Senate File 580 - Reprinted SENATE FILE 580 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 571) (SUCCESSOR TO SF 402) (As Amended and Passed by the Senate March 17, 2021 ) 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 specified 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 SF 580 (4) 89 jda/rn/mb

S.F. 580 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 the 24 department of management, including any amounts received as 25 replacement taxes under chapter 437A or 437B, shall be reduced 26 by ten percent. Once a political subdivision has been found 27 to have violated a provision of chapter 554E and the amount 28 of the political subdivision’s budget certified under this 29 chapter and the amount of taxes certified back to the county 30 auditor by the department of management, including any amounts 31 received as replacement taxes under chapter 437A or 437B, have 32 been reduced by ten percent, if the political subdivision fails 33 to remedy the violation of chapter 554E prior to January 31 of 34 any subsequent fiscal year, the percentage reduction of the 35 -1- SF 580 (4) 89 jda/rn/mb 1/ 21

S.F. 580 political subdivision’s budget certified under this chapter 1 and the amount of taxes certified back by the department of 2 revenue, including any amounts received as replacement taxes 3 under chapter 437A or 437B, shall be reduced by a percentage 4 equal to the total reduction for the preceding fiscal year plus 5 five percent. 6 Sec. 3. Section 331.433A, subsection 4, paragraph a, 7 unnumbered paragraph 1, Code 2021, is amended to read as 8 follows: 9 The board shall set a time and place for a public hearing 10 on the resolution before the date for adoption of the 11 resolution and shall publish notice of the hearing not less 12 than ten nor more than twenty days prior to the hearing in the 13 county newspapers selected under chapter 349 . If the county 14 has an internet site, the notice shall also be posted and 15 clearly identified on the county’s internet site for public 16 viewing beginning on the date of the newspaper publication. 17 Additionally, if the county maintains a social media account 18 on one or more social media applications, the public hearing 19 notice or an electronic link to the public hearing notice 20 shall may be posted on each such account on the same day as 21 the publication of the notice. All of the following shall be 22 included in the notice: 23 Sec. 4. Section 384.15A, subsection 4, paragraph a, 24 unnumbered paragraph 1, Code 2021, is amended to read as 25 follows: 26 The council shall set a time and place for a public 27 hearing on the resolution before the date for adoption of the 28 resolution and shall publish notice of the hearing not less 29 than ten nor more than twenty days prior to the hearing in a 30 newspaper published at least once weekly and having general 31 circulation in the city. However, if the city has a population 32 of two hundred or less, publication may be made by posting in 33 three public places in the city. If the city has an internet 34 site, the notice shall also be posted and clearly identified 35 -2- SF 580 (4) 89 jda/rn/mb 2/ 21

S.F. 580 on the city’s internet site for public viewing beginning on 1 the date of the newspaper publication or public posting, as 2 applicable. Additionally, if the city maintains a social media 3 account on one or more social media applications, the public 4 hearing notice or an electronic link to the public hearing 5 notice shall may be posted on each such account on the same day 6 as the publication of the notice. All of the following shall 7 be included in the notice: 8 Sec. 5. NEW SECTION . 554E.1 Definitions. 9 As used in this chapter, unless the context otherwise 10 requires: 11 1. “Company” means and includes a person or an affiliate of 12 a person who owns or operates any of the following: 13 a. A massive online marketplace. 14 b. A massive online video sharing website. 15 c. A massive social networking website. 16 d. A monopolistic entity. 17 e. A pre-installed application store. 18 2. “Content generated by bots” means and includes content 19 that is created or posted on an internet site by a software 20 application or program. 21 3. “Excessively violent content” means any image, video, 22 or other content that, taking the material as a whole and 23 applying contemporary community standards with respect to what 24 is suitable for public distribution, meets all of the following 25 criteria: 26 a. Depicts or involves killing, maiming, dismembering, or 27 sexually assaulting an individual. 28 b. Lacks serious literary, scientific, political, or 29 artistic value. 30 4. “Expressive merchandise” means and includes any tangible 31 personal property that contains or displays a viewpoint that 32 constitutes constitutionally protected speech. 33 5. “Governmental entity” means and includes all of the 34 following: 35 -3- SF 580 (4) 89 jda/rn/mb 3/ 21

