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California Rolls Out Offshore Wind Permitting Roadmap06.15/Alert
On Friday, June 2, the California Energy Commission (CEC) hosted a workshop on permitting offshore wind energy facilities off the coast of California. The workshop came days after the CEC adopted a report entitled “Assembly Bill 525 Offshore Wind Energy Permitting Roadmap,” created in response to Assembly Bill 525, which established a goal for California to deploy up to 5,000 megawatts of offshore wind by 2030 and 25,000 megawatts by 2045. California aims to power 25 million homes with offshore wind by 2050. The report is the latest effort to bolster the development of California’s Offshore Wind Strategic Plan, which will be submitted to the legislature in 2023.
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Overview of the Impact of the 88th Legislative Session on the Oil, Gas and Renewables Industries in Texas06.14/Alert
While Texas is the top crude-oil and natural-gas producing state in the United States, it also leads the nation in wind power generation and is second only to California on utility-scale solar (source: U.S. EIA). During the 88th Legislature’s regular session (which ended on May 29, 2023), the Texas Legislature considered numerous bills whose stated purpose was to make the Texas electric grid more reliable—stemming from continuous calls for industry reform following disastrous Winter Storm Uri, which saw over two-thirds of Texans lose power and over 200 deaths. During Winter Storm Uri, many types of power generation failed, including both natural gas- and renewables-powered generation. However, various state officials—including Governor Greg Abbott and Lt. Gov. Dan Patrick—focused their criticism in the aftermath of the storm on renewables generation. The large proportion of non-dispatchable generation (such as wind and solar powered electricity) is perceived by certain officials and observers as a threat to the overall reliability of the Texas grid, with some arguing that increased dispatchable generation (typically gas-fired electricity) is urgently required (source: Lt. Gov. Dan Patrick: Statement on the Passage of the Texas Senate’s Power Grid Reform Package).
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The Corporate Transparency Act: Beneficial Ownership Information Reporting Checklist06.12/Alert
Enacted as part of the Anti-Money Laundering Act of 2020 in the National Defense Authorization Act for Fiscal Year 2021, the Corporate Transparency Act (CTA) requires certain entities—basically smaller and otherwise unregulated companies—to file a report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). This report identifies the entities’ beneficial owners, the persons who ultimately own or control the company, and provides similar identifying information about those individuals who formed the entity. The Act further authorizes FinCEN to disclose this information to certain government authorities and to financial institutions for select purposes.
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White House Announces Plan to Boost AI Research and Deployment06.06/Alert
One of the most advanced technologies of our time is the rise of generative artificial intelligence (AI), a field that currently operates with minimal regulation. U.S. government officials, however, are stepping up their interest in generative AI technology, including assessing the opportunities while cautioning about potential risks. Government agencies are also beginning to seek public comment on these issues, where we expect to see increased activity in the coming months.
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For Protest Timeliness Purposes, Forwarding an Agency Email Outside of Business Hours Constitutes Actual Notice06.01/Alert
The Government Accountability Office (GAO) is well-known for its strict rules for the timely submission of protests. Under these rules, a protest based on other than alleged improprieties in a solicitation must be filed no later than 10 calendar days after the protester knew, or should have known, of the basis for protest. The GAO has held that a protester is on constructive notice of information received via email during normal business hours, but is not on constructive notice when an email is received outside of normal business hours. However, where a protester has actual notice of information that is received outside of normal business hours, the timeliness period for filing a protest begins on the day the information was actually received. The GAO has previously held that opening an email constitutes actual notice, even if the opened email was not read. The GAO’s recent decision in Infotrend Inc. has identified an additional action that can constitute actual notice.
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AI Users Beware: Federal, State and Local Legislators and Regulators to Crack Down on AI-Related Employment Discrimination05.31/Alert
According to a 2022 survey from the Society for Human Resource Management, approximately one in four organizations use automation and/or AI to support employment-related activities, such as recruitment and hiring. AI tools used in employment decision-making include chatbots that guide applicants through the application process, algorithms that screen resumes and predict job performance, and even facial recognition tools used in interviews to evaluate a candidate’s attention span. For employers, these tools may offer an efficient and effective way to recruit promising talent, but federal, state and local governments are increasingly focused on the potential for discrimination.
