SF 486 (LSB 2346SV (1) 90)

SENATE FILE 486

BY  COMMITTEE ON TECHNOLOGY

(SUCCESSOR TO SSB 1189)

A BILL FOR

An Act relating to censorship of expression on online platforms, and providing penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  659B.1  Short title.
   This chapter shall be known and may be cited as “The Protecting Online Free Speech Act”.
    Sec. 2.  NEW SECTION.  659B.2  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Active state user” means an individual who uses a particular online platform’s platform services three or more times in a quarter while located in this state.
   2.  “Adversely treat” means to delete, remove, demonetize, or restrict access to, or availability of, content.
   3.  “Annual gross revenues” means income or revenue from all sources, before any expenses or taxes, computed according to generally accepted accounting principles.
   4.  “Annual gross revenues attributable to users located in this state” means the part of the annual gross revenues of the corporation that is computed using the apportionment fraction, the numerator of which is the population of residents of this state age thirteen years or older, and the denominator of which is the population of the United States age thirteen years or older, both as reported in the most annual estimates produced by the United States census bureau.
   5.  “Demonetize” means excluding or restricting an information content provider from participating in the service’s advertisement revenue sharing arrangements.
   6.  “Deplatform” means an online platform restricting, in whole or in part, covertly or overtly, the ability of an information content provider to post, upload, or publish content, as opposed to such platform taking such actions on an individual basis against specific and particular content produced by such information content provider.
   7.  “Distinct category of services” means general internet search, personal social networking, microblogging social networking, online video sharing, or online photo sharing.
   8.  “General internet search” means internet-based software that responds to a user’s textual query by using an algorithm or other methods to produce potentially relevant responses to such query, and responds to general queries, not simply those confined to a particular subject or featuring results from a specific internet site.
   9.  “Information content provider” means any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the internet or any other interactive computer service.
   10.  “Microblogging social networking” means a combination of blogging and instant messaging focused around users creating short messages to be posted and shared on an online social networking service.
   11.  “Online photo sharing” means an internet-based service that allows users to upload and store photographs and share them with other users, and that is primarily focused on the posting and transmission of such user-provided photos. 
   12.  “Online platform” means any internet site or application that is open to the public and allows users to create and share content electronically or engage in social networking, or any general search engine, provided that an online platform does not include any of the following:
   a.  Electronic mail services.
   b.  An internet site or application that consists primarily of news, sports, entertainment, or other information or content that is not user-generated but is created or preselected by the provider and for which any chat, comments, or interactive functionality is incidental to, directly related to, or dependent upon the provision of such information or content.
   13.  “Online video sharing” means an internet-based service that allows users to upload and store videos and share them with other users, and that is primarily focused on the posting and transmission of such user-provided videos.
   14.  “Personal social networking” means an internet-based service that allows users to construct public or semipublic profiles, publish content on such profiles, articulate a list of other users with whom they share a connection, and view or exchange content with such users, without the service being oriented toward a specific interest or service such as career networking or romantic connections.
   15.  “Platform services” means the distinct category of services an online platform offers to the public for creating and sharing content electronically, engaging in social networking, or searching for content.
    Sec. 3.  NEW SECTION.  659B.3  Platform fees to support universal service programs.
   1.  A corporation with annual gross revenues attributable to users located in this state of more than ten million dollars that owns or operates an online platform or platforms, shall be, in addition to any taxes, fees, or other charges, assessed a quarterly fee on platform services actively used by ten percent or more of individuals located in this state age thirteen and older. Such platform fee shall be equal to the lesser of fifteen percent of the annual gross revenues attributable to users located in this state that the corporation generates through such platform service and the sum of all of the following:
   a.  Seven dollars and fifty cents per quarter per active state user of the corporation’s general internet search platform services.
   b.  Five dollars per quarter per active state user of the corporation’s personal social networking platform services.
   c.  One dollar and fifty cents per quarter per active state user of the corporation’s microblogging social networking platform services.
   d.  One dollar and fifty cents per quarter per active state user of the corporation’s online video sharing platform services.
   e.  Five dollars per quarter per active state user of the corporation’s online photo sharing platform services.
   2.  The attorney general shall determine the number of applicable platform services’ active state users on which platform fees are owed, and the proportion of individuals located within this state who actively use such platform services, as follows:
   a.  The attorney general shall estimate the quarterly number and proportion of active state users by any of the following:
   (1)  Utilizing reputable commercially available estimates of the platform services’ active state users age thirteen and older, and computing the proportion of active state users by dividing such number by the most recent annual estimates for the state population age thirteen or older produced by the United States census bureau.
   (2)  Conducting a statistically representative survey of individuals located within this state age thirteen and older with a sample size sufficient to produce a margin of error of less than two percent at the ninety-five percent confidence level. Such survey shall estimate, for each corporation subject to online platform fees, the proportion of individuals located within this state who used each applicable platform service three or more times in the previous quarter. The estimated active state users for that quarter shall be the product of that proportion and the most recent annual estimates for the state population age thirteen and older produced by the United States census bureau.
   b.  The attorney general shall transmit its estimated number of active state users to the applicable corporations within sixty days of the end of the applicable quarter. The proportion and number of active state users shall be the estimated proportion and estimated number of active state users for that quarter, unless the online platform provides administrative records demonstrating by a preponderance of evidence that a different number of users within this state used the applicable platform services three or more times in the previous quarter. In such cases, the fee shall be owed on the administratively determined number of active state users, and the proportion shall be calculated by dividing such administratively determined number by the most recent annual estimates for the state population age thirteen and older produced by the United States census bureau.