S.F. 580 a. A unit of state government in the executive, legislative, 1 or judicial branch. 2 b. A political subdivision of the state, including a city, 3 county, township, school district, and any other governmental 4 entity authorized to levy taxes. 5 6. “Intellectual property” means a commercially valuable 6 product of the human intellect in a concrete or abstract form 7 that is protected by a copyright, trademark, or patent. 8 7. “Internet site” means the same as defined in section 4.1. 9 8. “Massive online marketplace” means and includes an 10 internet site that meets all of the following criteria: 11 a. Offers tangible personal property for sale to the general 12 public. 13 b. Sells or facilitates the sale of protected publications 14 or expressive merchandise. 15 c. Has at least seventy-five million subscribers or members 16 in the United States in the calendar year before the date a 17 court has found by a preponderance of the evidence that the 18 massive online marketplace violated this chapter, or has sold 19 goods to at least seventy-five million individuals in the 20 United States in the calendar year before the date a court 21 has found by a preponderance of the evidence that the massive 22 online marketplace has violated a provision of this chapter. 23 9. “Massive online video sharing website” means and includes 24 an internet site that meets all of the following criteria: 25 a. Allows users or the public to share videos with other 26 users or the public. 27 b. Hosts, stores, provides, or otherwise facilitates access 28 by individuals in the United States. 29 c. Has at least five hundred million videos available at any 30 point in time. 31 10. “Massive social networking website” means and includes 32 an internet site that meets all of the following criteria: 33 a. Allows users, through the creation of pages within 34 the internet site or profiles or by other means, to provide 35 -4- SF 580 (4) 89 jda/rn/mb 4/ 21

S.F. 580 information about themselves that is available to the public 1 or to other users. 2 b. Allows users a mechanism for communication with other 3 users. 4 c. Has at least twenty million subscribers or members 5 in the United States in the calendar year before the date a 6 court has found by a preponderance of the evidence that the 7 massive social networking website has violated a provision 8 of this chapter, or has been used by at least twenty million 9 individuals in the United States in the calendar year before 10 the date a court has found by a preponderance of the evidence 11 that the massive social networking website has violated a 12 provision of this chapter. 13 11. “Monopolistic entity” means a person who owns or 14 operates a social networking website, a person who owns or 15 operates an internet search engine, or a person who owns or 16 operates any similar internet site that displays content to its 17 users, and to which any of the following apply: 18 a. The person, within the ten-year period preceding the date 19 a court has found by a preponderance of the evidence that the 20 person has violated a provision of this chapter, has been found 21 to have violated any state or federal antitrust or price-fixing 22 law. 23 b. The person is involved in litigation in which the 24 office of the attorney general has alleged that the person has 25 violated any state or federal antitrust or price-fixing law. 26 12. “Obscene material” means any material depicting or 27 describing the genitals, sex acts, masturbation, excretory 28 functions, or sadomasochistic abuse which the average person, 29 taking the material as a whole and applying contemporary 30 community standards with respect to what is suitable material 31 for minors, would find appeals to the prurient interest and is 32 patently offensive; and the material, taken as a whole, lacks 33 serious literary, scientific, political, or artistic value. 34 13. “Person” means the same as defined in section 4.1. 35 -5- SF 580 (4) 89 jda/rn/mb 5/ 21

