California Man First to be Charged With Smuggling Greenhouse Gases Into US

A San Diego man was arrested Monday for smuggling greenhouse gasses into the United States from Mexico.

Federal prosecutors say this is the first criminal case of its kind in the country.

The indictment alleges Michael Hart, 58, imported hydrofluorocarbons (HFCs) – a chemical compound commonly used for refrigeration, air-conditioning and aerosols – from Mexico and then sold them for a profit, which violates regulations created in 2020 ostensibly intended to “slow climate change.”

“This is the first prosecution in the United States to include charges related to the American Innovation and Manufacturing Act of 2020 (AIM Act),” said a press release from the Southern District of California. “The AIM Act prohibits the importation of HFCs, commonly used as refrigerants, without allowances issued by the Environmental Protection Agency (EPA).”

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Biden’s New Regulation Could Make Up to 1 Million Jobs Vanish, According to Manufacturing Leader

The Biden administration is in the process of putting in place a rule one manufacturing leader says could kill off a million manufacturing jobs.

Jay Timmons, president and CEO of the National Association of Manufacturers, made his prediction in an advance copy of his annual state of manufacturing address, according to Fox Business.

The remarks said that while Biden claims to support manufacturers, “what he won’t tell you is that his federal agencies are, at this very moment, working to undermine his manufacturing legacy — those agencies are undermining your success.

“In fact, just two weeks ago, they announced one big regulation that could wipe out up to 1 million jobs. It’s referred to as National Ambient Air Quality Standards or PM2.5,” he said.

“It’s not the name that matters. It’s the consequences. It’s stricter than rules they have even in Europe,” he wrote.

“And in vast portions of the country, we will barely be able to build new manufacturing facilities as a result,” Timmons said.

The rule imposes a stricter air quality standard on what’s known as fine particle pollution.

“Michigan would be one of the states hit hardest. And if new manufacturing investments dry up, that spills over to the rest of the state economy,” Timmons said.

“It affects the family trying to sell their home, the teacher hoping for new investments in schools, the students looking for job opportunities here in the state,” Timmons said

Timmons said that forcing manufacturers to move to other nations defeats the goal of clean air rules.

“And to what end? You cannot solve the world’s environmental challenges by driving manufacturing investment away from the United States to countries with lower standards,” he said.

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Good Times, Bad Times: Eviction Edition

Happy Tuesday and welcome to another edition of Rent Free. Despite the ink still wet on many state-level YIMBY reforms prodding local governments to allow housing, we’re already witnessing a concerted counter-revolution from the forces of local control. This week’s stories include:

  • Slow-growth activists in the Boston-adjacent suburb of Milton, Massachusetts, have successfully overturned state-required zoning reforms that allowed apartments near the town’s train stations.
  • Local governments in Florida are trying to defang a new state law allowing residential high-rises in commercial zones with lawsuits and regulatory obstructions.
  • A lawsuit against Arlington, Virginia’s exceedingly modest “missing middle” reforms that were passed last year trundles on.

But first, our lead item is a short take on how America’s overregulated, undersupplied housing market turns good things, like economic growth, into bad things, like more evictions.

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Missouri Legislation Would Impose Restrictions On Intoxicating Hemp Products, Sparking Clash Over How To Regulate

Missouri lawmakers have heard hours of heated testimony at two hearings in the last week over bills aiming to regulate intoxicating hemp products that get people high the same as marijuana.

Currently there’s no state or federal law saying teenagers or children can’t buy products, such as delta-8 drinks, or that stores can’t sell them to minors—though some stores and vendors have taken it upon themselves to impose age restrictions of 21 and up.

And there’s no requirement to list potential effects on the label or test how much THC is actually in them.

“There’s zero reason why these THC products should not be treated like any other THC product in our state,” said state Sen. Nick Schroer, a Republican from Defiance, during a Monday Senate committee hearing.

The legislation’s proponents and opponents both agree the state should regulate the existing “Wild West” market for intoxicating hemp products.

The debate, however, is over whether the agency that oversees the state’s marijuana program, the Missouri Department of Health and Senior Services (DHSS), should regulate these hemp products.

If DHSS is put in charge, the products would have to be sold at DHSS-licensed dispensaries.

That’s what is proposed in legislation sponsored by Schroer and in the House filed by state Rep. Chad Perkins, a Bowling Green Republican.