   3.  Platform fees collected under this section shall be deposited in the Iowa communications network fund created in section 8D.14 and used for the purposes designated for that fund.
   4.  a.  Each corporation that owns or operates an online platform or platforms subject to fees under this chapter shall complete, under oath, and file with the attorney general a return for quarterly fee payments, along with such fee payment, within one hundred twenty days of the completion of the applicable quarter, provided that the attorney general may extend this deadline for good cause related to administratively determining the number of active state users in the applicable quarter.
   b.  A person who willfully files a false return under this section with the intent to evade the payment of fees due under this section is guilty of perjury and shall be punished as provided in section 720.2.
   c.  A person who is required to file a fee return and who willfully fails to file the return as required under this section is guilty of a class “D” felony.
   5.  a.  The attorney general shall assess interest on unpaid platform fees from the due date to the date on which the fee is paid if a person who is required to pay an online platform fee under this section either fails to pay an installment when due or pays less than the amount due. 
   b.  In addition to such interest, the attorney general shall assess a penalty not exceeding twenty-five percent of the amount due if a corporation required to pay a platform fee under this section fails to pay such tax within one hundred eighty days of the due date of such fee.
   6.  The attorney general shall issue regulations governing the assessment and collection of platform fees under this section, including the process for corporations to provide administrative data on the number of active state users on which fees are owed and certifying corporations for exemption under section 659B.4.
    Sec. 4.  NEW SECTION.  659B.4  Fee exemption for platforms that foster open discourse.
   1.  Notwithstanding section 659B.3, a corporation shall not owe any platform fees, nor be required to file a platform fee return, for any platform services for which, whether or not such platform services are market dominant, the corporation does all of the following:
   a.  Publishes on a quarterly basis the number of times during the quarter content created by information content providers within this state was adversely treated, the number of information content providers within this state who were deplatformed or demonetized, the number of appeals of such actions filed, and the number of appeals of such actions granted.
   b.  Incorporates into such platform service’s terms of service applicable to users in this state the following contractual terms:
   Section [Appropriate Section Number] —— Open Discourse and Fair Treatment
   Part 1. Coverage and Scope.
   This section applies to individuals who are residents of and physically located in the state of Iowa and are either users, or desired users, of our service.
   In the event of a conflict between the provisions of this section and any other provision in these terms of service, the provisions of this section shall prevail.
   Part 2. Definitions.
   For the purpose of this section: 
   1. “Restricting access to” or “availability of content” means restricting, in whole or in part, covertly or overtly, manually or algorithmically, the availability, visibility, or distribution of content a user posts, uploads, or publishes; provided that this phrase does not encompass the output of an algorithm we use for presenting or prioritizing content when such algorithm is:
   a. Generally applicable.
   b. Viewpoint neutral.
   c. Not designed to restrict the visibility or distribution of content of a specific user.
   2. “Demonetize” means excluding or restricting a user from participating in user advertisement revenue-sharing arrangements.
   3. “Deplatform” means restricting, in whole or in part, covertly or overtly, a user’s or desired user’s ability to post, upload, or publish content, as opposed to our taking such actions on a case-by-case basis against specific and particular content produced by such individual.
   Part 3. Commitments to Open Discourse and Fair Treatment.
   We promise:
   1. We will not deplatform or otherwise categorically deny service to you, although this commitment does not prejudice the ability of other users to decide with whom they interact, continue to interact, or accept to dialogue from.
   2. We will provide you an open forum for public debate or dialogue, without regard to differing ideological, political, philosophical, or religious perspectives.
   3. We will not demonetize or restrict access to or availability of your content based on ideological, political, philosophical, or religious views implied or expressed; provided that nothing in this paragraph prevents us from removing content that is otherwise obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable on similar grounds even though such content may also express philosophical, political, ideological, or religious views.
   4. We will only demonetize or restrict access to, or availability of, your content if it is not permitted under specific and plain and particular provisions of either our community standards or other provisions of our terms of service. We will apply those community standards and terms of service transparently, consistently, in good faith, and without pretext. We will not apply our community standards or terms of service selectively to some users and not others. If we demonetize or restrict access to or availability of your content, evidence that we have intentionally declined to demonetize or restrict access to or availability of similarly situated content from other users may be taken as evidence we have violated our obligations under this paragraph.
   5. If we demonetize or restrict access to or availability of your content, we will give you written notification within seven days of the action being taken. That notification will provide a specific and detailed explanation of the reason that content violated our community standards or terms of service, including a description of the plain and particular provisions of our community standards or terms of service such content violated.
   6. Appeals: Upon any restriction, demonetization, or content moderation as described above or under relevant law, you will have a meaningful opportunity to appeal to have such actions reversed. The grounds for appeal include, but are not limited to, the fact that our act of content moderation, whatever form it is in, must be made in good faith, without pretext, and applied consistently to all users.
   Part 4. Limitations.
   Nothing in this section affects our ability to demonetize or restrict access to or availability of content that is obscene or pornographic. Nor does anything in this section limit our ability to demonetize or restrict access to or availability of any content that is illegal under state or federal law, such as constitutionally unprotected content in furtherance of unlawful activity, content that is in violation of intellectual property laws, or content subject to a final judgment of a federal court or state court directing the removal of such content.
   Part 5. Enforcement and Damages.
   1. The provisions of this section are contractual and are enforceable at law or in equity. We expressly do not contract for any venue, jurisdiction, judicial forum, or choice of law provision for enforcement of this section. Notwithstanding any other provision in these terms of service, we waive said forum and choice of law provisions as applied to this section, allowing you or any proper legal authority to determine those, should the need arise, under all relevant and applicable laws. If you bring an action against us to enforce the terms of this section and obtain a final judgment prevailing against us, we will, in addition to any other remedies or penalties provided by law:
   a. Reimburse your court costs, fees, and reasonable attorney fees.
   b. Pay any actual damages you incurred through our failure to abide by the terms of this section.