S.F. 580 14. “Pornography” means and includes any material depicting 1 or describing erotic behavior that is intended to cause sexual 2 excitement which the average person, taking the material as a 3 whole and applying contemporary community standards, would find 4 appeals to the prurient interest and is patently offensive; 5 and the material, taken as a whole, lacks serious literary, 6 scientific, political, or artistic value. 7 15. “Pre-installed application store” means and includes 8 any program, application, service, or mechanism that is 9 pre-installed on a mobile telephone or other portable 10 electronic communication device capable of being used to write, 11 send, or view an electronic message that meets all of the 12 following criteria: 13 a. Facilitated at least one hundred million annual downloads 14 of programs or applications by individuals in the United 15 States in the calendar year before the date a court has found 16 by a preponderance of the evidence that the pre-installed 17 application store has violated a provision of this chapter. 18 b. Facilitated the download of programs or applications 19 that constitute a massive online marketplace, massive online 20 video sharing website, or massive social networking website 21 in the calendar year before the date a court has found by 22 a preponderance of the evidence that the pre-installed 23 application store has violated a provision of this chapter. 24 16. “Protected publication” means and includes any 25 newspaper, non-fiction book, periodical, religious text, or any 26 other publication that contains or displays a viewpoint that 27 constitutes constitutionally protected speech. 28 17. “Social networking website” means and includes an 29 internet site that meets all of the following criteria: 30 a. Allows users, through the creation of pages within 31 the internet site or profiles or by other means, to provide 32 information about themselves that is available to the public 33 or to other users. 34 b. Allows users a mechanism for communication with other 35 -6- SF 580 (4) 89 jda/rn/mb 6/ 21

S.F. 580 users. 1 Sec. 6. NEW SECTION . 554E.2 Prohibition on censorship —— 2 ability to opt out of certain algorithms. 3 1. a. A company shall not intentionally affect the ability 4 of a citizen of this state to view, comment, or otherwise 5 interact with a United States citizen’s content on the 6 company’s internet site by limiting, blocking, or otherwise 7 restricting any content on the company’s internet site if the 8 content constitutes constitutionally protected speech. 9 b. A company shall not intentionally restrict the ability of 10 a citizen of this state to download a social networking website 11 on a pre-installed application store. 12 c. A company shall not intentionally restrict the ability of 13 a citizen of this state to purchase any protected publication 14 or expressive merchandise on a massive online marketplace 15 if similar protected publications or expressive merchandise 16 were allowed for sale on the massive online marketplace at 17 the time the company restricted the ability of a citizen of 18 this state to purchase the protected publication or expressive 19 merchandise. 20 2. Notwithstanding subsection 1, a company may do any of the 21 following: 22 a. Restrict the ability of a citizen of this state to 23 view, comment, or otherwise interact with a United States 24 citizen’s content on the company’s internet site if the 25 content is criminal in nature, if the content does not 26 constitute constitutionally protected speech, or if the content 27 constitutes any of the following: 28 (1) Obscene material. 29 (2) Excessively violent content. 30 (3) Pornography. 31 (4) Content generated by bots. 32 (5) Intellectual property. 33 b. Restrict the ability of a citizen of this state to 34 download a social networking website program or application 35 -7- SF 580 (4) 89 jda/rn/mb 7/ 21

S.F. 580 from a pre-installed application store if the social networking 1 website is being used for criminal activity and the social 2 networking website does not have a policy in place to require 3 its employees to notify law enforcement upon receiving a 4 complaint or otherwise becoming aware of the criminal activity 5 being discussed or conducted on its social networking website, 6 or does not have a policy in place to require its employees 7 to refer the complaint or existence of criminal activity to 8 designated employees that carry out the policy. 9 c. Restrict the ability of a citizen of this state to 10 download a social networking website program or application 11 from a pre-installed application store if, within sixty days 12 of the restriction, the United States department of homeland 13 security determines the social networking website program or 14 application constitutes a national security threat. 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. 7. 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 -8- SF 580 (4) 89 jda/rn/mb 8/ 21