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EPA Proposes Aggressive Carbon Pollution Standards to Reduce Greenhouse Gas Emissions05.31/Alert
On May 23, 2023, the Environmental Protection Agency (EPA) published greenhouse gas (GHG) emissions standards for fossil-fuel-fired power plants, both new and existing, in The Federal Register. Interested parties have 60 days to provide comments on the proposed rule language, which will be due on or before July 24, 2023.
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A Hat Tip to the Manufacturing, R&D and Electric Power Industries: California Bill Would Provide Income Tax Credits for Sales and Use and District Taxes Paid on Certain “Qualified Tangible Personal Property”05.31/Alert
On May 22, 2023, the California Assembly unanimously passed a bill that, if enacted, would provide a significant benefit to California businesses that make capital investments in manufacturing, research and development (R&D), and electric power machinery and equipment in California. The bill, Assembly Bill 52 (AB 52), would provide income tax credits in an amount equal to the sales and use and district taxes paid on qualified tangible personal property primarily used in manufacturing, R&D, and electric power generation or production, or storage and distribution. The credit would complement the existing partial sales and use tax exemption under California Revenue and Taxation Code (RTC) section 6377.1, effectively giving taxpayers with sufficient California income tax liability a full sales and use tax exemption on such qualified tangible personal property.
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Congress Contemplates Creating a New Federal AI Regulatory Agency05.26/Alert
In a hearing of the Senate Judiciary Subcommittee on Privacy, Technology and the Law on May 16, multiple U.S. senators—including Senators Richard Durbin (D-IL), Lindsey Graham (R-SC), Peter Welch (D-VT) and Cory Booker (D-NJ)—supported the idea of a federal artificial intelligence (AI) agency to regulate the transformative technology.
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Mentor Protégé Joint Venture Experience: GAO Confirms Agency Must Consider Experience of Each Member05.25/Alert
Earlier this year, GAO sustained the bid protest of AttainX, Inc., B-421216 et al. (Jan 23, 2023), where the protestor argued that the agency’s evaluation was inconsistent with Small Business Administration (SBA) regulations requiring agencies to consider the experience of the individual members of the JV if the JV itself does not demonstrate experience. The awardee was MiamiTSPi, LLC, an 8(a) small business joint venture, composed of an 8(a) small business as the managing member and protégé, and another small business as the minority member and the mentor. The awardee JV sought reconsideration of the GAO’s decision. In MiamiTSPi, LLC-Reconsideration, B-421216.3 (May 11, 2023), GAO recently denied the request and provided further clarification on its interpretation of the SBA regulations regarding proposal evaluation for mentor-protégé JVs.
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Outlook on AI and Civil Rights Law and Policy05.25/Alert
The Administration’s October 2022 launch of the AI Bill of Rights: A Vision for Protecting Our Civil Rights was the first step toward cementing equity and civil rights with respect to artificial intelligence (AI) as core values upon which the Administration has built a series of guidance documents and executive actions.
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Supreme Court Overturns Fraud Convictions Further Limiting Prosecutorial Power in Political Corruption Cases05.17/Alert
On May 11, 2023, the Supreme Court overturned two federal wire fraud convictions involving alleged corruption surrounding New York’s “Buffalo Billion” initiative. Louis Ciminelli (Ciminelli) and Joseph Percoco (Percoco) were both defendants in an underlying criminal fraud case prosecuted in the Southern District of New York.
