EEOC Submits Request to Eliminate Optional Disclosure of Non-Binary Data for EEO-1 Reporting
On April 15, 2025, in response to Executive Order 14168, Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government, the EEOC filed an Information Collection Request (ICR) with OMB requesting what it classified as a non-substantive change to remove the option for employers to voluntarily report non-binary data for those in their workforce.
In past years, the EEO-1 reporting instructions allowed respondents to provide non-binary data in a narrative form in the comment box of the report. EEOC believes this voluntary option must be removed to comply with Executive Order 14168.
The data collection for 2024 has not yet opened but this may be an indication the Agency is preparing to do so at some point in the near future. Additionally, the ICR is not seeking any changes beyond the current data collection approval period which runs through 2026.
CPPA to Hold Board Meeting on Proposed CCPA Regulations
The California Privacy Protection Agency (“CPPA”) Board will hold a Board meeting on May 1, 2025, at 9:00 am PT. The public is invited to attend the meeting in person or virtually. The agenda for the meeting includes a legislative update on the CPPA’s positions on pending legislation and a discussion on the adoption of proposed CCPA regulations addressing automated decisionmaking, risk assessments, insurance and cybersecurity audits. The meeting also will cover proposed revisions to existing CCPA regulations.
Key Observations on the FAST-41 Transparency Projects Announced by the Permitting Council on April 18, 2025
On April 18, 2025, the Federal Permitting Improvement Steering Council (Permitting Council) identified ten critical mineral projects as FAST-41 Transparency Projects on the Federal Permitting Dashboard (the Projects). Inclusion on the Dashboard is intended to streamline approvals for qualifying projects by enhancing interagency coordination to facilitate a more efficient permitting process with increased transparency.
This announcement is one of the first concrete actions publicly announced under President Trump’s Immediate Measures to Increase American Mineral Production executive order issued on March 20, 2025 (the Mining Order). The Mining Order, among other things, directed the heads of several agencies to provide the National Energy Dominance Council (NEDC) a list of priority projects that could be expedited for approval and permitting. This list of the first Projects to be identified under this directive reflects a diverse selection of geographies, minerals, and development status.
A few key takeaways:
Geographic Diversity. The list identifies Projects in nine states: Alabama, Arizona, Arkansas, Idaho (with two projects), Michigan, Montana, Nevada, Oregon, and Utah. In addition, Project sponsors include both US companies and leading mining and mineral processing companies based outside the United States, including Canadian and Australian partners.
Broad Definition of “Critical Minerals.” Consistent with the approach in the Mining Order and subsequent actions, the list applies an expansive definition of “critical minerals,” including minerals previously included on the definition of “critical minerals” under 30 U.S.C. § 1606(a)(3), minerals added in the Mining Order, such as potash and gold, and coal, which was included as minerals through the Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241. The descriptions of the ten Projects identify the following target minerals: antimony, copper, gold, lithium, lithium carbonate, metallurgical coal, molybdenum, phosphate, potash, and silver.
Project Status. Seven of the Projects are in the pre-production phase, with two of those in the exploration stage and four nearing final permitting stages; the remaining Projects include three expansions of existing Projects and one processing facility currently in the permitting stage. Several of the Projects aim to reactivate historical mines while incorporating beneficial reclamation that otherwise may not occur as part of the project.
Reviewing Agencies. The Permitting Dashboard identifies the lead agency for each of the FAST-41 Transparency Projects, with five Projects led by the Department of the Interior Bureau of Land Management (BLM), three led by the Department of Agriculture US Forest Service (USFS), and two led by the Department of Energy (DOE).
What Happens Next? The announcement indicates that additional projects are anticipated to be identified as FAST-41 Transparency Projects on a rolling basis. While inclusion on the FAST-41 list is expected and intended to accelerate the development and approvals for listed projects, the FAST-41 website notes that inclusion on the list does not guarantee favorable review or approval of permits, or eligibility for federal funding.
San Francisco Holds Hearing on Proposed New Sourcing Regulations Under Proposition M
On the heels of Proposition M—which mandates that the San Francisco Tax Collector adopt sourcing rules for determining the location of gross receipts—the San Francisco Office of the Treasurer & Tax Collector released proposed sourcing regulations, holding a hearing to discuss the matter on April 8, 2025.
Overview of the Proposed Regulations
The proposed regulations generally align with the California Franchise Tax Board (FTB)’s market-based sourcing rules, but diverge in certain areas:
1. Waterfall Approach to Sourcing: The regulations implement a waterfall (tiered) approach to sourcing gross receipts from:
Services and intangible property, including the use of customer-related data, books and records, or reasonable approximation; and
Financial instruments, which also follow a waterfall structure due to limitations on mirroring FTB’s treatment via regulation.
2. Industry-Specific Rules Excluded: The proposed regulations do not adopt some of the FTB’s special industry sourcing rules (e.g., rules applicable to partnerships, banks, and construction contractors).