S.F. 580 be conclusive proof of the company’s breach of any agreement 1 between the company and a governmental entity in effect as 2 of the effective date of this Act regarding tax credits; 3 assistance under section 15.335B; sales tax exemptions or 4 refunds under chapter 423; or property tax credits, exemptions, 5 including but not limited to exemptions under chapter 427, 6 rebates, refunds, reimbursements, or grants for property 7 taxes paid, and the governmental entity shall cancel the 8 agreement effective as of the date of the court’s finding by 9 a preponderance of the evidence that a company has violated a 10 provision of this chapter. 11 b. A court’s finding by a preponderance of the evidence 12 that a company has violated a provision of this chapter shall 13 be conclusive proof of the company’s breach of any agreement 14 between the company and a governmental entity entered into 15 after the effective date of this Act regarding tax credits; 16 assistance under section 15.335B; sales tax exemptions or 17 refunds under chapter 423; or 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, and the governmental entity shall cancel the agreement 21 effective as of the date of the court’s finding. 22 2. Notwithstanding any other provision of law to the 23 contrary, upon a court’s finding by a preponderance of the 24 evidence that a company has violated a provision of this 25 chapter, the company shall be prohibited from entering into 26 any future agreement with a governmental entity regarding 27 tax credits; assistance under section 15.335B; sales tax 28 exemptions or refunds under chapter 423; or property tax 29 credits, exemptions, including but not limited to exemptions 30 under chapter 427, rebates, refunds, reimbursements, or grants 31 for property taxes paid, and shall be prohibited from receiving 32 any future payments; tax credits; assistance under section 33 15.335B; sales tax exemptions or refunds under chapter 423; or 34 property tax credits, exemptions, including but not limited to 35 -9- SF 580 (4) 89 jda/rn/mb 9/ 21

S.F. 580 exemptions under chapter 427, rebates, refunds, reimbursements, 1 or grants for property taxes paid. The prohibition provided in 2 this subsection shall begin on the date of the court’s finding. 3 Except as provided in section 554E.7, the prohibition shall 4 be for a period of twenty years. The twenty-year prohibition 5 shall be reinstated for each subsequent finding by a court 6 pursuant to this subsection. 7 3. Notwithstanding any other provision of law to the 8 contrary, upon a court’s finding by a preponderance of the 9 evidence that a company has violated a provision of this 10 chapter all of the following shall apply: 11 a. Tax credits; assistance from programs and funds under 12 section 15.335B; sales tax exemptions or refunds under chapter 13 423; or property tax credits, exemptions, including but not 14 limited to exemptions under chapter 427, rebates, refunds, 15 reimbursements, or grants for property taxes paid, that were 16 previously claimed by the company but not earned under the 17 terms of the agreement with the governmental entity at the time 18 of the cancellation of the agreement pursuant to subsection 1, 19 shall be recaptured or terminated by the governmental entity. 20 The recapture or termination pursuant to this subsection of 21 any tax credits; assistance under section 15.335B; sales tax 22 exemptions or refunds under chapter 423; or property tax 23 credits, exemptions, including but not limited to exemptions 24 under chapter 427, rebates, refunds, reimbursements, or grants 25 for property taxes paid, that were previously claimed but not 26 earned by the company shall supersede any agreement previously 27 entered into with the governmental entity. Recapture or 28 termination pursuant to this subsection shall be accomplished 29 in the same manner as provided in section 15.330, subsection 30 2, by the method for resolving a breach described in the 31 agreement, through court action, or any other means determined 32 by the attorney general to result in the most expeditious 33 recapture or termination of tax credits; assistance under 34 section 15.335B; sales tax exemptions or refunds under chapter 35 -10- SF 580 (4) 89 jda/rn/mb 10/ 21

