House Study Bill 235 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON HOLT) A BILL FOR An Act prohibiting the state or a political subdivision of the 1 state from entering into contracts with, or providing tax 2 incentives or any other benefits to, certain companies that 3 censor online content, and including effective date and 4 applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2024YC (1) 89 jda/rn

H.F. _____ Section 1. Section 15A.1, subsection 2, Code 2021, is 1 amended by adding the following new paragraphs: 2 NEW PARAGRAPH . e. Whether a court has found by a 3 preponderance of the evidence that the person to whom the funds 4 will be dispersed has violated a provision of chapter 554E. 5 NEW PARAGRAPH . f. Whether the person to whom the funds will 6 be dispersed is involved in litigation in which it has been 7 alleged that the person has violated a provision of chapter 8 554E. 9 Sec. 2. Section 24.17, subsection 2, Code 2021, is amended 10 to read as follows: 11 2. a. One copy of the budget shall be retained on file 12 in the office by the county auditor and the other shall be 13 certified by the county auditor to the state board. The 14 department of management shall certify the taxes back to the 15 county auditor by June 15. 16 b. For budgets for fiscal years beginning on or after 17 July 1, 2021, if a political subdivision that is a city, 18 county, school district, or township has been found to have 19 intentionally violated a provision of chapter 554E during the 20 twelve-month period prior to the date taxes are certified back 21 to the county auditor under paragraph “a” , the amount of the 22 political subdivision’s budget certified under this chapter and 23 the amount of taxes certified back to the county auditor by 24 the department of management shall be reduced by ten percent. 25 If the political subdivision fails to remedy the violation 26 of chapter 554E prior to the date of certification of taxes 27 back to the county auditor by the department of management for 28 the subsequent fiscal year, the percentage reduction of the 29 political subdivision’s budget certified under this chapter and 30 the amount of taxes certified back by the department of revenue 31 shall be reduced by a percentage equal to the total reduction 32 for the preceding fiscal year plus five percent. 33 Sec. 3. NEW SECTION . 554E.1 Definitions. 34 As used in this chapter, unless the context otherwise 35 -1- LSB 2024YC (1) 89 jda/rn 1/ 24

H.F. _____ requires: 1 1. “Company” means and includes a person or an affiliate of 2 a person who owns or operates any of the following: 3 a. A massive online marketplace. 4 b. A massive online video sharing website. 5 c. A massive social networking website. 6 d. A monopolistic entity. 7 e. A pre-installed application store. 8 2. “Excessively violent content” means any image, video, 9 or other content that, taking the material as a whole and 10 applying contemporary community standards with respect to what 11 is suitable for public distribution, meets all of the following 12 criteria: 13 a. Depicts or involves killing, maiming, dismembering, or 14 sexually assaulting an individual. 15 b. Lacks serious literary, scientific, political, or 16 artistic value. 17 3. “Expressive merchandise” means and includes any tangible 18 personal property that contains or displays a viewpoint that 19 constitutes constitutionally protected speech. 20 4. “Governmental entity” means and includes all of the 21 following: 22 a. A unit of state government in the executive, legislative, 23 or judicial branch. 24 b. A political subdivision of the state, including a city, 25 county, township, school district, and any other governmental 26 entity authorized to levy taxes. 27 5. “Internet site” means the same as defined in section 4.1. 28 6. “Massive online marketplace” means and includes an 29 internet site that meets all of the following criteria: 30 a. Offers tangible personal property for sale to the general 31 public. 32 b. Sells or facilitates the sale of protected publications 33 or expressive merchandise. 34 c. Has at least seventy-five million subscribers or members 35 -2- LSB 2024YC (1) 89 jda/rn 2/ 24