3.Clarification on Apportionment: The Tax Collector’s Office explicitly notes that the proposed sourcing rules do not modify the apportionment rules and are solely intended to guide the sourcing of gross receipts within the apportionment formula.
Procedural Background and Public Hearing
On April 8, 2025, the Tax Collector’s Office held a public hearing to discuss the proposed regulations and solicit feedback. Highlights from the hearing include:
1.Comparative Reviews: Tax Collector Office Staff conducted comparative reviews of sourcing frameworks from the FTB and other jurisdictions.
2.Written Comments: Hearing officials confirmed that written comments were due by close of business on April 18, 2025. They specified that comments identifying specific clients will be treated as confidential, whereas general submissions will be public.
3.Oral Comments: There were also oral comments provided by industry representatives.
One private practice tax representative raised concerns over ambiguity in the treatment of asset management service providers.
A San Francisco Chamber of Commerce representative expressed support for consistency with FTB rules but requested clarity regarding the applicability of certain industry-specific rules. The Chamber representative also suggested the addition of a presumption of correctness in favor of taxpayers who follow the regulations.
Takeaways
The Tax Collector’s Office collected public comments on the proposed sourcing regulations on April 18, 2025. Based on these comments, additional hearings may be held to discuss the concerns raised by the public in response to the proposed sourcing regulations.
Q1 2025 New York Artificial Intelligence Developments: What Employers Should Know About Proposed and Passed Artificial Intelligence Legislation
In the first part of 2025, New York joined other states, such as Colorado, Connecticut, New Jersey, and Texas,1 seeking to regulate artificial intelligence (AI) at the state level. Specifically, on 8 January 2025, bills focused on the use of AI decision-making tools were introduced in both the New York Senate and State Assembly. As discussed further below, the New York AI Act Bill S011692 (the NY AI Act) focuses on addressing algorithmic discrimination by regulating and restricting the use of certain AI systems, including in employment. The NY AI Act would allow for a right of private action, empowering citizens to bring lawsuits against technology companies. Additionally, the New York AI Consumer Protection Act Bill A007683 (the Protection Act) would amend the general business law to prevent the use of AI algorithms to discriminate against protected classes, including in employment.
This alert discusses these two pieces of legislation and provides recommendations for employers as they navigate the patchwork of proposed and enacted AI legislation and federal guidance.
Senate Bill 1169
On 8 January 2025, New York State Senator Kristen Gonzalez introduced the NY AI Act because “[a] growing body of research shows that AI systems that are deployed without adequate testing, sufficient oversight, and robust guardrails can harm consumers and deny historically disadvantaged groups the full measure of their civil rights and liberties, thereby further entrenching inequalities.” The NY AI Act would cover all “consumers,” defined as any New York state resident, including residents who are employees and employers.4 The NY AI Act states that “[t]he legislature must act to ensure that all uses of AI, especially those that affect important life chances, are free from harmful biases, protect our privacy, and work for the public good.”5 It further asserts that, as the “home to thousands of technology start-ups,” including those that experiment with AI, New York must prioritize safe innovation in the AI sector by providing clear guidance for AI development, testing, and validation both before a product is launched and throughout the product’s life.6
Setting the NY AI Act apart from other proposed and enacted state AI laws,7 the NY AI Act includes a private right of action allowing New York state residents to file claims against technology companies for violations. The NY AI Act also provides for enforcement by the state’s attorney general. In addition, under the proposed law, consumers have the right to opt out of automated decision-making or appeal its results.
The NY AI Act defines “algorithmic discrimination” as any condition in which the use of an AI system contributes to unjustified differential treatment or impacts, disfavoring people based on their actual or perceived age, race, ethnicity, creed, religion, color, national origin, citizenship or immigration status, sexual orientation, gender identity, gender expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, pregnancy, pregnancy outcomes, disability, height, weight, reproductive health care or autonomy, status as a victim of domestic violence, or other classification protected under state or federal laws.8
The NY AI Act demands that “deployers” using a high-risk AI system9 for a consequential decision10 comply with certain obligations. “Deployers” is defined as “any person doing business in [New York] state that deploys a high-risk artificial intelligence decision system.”11 This includes New York employers. For instance, deployers must disclose to the end user in clear, conspicuous, and consumer-friendly terms that they are using an AI system that makes consequential decisions at least five business days prior to the use of such system. The deployer must allow sufficient time and opportunity in a clear, conspicuous, and consumer-friendly manner for the consumer to opt-out of the automated process and for a human representative to make the decision. A consumer may not be punished or face any other adverse action for opting out of a decision by an AI system and the deployer must render a decision to the consumer within 45 days.12
Further, any deployer that employs a high-risk AI system for a consequential decision must inform the end user within five days in a clear, conspicuous, and consumer-friendly manner if a consequential decision has been made entirely by or with assistance of an automated system. The deployer must then provide and explain a process for the end user to appeal the decision, which must at minimum allow the end user to (a) formally contest the decision, (b) provide information to support their position, and (c) obtain meaningful human review of the decision.13
Additionally, deployers must complete an audit before using a high-risk AI system, six months after deployment, and at least every 18 months thereafter for each calendar year a high-risk AI system is in use. Regardless of final findings, the deployers shall deliver all audits conducted to the attorney general.