S.F. 580 423; or property tax credits, exemptions, including but not 1 limited to exemptions under chapter 427, rebates, refunds, 2 reimbursements, or grants for property taxes paid, that were 3 previously claimed by the company but not earned under the 4 terms of the agreement with the governmental entity at the time 5 of the cancellation of the agreement pursuant to subsection 1. 6 b. Payments or other quantifiable benefits received but not 7 earned by the company shall be returned to the governmental 8 entity. 9 4. Upon a court’s finding by a preponderance of the evidence 10 that a company has violated a provision of this chapter, the 11 prohibition provided in subsection 1 and the return of received 12 but not earned amounts provided in subsection 3 shall not be 13 stayed during appeal proceedings. 14 Sec. 8. NEW SECTION . 554E.4 Inventory of agreements with 15 companies —— obligations. 16 1. Within thirty days following the effective date of this 17 Act, a governmental entity shall do all of the following: 18 a. Conduct a review of currently effective agreements 19 related to tax credits; assistance under section 15.335B; sales 20 tax exemptions or refunds under chapter 423; or property tax 21 credits, exemptions, including but not limited to exemptions 22 under chapter 427, rebates, refunds, reimbursements, or 23 grants for property taxes paid, that were provided by the 24 governmental entity beginning January 1, 2001, through the 25 effective date of this Act, to determine if any agreements 26 related to tax credits; assistance under section 15.335B; sales 27 tax exemptions or refunds under chapter 423; or property tax 28 credits, exemptions, including but not limited to exemptions 29 under chapter 427, rebates, refunds, reimbursements, or grants 30 for property taxes paid, were entered into with, or provided 31 to, a company. 32 b. Provide notice to a company on the form provided by the 33 office of the attorney general pursuant to subsection 3, of 34 the governmental entity’s rights pursuant to section 554E.3 by 35 -11- SF 580 (4) 89 jda/rn/mb 11/ 21

S.F. 580 certified mail return receipt requested if the governmental 1 entity determines pursuant to subsection 1 that a currently 2 effective agreement; tax credit; assistance under section 3 15.335B; sales tax exemption or refund under chapter 423; or 4 property tax credit, exemption, including but not limited to 5 an exemption under chapter 427, rebate, refund, reimbursement, 6 or grant for property taxes paid, was entered into with, or 7 provided to, the company beginning January 1, 2001, through the 8 effective date of this Act. 9 c. Provide the office of the attorney general with copies of 10 the notice and receipt of delivery provided in subsection 2. 11 d. Nothing in this subsection shall be construed to 12 provide a company that did not receive notice a defense to 13 a suit alleging a violation of this chapter or a defense to 14 a suit alleging the company breached an agreement with the 15 governmental entity. 16 2. A governmental entity shall include all of the following 17 in agreements to which it is a party entered into on or after 18 the effective date of this Act: 19 a. A statement summarizing the governmental entity’s 20 enforcement rights under section 554E.3 with respect to 21 agreements related to tax credits; assistance under section 22 15.335B; sales tax exemptions or refunds under chapter 423; and 23 property tax credits, exemptions, including but not limited to 24 exemptions under chapter 427, rebates, refunds, reimbursements, 25 or grants for property taxes paid. 26 b. A provision stating that any agreement between the 27 governmental entity and a company subject to section 554E.3 28 that does not relate to tax credits; assistance under section 29 15.335B; sales tax exemptions or refunds under chapter 423; or 30 property tax credits, exemptions, including but not limited to 31 exemptions under chapter 427, rebates, refunds, reimbursements, 32 or grants for property taxes paid, may be canceled at the 33 governmental entity’s discretion within ninety days after a 34 court’s finding by a preponderance of the evidence that the 35 -12- SF 580 (4) 89 jda/rn/mb 12/ 21