H.F. _____ in the United States in the calendar year before the date a 1 court has found by a preponderance of the evidence that the 2 massive online marketplace violated this chapter, or has sold 3 goods to at least seventy-five million individuals in the 4 United States in the calendar year before the date a court 5 has found by a preponderance of the evidence that the massive 6 online marketplace has violated a provision of this chapter. 7 7. “Massive online video sharing website” means and includes 8 an internet site that meets all of the following criteria: 9 a. Allows users or the public to share videos with other 10 users or the public. 11 b. Hosts, stores, provides, or otherwise facilitates access 12 by individuals in the United States. 13 c. Has at least five hundred million videos available at any 14 point in time. 15 8. “Massive social networking website” means and includes an 16 internet site that meets all of the following criteria: 17 a. Allows users, through the creation of pages within 18 the internet site or profiles or by other means, to provide 19 information about themselves that is available to the public 20 or to other users. 21 b. Allows users a mechanism for communication with other 22 users. 23 c. Has at least twenty million subscribers or members in 24 the United States in the calendar year before the date a court 25 has found by a preponderance of the evidence that the massive 26 social networking website has violated a provision of chapter 27 554E, or has been used by at least twenty million individuals 28 in the United States in the calendar year before the date a 29 court has found by a preponderance of the evidence that the 30 massive social networking website has violated a provision of 31 this chapter. 32 9. “Monopolistic entity” means and includes all of the 33 following: 34 a. A person who, within the ten-year period preceding the 35 -3- LSB 2024YC (1) 89 jda/rn 3/ 24

H.F. _____ date a court has found by a preponderance of the evidence 1 that the person has violated a provision of this chapter, has 2 been found to have violated any state or federal antitrust or 3 price-fixing law. 4 b. A person who is involved in litigation in which it has 5 been alleged that the person has violated any state or federal 6 antitrust or price-fixing law. 7 10. “Obscene material” means any material depicting or 8 describing the genitals, sex acts, masturbation, excretory 9 functions, or sadomasochistic abuse which the average person, 10 taking the material as a whole and applying contemporary 11 community standards with respect to what is suitable material 12 for minors, would find appeals to the prurient interest and is 13 patently offensive; and the material, taken as a whole, lacks 14 serious literary, scientific, political, or artistic value. 15 11. “Person” means the same as defined in section 4.1. 16 12. “Pre-installed application store” means and includes 17 any program, application, service, or mechanism that is 18 pre-installed on a mobile telephone or other portable 19 electronic communication device capable of being used to write, 20 send, or view an electronic message that meets all of the 21 following criteria: 22 a. Facilitated at least one hundred million annual downloads 23 of programs or applications by individuals in the United 24 States in the calendar year before the date a court has found 25 by a preponderance of the evidence that the pre-installed 26 application store has violated a provision of this chapter. 27 b. Facilitated the download of programs or applications 28 that constitute a massive online marketplace, massive online 29 video sharing website, or massive social networking website 30 in the calendar year before the date a court has found by 31 a preponderance of the evidence that the pre-installed 32 application store has violated a provision of this chapter. 33 13. “Protected publication” means and includes any 34 newspaper, non-fiction book, periodical, religious text, or any 35 -4- LSB 2024YC (1) 89 jda/rn 4/ 24

H.F. _____ other publication that contains or displays a viewpoint that 1 constitutes constitutionally protected speech. 2 14. “Social networking website” means and includes an 3 internet site that meets all of the following criteria: 4 a. Allows users, through the creation of pages within 5 the internet site or profiles or by other means, to provide 6 information about themselves that is available to the public 7 or to other users. 8 b. Allows users a mechanism for communication with other 9 users. 10 Sec. 4. NEW SECTION . 554E.2 Prohibition on censorship —— 11 ability to opt out of certain algorithms. 12 1. a. A company shall not intentionally affect the ability 13 of a citizen of this state to view, comment, or otherwise 14 interact with a United States citizen’s content on the 15 company’s internet site by limiting, blocking, or otherwise 16 restricting any content on the company’s internet site if the 17 content constitutes constitutionally protected speech. 18 b. A company shall not intentionally restrict the ability of 19 a citizen of this state to download a social networking website 20 on a pre-installed application store. 21 c. A company shall not intentionally restrict the ability of 22 a citizen of this state to purchase any protected publication 23 or expressive merchandise on a massive online marketplace 24 if similar protected publications or expressive merchandise 25 were allowed for sale on the massive online marketplace at 26 the time the company restricted the ability of a citizen of 27 this state to purchase the protected publication or expressive 28 merchandise. 29 2. Notwithstanding subsection 1, a company may do any of the 30 following: 31 a. Restrict the ability of a citizen of this state to 32 view, comment, or otherwise interact with a United States 33 citizen’s content on the company’s internet site if the 34 content is criminal in nature, if the content does not 35 -5- LSB 2024YC (1) 89 jda/rn 5/ 24