“Similar to alcohol, one regulatory body covers all intoxicating liquors and alcohol, such as beer, bourbon, wine, moonshine, brandy and even hooch,” said Schroer, who chairs the legislative committee that oversees Missouri’s marijuana rules.

Opponents contend restricting hemp-derived THC products to be sold at the dispensaries would allow the “marijuana monopoly” to take over the market, given the limited number of licenses for dispensaries available.

They argue there should be a separate regulating system in place for intoxicating hemp products that would allow them to continue to be sold in gas stations and liquor stores.

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The US Has Failed to Pass AI Regulation. New York City Is Stepping Up

AS THE US federal government struggles to meaningfully regulate AI—or even function—New York City is stepping into the governance gap.

The city introduced an AI Action Plan this week that mayor Eric Adams calls a first of its kind in the nation. The set of roughly 40 policy initiatives is designed to protect residents against harm like bias or discrimination from AI. It includes development of standards for AI purchased by city agencies and new mechanisms to gauge the risk of AI used by city departments.

New York’s AI regulation could soon expand still further. City council member Jennifer Gutiérrez, chair of the body’s technology committee, today introduced legislation that would create an Office of Algorithmic Data Integrity to oversee AI in New York.

If established, the office would provide a place for citizens to take complaints about automated decisionmaking systems used by public agencies, functioning like an ombudsman for algorithms in the five boroughs. It would also assess AI systems before deployment by the city for bias and discrimination.

Several US senators have suggested creating a new federal agency to regulate AI earlier this year, but Gutiérrez says she’s learned that there’s no point in waiting for action in Washington, DC. “We have a unique responsibility because a lot of innovation lives here,” she says. “It’s really important for us to take the lead.”

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Wisconsin Could Make It Impossible for Cottage Food Producers To Make a Living

Since 2017, Wisconsinites have been legally allowed to sell a number of home-baked goods to the general public, free to make as much money as their products can garner. But a new bill being considered by the Wisconsin Legislature could change that, essentially making it impossible for so-called cottage food producers to make a living.

Assembly Bill 897 would increase “the sales threshold from $5,000 to $20,000” for homemade food products, according to a state analysis of the bill. That might seem like an improvement, but “the current sales cap applies only to canned goods,” notes Jobea Murray, board president of the Wisconsin Cottage Food Association. “All other cottage food products are currently unlimited in their sales.” (A bill being considered by the Senate would impose a slightly higher annual cap of $25,000.)

If enacted, A.B. 897 would create one of the strictest cottage food regimes in the country. The states that have a sales cap usually have a limit that’s “high enough for home-based producers to earn a living wage,” says Suranjan Sen, an attorney at the Institute for Justice (I.J.), a libertarian public interest law firm. “Florida’s cap, for example, is $250,000 annually.”

A $20,000 annual sales cap “would make Wisconsin’s the most restrictive cap in the nation,” he continues.

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California’s Attack on Gig Work Predictably Drove Workers Out of Jobs

California’s attempt at forcing gig workers to become traditional employees backfired by driving many of those workers out of their jobs.

In the wake of a new law (Assembly Bill 5) that was intended to reclassify many independent contractors as regular employees, self-employment in California fell by 10.5 percent and overall employment tumbled by 4.4 percent, according to a study released Thursday by the Mercatus Center, a free market think tank housed at George Mason University. In professions where self-employment was more common, the effects were more dramatic, and in some fields employment declined by as much as 28 percent after A.B. 5’s implementation.

Meanwhile, researchers Liya Palagashvili, Paola A. Suarez, Christopher M. Kaiser, and Vitor Melo reported finding no increase in the number of employees classified as full employees. In professions where there was an uptick in traditional employees receiving W-2 wages and benefits, those increases were not large enough to cancel out the number of self-employed workers who left jobs.

“These results suggest that AB5 did not simply alter the composition of the workforce as intended by lawmakers,” the four researchers wrote. “Instead, our findings suggest that AB5 was associated with a significant decline in self-employment and overall employment in California.”

That could have significant implications for the Department of Labor’s (DOL) recently announced attempt at duplicating California’s policy across the rest of the country.

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Labor Department’s New Regs Aim To Rescue Gig Workers From Their Own Preferences

Most workers in the gig economy say they like their jobs and value the flexibility that comes with being an independent contractor.

