involvement with the Landmarks Society of Greater Utica!

Beyond Zoom; Where the Rocket Stops

Mon, 16 May 2016 16:00:00 GMT

Congratulations! You have organized a business and have commenced, or are about to commence, operations.

Why has it become increasingly difficult for small businesses to achieve their goals?

What is holding small businesses back? A recent study by the Competitive Enterprise Institute (CEI), as reported in the Wall Street Journal, supplies at least part of the answer. CEI reports that federal regulations now impose $1.9 trillion of annual cost on the U.S. economy – a staggering $15,000 per U.S. household per year. This regulatory burden, according to CEI, has set historical records for U.S. regulatory burden creation in six of the seven years of the current federal administration. This regulatory burden takes an especially hard swing at small businesses. Why is this the case you ask?

Regulatory compliance has a high fixed cost and a low marginal cost, and big companies are able to spread this cost across more revenue and more employment than small companies. Therefore, the cost of compliance is much higher per employee and per dollar of revenue for small businesses. It is no surprise, then, that for April 2016 the U.S. Department of Labor reported modest job growth and a shrinking U.S. labor force.

What can you do to succeed in this hostile environment?

We at Hage & Hage have both the legal expertise and the entrepreneurial experience to help navigate this complex geography. Reach out to us.

Martindale-Hubbell Rating

Tue, 04 Aug 2015 16:00:00 GMT

J.K. Hage III, our managing member, has received this AV® Preeminent™ rating for 10 years now.

Albany Law School Article

Tue, 04 Aug 2015 16:00:00 GMT

Honored to be featured in latest issue of the Albany Law School Magazine. Read the full article “Families Lawyering Together” by Paul Grondahl on Page 31 here .