H.F. _____ constitute constitutionally protected speech, or if the content 1 constitutes any of the following: 2 (1) Obscene material. 3 (2) Excessively violent content. 4 b. Restrict the ability of a citizen of this state to 5 download a social networking website program or application 6 from a pre-installed application store if the social networking 7 website is being used for criminal activity and the social 8 networking website does not have a policy in place to require 9 its employees to notify law enforcement upon receiving a 10 complaint or otherwise becoming aware of the criminal activity 11 being discussed or conducted on its social networking website, 12 or does not have a policy in place to require its employees 13 to refer the complaint or existence of criminal activity to 14 designated employees that carry out the policy. 15 3. a. A company shall provide its subscribers, members, and 16 users who are citizens of this state with the ability to opt 17 out of post promoting algorithms and shadow banning algorithms 18 on the company’s massive online marketplace, massive online 19 video sharing website, or massive social networking website. 20 b. For purposes of this subsection: 21 (1) “Post promoting algorithm” means and includes the 22 mechanism, process, or set of rules that is used to sort the 23 content that is visible to a subscriber, member, or user based 24 on data or information possessed, used, or controlled by a 25 company which relates to the subscriber, member, or user. 26 (2) “Shadow banning algorithm” means and includes the 27 mechanism, process, or set of rules that is used to restrict 28 the visibility of a subscriber’s, member’s, or user’s content 29 to other subscribers, members, or users in a way that is not 30 readily apparent to the subscriber, member, or user who created 31 the content. 32 Sec. 5. NEW SECTION . 554E.3 Enforcement —— companies. 33 1. a. A court’s finding by a preponderance of the evidence 34 that a company has violated a provision of this chapter shall 35 -6- LSB 2024YC (1) 89 jda/rn 6/ 24

H.F. _____ be conclusive proof of the company’s breach of any agreement 1 between the company and a governmental entity in effect as of 2 the effective date of this Act, and the governmental entity 3 shall cancel the agreement effective as of the date the company 4 receives the notice the governmental entity provides pursuant 5 to section 554E.4, subsection 1, paragraph “b” , or if the 6 governmental entity fails to send the notice, the governmental 7 entity shall cancel the agreement effective thirty days after 8 the effective date of this Act. Nothing in this subsection 9 shall be interpreted to provide a company that did not receive 10 notice a defense to a suit alleging a violation of this 11 chapter or a defense to a suit alleging the company breached an 12 agreement with the governmental entity. 13 b. A court’s finding by a preponderance of the evidence 14 that a company has violated a provision of this chapter shall 15 be conclusive proof of the company’s breach of any agreement 16 between the company and a governmental entity entered into 17 after the effective date of this Act, and the governmental 18 entity shall cancel the agreement effective as of the date of 19 the court’s finding. 20 2. Notwithstanding any other provision of law to the 21 contrary, upon a court’s finding by a preponderance of the 22 evidence that a company has violated a provision of this 23 chapter, the company shall be prohibited from entering into 24 any future agreement with a governmental entity and shall be 25 prohibited from receiving any future payments; tax credits; 26 assistance under section 15.335B; sales tax exemptions or 27 refunds under chapter 423; property tax credits, exemptions, 28 including but not limited to exemptions under chapter 427, 29 rebates, refunds, reimbursements, or grants for property taxes 30 paid; or any other special benefits from a governmental entity. 31 The prohibition provided in this subsection shall begin on the 32 date of the court’s finding. Except as provided in section 33 554E.7, the prohibition shall be for a period of twenty years. 34 The twenty-year prohibition shall be reinstated for each 35 -7- LSB 2024YC (1) 89 jda/rn 7/ 24