As mentioned above, enforcement is permitted by the attorney general or a private right of action by consumer citizens. If a violation occurs, the attorney general may request an injunction to enjoin and restrain the continuance of the violation.14 Whenever the court shall determine that a violation occurred, the court may impose a civil penalty of not more than US$20,000 for each violation. Further, there shall be a private right of action for any person harmed by any violation of the NY AI Act. The court shall award compensatory damages and legal fees to the prevailing party.15
The NY AI Act also offers whistleblower protections, prohibits social scoring AI systems, and prohibits waiving legal rights.16
Assembly Bill 768
Also on 8 January 2025, New York State Assembly Member Alex Bores introduced the Protection Act. Like the NY AI Act, the Protection Act seeks to prevent the use of AI algorithms to discriminate against protected classes.
The Protection Act defines “algorithmic discrimination” as any condition in which the use of an AI decision system results in any unlawful differential treatment or impact that disfavors any individual or group of individuals on the basis of their actual or perceived age, color, disability, ethnicity, genetic information, English language proficiency, national origin, race, religion, reproductive health, sex, veteran status, or other classification protected pursuant to state or federal law.17
The Protection Act requires a “bias and governance audit” consisting of an impartial evaluation by an independent auditor, which shall include, at a minimum, the testing of an AI decision system to assess such system’s disparate impact on employees because of such employee’s age, race, creed, color, ethnicity, national origin, disability, citizenship or immigration status, marital or familial status, military status, religion, or sex, including sexual orientation, gender identity, gender expression, pregnancy, pregnancy outcomes, and reproductive healthcare choices.18
If enacted, beginning 1 January 2027, the Protection Act would require each deployer of a high-risk AI decision system to use reasonable care to protect consumers from any known or reasonably foreseeable risks of algorithmic discrimination.19 Specifically, deployers would be required to implement and maintain a risk management policy and program that is regularly reviewed and updated. The Protection Act references external sources employers can look to for guidance and compliance, such as the “AI Risk Management Framework” published by the National Institute of Standards and Technology and the ISO/IEC 42001 of the International Organization for Standardization.20
On 1 January 2027, employers deploying a high-risk AI decision system that makes or is a substantial factor in making a consequential decision concerning a consumer would also have to:
Notify the consumer that the deployer has used a high-risk AI decision system to make, or be a substantial factor in making, a consequential decision.
Provide to the consumer a statement disclosing: (I) the purpose of the high-risk AI decision system; and (II) the nature of the consequential decision.21
Make available a statement summarizing the types of high-risk AI decision systems that are currently used by the deployer.
Explain how the deployer manages any known or reasonably foreseeable risks of algorithmic discrimination.
Notify the consumer of the nature, source, and extent of the information collected and used by the deployer.22
New York City Council Local Law Int. No. 1894-A
While the NY AI Act and Protection Act are not yet enacted, New York City employers should ensure they are following Local Law Int. No. 1984-A (the NYC AI Law), which became effective on 5 July 2023. The NYC AI Law aims at protecting job candidates and employees from unlawful discriminatory bias based on race, ethnicity, or sex when employers and employment agencies use automated employment decision-making tools (AEDTs) as part of employment decisions.
Compared to the proposed state laws, the NYC AI Law narrowly applies to employers and employment agencies in New York City that use AEDTs to screen candidates or employees for positions located in the city. Similar to the proposed state legislation, bias audits and notice are required whenever an AEDT is used. Notice must be provided to candidates and employees of the use of AEDTs at least 10 business days in advance. Under the NYC AI Law, an AEDT is:
[A]ny computational process, derived from machine learning, statistical modeling, data analytics, or [AI], that issues simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons.
The NYC AI Law demands audits be completed by an independent auditor who details the sources of data (testing or historical) used in the audit. The results of the bias audit must be published on the website of employers and employment agencies, or an active hyperlink to a website with this information must be provided, for at least six months after the latest use of the AEDT for an employment decision. The summary of results must include (i) the date of the most recent bias audit of the AEDT; (ii) the source and explanation of the data; (iii) the number of individuals the AEDT assessed that fall within an unknown category; and (iv) the number of applicants or candidates, the selection or scoring rates, as applicable, and the impact ratios for all categories.23 The penalties for noncompliance with the NYC AI Law include penalties of US$500 to US$1,500 per violation, and there is no cap on the civil penalties. Further, the NYC AI Law authorizes a private right of action, in court or through administrative agencies, for aggrieved candidates and employees.
Takeaways for Employers
Employers should work to be in compliance with the existing NYC AI Law and prepare for future state legislation.24
Employers should:
Assess AI Systems: Identify any AI systems your company develops or deploys, particularly those used in consequential decisions related to employment.
Review Data Management Policies: Ensure your data management policies comply with data security protection standards.