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Where Employment and Trade Compliance Intersect—Protecting Your Company in a World of Dueling Enforcement Risks for Export Controls and Anti-Discrimination05.16/Alert
On April 18, 2023, the U.S. Department of Justice (DOJ) announced a settlement agreement with GM to resolve allegations that the company violated the Immigration and Nationality Act (INA). The DOJ found that the company’s employment eligibility verification process violated U.S. law in part due to overbroad attempts to comply with export control laws. Specifically, the DOJ found that:
During onboarding, GM required non-U.S. citizens who were lawful U.S. permanent residents, and who therefore are “U.S. persons” for export control purposes, to provide an unexpired foreign passport as a condition of employment, imposing a discriminatory barrier in the hiring process; and GM improperly combined its I-9 process to verify permission to work in the United States with its export compliance assessment, which required non-U.S. citizens to provide specific documents that were not strictly necessary to prove their permission to work.
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Supreme Court of Virginia Strikes Down County Zoning Overhaul Adopted via Electronic Meetings During COVID-19 Pandemic05.15/Alert
The Supreme Court of Virginia voided Fairfax County’s modernized zoning ordinance, known as zMOD. The Supreme Court decision, Berry v. Board of Supervisors of Fairfax County, 884 S.E.2d 515 (Va. 2023), made the zMOD ordinance void ab initio.
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China Amends the Counter-Espionage Law05.15/Alert
On April 26, 2023, the Standing Committee of the National People’s Congress of the People’s Republic of China (PRC) passed an amended Counter-Espionage Law. These changes constitute the first amendments to the Counter-Espionage Law since its introduction in November 2014. The amended law will come into effect on July 1, 2023.
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IRS, Department of Treasury Release Guidance on Domestic Content Rules for Energy Projects05.15/Alert
On Friday (May 12, 2023), the Department of Treasury and the Internal Revenue Service (IRS) released Guidance for taxpayers seeking to take advantage of domestic content bonus credits associated with energy projects under the Inflation Reduction Act (IRA). Specifically, the Guidance sets out the requirements for using domestic steel, iron and manufactured products in order for a project to be eligible for the domestic content bonus credit amount. Projects that meet the domestic content requirement will be eligible to receive a 10 percent bonus under the production tax credit and up to a 10 percent bonus under the investment tax credit, provided that other requirements are also met.
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Florida Legislature Reins in Florida Telephone Solicitation Act05.12/Alert
Like the Telephone Consumer Protection Act (TCPA), navigating the Florida Telephone Solicitation Act (FTSA) can be a minefield for businesses engaging in telemarketing and text marketing to Florida residents and those that conduct business in the state. The FTSA, commonly dubbed the mini-TCPA, prohibits using certain automated dialers to call (or text) consumers without their consent and enables consumers to recover $500 per call. The FTSA also provides for up to $1,500 in treble damages for willful or knowing violations, plus reasonable attorney’s fees and costs. In July of 2021, the Florida legislature enacted language that broadened the language in the statute, distinguishing it from its federal counterpart, which resulted in a floodgate of litigation. As a result, FTSA violations have the potential to be financially devastating, especially for businesses underinsured against exposure.
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Florida’s Response to ESG Investing05.11/Alert
As many financial institutions and investment managers move towards integrating environmental, social and governance (ESG) factors into their decision making, Governor DeSantis signed a new law that prohibits reliance on ESG when it comes to Florida’s funds.
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EPA Continues the Beat with an Advanced Notice of Proposed Rulemaking for Additional CERCLA Hazardous Substance Designations for PFAS05.09/Alert
On April 13, 2023, the Environmental Protection Agency (EPA) issued an Advanced Notice of Proposed Rulemaking (ANPRM) requesting input on seven potential future hazardous substance designations of per- and polyfluoroalkyl substances (PFAS) under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). (See Addressing PFAS in the Environment, 88 Fed. Reg. 22399, Apr. 13, 2023.) The seven PFAS identified are:
• Perfluorobutanesulfonic acid (PFBS), CASRN 375–73–5;
• Perfluorohexanesulfonic acid (PFHxS), CASRN 355–46–4;
• Perfluorononanoic acid (PFNA), CASRN 375–95–1;
• Hexafluoropropylene oxide dimer acid (HFPO–DA), CASRN 13252–13–6 (sometimes called GenX);
• Perfluorobutanoic acid (PFBA), CASRN 375–22–4;
• Perfluorohexanoic acid (PFHxA), CASRN 307–24–4; and
• Perfluorodecanoic acid (PFDA), CASRN 335–76–2.