H.F. _____ subsequent finding by a court pursuant to this subsection. 1 3. Notwithstanding any other provision of law to the 2 contrary, upon a court’s finding by a preponderance of the 3 evidence that a company has violated a provision of this 4 chapter all of the following shall apply: 5 a. Tax credits; assistance from programs and funds under 6 section 15.335B; sales tax exemptions or refunds under chapter 7 423; property tax credits, exemptions, including but not 8 limited to exemptions under chapter 427, rebates, refunds, 9 reimbursements, or grants for property taxes paid; or any 10 other special benefits previously claimed by the company 11 shall be recaptured or terminated by the governmental entity. 12 The recapture or termination of any tax credits; assistance 13 under section 15.335B; sales tax exemptions or refunds under 14 chapter 423; property tax credits, exemptions, including but 15 not limited to exemptions under chapter 427, rebates, refunds, 16 reimbursements, or grants for property taxes paid; or any other 17 special benefits previously claimed by the company pursuant 18 to this subsection shall supersede any agreement previously 19 entered into with the governmental entity. Recapture or 20 termination pursuant to this subsection shall be accomplished 21 in the same manner as provided in section 15.330, subsection 22 2, by the method for resolving a breach described in the 23 agreement, through court action, or any other means determined 24 by the attorney general to result in the most expeditious 25 recapture or termination of tax credits; assistance under 26 section 15.335B; sales tax exemptions or refunds under chapter 27 423; property tax credits, exemptions, including but not 28 limited to exemptions under chapter 427, rebates, refunds, 29 reimbursements, or grants for property taxes paid; or any other 30 special benefits previously claimed by the company. 31 b. Payments or other quantifiable benefits received but not 32 earned by the company shall be returned to the governmental 33 entity. 34 4. Upon a court’s finding by a preponderance of the evidence 35 -8- LSB 2024YC (1) 89 jda/rn 8/ 24

H.F. _____ that a company has violated a provision of this chapter, the 1 prohibition provided in subsection 1 and the return of received 2 but not earned amounts provided in subsection 3 shall not be 3 stayed during appeal proceedings. 4 Sec. 6. NEW SECTION . 554E.4 Inventory of agreements with 5 companies —— obligations. 6 1. Within thirty days following the effective date of this 7 Act, a governmental entity shall do all of the following: 8 a. Conduct a review of currently effective agreements; 9 tax credits; assistance under section 15.335B; sales tax 10 exemptions or refunds under chapter 423; property tax credits, 11 exemptions, including but not limited to exemptions under 12 chapter 427, rebates, refunds, reimbursements, or grants for 13 property taxes paid; or any other special benefits provided by 14 the governmental entity beginning January 1, 2001, through the 15 effective date of this Act, to determine if any agreements, tax 16 credits; assistance under section 15.335B; sales tax exemptions 17 or refunds under chapter 423; property tax credits, exemptions, 18 including but not limited to exemptions under chapter 427, 19 rebates, refunds, reimbursements, or grants for property taxes 20 paid; or any other special benefits were entered into with, or 21 provided to, a company. 22 b. Provide notice to a company on the form provided by the 23 office of the attorney general pursuant to subsection 3, of 24 the governmental entity’s rights pursuant to section 554E.3 by 25 certified mail return receipt requested if the governmental 26 entity determines pursuant to subsection 1 that a currently 27 effective agreement; tax credit; assistance under section 28 15.335B; sales tax exemption or refund under chapter 423; 29 property tax credit, exemption, including but not limited to 30 an exemption under chapter 427, rebate, refund, reimbursement, 31 or grant for property taxes paid; or any other special benefit 32 was entered into with, or provided to, the company beginning 33 January 1, 2001, through the effective date of this Act. 34 c. Provide the office of the attorney general with copies of 35 -9- LSB 2024YC (1) 89 jda/rn 9/ 24

