That is one of the more goofy laws that I have heard of. If you can use a .17 cal I would go to a 17 hornet. If you are limited to rimfire than yeah that is about the most pop you are gonna get. Even as bad as most of the 17WSM's shoot, it will be plenty accurate for coyote out to 150-175 yards. I would not shoot them beyond 125-150 with a wsm but that is just me.