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Joint Statement by Federal Agencies Marks Heightened Enforcement Attention on Potential Bias in AI Systems05.05/Alert
On April 25, 2023, the Consumer Financial Protection Bureau (CFPB), Department of Justice (DOJ) Civil Rights Division, the Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) issued a joint statement affirming that they will be working collaboratively to enforce existing laws and regulations as applied to potential discrimination and bias in artificial intelligence (AI) systems. Companies that use AI and other automated systems should prepare for greater scrutiny from these agencies.
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Congressional Action on AI Takes Major Step Forward05.04/Alert
Congressional leaders are intensifying efforts to legislate and regulate artificial intelligence (AI) technology. On April 13, Senate Majority Leader Chuck Schumer (D-NY) publicly announced a framework on artificial intelligence (AI) regulation. The announcement came in response to the Chinese Communist Party’s release of their own AI regulatory framework. Schumer revealed his framework as part of the United States’ duty to “lead and shape the rules governing such a transformative technology” rather than allow China to “write the rules of the road.”
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No Cutting the (Priority) Line!: Incidental Beneficiaries to Assumed Contracts and Leases Cannot Assert Cure Claims Against Debtors05.03/Alert
The Second Circuit held that a creditor seeking to assert a cure claim must have a contractual right to payment under the assumed contract or lease, and accordingly, a creditor with only a tangential or incidental interest in a contract or lease cannot assert a cure claim. (See In re George Washington Bridge Bus Station Development Venture LLC, No. 21-2050-bk, 2023 WL 2847175, 2d Cir. Apr. 10, 2023.) To allow otherwise would subvert Congress’s intent in creating a priority scheme for bankruptcy cases and contradict the language of section 365 of the U.S. Bankruptcy Code, because parties with no legal rights would get paid before creditors with legal rights to payment. The Second Circuit left unanswered whether intended beneficiaries can assert cure claims, but hinted that intended beneficiaries should be entitled to the protections afforded to counterparties to assumed contracts because they have a right to performance.
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FCC Adopts International Section 214 Authorization Order and Notice of Proposed Rulemaking to Address National Security Concerns Posed by Foreign Ownership05.03/Alert
The Federal Communications Commission (FCC), on April 25, 2023, released an Order and Notice of Proposed Rulemaking (NPRM) relating to international Section 214 authorizations, in response to recent concerns regarding national security, law enforcement and foreign ownership of telecommunications services. International Section 214 authorizations are issued to telecommunications providers that seek to offer international services originating or terminating in the United States.
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U.S. Patent Trial and Appeal Board (PTAB) Considers Sweeping Reform to Address Discretionary Denials and Petitions Filed by Certain For-Profit Entities05.03/Alert
On April 21, 2023, the U.S. Patent and Trademarks Office (USPTO) published an advance notice of proposed rulemaking seeking comments on the proposed changes addressing the U.S. Patent Trial and Appeal Board’s (PTAB) authority under 35 U.S.C. §§ 314(a) and 325(d) to exercise its discretion in denying petitions for inter partes review (IPR) and post-grant review (PGR). The USPTO is specifically seeking public input on a number of changes under consideration for future rule changes. Those who regularly make use of the IPR and post-grant proceedings before the PTAB will want to carefully review the changes under consideration and provide comments by June 20, 2023, if they want to affect the USPTO’s final rule changes.
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Los Angeles Initiative Seeks to Impose $450,000 Cap on Annual Compensation of Executives in Health Care Facilities05.02/Alert
An initiative submitted by the Service Employees International Union United Healthcare Workers West (SEIU-UHW) seeks to limit the annual compensation of health care executives in the city of Los Angeles to $450,000 per year. Entitled the “Limit Excessive Healthcare Executive Compensation Ordinance,” the initiative argues that health care executives should not receive higher compensation than the U.S. President, whose compensation is set by federal statute in 3 U.S.C. § 102 (Compensation of the President). Employing a similar legislative strategy, the initiative proposes a cap on the compensation of health care administrative professionals with executive, managerial or administrative duties, i.e., CEOs, CFOs, executive vice presidents and similar administrators, at privately owned health care facilities located in the city of Los Angeles. Covered health care facilities would include licensed general acute care hospitals, acute psychiatric hospitals, skilled nursing facilities and even residential care facilities for the elderly. Notably, medical professionals that provide medical services, research, patient care or other non-administrative services are excluded from the compensation cap.