H.F. _____ the notice and receipt of delivery provided in subsection 2. 1 2. A governmental entity shall include in all agreements 2 to which it is a party entered into on or after the effective 3 date of this Act a statement summarizing the governmental 4 entity’s enforcement rights under section 554E.3 with respect 5 to agreements; tax credits; assistance under section 15.335B; 6 sales tax exemptions or refunds under chapter 423; property tax 7 credits, exemptions, including but not limited to exemptions 8 under chapter 427, rebates, refunds, reimbursements, or grants 9 for property taxes paid; or any other special benefits. 10 3. The office of the attorney general shall develop and 11 provide to governmental entities a form to be used for the 12 notice provided in subsection 2 within seven days of the 13 effective date of this Act. 14 Sec. 7. NEW SECTION . 554E.5 Enforcement —— governmental 15 entities. 16 Notwithstanding any other provision of law to the contrary, 17 upon a court’s finding by a preponderance of the evidence that 18 a governmental entity intentionally violated a provision of 19 this chapter, including but not limited to by making payments 20 or providing tax credits; assistance under section 15.335B; 21 sales tax exemptions or refunds under chapter 423; property tax 22 credits, exemptions, including but not limited to exemptions 23 under chapter 427, rebates, refunds, reimbursements, or grants 24 for property taxes paid; or any other special benefits in 25 violation of section 554E.3, all of the following shall apply: 26 1. The governmental entity’s certified budget and amount of 27 taxes certified shall be reduced as provided in section 24.17, 28 subsection 2, paragraph “b” . 29 2. If the governmental entity receives an appropriation, 30 the governmental entity’s portion of each appropriation in the 31 fiscal year of the court’s finding of an intentional violation 32 shall be reduced by ten percent. If the governmental entity 33 fails to remedy the violation of this chapter prior to the 34 beginning of the subsequent fiscal year, the governmental 35 -10- LSB 2024YC (1) 89 jda/rn 10/ 24

H.F. _____ entity’s portion of each appropriation made by the general 1 assembly for the subsequent fiscal year shall be reduced by a 2 percentage equal to the percentage reduction for the preceding 3 fiscal year plus five percent. All appropriation amounts 4 reduced pursuant to this section shall be transferred to the 5 fund from which they were appropriated. 6 Sec. 8. NEW SECTION . 554E.6 Obligations of the office of 7 the attorney general. 8 1. The office of the attorney general shall enforce 9 the provisions of this chapter, including in all appeal 10 proceedings. 11 a. The office of the attorney general shall appeal a 12 district court’s decision if a company prevails in the district 13 court in an action under this chapter. 14 b. The office of the attorney general shall file an 15 application for further review with the supreme court if, after 16 the appeal provided in paragraph “a” , the supreme court issues 17 an order of transfer and transfers the case to the court of 18 appeals and the company prevails in the action before the court 19 of appeals. 20 c. When an appeal is taken by the office of the attorney 21 general, the office shall not be required to give an appeal 22 bond or security for costs. 23 2. a. Within sixty days following the effective date 24 of this Act, the office of the attorney general shall make 25 available on its internet site a system to allow a citizen of 26 this state to report potential violations of this chapter by a 27 company or by a governmental entity to the office. 28 b. The system required pursuant to paragraph “a” shall 29 include all of the following: 30 (1) A mechanism for the electronic submission of 31 photographs or other evidence of a company’s potential 32 violation of this chapter. 33 (2) An annual accounting, on a calendar year basis, of the 34 number of complaints received by the office of the attorney 35 -11- LSB 2024YC (1) 89 jda/rn 11/ 24

H.F. _____ general related to the number of potential violations of this 1 chapter by companies and governmental entities. In addition 2 to the current year’s accounting, the system shall display 3 annual accountings required by this subparagraph for the years 4 preceding the current calendar year. 5 (3) An annual accounting, on a calendar year basis, of the 6 number of investigations required pursuant to subsections 3 7 and 4 in which the office of the attorney general determines 8 there is a reasonable suspicion that a company or governmental 9 entity violated this chapter. In addition to the current 10 year’s accounting, the system shall display annual accountings 11 required by this subparagraph for the years preceding the 12 current calendar year. 13 (4) A list of the companies that a court has found by a 14 preponderance of the evidence have violated this chapter. 15 (5) A list of the governmental entities that a court has 16 found by a preponderance of the evidence have violated this 17 chapter. 18 (6) A mechanism to ensure that the person submitting the 19 report is a citizen of this state. 20 3. Notwithstanding subsection 5, the office of the attorney 21 general shall complete the investigation of a report received 22 pursuant to subsection 2 within thirty days of the receipt 23 of the report if the report included a photograph or other 24 evidence that, in the opinion of the office, indicates a 25 company’s potential violation of this chapter. 26 4. The office of the attorney general shall contact a person 27 who submits a report pursuant to subsection 2 related to a 28 company’s potential violation of this chapter that did not 29 contain a photograph or other evidence within seven days of 30 the receipt of the report and inform the person of one of the 31 following: 32 a. The office will investigate the report, in which case the 33 office shall complete the investigation within thirty days of 34 the receipt of the report. 35 -12- LSB 2024YC (1) 89 jda/rn 12/ 24