S.F. 580 company has violated a provision of this chapter. 1 3. The office of the attorney general shall develop and 2 provide to governmental entities a form to be used for the 3 notice provided in subsection 2 within seven days of the 4 effective date of this Act. 5 Sec. 9. NEW SECTION . 554E.5 Enforcement —— governmental 6 entities. 7 Notwithstanding any other provision of law to the contrary, 8 upon a court’s finding by a preponderance of the evidence 9 that a governmental entity intentionally violated a provision 10 of this chapter, including but not limited to by making 11 payments or providing tax credits; assistance under section 12 15.335B; sales tax exemptions or refunds under chapter 423; or 13 property tax credits, exemptions, including but not limited to 14 exemptions under chapter 427, rebates, refunds, reimbursements, 15 or grants for property taxes paid, in violation of section 16 554E.3, all of the following shall apply: 17 1. The governmental entity’s certified budget and amount of 18 taxes certified shall be reduced as provided in section 24.17, 19 subsection 2, paragraph “b” . 20 2. If the governmental entity receives an appropriation, 21 the governmental entity’s portion of each appropriation in the 22 fiscal year of the court’s finding of an intentional violation 23 shall be reduced by ten percent. If the governmental entity 24 fails to remedy the violation of this chapter prior to the 25 beginning of the subsequent fiscal year, the governmental 26 entity’s portion of each appropriation made by the general 27 assembly for the subsequent fiscal year shall be reduced by a 28 percentage equal to the percentage reduction for the preceding 29 fiscal year plus five percent. All appropriation amounts 30 reduced pursuant to this section shall be transferred to the 31 fund from which they were appropriated. 32 Sec. 10. NEW SECTION . 554E.6 Obligations of the office of 33 the attorney general. 34 1. The office of the attorney general shall enforce 35 -13- SF 580 (4) 89 jda/rn/mb 13/ 21

S.F. 580 the provisions of this chapter, including in all appeal 1 proceedings. 2 a. The office of the attorney general shall appeal a 3 district court’s decision if a company prevails in the district 4 court in an action under this chapter. 5 b. The office of the attorney general shall file an 6 application for further review with the supreme court if, after 7 the appeal provided in paragraph “a” , the supreme court issues 8 an order of transfer and transfers the case to the court of 9 appeals and the company prevails in the action before the court 10 of appeals. 11 c. When an appeal is taken by the office of the attorney 12 general, the office shall not be required to give an appeal 13 bond or security for costs. 14 2. a. Within sixty days following the effective date 15 of this Act, the office of the attorney general shall make 16 available on its internet site a system to allow a citizen of 17 this state to report potential violations of this chapter by a 18 company or by a governmental entity to the office. 19 b. The system required pursuant to paragraph “a” shall 20 include all of the following: 21 (1) A mechanism for the electronic submission of 22 photographs or other evidence of a company’s potential 23 violation of this chapter. 24 (2) An annual accounting, on a calendar year basis, of the 25 number of complaints received by the office of the attorney 26 general related to the number of potential violations of this 27 chapter by companies and governmental entities. In addition 28 to the current year’s accounting, the system shall display 29 annual accountings required by this subparagraph for the years 30 preceding the current calendar year. 31 (3) An annual accounting, on a calendar year basis, of the 32 number of investigations required pursuant to subsections 3 33 and 4 in which the office of the attorney general determines 34 the preponderance of the evidence indicates that a company 35 -14- SF 580 (4) 89 jda/rn/mb 14/ 21

S.F. 580 or governmental entity violated this chapter. In addition 1 to the current year’s accounting, the system shall display 2 annual accountings required by this subparagraph for the years 3 preceding the current calendar year. 4 (4) A list of the companies that a court has found by a 5 preponderance of the evidence have violated this chapter. 6 (5) A list of the governmental entities that a court has 7 found by a preponderance of the evidence have violated this 8 chapter. 9 (6) A mechanism to ensure that the person submitting the 10 report is a citizen of this state. 11 3. Notwithstanding subsection 5, the office of the attorney 12 general shall complete the investigation of a report received 13 pursuant to subsection 2 within sixty days of the receipt 14 of the report if the report included a photograph or other 15 evidence that, in the opinion of the office, indicates a 16 company’s potential violation of this chapter. 17 4. The office of the attorney general shall contact a person 18 who submits a report pursuant to subsection 2 related to a 19 company’s potential violation of this chapter that did not 20 contain a photograph or other evidence within seven days of 21 the receipt of the report and inform the person of one of the 22 following: 23 a. The office will investigate the report, in which case the 24 office shall complete the investigation within sixty days of 25 the receipt of the report. 26 b. The person has thirty days to provide the office with 27 a photograph or other evidence that indicates a potential 28 violation of this chapter, in which case the office shall 29 complete the investigation within sixty days of the receipt of 30 the photograph or other evidence. 31 5. a. Upon completion of an investigation or investigations 32 in which the office of the attorney general determines the 33 preponderance of the evidence indicates that a company or 34 governmental entity has violated this chapter, the office shall 35 -15- SF 580 (4) 89 jda/rn/mb 15/ 21