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Follow the Money: AI Winners in President Biden’s FY 2024 Budget Request04.28/Alert
The artificial intelligence (AI) revolution is rapidly transforming industries and reshaping our world as we know it. With advances in machine learning, natural language processing and computer vision, AI has moved beyond the realm of science fiction and become a driving force of innovation and productivity. This disruptive technology is creating new opportunities, challenges and implications for society at large. The Biden Administration is taking notice—here is a look at new AI programs and funding proposed in President Biden’s fiscal year 2024 budget proposal released on March 9, 2023.
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“If You Don’t Make It There, You Can’t Make It Anywhere:” New York’s Zero Manufacturing Rate Requires New York Property04.27/Alert
A New York State Division of Tax Appeals (DTA) administrative law judge (ALJ) determined that Raytheon Company and affiliates (Raytheon) did not qualify for New York’s zero percent tax rate for manufacturers or the reduced tax rate for qualified emerging technology companies (QETCs). Raytheon’s primary contention in the litigation is that the zero percent manufacturing rate unconstitutionally discriminates against manufacturing activity outside New York. Specifically, Raytheon argued that the law as applied to its facts violated the U.S. Constitution, but the ALJ determined that Raytheon’s argument constituted a facial challenge to the statute that falls outside the DTA’s jurisdiction. Because the New York legislature included a poison pill in the session law that enacted the zero percent rate, the constitutional challenge could eliminate the zero percent manufacturing rate for all taxpayers.
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Human Rights Due Diligence—ESG Impact on M&A Transactions04.27/Alert
Over the past several years, environmental, social and governance (ESG) considerations have gained global importance in the context of mergers and acquisitions (M&A). Corporations, customers, regulators and investors are increasingly demanding the integration of ESG factors into the decision-making processes of businesses with regards to M&A in an effort to enhance business opportunities, protect reputations and mitigate risks. In today’s globalized economy, many companies rely on a complex web of supply chains that span multiple countries. Beginning with the exposure of China’s crimes against Uyghurs and other Muslim ethnic groups in Xinjiang and compounded by Russia’s recent invasion of Ukraine, there has been a renewed push for global brands to take their ESG efforts more seriously. As a result, companies and potential buyers are more sensitive to the risk of doing business in countries like China where labor costs are much lower than in other developed countries but where there is simultaneously a lack of respect for human rights and humane labor conditions.
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Concerns Over PFAS Contribute to New Federal Legislation Expanding FDA’s Authority Over Cosmetics04.24/Alert
On December 29, 2022, President Biden signed the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) into law. (See Consolidated Appropriations Act, 2023, Pub. L. No: 117-328, § 3501-06.) MoCRA substantially expands the authority of the Food and Drug Administration (FDA) to promulgate new regulations over cosmetics and initiate enforcement against manufacturers and distributors of cosmetic products that present health risks. Most MoCRA provisions, including those dealing with facility registration and product listing, take effect on December 29, 2023, and existing facilities will have to register and comply with its product listing requirements as of this date.