H.F. _____ b. The person has thirty days to provide the office with 1 a photograph or other evidence that indicates a potential 2 violation of this chapter, in which case the office shall 3 complete the investigation within thirty days of the receipt of 4 the photograph or other evidence. 5 5. a. Upon completion of an investigation in which 6 the office of the attorney general determines there is a 7 reasonable suspicion that a company or governmental entity has 8 violated this chapter, the office shall file suit in a court 9 of competent jurisdiction to enforce the provisions of this 10 chapter. 11 b. The office of the attorney general shall file suit for a 12 violation of this chapter every four years from the date of the 13 most recent court’s finding if the office determines there is 14 reasonable suspicion that a company has violated this chapter 15 at any point during the four-year period after the court’s most 16 recent finding. 17 c. The office of the attorney general shall file suit to 18 enforce this chapter against a governmental entity every year 19 from the date of the most recent court’s finding that the 20 governmental entity has violated this chapter if the office 21 determines there is reasonable suspicion that a violation of 22 this chapter has occurred at any point during the one-year 23 period after the court’s most recent finding. 24 6. All records provided to the office of the attorney 25 general pursuant to this section shall be kept confidential and 26 are not subject to chapter 22. 27 Sec. 9. NEW SECTION . 554E.7 Petition for stay. 28 1. No sooner than four years after a court’s finding that 29 a company violated a provision of this chapter pursuant to 30 section 554E.3, the company may petition the court for a stay 31 of the provisions of section 554E.3, subsection 1. 32 2. At the time the company petitions the court for a stay 33 pursuant to subsection 1, the company shall file with the court 34 a bond payable to the state in an amount deemed necessary by 35 -13- LSB 2024YC (1) 89 jda/rn 13/ 24

H.F. _____ the office of the attorney general. 1 3. Within thirty days after a company files a petition for 2 a stay pursuant to subsection 1, the office of the attorney 3 general shall file with the court a statement indicating any 4 reports received under section 554E.6, subsection 2, related 5 to the company from the date of the court’s finding that 6 the company violated a provision of this chapter pursuant to 7 section 554E.3 through the date the company filed the petition 8 for a stay. 9 4. The court shall grant the petition for stay filed 10 pursuant to subsection 1 if it finds that the company did not 11 violate the provisions of this chapter from the date of the 12 court’s finding that the company violated a provision of this 13 chapter pursuant to section 554E.3 through the date the company 14 filed the petition for a stay. 15 a. Beginning one year after the court grants the petition 16 for stay pursuant to this subsection, the company shall 17 annually file with the court an additional bond in the amount 18 of any payments; tax credits; assistance under section 15.335B; 19 sales tax exemptions or refunds under chapter 423; property tax 20 credits, exemptions, including but not limited to exemptions 21 under chapter 427, rebates, refunds, reimbursements, or grants 22 for property taxes paid; or any other special benefits the 23 company received from the state during the previous year. 24 b. A governmental entity shall not make any payments to 25 the company, or provide the company with any tax credits; 26 assistance under section 15.335B; sales tax exemptions or 27 refunds under chapter 423; property tax credits, exemptions, 28 including but not limited to exemptions under chapter 427, 29 rebates, refunds, reimbursements, or grants for property taxes 30 paid; or any other special benefits, until the company has 31 satisfied the requirements in paragraph “a” for the previous 32 year. 33 5. The company shall be permanently prohibited from 34 entering into any agreement with a governmental entity and 35 -14- LSB 2024YC (1) 89 jda/rn 14/ 24