   2.  The fee exemption provided under this section shall not apply to any corporation’s platform services if a court of competent jurisdiction issues a final order holding the contractual language set forth in subsection 1, paragraph “b”, unenforceable, in whole or in part, against such corporation and platform services. In such event, the attorney general shall submit a notice within thirty days informing such corporation that it will be liable for the platform fees of section 659B.3. Such liability shall commence the first full quarter beginning after the attorney general submits such notice.
    Sec. 5.  NEW SECTION.  659B.5  Rules of construction.
   1.  This chapter shall not be construed as requiring online platforms to verify the state of residency of users of their services. An online platform fulfills its duties under this chapter if it satisfies them with regard to conduct that occurs within this state.
   2.  Platform services of an online platform shall be construed as mutually distinct categories.
    Sec. 6.  NEW SECTION.  659B.6  Severability.
   1.  Subject to the provisions of this section, the provisions of this chapter are severable pursuant to section 4.12. If any section, subsection, or other part of this chapter is declared invalid or unconstitutional by a court of competent jurisdiction, that declaration shall not affect the part which remains.
   2.  The provisions of section 659B.4 are not severable. If any provision or a part thereof is declared invalid or unconstitutional, that declaration shall invalidate the whole of section 659B.4; provided that such declaration shall not affect the rest of this chapter which remains.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the censorship of expression on market dominant online platforms and creates the protecting online free speech Act. The bill defines “active state user”, “adversely treat”, “annual gross revenues”, “annual gross revenues attributable to users located in this state”, “demonetize”, “deplatform”, “distinct category of services”, “general internet search”, “information content provider”, “microblogging social networking”, “online photo sharing”, “online platform”, “online video sharing”, “personal social networking”, and “platform services”.
   The bill provides a corporation with more than 10 million users in the state shall be assessed a quarterly fee on platform services to support universal service programs. The bill provides that the attorney general shall determine the number of applicable platform services’ active state users on which platform fees are owed, and the proportion of individuals located within this state who actively use such platform services and provide its estimated number of active state users to the applicable corporations within 60 days of the end of the applicable quarter. The fees collected shall be deposited in the Iowa communications network fund for the purposes of that fund. A corporation subject to platform fees shall file a return for quarterly fee payments and the fee payment to the attorney general within 120 days of the completion of the quarter. A person who willfully files a false return with the intent to evade the payment of fees or willfully fails to file a fee return is guilty of a class “D” felony. A class “D” felony is punishable by confinement for no more than five years and a fine of at least $1,025 but not more than $10,245.
   The bill provides that the attorney general shall assess interest on unpaid platform fees from the due date to the date on which the fee is paid if a person who is required to pay an online platform fee and shall assess a penalty not exceeding 25 percent of the amount due if a corporation required to pay a platform fee fails to pay such tax within 180 days of the due date of such fee. The bill provides that the attorney general shall issue regulations governing the assessment and collection of platform fees.
   The bill provides that a corporation shall not owe any platform fees when the corporation publishes the statistics called for by the bill and incorporates into such platform service’s terms of service applicable to users in this state contractual terms provided in new Code section 659B.4. 
   The bill provides that the protecting online free speech Act shall not be construed as requiring online platforms to verify the state of residency of users of their services and that platform services shall be construed as mutually distinct categories. 
   The bill provides that provisions of the bill are severable pursuant to Code section 4.12 except for Code section 659B.4 (fee exemption for platforms that foster open discourse).