Prepare for Audits: Familiarize yourself with the audit requirements and begin preparing for potential audits of high-risk AI systems.
Develop Internal Processes: Establish internal processes for employee disclosures related to AI system violations.
Monitor Legislation: Stay informed about proposed bills, such as AB326525 and AB3356,26 and continually review guidance from federal agencies.
Our Labor, Employment, and Workplace Safety lawyers regularly counsel clients on a wide variety of concerns related to emerging issues in labor, employment, and workplace safety law and are well-positioned to provide guidance and assistance to clients on AI developments.
Footnotes
1 Please see the following alert for more information on the proposed Texas legislation: Kathleen D. Parker, et al., The Texas Responsible AI Governance Act and Its Potential Impact on Employers, K&L GATES HUB (Jan. 13, 2025), https://www.klgates.com/The-Texas-Responsible-AI-Governance-Act-and-Its-Potential-Impact-on-Employers-1-13-2025.
2 S. 1169, 2025-2026 Gen. Assemb., Reg. Sess., § 85 (N.Y. 2025), https://www.nysenate.gov/legislation/bills/2025/S1169.
3 A.B. 768, 2025-2026 Gen. Assemb., Reg. Sess., § 1550 (N.Y. 2025), https://www.nysenate.gov/legislation/bills/2025/A768.
4 S. 1169, supra note 2, § 85.
5Id. § 2(b).
6Id. § 2(c).
7 Please see the following alert for more information on state AI laws: Michael J. Stortz, et al., Litigation Minute: State Generative AI Statutes and the Private Right of Action, K&L GATES HUB (Jun. 17, 2024), https://www.klgates.com/Litigation-Minute-State-Statutes-and-the-Private-Right-of-Action-6-17-2024
8 S. 1169, supra note 2. § 85(1).
9 Id. § 85(12) “High-Risk AI System” means any AI system that, when deployed: (A) is a substantial factor in making a consequential decision; or (B) will have a material impact on the statutory or constitutional rights, civil liberties, safety, or welfare of an individual in the state.
10 Id. § 85(4) “Consequential Decision” means a decision or judgment that has a material, legal or similarly significant effect on an individual’s life relating to the impact of, access to, or the cost, terms, or availability of, any of the following: (A) employment, workers’ management, or self-employment, including, but not limited to, all of the following: (i) pay or promotion; (ii) hiring or termination; and (iii) automated task allocation. (B) education and vocational training, including, but not limited to, all of the following: (i) assessment or grading, including, but not limited to, detecting student cheating or plagiarism; (ii) accreditation; (iii) certification; (iv) admissions; and (v) financial aid or scholarships. (C) housing or lodging, including rental or short-term housing or lodging. (D) essential utilities, including electricity, heat, water, internet or telecommunications access, or transportation. (E) family planning, including adoption services or reproductive services, as well as assessments related to child protective services. (F) health care or health insurance, including mental health care, dental, or vision. (G) financial services, including a financial service provided by a mortgage company, mortgage broker, or creditor. (H) law enforcement activities, including the allocation of law enforcement personnel or assets, the enforcement of laws, maintaining public order or managing public safety. (I) government services. (J) legal services.
11 A.B. 768, supra note 3, § 1550(7).
12 S. 1169, supra note 2, § 86(a).
13Id. § 86(2).
14 Id. § 89(b)(1).
15 Id. § 89(b)(2).
16Id. §§ 86(b), 89(a), 86(4).
17 A.B. 768, supra note 3, § 1550(1).
18 Id. § 1550(3).
19 Id. § 1552(1)(a).
20 Id. § 1552(2)(a).
21 Id. § 1552(5)(a).
22 Id. § 1552(6)(a).
23 N.Y.C. Dep’t of Consumer & Worker Prot., Automated Employment Decision Tools (AEDT) – Frequently Asked Questions, https://www.nyc.gov/assets/dca/downloads/pdf/about/DCWP-AEDT-FAQ.pdf.
24 Please see the following alert for more information: Maria Caceres-Boneau, et al., New York Proposal to Protect Workers Displaced by Artificial Intelligence, K&L GATES HUB (Feb. 20, 2025), https://www.klgates.com/New-York-Proposal-to-Protect-Workers-Displaced-by-Artificial-Intelligence-2-18-2025
25 A.B. 3265, 2025-2026 Gen. Assemb., Reg. Sess., (N.Y. 2025), https://www.nysenate.gov/legislation/bills/2025/A3265
26 A.B. 3356, 2025-2026 Gen. Assemb., Reg. Sess., (N.Y. 2025), https://www.nysenate.gov/legislation/bills/2025/A3356
Court Voids Alabama Medical Cannabis Awards: What’s Next on This Far Too Long, Too Strange Trip?
“If we couldn’t laugh, we’d all go insane,” we were told by the late, ever so great Jimmy Buffett. So before I go into details about the Montgomery County Circuit Court order that threatens to derail Alabama’s medical cannabis program before the train leaves the station, I’m reminded of the scene from the wonderful Farrelly Brothers film Dumb and Dumber when an exasperated Lloyd Christmas (played seemingly effortlessly by then rising superstar Jim Carrey) exclaims, “We got no food, no jobs… our pets’ heads are falling off!”