H.F. _____ shall be permanently prohibited from receiving any payments; 1 tax credits; assistance under section 15.335B; sales tax 2 exemptions or refunds under chapter 423; property tax credits, 3 exemptions, including but not limited to exemptions under 4 chapter 427, rebates, refunds, reimbursements, or grants for 5 property taxes paid; or any other special benefits from a 6 governmental entity if the company violates a provision of 7 this chapter after a court has granted the company’s petition 8 for stay pursuant to this section and before the end of the 9 twenty-year prohibition provided in section 554E.3, subsection 10 1. 11 6. The amount of any bond forfeited under this section shall 12 be deposited in the general fund of the state. 13 7. A company shall not file more than one petition for 14 a stay of the provisions of section 554E.3, subsection 1, 15 during the twenty-year prohibition provided in section 554E.3, 16 subsection 1. 17 8. Nothing in this section shall be construed to limit the 18 authority of the office of the attorney general under section 19 554E.6 to investigate potential violations of this chapter or 20 file suit to enforce the provisions of this chapter. 21 Sec. 10. NEW SECTION . 554E.8 Right to intervene —— 22 enforcement by citizens of this state. 23 1. A governmental entity impacted by an action under this 24 chapter may intervene in any action under this chapter. 25 2. A citizen of this state who has reported a company’s 26 potential violation of this chapter pursuant to section 554E.6 27 may intervene in any action related to the company under this 28 chapter. 29 3. Notwithstanding section 554E.6, subsection 1, a citizen 30 of this state who has reported a company’s potential violation 31 of this chapter pursuant to section 554E.6 may file suit in a 32 court of competent jurisdiction to enforce the provisions of 33 this chapter if the company is not currently subject to the 34 prohibition provided in section 554E.3, subsection 2, and if 35 -15- LSB 2024YC (1) 89 jda/rn 15/ 24

H.F. _____ the company’s potential violation of this chapter occurred at 1 least thirty days following the effective date of this Act. 2 Sec. 11. NEW SECTION . 554E.9 Rules. 3 The office of the attorney general shall adopt rules 4 pursuant to chapter 17A to administer and interpret this 5 chapter. 6 Sec. 12. LEGISLATIVE FINDINGS AND LEGISLATIVE INTENT. The 7 general assembly finds all of the following: 8 1. The United States Constitution and the Constitution of 9 the State of Iowa guarantee citizens of this state the freedom 10 of speech. 11 2. The ability of citizens of this state to voice their 12 opinions on matters that impact themselves or society generally 13 is of paramount importance in order to have a healthy, 14 functioning, and inclusive democracy in which every citizen can 15 participate. 16 3. Freedom of speech is not only necessary in order 17 for every citizen of this state to feel included in their 18 representative democracy, but also necessary for there to be 19 free and open debate so society can improve its knowledge, 20 understanding, and perspective on issues that impact science, 21 religion, academia, public officials, and public policy 22 generally, regardless of how popular or unpopular any 23 particular person, entity, speech, idea, or opinion may be. 24 4. The purpose of guaranteeing the freedom of speech in the 25 United States Constitution and Constitution of the State of 26 Iowa is to protect the people from government to ensure that 27 no one person, group, or entity controls what individuals or 28 society see as the truth, controls what individuals or society 29 are allowed to believe or think, or controls what is and is not 30 open for debate. 31 5. Without freedom of speech, free and open debate, and 32 freedom of thought in society, individuals begin to lose faith 33 and trust in science, religion, academia, public officials, and 34 the legitimacy of their representative government. 35 -16- LSB 2024YC (1) 89 jda/rn 16/ 24

H.F. _____ 6. The majority of individuals and entities voice their 1 support, opposition, or opinions on science, religion, 2 academics, public officials, and public policy through the 3 internet. 4 7. A majority of individuals and entities now receive 5 information and opinions about science, religion, academia, 6 public officials, and public policy through the internet. 7 8. It can be safely concluded that the public forum where 8 individuals, entities, and society generally debate the issues, 9 voice their support, opposition, or opinions, obtain and 10 receive information, and learn about current events has largely 11 moved from the physical public square and print materials 12 distributed locally, to the internet through companies. 13 9. Congress has provided civil immunity to many companies 14 through 47 U.S.C. §230 (the Communications Decency Act), 15 which allows those companies to flourish by treating them 16 as distributors of information instead of publishers of 17 information, which allows the companies to label, reduce 18 distribution, or remove information on their platforms, 19 websites, marketplaces, application stores, and the internet 20 generally. 21 10. Certain companies have exploited and abused the 22 Communications Decency Act to the point where many citizens of 23 this state are losing faith and trust in science, religion, 24 academia, public officials, public policy generally, and the 25 legitimacy of their representative government at all levels. 26 11. Certain companies that exploit and abuse the 27 Communications Decency Act have grown to such an extent that 28 they dominate the marketplace such that citizens of this 29 state have no real alternatives if they do not agree with the 30 information moderation policies used by those companies, are 31 disallowed from voicing their opinions on the platforms created 32 by the companies, have their opinions and thoughts hidden 33 from the general public, or are disallowed from having their 34 publications sold to the general public in online marketplaces. 35 -17- LSB 2024YC (1) 89 jda/rn 17/ 24