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Maine and Massachusetts Consider PFAS Legislation04.21/Alert
Maine Regulators Propose Rules Providing Guidance on Newly Enacted Ban on PFAS-Containing Products
The Maine Department of Environmental Protection has proposed a new rule intended to establish, in greater detail, the procedures necessary for compliance with Public Law c. 477, entitled “An Act To Stop Perfluoroalkyl and Polyfluoroalkyl Substances Pollution.” As discussed in a previous post, this law, which went into effect January 1, 2023, imposes reporting requirements for consumer products with intentionally added per- and polyfluoroalkyl substances (PFAS) and phases out products containing PFAS beginning with carpets, rugs and fabric treatments. The proposed regulation largely echoes the language of the statute itself but does provide new definitions material to the statute’s “currently unavailable use” exemption and elaborates on the required content of the statutorily prescribed notices regarding PFAS-containing products. -
China Issues Proposed Regulations on Generative AI04.19/Alert
With OpenAI’s introduction of ChatGPT into the market, Generative Artificial Intelligence (Generative AI) has dominated the headlines across the globe. Many technology companies have followed suit and released their Generative AI tools and services. Generative AI is widely expected to empower and change business models across industries and has immediately improved efficiency in many sectors. Pillsbury has been closely monitoring and advising our clients on these fast-changing AI technologies. (See our website at Artificial Intelligence (AI) Law | Pillsbury Law.)
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The Nuclear Regulatory Commission Unanimously Votes to Separate Fusion Energy Regulation from Nuclear Fission04.19/Alert
On April 14, 2023, in a unanimous vote, the Commissioners of the U.S. NRC directed that fusion energy devices will be regulated under the agency’s existing rules for use of byproduct materials in 10 C.F.R. Part 30, with only a limited-scope rulemaking. This approach separates the regulatory framework for fusion from the utilization facility framework applicable to nuclear fission energy and will allow the NRC to tailor its regulatory approach to the emerging fusion energy sector.
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Consumer Financial Protection Bureau Finalizes Small Business Lending Data Rule04.17/Alert
On March 30, 2023, the Consumer Financial Protection Bureau (CFPB) issued a final rule that requires small business lenders to collect detailed demographic and financial data about applications and originations, and annually report that data to the CFPB. Currently, lenders typically only collect demographic data (such as the race or ethnicity of an applicant) with residential mortgage applications because federal law has significantly restricted the collection of such data in other circumstances. The new rule will therefore require small business lenders to make substantial operational changes. Lenders will also need to assess and revise their compliance programs to manage both the new data collection and reporting requirements, as well as the increased fair lending scrutiny that is likely to result from regulators’ access to this detailed data.
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Canadian Government Moves Forward on Major Clean Hydrogen Investment Tax Credit04.12/Alert
On Tuesday, March 28, Canadian Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland presented Budget 2023: A Made-in-Canada Plan, the 2023 – 2024 Canadian federal budget proposal. The proposed budget includes several clean energy programs, including a $17.7 billion CAD ($12.6 billion USD) Clean Hydrogen Investment Tax Credit (ITC).
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Department of Energy Announces Strategy for Offshore Wind Deployment04.12/Alert
On Thursday March 29, 2023, the Department of Energy (DOE) announced its offshore wind strategy to advance the deployment of offshore wind energy in the United States. The strategy reflects the DOE’s comprehensive approach for accelerating a carbon-free electricity sector by 2035 and a net-zero economy by 2050.
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Washington Court Reaffirms Tribal Sovereignty in Sports Betting Case, But Differences Among Courts Begin to Emerge04.12/Alert
Over recent decades, tribal gaming has developed into a $32 billion industry, providing economic stability and tribal government funding for sovereign nation building. More recently, the U.S. Supreme Court’s decision (in 2018) to overturn the Professional and Amateur Sports Protection Act has sparked renegotiations of tribal-state gaming compacts across the country to allow tribes to enter the online sports betting arena.
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Court of Appeals Finds That Insurers May Not Participate in Bankruptcy Negotiations by Invoking an Insured’s Duty to Cooperate04.10/Alert
In Truck Ins. Exch. v. Kaiser Gypsum Co. (In re Kaiser Gypsum Co.), 60 F.4th 73 (4th Cir. 2023), the U.S. Court of Appeals for the Fourth Circuit found that an insured’s duty to cooperate under its general liability insurance policies, which require the insured to assist and cooperate with litigation-related defense, does not give its insurer the right to negotiate the terms of a chapter 11 plan in the insured’s asbestos bankruptcy because the duty to cooperate is limited to “traditional litigation activities.” The Fourth Circuit also found that the insurer was not a “party in interest” and lacked standing to object to the plan because, by leaving the insurer’s rights and obligations under the policy intact, the plan was “insurance neutral.”