Short of a quick reversal by the Court of Civil Appeals or some action by the Alabama Medical Cannabis Commission, I’m afraid we’ve reached pets’ heads falling off status for medical cannabis in Alabama. But I still believe in a path forward. Follow along, if you have the stomach for it.
Whitt, You Seem a Little Unhinged. Did Something Happen?
Yes, glad you asked. I mean, yes something happened. I’m reserving a response to the first part.
On Monday — the day after the holiest of days on the cannabis calendar and just days after a hearing during which the Montgomery County Circuit Court heard arguments about whether an emergency rule promulgated by the AMCC in late 2023 and relied upon by the AMCC to conduct public hearings with applicants and award licenses was lawfully enacted — the Montgomery County Circuit Court declared the emergency rule was void and permanently enjoined the AMCC from taking any actions based on the awarding and denial of licenses in December 2023.
The AMCC adopted the emergency rule in 2023 because – as it stated at the time – denying patients access to medical cannabis created a public health emergency and there was not sufficient time to allow for the typical notice and comment period that applies to traditional rules due to the myriad delays in the licensing process to date (which was then more than two years in the making). Notably, at the same time the AMCC issued the emergency rule, the AMCC also entered a non-emergency rule with the same language and, following a notice and comment period, that rule became law in February 2024. It remains on the books.
The AMCC held public hearings and awarded licenses in December 2023. Winning cultivators and processors were actually issued licenses, while dispensary and integrated facility awardees were stopped from being issued licenses when the trial court entered injunctions prohibiting their issuance in the closing days of 2023.
Those injunctions remained in place until yesterday – nearly a year and a half after the licenses were initially awarded – when the trial court concluded that there was no emergency at the time of the emergency rule and, as a result, integrated facility awards were invalid. As a result, the trial court permanently enjoined the AMCC from issuing licenses in the integrated facility category based on the events of December 2023. Although the ruling is limited by its terms to integrated facility licenses, it stands to reason that it will similarly be applied to all categories because the December proceedings for all license categories were conducted pursuant to the now-invalid emergency rule.
So Now What?
I don’t think it’s a stretch that disappointed awardees in the integrated facility category are drafting appeals just as I am pulling links off YouTube for Dumb and Dumber. There is reason to believe the appellate court may, just as it did last month, overrule the trial court or at least put a hold on the effect of the ruling such that the AMCC can begin the investigative hearing process (which is the final substantive step before the issuing of licenses) while the appeal is pending.
Avid readers of Budding Trends will recall that, following a three-hour oral argument, the Court of Appeals issued a unanimous order overturning the trial court with language that suggested the appellate court may be tiring of the continued delay in the litigation. While that court may be inclined to show some deference to the trial court’s conclusion that no emergency existed when the emergency rule was promulgated, I have a sense the Court of Appeals may be more inclined to get this process back on track. Challengers to the trial court’s order have a number of arguments, and I will keep my promise to not bore you with Latin phrases and legalese and minutiae. I do think, however, that the Court of Appeals may view this recent ruling by the trial court with a keen and skeptical eye and with a broader view of what these delays mean to Alabamians seeking access to medicine.
While that is all playing out in the courts, I believe the AMCC may be able to take certain action to keep the process moving forward. First, for example, there is no injunction in place as of this writing that would prevent the AMCC from initiating investigative hearings for any other license categories. The AMCC should move forward with appropriate speed to conduct those hearings unless and until they are ordered otherwise by a court of competent jurisdiction.
Secondly, I believe the AMCC is within its rights to simply have another vote on the integrated facility applications without relying on the results of the December 2023 proceedings. In relevant part, the injunction simply prevents the AMCC “from taking any action in furtherance of the December 12, 2023 awards and denials of medical cannabis licenses in the integrated facility category.” The AMCC should announce that it is going to have a meeting in a month or two. This should allow for AMCC commissioners to review the materials that were presented to it in December 2023 and then vote to award licenses pursuant to the non-emergency rule that took effect in February 2024 and not be subject to the defect the trial court found with the emergency rule. The AMCC has all of the materials it needs in its possession to conduct this new review and issue awards consistent with yesterday’s order.
Onward. Forward.
Randy Pausch was a professor of computer science, human-computer interaction, and design at Carnegie Mellon University in Pittsburgh. In 2007, his doctors informed him that he had pancreatic cancer and had only three to six months left to live. His first task was saying goodbye to the job he loved by participating in Carnegie Mellon’s last lecture circuit – a hypothetical “final talk” – i.e., “What wisdom would you try to impart to the world if you knew it was your last chance?”
The entire lecture is wonderful – heartbreaking and sad but also incredibly powerful and hopeful. I encourage you to give it a view when you have a chance. But one part in particular came to mind as I tried to wrap my head around what the court did yesterday and what it means going forward. He shared a vignette that ended in a professional setback and offered advice for how to deal with a situation when you’ve hit a brick wall:
[R]emember, the brick walls are there for a reason. The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something. Because the brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the other people.