H.F. _____ 12. Members of Congress belonging to both parties have known 1 about these abuses and exploitations of the Communications 2 Decency Act for years, and congressional committees have 3 released reports detailing these exploitations and abuses, 4 but Congress has done nothing to reduce or prevent them from 5 continuing in the future. 6 13. Near the end of his presidency, President Donald J. 7 Trump attempted to force Congress to prevent any future harm 8 caused by the continued ability of companies to exploit and 9 abuse the Communications Decency Act by vetoing the National 10 Defense Authorization Act, but Congress decided to override 11 President Trump’s veto instead of preventing the harm and abuse 12 from continuing by repealing or amending the Communications 13 Decency Act. 14 14. The general assembly does not have the authority to 15 enact any law that is inconsistent with the Communications 16 Decency Act. 17 15. The general assembly does have the ability to ensure 18 that the state and its political subdivisions do not give any 19 taxpayer money, tax incentives, or any other benefit to the 20 companies causing harm to our society by exploiting and abusing 21 the Communications Decency Act. 22 16. It is the intent of the general assembly that this 23 Act be interpreted broadly to prevent taxpayer money, tax 24 incentives, or any other benefits from being awarded to the 25 companies that are the subject of this Act. 26 Sec. 13. TRANSITIONAL COMPLAINT REPORTING SYSTEM. Within 27 thirty days following the effective date of this Act, and until 28 fifty-nine days following the effective date of this Act, the 29 office of the attorney general shall make available on its 30 internet site a transitional system to allow a citizen of 31 this state to report potential violations of chapter 554E by 32 a company or a governmental entity to the office. The system 33 shall include, at a minimum, a mechanism for the electronic 34 submission of reports of potential violations of chapter 554E 35 -18- LSB 2024YC (1) 89 jda/rn 18/ 24

H.F. _____ and the electronic evidence associated with the potential 1 violations. 2 Sec. 14. IMPLEMENTATION OF ACT. Section 25B.2, subsection 3 3, shall not apply to this Act. 4 Sec. 15. EFFECTIVE DATE. This Act, being deemed of 5 immediate importance, takes effect upon enactment. 6 Sec. 16. APPLICABILITY. This Act applies to agreements 7 between a company and a governmental entity in effect or 8 entered into on or after the effective date of this Act. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill prohibits the state or political subdivisions of 13 the state from entering into contracts with, or providing tax 14 incentives or any other benefits to, certain companies that 15 censor online content. 16 The bill requires that, before public funds are used for 17 economic development, the public body dispensing the public 18 funds shall consider whether a court has found that the person 19 to whom the funds will be dispersed has violated a provision 20 of new Code chapter 554E, and whether the person is involved 21 in litigation in which it has been alleged that the person 22 violated Code chapter 554E. 23 The bill modifies Code section 24.17 to provide that, for 24 fiscal years beginning on or after July 1, 2021, if a political 25 subdivision has been found to have violated new Code chapter 26 554E during the 12-month period prior to the date taxes are 27 certified, the amount of the political subdivision’s budget 28 certified under Code chapter 24 and the amount of taxes 29 certified back to the county auditor by the department of 30 management shall be reduced as described in the bill. 31 The bill establishes new Code chapter 554E. The bill 32 adds several defined terms to the Code chapter, including 33 definitions for “company”, “excessively violent content”, 34 “expressive merchandise”, “governmental entity”, “internet 35 -19- LSB 2024YC (1) 89 jda/rn 19/ 24