S.F. 580 file suit in a court of competent jurisdiction to enforce the 1 provisions of this chapter. 2 b. The office of the attorney general shall file suit for 3 a violation of this chapter every four years from the date of 4 the most recent court’s finding if the office determines that 5 a company has violated this chapter at any point during the 6 four-year period after the court’s most recent finding. 7 c. (1) The office of the attorney general shall file suit 8 against a governmental entity that has previously been found 9 to have violated a provision of this chapter no later than 10 February 1 of any subsequent fiscal year if the office of the 11 attorney general determines that the governmental entity failed 12 to remedy a prior violation of this chapter prior to January 13 31 of the current fiscal year. 14 (2) In a suit filed pursuant to this paragraph, the sole 15 issue before the court shall be to determine whether the 16 governmental entity has remedied a prior violation of this 17 chapter. 18 d. The office of the attorney general may join all claims 19 arising from investigations under this subsection against a 20 company or governmental entity if the preponderance of the 21 evidence indicates that the company or governmental entity has 22 violated this chapter. 23 6. a. To accomplish the objectives and to carry out the 24 duties prescribed by this section, the office of the attorney 25 general, in addition to other powers conferred upon the office 26 of the attorney general by this section, may issue subpoenas to 27 any person, administer an oath or affirmation to any person, 28 conduct hearings in aid of any investigation or inquiry, and 29 prescribe such forms as may be necessary. 30 b. Subject to paragraph “c” , information, documents, 31 testimony, or other evidence provided to the office of the 32 attorney general by a person pursuant to paragraph “a” , or 33 provided by a person as evidence in any civil action brought 34 pursuant to this section, shall not be admitted in evidence, 35 -16- SF 580 (4) 89 jda/rn/mb 16/ 21

S.F. 580 or used in any manner whatsoever, in any criminal prosecution 1 or forfeiture proceeding against that person. If a criminal 2 prosecution or forfeiture proceeding is initiated in a state 3 court against a person who has provided information pursuant to 4 paragraph “a” , the state shall have the burden of proof that the 5 information provided was not used in any manner to further the 6 criminal investigation, prosecution, or forfeiture proceeding. 7 c. Paragraph “b” does not apply unless the person has first 8 asserted a right against self-incrimination and the office of 9 the attorney general has elected to provide the person with a 10 written statement that the information, documents, testimony, 11 or other evidence at issue are subject to paragraph “b” . After 12 a person has been provided with such a written statement by the 13 office of the attorney general, a claim of privilege against 14 self-incrimination is not a defense to any action or proceeding 15 to obtain the information, documents, testimony, or other 16 evidence. The limitation on the use of evidence in a criminal 17 proceeding contained in this section does not apply to any 18 prosecution or proceeding for perjury or contempt of court 19 committed in the course of the giving or production of the 20 information, documents, testimony, or other evidence. 21 7. Service by the office of the attorney general of any 22 notice requiring a person to file a statement or report, or of 23 a subpoena upon any person, shall be made personally within 24 this state, but if such cannot be obtained, substituted service 25 may be made in any of the following ways: 26 a. Personal service thereof without this state. 27 b. The mailing thereof by registered mail to the last known 28 place of business, residence, or abode within or without this 29 state of such person for whom the same is intended. 30 c. As to any person other than a natural person, in the 31 manner provided in the rules of civil procedure as if a 32 petition had been filed. 33 d. Such service as a district court may direct in lieu of 34 personal service within this state. 35 -17- SF 580 (4) 89 jda/rn/mb 17/ 21