We’ve come to yet another brick wall in this tortured litigation, and I wouldn’t blame anyone who was beginning to lose hope that we’ll ever see that light at the end of this winding tunnel. But I remember why the wall is there and how badly we want to launch a medical cannabis program in Alabama. Let’s show how much we want it. Let the brick walls keep the other people out.
Thanks for stopping by.
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CMS Extends Revalidation Deadline for Skilled Nursing Facilities to August 1, 2025
In its April 17 MLN Newsletter, the Centers for Medicare and Medicaid Services (CMS) once again extended the deadline for skilled nursing facilities (SNF) to submit their off-cycle revalidation from May 1 to August 1, 2025.
This new deadline gives SNFs additional time to collect the ownership and Additional Disclosable Party (ADP) information necessary for the revalidation filing, and for many SNFs, the extension comes with a wave of relief.
In mid-March, the American Health Care Association and National Center for Assisted Living (AHCA/NACL) reported that fewer than 20% of SNFs had submitted their required revalidation applications. Based on our experience, even for those facilities that have submitted their revalidations, the applications have been frequently returned through development letters requesting additional information, often with multiple rounds of review to address deficiencies. Application development requests have varied widely depending on the analyst reviewing the application and the Medicare Administrative Contractor (MAC).
The inconsistencies in MAC responses and the ever-changing guidance by CMS have left many SNFs with more questions than answers. Most recently, CMS again updated its ADP revalidation guidance on April 9, 2025, to include additions in Section IV related to therapy providers and the FAQs to address requirements for ADPs.
To ensure a timely response to this newly extended deadline, plan ahead to gather the necessary information from ADPs and expect a long process of review, potentially with multiple rounds of inquiries from the MAC. Please review our previously published article to learn about the updated reporting requirements.
DENIED!!: Eleventh Circuit Refuses to Permit Intervention in IMC Case– IS This The End For One-to-One? (Probably)
So big news today.
This morning the Eleventh Circuit Court of Appeals entered an order denying the efforts of several parties– including the National Consumers League–to intervene and defend the FCC’s TCPA one-to-one consent ruling.
This development comes after the Eleventh Circuit had previously struck down the ruling and the FCC stated it would not pursue it further.
With this latest denial the fate of the TCPA one-to-one rule appears sealed. Theoretically the proposed intervenors could seek Supreme Court review of the Eleventh Circuit’s denial but the chances of success on such an effort are too low to merit discussion.
So, unless something insane happens (and these days- who knows!) the FCC’s TCPA one-to-one consent rule is officially dead!
Yay.
R.E.A.C.H. will be updating its standards in light of this change so be on the lookout for that.
Although the FCC’s TCPA one-to-one consent rule is dead the FCC’s TCPA revocation rule is not– in fact it is very much alive and in effect RIGHT NOW.
Over the weekend I saw on LinkedIn some folks suggesting the “reasonable means” provision of the ruling was stayed– ABSOLUTELY FALSE. The ONLY part of the rule that was stayed was the scope provisions– so be sure to get it right!
Speaking of getting it right, Telnyx CEO Dave Casem is now set to speak at LCOC III, along with Quote Velocity, Tree, Everquote and a ton of other big names. You CANNOT miss this show folks. Ticket prices jump soon so get in now.
Chat soon.
New Executive Order Reinforces Federal Preference for Procurement of Commercial Products and Services
The federal government has long maintained a preference for selecting commercial products and services in the federal procurement space. This preference has been the case since at least the time President Clinton signed the Federal Acquisition Streamlining Act of 1994 (FASA) into law, and has been reiterated by Congress since then, including in the National Defense Authorization Act for Fiscal Years 2016 and 2017, for example, and the preference is enshrined in Federal Acquisition Regulation (FAR) Part 12.
On April 16, 2025, t President Trump issued an Executive Order, Ensuring Commercial, Cost-Effective Solutions in Federal Contracts, adding to government’s efforts to prioritize commercial products and services. From now on, when agencies choose to utilize non-commercial products or services, they must document that choice and receive approval from an agency’s approval authority (which is defined as the senior procurement executive).
The Executive Order provides specific timelines and requirements for procurement officials:
Within 60 days of the Executive Order, the senior procurement executive must direct their contracting officers to review all solicitations and other open procurement actions where the government was unable to identify a viable commercially available alternative, and all of these procurement actions should be consolidated into a consolidated application requesting approval to purchase noncommercial products or services.
Within 30 days of receiving the application materials, the senior procurement executive shall review the market research supporting the application and make any recommendations to advance the use of a commercial solution.
Within 120 days of the Executive Order (and annually thereafter), the senior procurement executive for each agency must provide a report to the Director of the Office of Management and Budget (OMB) detailing the agency’s compliance with its requirements to prioritize the use of commercial products and services and explaining how it is implementing the Executive Order.