The federal government, however, is coming to rescue them from their own choices.

The Department of Labor announced new rules this week that will limit the circumstances in which workers can be classified as independent contractors. Once implemented, those rules will force some workers currently operating as independent contractors to become full-fledged employees—thus triggering other federal mandates regarding pay and benefits.

“This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned,” acting Secretary of Labor Julie Su said in a statement.

In reality, the department is unleashing federal bureaucrats to micromanage the decisions that those workers have already made for themselves. When it is fully implemented in March, the new rule will impose a vague six-part test to determine whether a worker should count as an employee or a contractor. Determining factors whether the job is deemed to be permanent or temporary, as well as how much control bosses have over employees’ time, and how essential the employees are to the business’ overall activity.

Those determined to be employees will be forcibly reclassified even if they do not want to be.

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Elizabeth Warren’s Terrible Model for Tech Regulation

The Interstate Commerce Commission (ICC), which existed for about a century before being mercifully put out to pasture in 1995, is one of the best historical examples of how governmental attempts at regulating the economy can backfire.

Created with the stated goal of protecting consumers from the competitive interests of Gilded Age railroad barons, the ICC was quickly captured by the very special interests it sought to control, then helped entrench a railroad cartel. At the height of its powers, the ICC tried to limit the use of trucks for hauling freight (an effort that thankfully failed) and used its influence to have a critic of the railroad monopoly committed to an asylum.

Naturally, some senators see the ICC as the ideal model for a new agency aimed at regulating Big Tech. Bad ideas never seem to truly die in Washington.

While promoting their bipartisan bill to ramp up federal regulation of successful tech companies in The New York Times, Sens. Lindsey Graham (R–S.C.) and Elizabeth Warren (D–Mass.) pointed to the ICC as one model for what they aim to do. “It’s time to rein in Big Tech,” they argued, “and we can’t do it with a law that only nibbles around the edges of the problem.” Warren has also invoked the ICC in posts on X (formerly known as Twitter) and in public comments calling for tighter federal control over companies like Amazon and Facebook.

Indeed, their bill wouldn’t nibble. It would create a new federal commission to regulate online platforms. The Digital Consumer Protection Commission would have concurrent jurisdiction (which really means overlapping and duplicative mandates) with the Federal Communications Commission (FCC) and the Department of Justice. In the senators’ telling, this newfangled ICC would aim to “preserve innovation while minimizing harm presented by emerging industries.”

That’s far from the whole story of the original ICC.

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New Colorado Marijuana Hospitality Rules Take Effect As Regulators Tout Earlier ‘Successes’ Like Online Sales

Colorado marijuana regulators are promoting new rules for the industry that take effect on Monday—including increased sales limits for cannabis hospitality businesses that allow on-site use. They are also touting “successes” from the past year such as opening up online sales.

The state Marijuana Enforcement Division (MED) shared a list of rules that have been enacted under legislation passed by lawmakers and signed into law by Gov. Jared Polis (D) last year.

At the top of the list is the online sales development, which took effect last August. Customers must still physically pick up the marijuana products from retailers, but now they can browse and electronically purchase cannabis online ahead of visiting the store.

As of January 8, other key regulations are being implemented, too. That includes increasing the amount of cannabis that can be sold at licensed marijuana hospitality businesses to one ounce of flower and eight grams of concentrate.

The new rules will also require hospitality businesses to provide patrons with information about transportation options and establish standards to prevent overconsumption, while exempting them from certain requirements related to video surveillance at certain areas of spas.

Regulations that have already taken effect this past year that MED highlighted include new authorizations to seize and destroy regulated marijuana products that pose a threat to public health, a rule that allows new cannabis businesses to maintain and renew state licensure even if they’re rejected by local governments and empowering regulators to promulgate rules allowing or banning “chemical modification, conversion, or synthetic derivation of cannabinoids.”

“As we approach the new year, we are committed to leveraging the unique opportunity we have to reflect on our successes and lessons learned as one of the most mature adult-use cannabis markets in the nation,” Dominique Mendiola, senior director of MED, said in a press release. “We look forward to continuing our work together to demonstrate a model for responsible regulation as directed by the voters of Colorado and the General Assembly.”

The regulatory update comes days after Colorado’s governor, advocates and stakeholders celebrated the 10th anniversary of the first legal cannabis sales nationally and globally in the state.

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