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Nuclear Energy Agency Announces Publication of the Small Modular Reactor Dashboard04.06/Alert
On March 13, 2023, the Organization for Economic Co-operation and Development (OECD) Nuclear Energy Agency (NEA) announced publication of the Small Modular Reactor Dashboard, a compilation of verified publicly available information on progress-to-date towards SMR first-of-a-kind (FOAK) deployment and commercialization. This information aims to help the public understand the pace of progress to commercial deployment of these technologies as governments consider available paths to achieve net zero by 2050.
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AI Warning: ChatGPT Blocked for Data Laws Breach04.04/Alert
Wherever you are located, you need to be mindful of various laws around the world that may apply to your development and use of AI. Recent laws proposed in Europe (e.g., the AI Act) have attracted a lot of attention, but it can often be a mistake to overlook other laws that can apply and are currently in force, such as the General Data Protection Regulation (GDPR). The Italian data regulator’s enforcement action against OpenAI and ChatGPT this past week reminded everyone that laws such as GDPR do indeed impact the creation, development and use of AI.
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Commerce Releases New Proposed Rule Governing Restrictions on Chinese Investments by CHIPS Act Applicants03.31/Alert
On March 21, 2023, the Department of Commerce (Commerce) released a Notice of Proposed Rulemaking (NPRM) imposing guardrails preventing the “improper use of funds” made available under the CHIPS Act of 2022, which creates a private sector incentive program to boost semiconductor manufacturing in the United States. The guardrails are designed to ensure that technology and innovation spurred by the CHIPS Act is targeted towards domestic investment in semiconductor facilities and equipment, exclusively, and does not benefit adversarial countries, principally China.
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Application Windows Opening for New Federal Funding03.31/Alert
On August 16, 2022, the passage of the Inflation Reduction Act (IRA) marked the establishment of a trifecta of bipartisan legislation aimed at improving U.S. economic competitiveness through innovation and domestic industrial productivity. In total, the IRA, the CHIPS and Science Act (CHIPS) and the Infrastructure Investment and Jobs Act (IIJA) provide about $2 trillion in federal funding, offering businesses and organizations a rare opportunity to apply for federal grants or take advantage of other federal incentive benefits. Many application windows for grants, loans and other incentives have opened since the passage of these landmark bills, with additional application periods opening across the first three quarters of 2023. Businesses should be assessing how available programs align with objectives and growth plans and preparing to meet critical eligibility and compliance obligations to obtain benefits. Though more details are still to come, below are considerations for companies seeking to benefit from new federal spending and incentive programs to support infrastructure projects, technology innovation, semiconductor manufacturing, and climate protection and clean energy initiatives.
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Cross-Border Data Transfer Mechanisms and Requirements in China03.22/Alert
In recent years, alongside the rapid development of the digital economy and the concomitant increase in data generation, collection, processing and monitoring in the People’s Republic of China (PRC or China), the Chinese government has accelerated efforts to establish a robust legal framework for data protection. Over the past five years, China has promulgated several major data protection laws, including the Cybersecurity Law (CSL) (effective from June 1, 2017), the Personal Information Protection Law (PIPL) (effective from November 1, 2021) and the Data Security Law (DSL) (effective from September 1, 2021), together with a series of implementation regulations and administrative guidance. These laws and regulations, particularly with respect to requirements on the processing of personal information and cross-border data transfer, pose significant challenges and compliance obligations for multinational companies when conducting business in and with China. This article outlines our observations of the mechanisms and practice of cross-border transfer of personal information under China’s current legal framework.
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Don’t Let Bank Uncertainty Delay Payroll: Considerations for Employers03.16/Alert
With bank uncertainty making headlines, we answer employers’ most frequently asked questions about the consequences of payroll delays, strategies for mitigating risk and more.