Moving forward, non-commercial procurements will be subject to additional scrutiny:
When a contracting officer proposes to utilize non-commercial products or services, the contracting officer must provide detail to the senior procurement executive of the market research conducted and the justification for choosing that path. The senior procurement executive may accept or deny the contracting officer’s request.
The senior procurement executive may seek additional guidance from the Director of OMB who will notify the agency official in writing of its recommendation after conducting a review.
As a whole, this Executive Order pushes contracting agencies to conduct market research and justify the use of non-commercial products and services, consistent with FASA. Contractors selling non-commercial products and services to the federal government should take notice, especially when there is an arguably commercial alternative, even if the commercial alternative is less advantageous in price or features.
Skilled Nursing Facilities: CMS Extends Medicare Revalidation Deadline
On April 17, 2025, the Centers for Medicare and Medicaid Services (CMS) announced another extension of the deadline by which skilled nursing facilities (SNFs) must revalidate their Medicare enrollments:
Enrolled skilled nursing facilities should collect data on ownership, managerial, and related party information and submit their revalidation. CMS extended the deadline to August 1, 2025.[1]
Prior to the extension, the revalidation deadline for all Medicare-enrolled SNFs was May 1, 2025. However, as recently as April 9, 2025, CMS published guidance attempting to clarify new disclosure requirements.[2] This round of revalidations comes in the wake of the Final Rule CMS published in the Federal Register on November 17, 2023[3], which became effective on January 16, 2024. These regulations set forth additional requirements for SNFs in disclosing ownership and control interests and additional disclosable parties (ADPs) as part of their Medicare enrollment.[4]
Under these regulations, SNFs must disclose the members of the facility’s governing body, officers, directors, members, partners, trustees, managing employees, and additional disclosable parties (and their organizational structures)[5], which include any person or entity who does any of the following:
(1)
Exercises operational, financial, or managerial control over the facility or a part thereof.
Provides policies or procedures for any of the operations of the facility; or
Provides financial or cash management services to the facility.
(2)
Leases or subleases real property to the facility; or
Owns a whole or part interest equal to or exceeding 5% of the total value of such real property.
(3) Provides—
Management or administrative services.
Management or clinical consulting services; or
Accounting or financial services to the facility.[6]
As the basis for these disclosure requirements, CMS referenced concerns with private equity ownership of SNFs and its desire to assess the impact of such ownership on quality of patient care. CMS stated that:
Part of the challenge CMS faces in ensuring quality care at nursing homes is our lack of sufficient knowledge of all the parties associated with the nursing home’s ownership, operations, and management. Without a complete understanding of the full scope of the facility’s operations and its relationship with other persons and entities, it can be challenging to pinpoint the origin within the organization’s overall structure of any quality-of-care problems, as well as whether taxpayer funding is being appropriately spent on care.[7]
Additionally, in response to comments regarding the administrative burden and operational difficulties these reporting requirements may impose on SNFs, CMS determined that “the importance of quality care and the potential saving of lives justifies additional burden on the part of the nursing facilities.”[8]
CMS’ public announcement does not cast light on its rationale for the deadline extension, but the sheer scope of the administrative lift for SNFs to comply with these reporting requirements may be a contributing factor. Given the Trump Administration’s scrutiny of existing HHS guidance and even existing regulations that are deemed to be overly burdensome, we cannot rule out the possibility of a change in course as to CMS’ focus on ownership and control transparency. Given the additional time for completion, providers should watch carefully for additional guidance with respect to the completion of their revalidations.
[1] Centers for Medicare & Medicaid Services, 2025-04-17-MLNC (April 17, 2025) https://www.cms.gov/training-education/medicare-learning-network/newsletter/2025-04-17-mlnc#_Toc195616278.
[2] Centers for Medicare & Medicaid Services, GUIDANCE FOR SNF ATTACHMENT ON FORM CMS-855A (April 9, 2025) https://www.cms.gov/files/document/guidance-snf-attachment-855a.pdf.
[3] 88 FR 80141 (Nov. 17, 2023).
[4] 42 C.F.R. § 424.516(g).
[5] Id.
[6] 42 C.F.R. § 424.502.
[7] 88 FR 80141, 80147 (Nov. 17, 2023).
[8] Id. at 80148.
AI Updates: Committees on Capitol Hill Continue Debate on Future of Emerging Technologies
“And if you study the history of the world, the nations that are the most military and economically domineer [sic] are the nations that are the most innovative,” Sen. Jon Husted (R-OH) remarked at a recent congressional hearing. This sentiment is shared by many of his colleagues on both sides of the aisle on Capitol Hill who recognize the need for America to stay at the forefront of development and deployment of artificial intelligence (AI). Lawmakers continue to be caught in a debate between promoting innovation and allowing for the creation of new technologies domestically while also safeguarding the American people from the risks they pose.