S.F. 580 8. If a person fails or refuses to file a statement or 1 report, or obey any subpoena issued by the office of the 2 attorney general, the office of the attorney general may, after 3 notice, apply to the Polk county district court or the district 4 court for the county in which the person resides or is located 5 and, after hearing, request an order that provides for any of 6 the following: 7 a. A grant of injunctive relief, restraining the sale or 8 advertisement of any merchandise by such persons. 9 b. The dissolution of a corporation created by or under the 10 laws of this state or revoking or suspending the certificate of 11 authority to do business in this state of a foreign corporation 12 or revoking or suspending any other licenses, permits, or 13 certificates issued pursuant to law to such person which are 14 used to further the allegedly unlawful practice. 15 c. A grant of such other relief as may be required until the 16 person files the statement or report, or obeys the subpoena. 17 9. a. The office of the attorney general shall notify the 18 department of management upon a court’s initial finding by a 19 preponderance of the evidence that a governmental entity has 20 intentionally violated a provision of this chapter, including 21 in a suit filed pursuant to section 554E.8, subsection 3. 22 b. The office of the attorney general shall notify the 23 department of management no later than June 1 of any subsequent 24 fiscal year if a governmental entity fails to remedy the 25 violation of chapter 554E prior to January 31 of the current 26 fiscal year. 27 10. All records provided to the office of the attorney 28 general pursuant to this section shall be kept confidential and 29 are not subject to chapter 22. 30 Sec. 11. NEW SECTION . 554E.7 Petition for stay. 31 1. No sooner than four years after a court’s finding that 32 a company violated a provision of this chapter pursuant to 33 section 554E.3, the company may petition the court for a stay 34 of the provisions of section 554E.3, subsection 1. 35 -18- SF 580 (4) 89 jda/rn/mb 18/ 21

S.F. 580 2. At the time the company petitions the court for a stay 1 pursuant to subsection 1, the company shall file with the court 2 a bond payable to the state in an amount deemed necessary by 3 the office of the attorney general. 4 3. Within thirty days after a company files a petition for 5 a stay pursuant to subsection 1, the office of the attorney 6 general shall file with the court a statement indicating any 7 reports received under section 554E.6, subsection 2, related 8 to the company from the date of the court’s finding that 9 the company violated a provision of this chapter pursuant to 10 section 554E.3 through the date the company filed the petition 11 for a stay. 12 4. The court shall grant the petition for stay filed 13 pursuant to subsection 1 if it finds that the company did not 14 violate the provisions of this chapter from the date of the 15 court’s finding that the company violated a provision of this 16 chapter pursuant to section 554E.3 through the date the company 17 filed the petition for a stay. 18 a. Beginning one year after the court grants the petition 19 for stay pursuant to this subsection, the company shall 20 annually file with the court an additional bond in the amount 21 of any payments; tax credits; assistance under section 22 15.335B; sales tax exemptions or refunds under chapter 423; or 23 property tax credits, exemptions, including but not limited to 24 exemptions under chapter 427, rebates, refunds, reimbursements, 25 or grants for property taxes paid, which the company received 26 from the state during the previous year. 27 b. A governmental entity shall not provide the company 28 with any tax credits; assistance under section 15.335B; sales 29 tax exemptions or refunds under chapter 423; or property tax 30 credits, exemptions, including but not limited to exemptions 31 under chapter 427, rebates, refunds, reimbursements, or grants 32 for property taxes paid, until the company has satisfied the 33 requirements in paragraph “a” for the previous year. 34 5. The company shall be permanently prohibited from 35 -19- SF 580 (4) 89 jda/rn/mb 19/ 21