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EPA Proposes Stringent Regulation of PFAS in Drinking Water03.16/Alert
On March 14, 2023, the EPA proposed a National Primary Drinking Water Regulation under the Safe Drinking Water Act to establish Maximum Contaminant Levels (MCLs) for six per- and polyfluoroalkyl substances (PFAS).
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Department of Energy Announces $6 Billion Funding Opportunity for Industrial Decarbonization and Emissions Reduction Projects03.13/Alert
On March 8, 2023, the Department of Energy (DOE) announced approximately $6 billion in funding to accelerate decarbonization projects in energy intensive industries and provide American manufacturers a competitive advantage. Funded by the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA), the Industrial Demonstrations Program will focus on revolutionizing energy intensive industrial processes with the highest emissions, where decarbonization technologies will have the greatest impact. Industries that represent the greatest opportunities include iron, steel, steel mill products, aluminum, cement, concrete, glass, pulp, paper, industrial ceramics and chemical products.
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New Biden Administration Cyber Strategy Proposes Dramatic Shift in Order to Hold Software Developers Liable for “Insecure” Software03.13/Alert
On March 2, 2023, the Biden administration released its National Cyber Security ("Strategy") to create a more defensible, resilient and value-aligned digital ecosystem which includes, among other priorities, the administration’s efforts to make software firms liable for system insecurities.
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New UK GDPR Reform Bill Published03.10/Alert
Businesses already face an uphill struggle keeping pace with fast changing and numerous new data laws being passed in multiple U.S. states as well as countries around the world. The one silver lining has been the emergence of a recent trend of basing, to some extent, many of these new laws on the GDPR. This means that one way forward has been to look to build upon effort already expended on creating and administering GDPR compliance frameworks, albeit with updating needed for relevant recent changes or enforcement. The UK government changes therefore may well leave some feeling nervous. The changes to the UK GDPR will have to be scrutinized after the post-parliamentary readings to assess final impact of the Data Protection & Digital Information (No.2) Bill (DPDI2) (e.g., regarding fines, AI, cookies, transfers, legitimate interests, records of processing activities (ROPA), data protection officers (DPOs), Data Protection Impact Assessments (DPIAs), etc.). We will also have to see how the EU responds, as any removal of adequacy status will add further complications to EU-UK data transfers. Any business with UK operations, customers, suppliers or partners will need to freshly review and consider changes to its policies, documents and procedures to account for DPDI2.
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China Publishes Measures on Standard Contract for Cross-border Transfer of Personal Information03.10/Alert
The Cyberspace Administration of China (CAC) issued the final version of the Measures on the Standard Contract for the Cross-border Transfer of Personal Information (Standard Contract Measures) on February 24, 2023, which includes a template standard contract (Standard Contract). The Measures will take effect on June 1, 2023, but set forth a six-month grace period until December 1, 2023, to provide companies with time to take actions for compliance.
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Seeking Certainty: Redefining “Waters of the United States”03.09/Alert
Making good on a promise to redefine the Clean Water Act (CWA) term, “Waters of the United States” or WOTUS, on January 18, 2023, the latest revised definition of “Waters of the United States” was published in the Federal Register by the U.S. Army Corps of Engineers (ACOE) and the Environmental Protection Agency (EPA) at 86 FR 3004. The effective date of this rule will be March 20, 2023. Remarkably, this action marks the fourth time in eight years that these agencies have attempted to craft a workable definition of WOTUS and thereby affect far-ranging impacts on everything from infrastructure and agriculture to private land use. While the agencies indicate that the newly redefined WOTUS is, in many ways, a return to the longstanding regulatory regime, there are several notable changes.
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Department of Energy Opens Second Award Cycle for Civil Nuclear Credit Program03.08/Alert
On March 2, 2023, the Department of Energy (DOE) announced the opening of the second round awards cycle of the Civil Nuclear Credit (CNC) Program and released application guidance. The application guidance describes the timelines, deliverables and supporting information needed to apply for CNC certification and to submit sealed bids to receive allocated credits.
Insights