Last year, we saw action from both the Bipartisan House AI Task Force as well as the Senate AI Working Group releasing recommendations on next steps relating to AI (see here for our summary of the House’s report). Over the past few weeks, there has been renewed momentum in this new session of Congress, with numerous committees, covering a wide range of jurisdictions, holding hearings to discuss AI. The four hearings below range in jurisdiction and continue to show that AI touches nearly every industry:
Harnessing Artificial Intelligence Cyber Capabilities, Senate Armed Services Committee
America’s AI Moonshot: The Economics of AI, Data Centers, and Power Consumption, House Oversight Committee
Converting Energy into Intelligence: the Future of AI Technology, Human Discovery, and American Global Competitiveness, House Energy and Commerce Committee
Examining Trends in Innovation and Competition, House Judiciary Committee
Below we offer high level recaps for these hearings. Our team continues to track how Congress is grappling with AI and its impacts on numerous industries, with the expectation that we will continue to see a high level of interest from Capitol Hill and the Trump Administration on how to best regulate this critical technology.
Harnessing Artificial Intelligence Cyber Capabilities
On 25 March 2025, the Senate Armed Services Cybersecurity Subcommittee held a hearing titled Harnessing Artificial Intelligence Cyber Capabilities. Chaired by Sen. Mike Rounds (R-SD) and Ranking Member Senator Jacky Rosen (D-NV), the hearing gathered testimony from cyber-industry leaders and experts, focusing on the implications of integrating AI into the cyber defense and offense strategies of the Department of Defense (DOD). It also contemplated the role of human oversight in AI and the energy demands needed to support AI development.
Witnesses warned that the pursuit of artificial general intelligence (AGI) could create international tensions akin to that of the nuclear arms race. They argued that DOD will not be exempt from these dynamics. Drawing on the statements of the experts and the Senators, the message was clear: innovate or face an existential threat. As National Defense Authorization Act (NDAA) negotiations get underway for fiscal year (FY) 2026, these considerations are sure to be top of mind for many lawmakers as they have been in previous iterations of the bill. See here for our previous publication on AI in the FY 2025 NDAA.
America’s AI Moonshot: The Economics of AI, Data Centers, and Power Consumption
On 1 April 2025, the House Oversight Committee’s Economic Growth, Energy Policy, and Regulatory Affairs Subcommittee held a hearing titled America’s AI Moonshot: The Economics of AI, Data Centers, and Power Consumption. Like their Senate counterparts on the Armed Services Cybersecurity Subcommittee, the members of the House Oversight Committee warned of the consequences of falling behind in the AI arms race to foreign adversaries. There was not a clear consensus amongst the members, however, on how to meet the energy demand required by data centers used for AI. Natural gas, wind, solar, coal, and nuclear power were all floated as possible sources for energy. The members debated the tradeoffs between environmental impacts and sufficiency of the sources, especially as this relates to local communities where the data centers are or would be located.
Converting Energy Into Intelligence: The Future of AI Technology, Human Discovery, and American Global Competitiveness
On 9 April 2025, the House Energy and Commerce Committee held a hearing title Converting Energy into Intelligence: The Future of AI Technology, Human Discovery, and American Global Competitiveness, at which members echoed many of the points made during the House Oversight Committee’s hearing, especially in the debate of whether to use renewable or non-renewable energy sources. This, along with efforts from members like Rep. Julie Fedorchak (R-ND), who has started a new AI and Energy Working Group, shows the continued focus on how the US will power AI going forward. Rep. Fedorchak released a request for information in March and is working with stakeholders to develop a legislative framework for powering the future of AI.
Examining Trends in Innovation and Competition
On 2 April 2025, the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust held a hearing titled Examining Trends in Innovation and Competition. This hearing approached AI from a slightly different angle. The Subcommittee narrowed its discussion primarily to what a regulatory framework should look like. During the hearing, there was concern from witnesses that an overreaching framework could have a chilling effect on innovation. Witnesses alluded to the European model, and the GDPR and Digital Markets Act (DMA) in particular. Subcommittee Chair Scott Fitzgerald (R-WI) advocated instead for a framework more reflective of the method that the US has traditionally followed, saying “we need to stay true to what works, and that is free enterprise, open competition and light-touch regulatory approach that allows innovation to flourish.”
Momentum Continues in 2025
Although these hearings do not represent formal legislative momentum on AI, the bipartisan interest in AI is clear. With the expectation that Congress will continue to address AI writ large with a focus on energy and defense, we are expecting continued movement and robust policy efforts throughout the rest of 2025. This is a critical time for stakeholders to engage in this area, and our team is ready and available to assist.
Safety Perspectives from the Dallas Region: OSHA’s Evolving Investigation Tactics and Communications [Podcast]
In this episode of our Safety Perspectives From the Dallas Region series, John Surma (Houston) and Frank Davis (Dallas) delve into the intricacies of OSHA’s Rapid Response Investigation (RRI) letters and the emerging trend of OSHA’s use of email questionnaires that the agency doesn’t treat like an RRI letters. Frank and John discuss the implications of these communications, how employers can respond, and the potential legal ramifications of responding to these communications, providing valuable insights for navigating OSHA’s investigative processes.